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News Related to Burma



(Bangkok Post)
ASEAN / NEW ECONOMICS REGION PLANNED 



Draft stops short of customs union 

No uniform tariffs against third parties

Somporn Thapanachai


Asean members aim to build an Asean Economics Region (AER) by









(Bangkok Post)
ASEAN / NEW ECONOMICS REGION PLANNED 



Draft stops short of customs union 

No uniform tariffs against third parties

Somporn Thapanachai


Asean members aim to build an Asean Economics Region (AER) by 2020 but 
will not create a customs union, according to a draft agreement.

The AER will include the Asean Free Trade Area (Afta) with tariffs 
ranging from zero to 5%, to be in place by 2003, on trade within the 
group. 

However, Vietnam will complete its tariff cuts by 2006 and three 
proposed new members - Burma, Cambodia and Laos - by 2008, according to 
a source at the Commerce Ministry's business economics department.

Asean currently groups Brunei, Indonesia, Malaysia, the Philippines, 
Singapore, Thailand and Vietnam.

The group will have no tariffs on internal trade after 2003 but member 
nations will not apply identical rates to products from third countries. 
Therefore they will not be forming a customs union, according to the 
official.

The AER will include the Asean Investment Area (AIA), formed to free the 
flow of investment within the region by 2010. The draft agreement for 
the establishment of the AIA is scheduled to be completed next year. It 
will then go to economics ministers.

Asean aims to have a free flow of trade in services - especially 
professional - by that time.

The group also wants more liberalisation of financial services. Thailand 
is willing to grant Asean members greater access than it has offered to 
other members of the World Trade Organisation (WTO). Indonesia, which 
has more than 200 banks, has doubts about how far it should open up its 
banking services.

Cooperation in science and technology, especially in providing 
information, is to expand. Asean members are committed through the WTO 
to free trade in information technology products by 2000.

Thailand is stressing the liberalisation of transport, communications 
and telecommunications as it wants to benefit from being in the centre 
of the region.

The AER would speed up the flow of goods in transit through member 
countries, the source said.

Members would agree to cooperate in sustaining food production and 
improving the quality of life for farmers. They would also set up the 
Asean Foundation to handle personnel development.

Although the group has a framework agreement on protecting intellectual 
property rights, this issue would not be covered by the AER as there 
were doubts whether they would cooperate as envisaged. 

To prepare the legal framework for the AER, members might have to 
standardise many laws between 2003 and 2015, the source said.

While the vision for economic development did not appear bold, Asean 
economics ministers meeting on Friday might take a stronger approach. 

On the cultural side, the group might consider cooperation in tourism by 
setting up an Asean fund to restore major attractions such as Angkor Wat 
in Cambodia, he said.







(Bangkok Post?s Post-bag)

The question of beggars in Burma

The letter from Patrick Taylor, "Admitting Burma Depends on Asean" 
(Postbag, May 31), raises a few interesting points.

Is he suggesting people not born in, or citizens of the countries 
involved in the Asean-Slorc debate should not express their opinions? 
Thank God we have a free press in Thailand.

Mr Taylor apparently believes the military junta that presently rules 
Burma is to be admired as it clears the streets of beggars, pimps and 
muggers and makes his frequent trips to Burma more pleasurable.

I do think his grouping the poor old beggars with the pimps and muggers 
a little unfair. After all a pimp is offering an illegal procurement 
service. A mugger is stealing your money, whereas a beggar is asking for 
charity.

Is he suggesting in order to rid New York or London of muggers, pimps 
and beggars, we resort to a Slorc style government in the US and 
Britain?

Ray Selby



Highland Quality of Life


------------------------------------------------------------------------


<Picture: *>The Highland Quality of Life Development Association (Bahn 
Ruam Jai Project) has existed since 1984 to promote a higher quality of 
life for hilltribe people in the Chiang Mai area, and particularly to 
meet children's educational needs. The present site has a dormitory and 
classrooms for 41 hilltribe children as well as a small organic farm. 
They also support over 200 other children who live in the own villages. 
Other projects include health and nutrition groups for hilltribe women, 
and advocacy in negotiations between hilltribe villages and developers.

The association, located in San Pranate, Sansai District, is directed by 
Khun Seewigaa Kittiyoungkun, who can be reached by phone or fax at 
053-491-814.

