Southeast Asia Program

Southeast Asia from the Corner of 18th & K Streets

Volume III | Issue 13| July 5, 2012

Time to End Strategic Ambiguity in the South China Sea

gregory poling
Gregory Poling is research associate in the Southeast Asia Program at the Center for Strategic and International Studies in Washington, D.C. July 5, 2012
The CSIS Southeast Asia Program hosted its second annual conference ontheSouthChinaSeaJune2728.Asexpected,theevent,titledThe SouthChinaSeaandAsiaPacificinTransition:ExploringOptionsfor ManagingDisputes,sawitsfairshareofsparksbetweenthepanelists. This was especially true between the Chinese and Philippine and Chinese andVietnamesespeakers.Butafteradayandahalfofheateddiscussion, oneclearmessagehaddeveloped:ambiguityovertheterritorialand maritimeclaimsintheSouthChinaSeadoesnotserveanyonesinterests. While participants tended to revisit the issues of sovereignty and table ideas for just managing rather than resolving disputes, this years conference felt markedly different from the one on broadly the same themelastyear.Therewaspalpabletensionintheroomaseachofthree ChineseexpertssoughttodefendBeijingspositions.Itisimportant tonotethepluralpositions,becausetherewasscantagreementas towhatpreciselytheChinesepositionis.Fellowpanelistsandseveral sharp questioners from the audience demonstrated that there was little appetiteforvaguepronouncementsofChinesepolicyandjustifications. Whattheaudiencewasexpressingwaspreciselytheexasperationthat has spread through policy communities both in Washington and in Asia.ItisexasperationnotwiththeSouthChinaSeadisputeitself,or even with perceived recent aggressiveness from Beijing, both of which havebecomepartoftheregionallandscape.Rather,itisfrustration

Inside This Issue

the week that was
Googles transparency report reveals frequent removal of content in Thailand due to lse-majest DerekMitchellconfirmedasU.S. ambassador to Myanmar Chinasstate-ownedoilfirmopensnine blocks in disputed waters to foreign bids

looking ahead
ASEAN Regional Forum and ASEAN Ministerial Meeting/Post Ministerial Conferences U.S.-IndonesiaTIFAtalkswithCraig Allen and Barbara Weisel Talk at CSIS on Hillary Clintons economic legacy

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Southeast Asia from the of 18th & K Streets November 5, 2012 2 Southeast Asia from the CornerCorner of 18th & K Streets July 9, 2011 || 2

Time to End Strategic Ambiguity in the South China Sea (continued) Two Models for Integrating Asia: A Must Win for President Obama (continued)
with the perpetual uncertainty created by a Chinese policy that amounts to avoiding takingapositionatallcosts.Withouta definedChineseposition,resolvingclaims andreconcilingpositionsisnotpossible. Chinas policy of strategic ambiguity, as it has been euphemistically called, serves its purposeswell.ItallowsChinatheflexibility to interpret its position to serve the audience athand.ThisiswhytheMinistryofForeign Affairs was able to issue its well-publicized statement in February 2012 stating that no nation claims sovereignty over the entire South China Sea and that the dispute isonlyabouttheislandsandadjacent waters.ThisraisedhopesintheUnitedStatesandamongtheother Asian claimants that China was backing away from the 9-dash lines claimandmovingtobringitsclaimsinlinewithinternationallaw. That,however,hasclearlynotbeenthecase.Thisyearstensionsinthe sea started with a two-month standoff between Chinese and Philippine shipsatScarboroughShoal.Thatconfrontation,despitepronouncements tothecontraryfromBeijing,servedasanexampleofacreepingevolution inBeijingsclaims.ForyearstheChineseterritorialclaimsintheSouth ChinaSeaextendedonlytotheSpratlys(Nansha,orSouthBanks) andParacels(Xisha,orWestBanks).Anyclaimtootherfeatures,like Scarborough Shoal, was only implied in so far as they fell within the ambiguous9-dashlines.ThenChinaextendeditsclaimtotheentirely submergedMacclesfieldBankviatheimaginaryZhongsha,orMiddle Banks, despite there being no way under international law to claim title overasubmergedfeatureasifitwereanisland.Further,inrecentyears, as Beijing has tried to move beyond an overreliance on the indefensible 9-dash lines, Scarborough Shoal has been incorporated as part of Zhongsha.ThefactthatitlieshundredsofmilesfromMacclesfieldBank or that it appears on none of the historical documents China puts forth toproveitstitletotheSpratlysandParacelsseeminglydoesnotmatter. Beijing showed similar disregard for the policy put forth in its February Ministry of Foreign Affairs statement when in early May it reinstated itsannualunilateralfishingbanforalloftheSouthChinaSeaabovethe 12thparallel.SuchabanwouldbepossibleonlyifChinawereclaiming

