Indonesia

Blackout Ordeal in Java Leads to Questions, Lawsuits (4-8 Aug)

 Indonesian citizens across the island of Java were hit by a sustained electricity outage on Sunday, 4 August, following disruptions to several power plants. Tens of millions were affected as traffic lights, cashless payment services and commuter rail systems stopped working in places such as Jakarta. While state-owned utility company Perusahaan Listrik Negara (PLN) apologised for the blackout, President Joko Widodo “Jokowi” was outspoken in his frustration with the firm. The results of the police investigation into the causes of the blackout are due to be announced on Thursday 15 August. In the meantime, a US$21.9 billion class action lawsuit has been submitted by the Indonesia Young Advocates Forum against PLN, the President, the Ministry of State-Owned Enterprises and the Ministry of Energy and Mineral Resources. This will be a particular test for State-Owned Enterprise Minister Rini Soemarno and Energy and Mineral Resources Minister Ignasius Jonan, who were both reprimanded by Jokowi during a July cabinet meeting for their ministries’ contributions to Indonesia’s trade deficit in early 2019.

Sources: Channel NewsAsia, The Jakarta Post, Jakarta Globe, Antara News, Tempo.Co

Jokowi Warns That Officials Who Fail to Stamp Out Forest Fires Will Be Sacked (6 Aug)

 President Jokowi reportedly told the military and police chiefs to sack officials who did not tackle the ongoing forest fires in Indonesia. Faced with a surge in fires since late July/early August, Jokowi said that Indonesia would be “humiliated” if the fires and the resulting haze problem cannot be solved. He was due to visit Malaysia and Singapore from 8-9 August, both of which that were badly affected by the haze in 2015. Jokowi’s warnings not only hint at his determination to address the haze issue, but also an inclination to use harsher methods in pursuing his goals.

Sources: Mongabay, SCMP, The Edge Markets MY

PDI-P Congress – Megawati Retains Leadership Role, Stakes Claim for Cabinet (8 Aug)

 The Indonesian Democratic Party of Struggle (PDI-P) re-elected Megawati Soekarnoputri as its chairman at the party’s congress on Thursday, 8 August. During the general election in April, PDI-P had won 19.3% of the popular vote, making it the biggest political party in Indonesia’s next Parliament. Notably, President Jokowi had responded to Megawati’s remark about getting more than four cabinet seats by saying that it is “certain” that PDI-P will get the most seats in his new cabinet. Other members of Jokowi’s coalition subsequently accepted Megawati’s request, though parties such as the National Democratic Party (NasDem) remained opposed to new parties being admitted to the coalition. Speculation about the cabinet line-up is expected to continue until October.

Sources: Jakarta Globe, The Straits Times, The Jakarta Post (Premium)

Indonesia’s GDP Grows 5.05% in Q2 2019, Government Data Shows (5 Aug)

Indonesia’s economy grew at an inflation-adjusted rate of 5.05% year-on-year, according to government data. While this figure was broadly in line with the annual average of 5% in recent years, it was also the lowest rate of expansion in the past two years, raising doubts about whether the government will achieve its growth target of 5.3% in 2019. Some analysts also attribute the lower-than-expected growth to an increase in the current account deficit amid heightened demand for foreign exchange. Bank Indonesia, meanwhile, stands poised to cut its key policy rate again after a two-year period of tightening.

Sources: Nikkei Asian Review, The Jakarta Post, Business Times, The Jakarta Post (Premium)

Jokowi Makes First Official Visits to Malaysia and Singapore Following Re-Election (8-9 Aug)

President Jokowi made his first official visit to Malaysia since being re-elected in April 2019. Meeting with Prime Minister Dr Mahathir Mohamad, both leaders discussed bilateral issues and common interests, including palm oil, Indonesian domestic workers and the Indonesian flight information region (FIR). Analysts and observers have pointed to these meetings as indicative of warmer Indonesia-Malaysia ties, especially with the release of Indonesian Siti Aisyah, one of the women charged with the murder of Kim Jong-Nam following lobbying from Jakarta.