(We Burmans should learn something from the article.  Mostly those hill 
tribes are orginally from Burma like Karens, Mons, Palaungs and ?.. .  
How a government should take care of the ethnic people equally is 
necessary for the  future of the Burma despite the diversity.  How will 
Burmans treat the ethnic people to let them to practise their rights in 
administration, literatural preservation, ?..)


(The Nation)
Decisive action may stop recession 



There are few other avenues open to the authorities to heal the 
financial system other than by drastic surgery, believe Vatchara 
Charoonsantikul and Thanong Khanthong. 

Ayutthaya's failure to mobilise resources, to coordinate and manage 
strategies led to its fall to the Burmese in 1767. As Mark Twain puts 
it, ''History does not repeat itself ­ but it rhymes." 

The Chavalit government's failure to deal with the macroeconomic crisis 
rhymes perfectly with the turmoil inside Ayutthaya while the Burmese 
armies were engulfing the old capital. 

There is a seemingly unbridgeable gap between the political apparatus 
and the Finance Ministry and the Bank of Thailand machinery, an 
inability to respond effectively and in timely fashion to the foreign 
exchange and financial crises which threaten to plunge the Thai economy 
into a recession. 

It takes two to tango. Without effective coordination between the 
politicians and the bureaucrats, the chances of Thailand overcoming the 
macroeconomic dilemma are slim. 

On Saturday, Prime Minister Chavalit Yongchaiyudh sent his emissary, 
Bokhin Polakula, to meet Chat Pattana leader Chatichai Choonhavan. Their 
talks appear to have centred on dissatisfaction with the economic team 
assembled by Finance Minister Amnuay Viravan. 

If reports that Chat Pattana would like to get hold of the Finance 
portfolio are true, it only adds to the confusion and disarray at the 
very top of the country's macroeconomic management. 

The political body hardly understands that Thailand is in deep peril, 
balanced on a tightrope. The slightest imbalance will send the whole 
country down into the disastrous Mexico valley. 

When foreign speculators returned in mid-May for their second foray 
against the baht this year, banking authorities responded by shutting 
down the foreign exchange swap market. 

The semi-exchange controls sent the cost of baht borrowings on the 
offshore market up more than 1,000 per cent, dealing the speculators a 
stinging blow. Some of them lost up to US$50 million (Bt1.3 billion) 
through this unsuccessful campaign to force a baht devaluation. 

Trying to get a hold on the baht to settle their forward positions, some 
speculators circumvented the loopholes by selling back baht-denominated 
commercial paper to local mutual funds or financial institutions. This 
prompted the authorities to jump behind the speculators' back again by 
ordering the local institutions not to buy back commercial paper from 
foreigners. 

This came after some local and foreign bank branches had already 
repurchased between Bt12 billion and Bt15 billion of baht-denominated 
commercial paper from the relieved speculators, who then lent out their 
fresh baht-supply to others on the offshore market for a handsome profit 
of 40 per cent in interest rate equivalents. 

Undaunted, the foreign speculators, who had huge short baht positions to 
cover, tried to circumvent the regulation by going directly to importers 
and asking for forward invoices to get hold of the baht. Again, they 
were blocked by vengeful Thai regulators. 

Last week the foreign speculators appeared to have found their baht 
mines in the stock market. They went in to mercilessly hammer the 
blue-chip stocks. Baht proceeds from the stock market battering were 
shifted offshore, where sharp profits from baht lending were easily 
made. 

This time the cat-and-mouse game is over. The regulators cannot shut 
down the stock market. The foreign investors have emerged as a dominant 
force on the Thai exchange, accounting for almost 60 per cent of all buy 
and sell transactions last week. 

With local institutional and retail investors running out of cash, the 
foreign investors have virtually taken the Thai market hostage. 

Selling pressure from them will further depress the financial assets of 
most Thai companies, which tie most of their assets to stocks. A 
meltdown of their financial assets has complicated the task of the 
authorities to resolve the financial crisis. 

With the stock market meltdown and a collapse in the credit system, 
liquidity has dried up. A shut-down of the foreign exchange swap market 
has also added to the foreign investors' nervousness over Thailand's 
policies. 