Chinas 9 dash lines claim to the waters of the South China Sea is not based on international law and keeps Bejings stance on maritime boundaries purposely ambiguous

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Southeast Asia from the Corner of 18th & K Streets

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Time to End Strategic Ambiguity in the South China Sea (continued)

allthewaterswithinthe9-dashlines,notonlyitsislandsandadjacent waters.TheninlateJune,theChinaNationalOffshoreOilCorporation (CNOOC)firedashotacrossVietnamsbowbyannouncingthecompany would open nine oil and gas blocks in the South China Sea to foreign bids.Thecatchwasthatallnineblocksliewithinthe200-nauticalmileexclusiveeconomiczone(EEZ)ofVietnam,andmanyinfact overlapwithexistingblocksalreadyleasedbyVietnam,includingthose committedtoExxon-Mobil.Moreimportantly, CNOOCsblocksarenotdefensibleundera claimtotheislandsandadjacentwaters of the South China Sea because there is noislandwithin200nauticalmiles(the maximumallowableEEZ)ofalltheblocks. These developments highlight the need for the ASEAN claimantsVietnam, the Philippines, Malaysia, and Bruneito take a stand on what is genuinely in dispute in the South China Sea andwhatisnot.Aslongasthatfundamental fact remains unclear, China will continue to employ ambiguous and contradictory claims to pursue its interests in the South China Seaattheexpenseofitssmallerneighbors. Somestepshavebeentakeninthisdirection.VietnamandMalaysias 2009jointsubmissionoftheirsouthernextendedcontinentalshelves totheUNCommissionontheLimitsoftheContinentalShelfwasan importantfirststepinthiseffort.ThePhilippinesbaselinelaw,passed the same year, establishing its coastal baselines in accordance with theUNConventionontheLawoftheSeas(UNCLOS),wasanother. Despite these steps, too much remains ambiguous in the South China Sea.VietnamsNationalAssemblyrecentlypassedaLawoftheSea reiterating its claim to the Paracels and Spratlys, but it remains unclearjustwhatVietnamisclaiminginthemaritimedomain. Beyond its southern boundaries with Malaysia, where are its claimed baselinesanditsextendedcontinentalshelf?Doesitconsiderthe islandsoftheSpratlysandParacelscapableofgeneratinganEEZor not?Thesamequestionsmustbeaskedandansweredbytheother threeASEANclaimants,Brunei,MalaysiaandthePhilippines.
China National Offshore Oil Corporations recent invitation for foreign bids on nine oil and gas blocks in the South China Sea has raised anew concerns about the nature of Chinas claims. All of the blocks overlap with Vietnams exclusive economic zone.

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Southeast Asia from the of 18th & K Streets November 5, 2012 4 Southeast Asia from the CornerCorner of 18th & K Streets July 9, 2011 || 4

Time to End Strategic Ambiguity in the South China Sea (continued) Two Models for Integrating Asia: A Must Win for President Obama (continued)
The ASEAN parties have seen their positions onmanyofthesequestionsslowlyconverge. For instance, all four appear to operate under the assumption that the Spratlys and Paracels are not legally islands, but merely rocks and therefore entitled only toa12-nautical-mileterritorialsea. An honest effort to resolve the disputes in the South China Sea requires that this and otherassumptionsbecodifiedinlaw.This does not mean any of the claimants have to give up anything regarding their claims to the featuresintheSouthChinaSea.Instead,it would allow them to strengthen the legal basis of their maritime claims and separate the far moreintractable,butgeographicallymuchsmaller,territorialdisputes. Most importantly, it would allow them to present a united front to China in arguingonecrucialpoint:Theonlyacceptablebasisformaritimeclaims intheSouthChinaSeamustbeinternationallaw,especiallyUNCLOS. Were the ASEAN claimants to present an agreed-upon framework for establishing what is and is not disputed, the burden would rest with Beijingtoclarifythebasisforitsownclaims.Atthatpoint,Beijingwould havelimitedoptions.Suchpressuremightgivemoremoderatevoices, like those in the Ministry of Foreign Affairs, more credibility, allowing China to clarify its claims by retaining those to the Spratlys and Paracels butgivingupitsegregiousclaimstothewatersinbetween.Thiswould markanimportantsteptowardresolvingtheSouthChinaSeadisputes. Alternately, Beijing could reject entirely the primacy of accepted internationallawinthedispute,butthatwouldbeextremelydamaging toChinaslargerinterests.Beijingwouldmorelikelyrefuseto engageinanydialogueatall.Whilepossibleintheshort-term,such a course of action would identify China as the undeniable remaining belligerent in the dispute and rally regional and international opinionaroundtheASEANclaimantsposition.Eventually,China wouldlikelyfinditlessdamagingtoitsreputationandinterests toclarifyitsclaimsthantoclingtoitstraditionalambiguity. Most of the time in the CSIS conference was spent discussing the basesofthedisputesandexploringwaystomanageinevitable