Sources: SCMP, The Edge Markets MY, Jakarta Globe

President Jokowi also visited Singapore to attend the nation’s 54^th national gallery celebrations on Friday, 9 August. He joined Malaysian Prime Minister Dr Mahathir Mohamad and Brunei Sultan Haji Hassanal Bolkiah in meeting Singaporean Prime Minister Lee Hsien Loong at the national gallery prior to the parade. In an interview with Channel NewsAsia on 6 August, he said that his government would continue to work with Singapore in developing locations such as Batam, Bintan and Karimun. Jokowi also expressed a hope that Singapore and Indonesia would cooperate to develop Indonesia’s human capital, a policy priority of his second term in office.

 Sources: MFA Press Release, Channel NewsAsia

Malaysia

Azmin Video Scandal – Relative Quiet as Attention Zeroes in On Succession (1-7 Aug)

 The video scandal afflicting Economic Affairs Minister Azmin Ali entered its second month as supporters of Parti Keadilan Rakyat (PKR) President Anwar Ibrahim took Azmin to task for calling on Dr Mahathir to serve his full five-year term as Prime Minister on 29 July. A “steady stream of complaints” against Azmin was reportedly submitted to the PKR disciplinary board over the past month. A joint statement expressing support to Anwar as the party President and next Prime Minister gathered the signatures of 197 of 219 PKR division chiefs by 4 August. It was an apparent response to an earlier open letter in support of Azmin. Under these circumstances, Azmin denied that he is not supporting Anwar to be the next Prime Minister on 2 August.

Media attention to developments in the scandal faded after the first week of August, and commentaries turned to talking about the need for reconciliation between Anwar and Azmin. Speculation surrounding the succession issue has also increased due to the current tensions. While Dr Mahathir dramatically stated that he would step down before his five-year term is up unless someone puts “a gun to [his] head”, he has been reluctant to specify a handover date. On 7 August, Malaysian civil society organisations such as Bersih 2.0 and the Muslim Youth Movement of Malaysia called on him to take “clear and decisive steps” to clarify the transition plan and bring about political stability.

 Sources: The Star, The Star, The Straits Times, Malay Mail, The Edge Markets MY, Free Malaysia Today, Channel NewsAsia

Tensions and Unrest in Selangor Over a Unilateral Conversion Amendment (1-14 Aug)

 A political storm is brewing in Selangor following Menteri Besar Amirudin Shari’s attempt to table an amendment on unilateral child conversion to Islam. The amendment, which originated from the Selangor Islamic Religious Council (Mais) with backing from the Selangor Sultan, was opposed by the majority of Pakatan Harapan (PH) assemblypersons in the state. Selangor speaker Ng Suee Lim reportedly refused to prioritise the amendment, and cut short the state assembly meeting that started on 29 July before it could be tabled. This led to Amirudin attempting to push the amendment through, igniting the current furore.

Free Malaysia Today cited a PH source that the amendment was an attempt to strengthen certain leaders’ political power among Malay voters. It has, however, had other side effects on PH’s stability. Beyond criticism of the amendment, rumours circulated on 7 August that members of PKR had reached out to United Malays National Organisation (UMNO) members in an attempt to unseat Amirudin, though the latter group declined the invitation. Furthermore, a meeting between the Selangor Sultan and four non-Muslim executive councillors on 8 August led to a fresh round of speculation about what transpired during the meeting. As of 12 August, Amirudin said that the amendment would be studied and discussed further at the state and federal levels.