An economy cannot function without liquidity. Even worse, most of the 
scarce money is being channelled unproductively to keep the troubled 
finance companies afloat. 

Normal commercial lendings faced a big jolt, threatening to send the 
economy into a tailspin. There are grounds for a Union Bank of 
Switzerland economist's assessment that the chance of a recession in 
Thailand has increased from zero to 30 per cent. 

If that does happen, local companies will go bankrupt and factories will 
close down. Unemployment will skyrocket and trigger social and political 
unrest. 

In such a climate, no fresh investment will pour into the country. The 
agony from a recession heightens. That is pure disaster. 

Of utmost concern is the almost virtual halt in capital inflow. As a 
capital deficit country, the Thai economy depends on foreigners by as 
much as 20 per cent of its total domestic money demand. 

Until now, foreigners have been willing to finance Thailand's current 
account deficit to the tune of Bt300 billion to Bt400 billion a year. 

With the financial crisis, that foreign money is not coming in, 
resulting in a shrinking of the economy to the level where it is being 
supported by domestic cash. Without foreign capital, there is no way the 
economy can grow six or seven per cent. 

The cost of funds, or interest rates, have to be kept high to attract 
foreign capital and defend the baht. The high interest rate policy is 
sending Thai corporations to their knees. No companies in the world can 
afford to pay 15 to 16 per cent a year for a prolonged period. 

And this adversely affects the price competitiveness of Thai 
manufactured goods in the global markets. When exporters cannot sell 
their products, that spells disaster for Thailand, which is 
unquestionably an export-led economy. 

The speculative baht attack notwithstanding, the foreign exchange crisis 
is a by-product of a financial crisis. For years Thailand has mismanaged 
its macroeconomic policy by maintaining the currency peg system while 
moving to undertake radical financial deregulation. 

While the interest rate has been floated, the foreign exchange rate is 
fixed. With the predictability of baht movements due to the fixed 
currency regime, foreign capital began to pour into the Thai market in 
the early 1990s. 

If the currency peg system had been unpegged in 1993 or 1994, the ''hot 
money", or short-term capital, would not have flooded the Thai market 
and set the stage for the bubble economy. 

This currency peg system now handcuffs the banking authorities' monetary 
policy. Without flexibility in managing the monetary policy, the central 
bank cannot set interest rates. Sooner or later the currency peg system 
must be abandoned. 

Now Thailand is paying a dear price for the fixed exchange regime, which 
will have to be thrown away whenever the window of opportunity arises. 

To complicate the problems, finance companies, which account for Bt1.4 
trillion in total deposits, are in big trouble. A third of them could go 
bankrupt anytime if banking regulators deny them liquidity support. 

The regulators are preparing a comprehensive mergers and acquisitions 
package to deal with the troubled finance companies once and for all. 
Yet the measures appear to have been delayed by a bureaucratic deadlock. 

A lack of understanding from the political apparatus has further dealt a 
setback to attempts to resolve the financial crisis. 

There are few avenues left for the authorities other than drastic 
surgery. 

First, bankrupt finance companies must be allowed to go under by market 
forces. 

Second, the mergers and acquisitions package must be pushed out boldly 
with incentives for merged finance companies to become banks as quickly 
as possible. 

Third, the shut-down of the foreign exchange swap market must be lifted 
with new but fair rules limiting transactions. 

Fourth, interest rates must be brought down to relieve economic woes. 

Fifth, the currency peg system must be abandoned to allow the baht value 
to reflect the capital movements of Thailand's trading partners. This is 
not a one-time devaluation because a devaluation is a betrayal of 
international trust. 

Sixth, measures to further deregulate the economy, accelerate 
privatisation, consolidate the fiscal policy, encourage investment over 
consumption, and bolster exports must be announced with a strong and 
credible action plan. 

These measures must be implemented almost simultaneously and immediately 
if Thailand is to ever get out of this mess, which will also have 
far-reaching political implications. Time is running out.


Editorial & Opinion 

Media monitoring centre a sign of desperation 



Prime Minister Chavalit Yongchaiyudh will not have much to celebrate as 
his administration marks six months in power. What he may not see 
clearly is that his government is more fragmented than ever. But he 
should notice how many of his ministers have become liabilities as the 
government attempts to deal effectively with the country's problems in 
the short and long term. 