In May 2012 China reinstituted its annual unilateral fishing ban for much of the South China Sea. The vast area covered by the ban suggest that Beijing is still claiming all the waters within the 9-dash lines.

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Time to End Strategic Ambiguity in the South China Sea (continued)

incidents rather than suggesting means for actually solving thedisputes.GiventhecomplexityandlongevityoftheSouth ChinaSeaissue,suchdifficultiesaretobeexpected. But th most important reason that there seemed little light at the endofthetunnelwasthatsomuchofthedisputeremainsambiguous. It is time for the ASEAN claimants to fully codify, both in domestic legislation and in a multilateral framework, what is and is not in dispute underinternationallaw.Thatwouldbeapositionthattheinternational community,includingtheUnitedStates,couldlegitimatelysupport because it would mean not defending the claims of any individual partytothedispute,butrathersupportinginternationallawitself.

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The Week That Was

indonesia
UmarPatekgiven20yearsfor2002Balibombings.The West Jakarta DistrictCourtsentencedHisyambinAliZein,widelyknownasUmarPatek, to a 20-year sentence June 22 for his role in the 2002 bombing of a Bali nightclubthatkilled202people.Thetriallastedthreemonths.Heavoided a life sentence because the court found he was not a mastermind of the bombings.Patekslawyer,AsludinHanjuni,saidJune28thatPatekwould notseektoappeal. PertaminapurchasesVenezuelanoilassetsfor$725million.Pertamina, Indonesias state-owned oil company, agreed to pay Harvest Natural Resources $725 million for its stake in a joint venture with Venezuelas state-ownedoilcompany.ThedealissubjecttotheVenezuelan governmentsapproval.ThismarksagrowingtrendofAsianoilcompanies developingassetsandagreementsabroad.China,Japan,SouthKorea,and VietnamallhaverecentlysignedoildealswithCaracas.Pertaminasaidit hopestoaggressivelydevelopitsoverseasbusinessasIndonesianoil reservesbegintotaperoff. IndonesiapledgesuptoonebilliondollarstoIMF.Indonesia announced June 28 it will provide up to one billion dollars to boost the resources of theInternationalMonetaryFund(IMF),followingsimilarmovesbyother emergingeconomies.DeputyForeignMinisterMahendraSiregarinitially said June 20 that Indonesia would not commit any funds as leaders of Brazil, Russia, India, China, and South Africa increased their contributions inexchangeforagreatervoiceintheinstitution.TheIMFisseeking contributionsinlightofthecontinuingfinancialcrisisinEurope. SmogfromSumatracloudsskiesoverMalaysia,Singapore.Smog engulfedtheskylinesofKualaLumpurandSingaporeinthepasttwo weeks,largelyduetofiresfromlandclearingonSumatraandIndonesian Borneo.IndonesiasNationalMeteorological,Climatology,andGeophysics Agency June 17 reported 163 hot spots on Sumatra, more than double the numberthedaybefore.Indonesianauthoritiesareattemptingtoregulate theburning,butenforcementisdifficultgiventhesizeoftheaffected areaandlimitedpolicingcapabilities.SingaporesNationalEnvironment AgencysaidJune17thathazyconditionswouldlikelycontinueforthenext twoweeks. Voter rolls for Jakarta gubernatorial race called into question as campaignbegins.CampaigningforJakartasgovernorraceofficially