 Sources: Malaysiakini, The Star, Malay Mail, Free Malaysia Today, The Star

Move to Introduce Arabic Script in All Malaysian Schools Stirs Unrest (1-14 Aug)

 The revelation that Khat or Jawi calligraphy would be taught as part of the Bahasa Melayu curriculum for Year Four pupils has attracted criticism, particularly from Tamil and Chinese educationist groups such as the Chinese Dong Zong. Analysts have noted that the decision to introduce Jawi script had been made years before during the tenure of Barisan Nasional (BN), and some opportunistic PH leaders had seen it as a chance to burnish their Malay-Muslim credentials. To many non-Malay communities, however, the policy was seen as a sign of creeping Islamisation. Democratic Action Party (DAP) leader Lim Kit Siang was heckled during an event in his constituency of Iskandar Puteri over his defence of the Khat policy, and he even predicted that he would lose his seat if he had to defend it in a snap election. Prime Minister Dr Mahathir also waded into the fray, labelling Dong Zong as “racists” for their claim that Khat is a medium to spread Islam. Finance Minister Lim Guan Eng has said that he will raise the Khat issue at the cabinet meeting on Wednesday, 14 August.

 Sources: The Star, The Straits Times, Malay Mail, Malay Mail, Free Malaysia Today, Free Malaysia Today, Malay Mail

Government U-Turn on Lynas License Issue Attracts Criticism (5-14 Aug)

Reports that the Malaysian government plans to extend Lynas Corp’s license to operate a rare earths manufacturing plant ahead of a 2 September deadline have led to a public outcry. Dr Mahathir reasoned that expert studies indicated that the faintly radioactive waste was not hazardous to health, and that he could not force Lynas Corp to leave after inviting it to invest in the country. However, one of PH’s clearest campaign promises was that Lynas could not leave radioactive waste products within Malaysia. The dropping of this promise attracted criticism from PH lawmakers and members of the public, and derision from former Prime Minister Najib Razak. Analysts are divided on how this issue will affect support for parties such as PKR and the DAP. However, the latter party is summoning its leaders for another meeting at party headquarters on Tuesday, 13 August, to discuss the issue. In conjunction with the fallout from the unilateral conversion and Khat issues, the DAP is expected to take a tougher position on the three issues at the cabinet meeting on Wednesday, 14 August.

 Sources: Reuters, The Straits Times, Malay Mail, Free Malaysia Today, Malaysiakini

Trade War – US Investments Soar as Malaysia’s Finance Minister Aims to Boost Chinese Investments (8 Aug)

 The Straits Times reported that while foreign direct investment (FDI) inflows from China to Malaysia had underperformed in Q1 2019 as compared to the same quarter last year, investments from the US more than tripled last year’s annual manufacturing investments in the first quarter alone. Analysts have suggested that China might be deterred by the Malaysian government’s approach towards negotiating large infrastructure projects. In contrast, relatively low costs, supportive infrastructure and market regulations have made Malaysia more attractive to US electrical and electronics firms.

Separately, Finance Minister Lim Guan Eng said at the Malaysia-China Belt and Road Economic Cooperation Forum 2019 that he hopes to woo more high tech investments from China. He welcomed investments by Huawei in Malaysia, and called on more China-based exporters to relocate their operations to Malaysia.

 Sources: The Straits Times, New Straits Times

Myanmar 

UN investigators issue report on Tatmadaw economic influence, urge further sanctions (5 Aug)

The United Nations’ fact-finding mission in Myanmar has issued a report detailing the Tatmadaw’s ties with powerful military-owned conglomerates and crony companies. The report urged foreign investors to avoid dealing with such entities and called for a complete arms embargo on the country. The report asserts that the Tatmadaw’s extensive economic holdings fuelled its operations around the country. It also accuses several companies such as Asia World Group and KBZ group of being culpable in efforts to prevent displaced individuals in Rakhine State from returning home. A statement that has since been issued by the Union Enterprise of Humanitarian Assistance, Resettlement and Development in Rakhine (UEHRD), which is implicated in the report, “categorically rejects” the report’s allegations, and accused it of being “an action intended to harm the interests of Myanmar and its people.” Some international firms have since decided to withdraw from partnerships with military-linked companies, with a prominent example being Belgium-based Newtec, which provided Tatmadaw-backed telecoms operator Mytel with equipment and technical support.