The fundamental problems of the government are its inability to see the 
truth, to act in a timely manner and to administer with vision. They are 
the same reasons why public confidence in the present cabinet has sunk 
to such low levels. The economy has deteriorated while the 
decision-making process is in disarray. 

Worse, the coalition partners have failed to guarantee a way out for the 
nation with their strong and politicised opposition to the draft of the 
new constitution. 

So criticism of the government has been the natural response. 

At the same time, signs of desperation among government leaders are 
becoming more obvious than ever. 

The majority of ministers are at a loss about what is happening to the 
country but they do see the labour problem looming with more layoffs 
anticipated as the financial crisis begins to bite. 

The public is confused about who is really in charge of designing and 
implementing economic measures. The big picture on the state of the 
economy and the macro-economic policies is not coming through. The 
economic screening committee which traditionally meets on Monday has not 
done so for some time now. 

The prime minister has stepped in but the dust of his intervention has 
yet to settle, partly because he is advised by so many economic advisory 
teams. 

Chavalit's consent for the Interior Ministry to form a media monitoring 
centre is a clear sign that the government is growing insecure. 

The media monitoring centre is chaired by Deputy Interior Minister 
Chalerm Yoobamrong and includes Interior officials and police officers 
as members. Chalerm has denied that this is a censorship body, but 
clearly the centre is being seen as a move to intimidate the media and 
curb press freedom. 

This job ought to be done by the government spokesman's office, rather 
than Interior officials and the police who are suitable for other kinds 
of jobs. 

The centre will do the country more harm than good. 

Foreigners will see Thailand taking a step back because the free flow of 
information is pivotal to democracy and economic well-being. The 
centre's existence will restrict debate on government policies. 

It raises more questions as to whether this government, if not 
competent, is democratic at all. 

It is a sign that the government no longer has confidence in its ability 
to run the country with good faith. 

In truth, much of the criticism against the government by the media has 
zeroed in on the fragmented, ill-qualified and mismanaged Chavalit 
cabinet. The silliness of some ministers and their comments is 
self-evident. The ability of the cabinet to work together as a team is 
absent. The government is facing a decline in credibility. 

At the centre is Chavalit who has been trying to coordinate policies. 
But he is fighting a losing battle, partly because he himself has made 
poor judgements, particularly on economic matters. It will take him 
another six months at least to get his act together, if he ever does so. 
This apparent lack of leadership on economic policies is one of the main 
reasons why confidence is so low and criticism so prevalent. 

Like it or not this is the image of the government. People are asking if 
they have to live with it until the new constitution is passed, the time 
Chavalit pledged to dissolve the House to make way for a new election.


(The Hindu)
U.S. policy on South-East Asia rebuffed 

Date: 09-06-1997 :: Pg: 11 :: Col: a 

By Sridhar Krishnaswami 

Washington, June. 8 

The Clinton Administration has had to face two situations from South 
East Asia in the last 10 days. First the Association of South East 
Asians snubbed the administration by deciding to go ahead and admit 
Myanmar into their scheme of things and thereby sending signal that 
South East Asia preferred to be ``united'' than to be divided on issues 
that have traditionally not been considered critical to governments in 
that part of the world. 

The second disappointment was even more pointed when Indonesia informed 
the U.S. that on account of being constantly chastised for its track 
record on human rights, a $ 200 millions F-16s deal was off. The 
so-called deal was not really going to take shape on account of 
reservations in Congress but it is not many a time that a Government in 
the Asia Pacific takes the cue of the importance of economics and sends 
a broader message to the Clinton Administration. The related fallout of 
the Indonesian decision is that the U.S. has now to find a new party for 
the F- 16s, and Pakistan has to wait for some more time for its 
``reimbursement''. 

Sooner or later many in the administration and Congress are bound to 
wake up to the ground realities: that the developing world- countries 
like Indonesia-is going to resort to the business and economic defence 
against unwanted and self- righteous punches on issues such as human 
rights. In the midst of the ongoing charade on human rights, it does not 
take too much for law makers to realise that given the nature of their 
legal fund raising,big businesses are not going to be too happy if 
overseas markets are being deliberately and systematically shut off. 