A forest fire in Indonesian Borneo. Hot spots due to slash-and-burn land clearing in Sumatra and Borneo have clouded the skies of Southeast Asia, including Kuala Lumpur and Singapore. http://www. flickr.com/photos/cifor/6347177914/in/ photostream

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Southeast Asia from the Corner of 18th & K Streets

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beganJune24,withelectionstobeheldJuly11,butfiveofthesix candidatesrefusedtoendorsethevoterrolls.Onecandidate,JokoWidodo, filedaclassactionsuitagainsttheJakartaelectioncommission,while others have called for delaying the election until the problems can be fixed.JokoslawyersaidJune25thattherearehundredsofthousandsof irregularandduplicatenamesontherolls.Thewinneroftheelectionwill controltheIndonesiancapitalandits$4.9billionbudget,andwilllikelybe highlyinfluentialinthe2014presidentialrace. GolkarnominatesBakrieas2014presidentialcandidate.Indonesias second-largest political party, Golkar, announced June 29 that Aburizal Bakrie will be party chairman and its candidate for the 2014 presidential election.Golkar,thepartyofousteddictatorSuharto,isthemostpopular partyinIndonesiainrecentpolling.Bakrie,acontroversialandextremely wealthyfigure,lagsbehindotherpotentialcandidates,includingformer presidentMegawatiSukarnoputri,inrecentpolls.Golkardeputychairman AgungLaksonosaidthepartywillnotdecideonavicepresidential candidate until 2013, when it will have a better sense about whether a coalitionwillneedtobeformed.

thailand
Googles transparency report reveals frequent removal of content due tolse-majest.Googles annual transparency report released June 18 revealed the Thai Ministry of Information, Communication, and Technology requested 374 YouTube videos be taken down in 2011, a sharp increase from only43in2010.Thevideosallegedlycommittedlse-majest,orinsulting themonarchy.Googlecompliedwith100percentoftherequests,while itsglobalaverageforcompliancewas63percent.Noneoftherequestsin Thailandincludedacourtorder.Thereportmarksacontinuingtrendof Thailandsmorestringentenforcementoflse-majestinthepastyear. Floodpreventionmeasurescouldresultinworsefloodingincentral provinces.Consulting company Team Group warned June 21 that newly constructeddikesandembankmentscouldresultingreaterfloodingin northern Bangkok and Ayutthaya province, potentially leaving its main town,MuangPhraNakhonSiAyutthaya,undermorethan9feetofwater. Thegrouppresenteditsfindings,basedonmodelsfromthedevastating 2011floods,attheKnowingandFightingagainstFloodingConference. Thailandhasbeentryingtofortifyitsfloodpreventionmeasures throughoutthepastyeartoavoidarepeatof2011.

A man makes his way through Bangkoks floodwaters in October 2011. This week, a private company revealed that some flood prevention measures could increase flooding in other areas. http://www.flickr. com/photos/philiproeland/6300371085/

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Southeast Asia from the Corner of 18th & K Streets

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U-Tapaodecisiondelayed,NASAcancelsclimatestudy.AU.S.embassy spokesperson announced June 28 that NASA had cancelled a planned climate study due to the delay and controversy over its request to use ThailandsU-Tapaoairbase.Thailandsarmycommander,Gen.Prayuth Chan-ocha, said he regretted the outcome and hoped that it could be revisitednextyear.NASApreviouslysaiditwouldneedapprovalbyJune26 togoforwardwiththestudy,scheduledtotakeplaceinAugust.Thesame day the Thai cabinet announced it would send the issue to the parliament forreview.SeveraloppositionlegislatorsopposedNASAsuseofthebase, sayingitcouldimpactThailandssovereignty. Redshirtleadersbailrevoked.ThailandsConstitutionalCourtfileda petitionJune21torevokeredshirtco-leaderJatupornPrompansbail, claiming that he violated the terms of his parole when he criticized the courtatarally.Whenaskedforclarification,thecourtannounceditwould hold a press conference on the issue June 25, but the press conference was subsequentlycanceled.Jatupornsaidthecourtoversteppeditsbounds,as itisnotawitnessorplaintiffinthecase.Heischargedwithterrorismfor his actions during the 2010 political violence that swept Bangkok leaving morethan90peopledead.