Sources: Irrawaddy, Irrawaddy, Frontier Myanmar, Frontier Myanmar, UNHRC

Floods and Landslides wreak havoc in Mon State (10 Aug – ongoing)

Severe flooding brought about by monsoon rains has damaged infrastructure and displaced thousands across Myanmar’s southern Mon state. These floods have caused significant landslides, the latest in Paung Township with a death toll of 72 people and many still missing. Vice President Henry Van Thio arrived on the scene recently to supervise rescue operations and moved quickly to test the geological stability of potentially vulnerable areas. The landslides have been blamed on increased mining activity, which has unsettled the soil due to the use of unsustainable demolition techniques. Up to 39,000 people from 9000 households are currently sheltering in relief camps in Mon state alone, after nearly two months of heavy rainfall. Myanmar’s Ministry of Social Welfare, Relief and Resettlement issued a statement indicating that between late June and early August, flooding in 11 of Myanmar’s 14 states and regions has affected 152,031 people, displacing 145,859 to the 346 relief camps nationwide.

Sources: Myanmar Times, Myanmar Times, Irrawaddy, Irrawaddy, Frontier Myanmar

Myanmar Charter Amendment Committee to draft Constitutional amendment bill (9 Aug)

Myanmar’s Union Parliament approved the report of the Charter Amendment Committee, in which nearly 4,000 recommendations were made for modifications to Constitutional provisions. Around 66 percent of lawmakers voted in support of the report, while 32 percent opposed it. This allows the committee to proceed with the drafting of an amending bill to the Constitution. Recommendations within the report include several directed at reducing the role of the military in politics and decentralising state power. The committee overseeing it was formed in February, with 45 representatives from 14 political parties – including independent candidates and Tatmadaw-elected parliamentarians. This marks the end of the first phase in the Constitutional reform process. Once a bill is formally drafted and tabled, article 436 of the Constitution – which is itself subject to some of the proposed changes – dictates that 75 percent of lawmakers must assent.

Sources: Myanmar Times, Irrawaddy

Myanmar and Korea to establish joint industrial complex near Yangon (9 Aug)

Myanmar’s Urban and Housing Development Department has signed a joint venture agreement with South Korea’s Korea Land and Housing Corporation to establish a joint industrial complex in Hlegu township, around 50km north of Yangon. The Korea-Myanmar Industrial Complex (KMIC) will span 558 acres and be comprised of industrial and commercial areas, alongside a research and development facility and training school. Basic infrastructure such as roads and utilities would be constructed by Myanmar, with a loan from the South Korean Economic Development Cooperation Fund. The KMIC is expected to create 50,000 to 100,000 jobs in the industrial, export and human resource sectors in and around Yangon, and focus on the production of export goods. The project as a whole is estimated to cost US$110m with investment interest from about 200 Korean companies. The project is due to be completed by 2023.

Sources: Irrawaddy, Myanmar Times

Deportees from Singapore charged under counter-terrorism laws (9 Aug)

Eight individuals accused of helping to raise funds for the Arakan Army, including a number deported from Singapore in July, have formally been charged under counter-terrorism laws at a court hearing in Yangon. This was the first time they had been allowed to speak to their defence lawyers and family members. If they are found guilty of the charges, they may face life in prison. Another suspect is still under investigation and two more are currently on the run. Suspects currently on trial include Aung Myat Kyaw, who is believed to be the brother of Arakan Army leader Tun Myat Naing, and was one of six people deported from Singapore. Aung Myat Kyaw said after the hearing that he had only been assisting people displaced by the fighting. The Tatmadaw is currently engaged in active military operations against the Arakan Army in Northern Rakhine State, where internet access remains deactivated.

Sources: Channel NewsAsia, Frontier Myanmar

Thailand

PM Prayut’s botched oath-taking draws criticism, calls for resignation (8 Aug)

Prime Minister Prayut Chan-o-cha has come under fire for failing to fully recite the oath of allegiance required by the Thai Constitution, when he was sworn in on the 16^th of July. The omission contained a sentence indicating the oath-taker’s dedication to upholding and complying with the constitution. PM Prayut stated that he took sole responsibility for the error and stressed that it was unintentional. PM Prayut’s political opponents have highlighted this error as potentially delegitimizing, and the opposition party Pheu Thai has called upon him to seek a royal pardon and lead the cabinet in a fresh swearing-in. After PM Prayut’s admission of responsibility, he reiterated that he was not intending to resign despite speculation that he would do so. Pheu Thai has since committed to pressing the issue in subsequent sittings of parliament.