The cancellation of the jet deal by Jakarta is in many ways a grim 
reminder of the flawed human rights approach of this administration 
which somehow conveniently makes the distinction between China on the 
one hand and smaller States on the other even if these States are 
critical to American strategic interests in the Asia Pacific. In the 
case of the F-16s deal, some here were making it sound that the Suharto 
Government would be inclined to use these jets against street 
demonstrators in Jakarta or against the dissent in East Timor. 

Indonesia perhaps miscalculated in the extent to which the executive in 
the U.S. has control over the Congress; but there is no doubt in the 
fact that Jakarta was not too pleased with statements of the 
administration in the recent past on how human rights was affecting 
forward movement in bilateral ties. Further during the recent elections 
in Indonesia and in the immediate aftermath, comments coming out of 
senior administration officials were not anything to be content with. 



A critical component of the Indonesia policy these days, especially as 
it concerns the Congress, is the Donorgate phenomenon. For the reminder 
of the Clinton second term the U.S. policy towards Indonesia will be 
seen through the prism of Mr.John Huang and the Lippo Group; their 
contributions to the Democratic Party; and in their potential links to 
Whitewater. Although the White House has been consistently arguing that 
there were no linkages to policies, not many in this country have taken 
it on the face value. So when it comes to Indonesia, the temptation will 
be to take the high moral ground even if this were to totally ignore the 
economic and strategic utility of Indonesia in South East Asia. 

In the case of Indonesia, it cuts both ways. For instance it is also 
alleged that Mr.Bill Clinton had twice refused to meet the Nobel Prize 
winner, Mr.Jose Ramos Horta-one of the activists in East Timor - and 
charges have been made that this administration may have worked against 
Mr.Horta in the run- up to the Nobel Peace Prize. The implications of 
the allegations is that highly placed Indonesian individuals - through 
their campiagn contributions link - may have exerted pressure on the 
White House against the President's meeting with Mr.Horta. 

In the case of the ASEAN announcing its intention to admit Myanmar into 
its fold, the Clinton Administration has not really been catching on to 
where the seven member grouping is coming from. That the ASEAN does not 
poke its nose into the internal affairs of others let alone member 
States is only one part of the explanation. The other - and more crucial 
to this immediate issue - is the strategic angle which for one reason or 
another the Clinton Administration does not wish to have any truck with. 

South East Asia is keen on bringing Yangon into its fold not out of any 
great love for the Generals of the State Law and Order Restoration 
Council, but nearly every one in that part of the world is privately 
apprehensive of Myanmar being turned into a Greater Chinese Lake on 
account of an isolationist policy at the bidding of the U.S. Some will 
make the point that individual nations in South East Asia have a lot of 
economic stake in Myanmar which is the key reason for not wanting to 
antogonise Yangon. 

In realising the limitations of the Myanmar market, the Asia Pacific is 
also making the point that if the Clinton Administration could claim 
that increased economic interaction with China eases the political 
environment there why this cannot be true in the context of South East 
Asia and Myanmar. Washington's argument that somehow China is a 
different category and that comparisons cannot be made in its policies 
towards Beijing and Yangon fails to take note of the fact that South 
East Asia and the ASEAN too have special considerations in the pursuit 
of their national and strategic interests. The expectation of the 
Clinton Administration that the Asia Pacific should follow the lead of 
Washington in Myanmar does not cut ice in a part of the world that has 
to factor in the economic and military rise of China.

(The Straight Times - Singapore)
Non-intervention policy of Asean queried 




------------------------------------------------------------------------
By Ho Wah Foon 
in Kuala Lumpur 



CONCERNS over the inclusion of Myanmar in Asean, as well as strained 
ties between Malaysia and Singapore, have sparked a debate among 
academics on whether the regional grouping should abandon its 
non-intervention principle. 

Myanmar, ruled by a military junta, will become an Asean member next 
month. Relations between Singapore and Malaysia have been strained since 
March this year. 

On the second day of the 11th Asia-Pacific Roundtable here yesterday, Mr 
Jusuf Wanandi from Indonesia kicked off the debate by saying that Asean 
members should think of ways to comment on the domestic developments of 
countries in the grouping. 

Mr Jusuf, the chairman of the supervisory board, Centre for Strategic 
and International Studies in Indonesia, said in his paper presented 
yesterday: 

"A formula has to be found where this could be done in an acceptable and 
reciprocal way. The case with the new members, especially Myanmar, will 
be an important test case on how this could be done successfully." 

He said the constructive engagement policy advocated by Asean might be 
too slow to help to transform Myanmar's political system and Asean 
needed to deal with these domestic issues as they could affect the 
region's stability. 

He noted that non-governmental organisations (NGOs) and the press in 
Asean countries were already playing an interventionist role. 

Examples he cited included the second international conference on East 
Timor held by NGOs in Kuala Lumpur last year and comments by newspapers 
on Myanmar's treatment of political opponents. 

Professor Michael Leifer of the London School of Economics and Political 
Science said Myanmar would not help to improve relations of Asean-10 
with its dialogue partners if Asean maintained its non-intervention 
policy. 

"Governments and NGOs of the dialogue partners feel that the respect for 
sovereignty should not give government the right to torture people, to 
detain political opponents, to instill fear in people ...," he said. 

A delegate from the floor said other Asean members should step in to 
prevent further tension created by the Singapore-Malaysia diplomatic 
row, which had spillover effects on Thailand and Indonesia. 

Mr Jusuf's suggestion, however, was opposed by some academics who argued 
that the resilience and strength of Asean had come from its principle of 
non-intervention. 

A representative from Myanmar said that he was all for constructive 
engagement and said Myanmar would want to resolve its internal problems 
"in our own way without external pressure. 

"Myanmar will abide by the rights and obligations of Asean. But in my 
view, there should be strict observance of sovereignty and no 
intervention," he said.



------------------------------------------------------------------------

<Picture>

Asean-US showdown over Myanmar not likely 



<Picture>
------------------------------------------------------------------------




By Derwin Pereira
in Jakarta

ASEAN has dismissed suggestions that it is heading for a showdown with 
the United States over admitting Myanmar next month to the seven-nation 
grouping. 

Asean Secretary-General Datuk Ajit Singh told a news conference 
yesterday that both Asean and the US wanted the same thing -- positive 
developments in Myanmar and regional stability -- but differed on how to 
achieve it. 

"The difference is that Washington wants to achieve these goals through 
enforcing sanctions," he said in response to a question. "Asean does not 
believe in that. We believe in the policy of constructive engagement." 

The US has led the way in putting pressure on Asean to delay admitting 
Myanmar over its human-rights record. Asean member states, however, have 
stressed that a longstanding policy of engaging Myanmar would reap 
better results. 

Datuk Ajit Singh said that Asean would have "very frank, very open and 
very engaging discussions" with Myanmar once it joined the group. 

"Myanmar is now in the same compound with the rest of Asean which makes 
it easier for us to talk to them," he said. 

He noted that Myanmar together with Cambodia and Laos were "working very 
hard" to fulfil the obligations of becoming Asean members. 

Asean had agreed last Saturday to admit the three countries into the 
grouping. 

He said he had submitted a report to Asean foreign ministers on the 
state of readiness of the three countries to join the grouping, which 
said the three would: Accede to the Bangkok Declaration of 1967, which 
established the grouping, and to the Treaty of Amity and Cooperation. 
Contribute US$1 million (S$1.4 million) to the Asean fund. Assume 
responsibility for chairing Asean meetings. Establish diplomatic 
missions in all other Asean countries. Train government officials in the 
use of the English language. 

At the briefing, Datuk Ajit Singh also announced that Asean economic 
ministers would meet in Jakarta on June 14 to discuss the group's 
economic vision for the next century. 

He said older Asean member states, on their part, would help Cambodia, 
Laos and Myanmar to standardise customs and immigration rules and 
harmonise laws on legal, taxation and tariff systems to integrate them 
into the Asean Free Trade Area (Afta). 

"This work is basic if the three countries want to implement Afta as 
quickly as possible," he said. 

To create Afta, Asean countries had agreed to eliminate tariffs 
altogether by 2003. 

He noted that Cambodia, Laos and Myanmar had already drawn a draft 
product list for the Common Effective Preferential Tariff scheme -- a 
requirement under Afta in which Asean countries are given uniform 
preferential treatment in intra-Asean trade.






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