Sources: Bangkok Post, Bangkok Post, Bangkok Post, Bangkok Post, Channel NewsAsia

DPM Prawit Wongsuwon named PPRP chief strategist amidst coalition unrest (13 Aug)

Palang Pracharath Party (PPRP) northern strategist Thammanat Prompao announced that the party would appoint DPM Prawit Wongsuwon to the position of chief strategist. Mr Prawit had previously been accused of exerting undue influence on PPRP decision-making prior to his recent application to join the party. With this announcement of Mr Prawit’s appointment also came the announcement that ongoing negotiations with smaller members of the government’s coalition who had threatened to defect had been resolved, and that nine of the ten parties had agreed to stay put. Mongkolkit Suksintaranont, leader of the Thai Civilized Party, had previously announced that his party would, alongside four others, be forming their own independent power bloc – which would have eliminated the government coalition’s slim majority in parliament. The Thai Civilized Party will still be leaving the coalition with its single vote, though PPRP’s coalition remains in control of 253 parliamentary seats.

Sources: Bangkok Post, Bangkok Post, Bangkok Post, The Nation, Bangkok Post

Bank of Thailand cuts interest rates, anticipates potential further cuts (7 Aug)

The Bank of Thailand (BOT) announced that it would be cutting its benchmark interest rates by a quarter-percentage point to 1.5 percent – the first such cut in four years. This move was highly unexpected, as the BOT had previously resisted rate cuts on account of potential rises in consumer debt and risks to financial stability. However, the need to account for deteriorating economic outlooks brought about by Sino-American tensions, the worsening drought in the country’s northeast, and the rising baht led the Central Bank to reconsider. The BOT remains concerned about financial stability even after the rate cut, and observers have speculated that the persistent strength of the Baht may even motivate a further rate cut later in 2019.

Sources: Bangkok Post, The Nation, Bloomberg

Thailand’s Cabinet approves 3.2tn baht (US$103.8bn) budget for 2020 (6 Aug)

Thailand’s Cabinet endorsed a budget of 3.2tn baht for FY 2020 – which is approximately 6.7 percent higher than the budget for FY 2019. Revenue collection for FY 2020 is estimated to hit 2.73tn Baht, which is up 7.1 percent from FY 2019. FY 2020 will therefore run with a budget deficit of 469bn baht, which will be 4.3 percent higher than FY2019. The government announced that this budget deficit would be mostly allocated to the investment budget, which will account for 20.5 percent of the total budget for the year. The first reading of the draft bill for the FY2020 budget is expected to take place on the 17^th of October 2019, and be carried out by late January 2020. This would be four months behind schedule, as was announced previously by the government in light of delays in the appointment of key figures in the government’s economic team. It was stated in January that this economic team will now be headed by PM Prayut Chan-o-cha himself, though DPM Somkid Jatusripitak, who previously helmed economic development, remains in charge of key economic portfolios such as Finance, and offices like the Board of Investment.

Sources: Bangkok Post, Bangkok Post

Investigations into explosions during ASEAN Foreign Ministers Meeting ongoing (2 Aug – ongoing)

Investigations into explosions in Bangkok during the ASEAN Foreign Ministers Meeting have linked the incidents to groups based in Thailand’s Muslim-majority south, according to DPM Prawit Wongsuwon. Further investigations are ongoing to determine how suspects travelled and where they obtained the materials for their explosives. A total of nine suspects have been detained. A further, unexploded firebomb was located at the Prathunam market in central Bangkok in the following week. These attacks took place following growing resentment in the country’s south, which emerged after the arrest of a rebel suspect – Abdullah Esormusor – in Southern Thailand, who was found in a coma at an army camp where rights groups have alleged that torture has taken place.

Sources: Channel NewsAsia, Channel NewsAsia, Channel NewsAsia, Reuters