myanmar
AungSanSuuKyidelaysparliamentarydebut.Nyan Win, a spokespersonforMyanmarsoppositionNationalLeagueforDemocracy, said July 1 that opposition leader Aung San Suu Kyi would not attend the parliamentarysessionbeginningthisweek.Shewasinitiallyscheduledto make her debut as an elected member of parliament July 4, but will not do sountilJuly9.NyanWincitedSuuKyisfatigueafterahecticfive-nation European tour as the reason for the delay and said Suu Kyis overall health isfine. DerekMitchellconfirmedasU.S.ambassadortoMyanmar.TheU.S. SenateJune29confirmedDerekMitchellasthefirstU.S.ambassadorto Myanmarinmorethantwodecades.Mitchellmostrecentlyservedasthe firstspecialrepresentativeandpolicycoordinatorforMyanmar,aposition createdbyU.S.presidentBarackObamain2011.Myanmarisexpectedto sendanambassadortotheUnitedStatesaswell. Myanmardelaysforeigninvestmentlaws.Myanmar indicated on June 23 that fresh economic legislation critical for investment could be pushed backanotherfewmonths.Officialssaidanewversionoftheforeign

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Southeast Asia from the Corner of 18th & K Streets

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investmentlawcouldbedelayedbyanotherfiveweeks,whilealawon specialeconomiczonescouldtakeuptofourmonthstobefinalized.Only around$133millionofthe$4.7billioninforeigninvestmenttoMyanmar approvedlastyearhasactuallymaterialized. Myanmarpreparestooffer18oilandgasblocksfortender.Myanmar will offer up to 18 oil and gas blocks in a new global tender to be launchedinthenexttwotothreemonths,anenergyofficialsaidJune 20.Myanmarhasalreadyinkedninedealswithforeigncompaniessince March,whichwillallowthecompaniestoscourforoilandnaturalgas. Parliamentary opposition leader Aung San Suu Kyi meanwhile warned June13thatthestate-ownedMyanmaOilandGasEnterprise,withwhich all foreign investors must engage in joint ventures, lacks transparency andaccountability.Atleastfornow,U.S.companiesareprohibitedfrom biddingontheseblocks.TheU.S.governmentannouncedinmid-May thatitwouldsuspendU.S.sanctionsagainstinvestmentinandfinancial transactionswithMyanmar,butofficialshavenotyetissuedageneral licenseoutliningwhat,ifany,restrictionswillremainonU.S.companies. MyanmarandBangladeshindilemmaoverRohingyarefugees. Bangladeshi security forces continue to detain and deport Rohingya MuslimsfleeingviolenceinwesternMyanmardespitegrowing internationalcallstoBangladeshtoopenitsborderstorefugees.Myanmar president Thein Sein and Bangladesh prime minister Sheikh Hasina will discusstheissuewhentheformertravelstoBangladeshJuly1517.The death toll from clashes between Rohingyas and Buddhist Rakhines rose to 62onJune21.RohingyasaredeniedcitizenshipinMyanmarandrefused entry to Bangladesh, which says it is already overburdened with some 400,000frompreviousinflows. Myanmarpresidentpromisessecondwaveofreforms.Myanmar president Thein Sein announced in a June 19 state of the union address thatthecountrywillembarkonasecondwaveofreformsbeginning thisyear.Thereformswillincludeaminimumwagelawandprivatization initiativesinsuchfieldsasenergy,electricity,education,health,and finance.TheinSeinalsovowedtotripleMyanmarsgrossdomesticproduct percapitaby2016.Thegovernmentappearedtokickoffthesecondwave July 3 by granting amnesty to 46 prisoners, including several well-known politicalprisoners.

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Southeast Asia from the Corner of 18th & K Streets

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philippines
Governmentsaysthereare5.5millionFilipinochildworkers.The PhilippineDepartmentofLaborandEmploymentreportedJune27that thenumberofFilipinochildlaborershasincreasedto5.5million,or approximatelyone-fifthofthecountryspopulationaged5to17years.The NationalStatisticsOffice,whichconductedthesurvey,foundthatchild laborersaremostlyemployedintheagriculturalandindustrialsectors. LaborSecretaryRosalindaBaldozrespondedtothefindingsbypledging toreducechildlaborby75percentinfouryears. Candidatestosubmitcampaignexpendituresin2013midterm elections.The Philippine Commission on Elections announced June 27 an anticorruption resolution that will require candidates in the 2013 midtermelectionstofiletheirstatementsofelectioncontributorsand expendituresbeforeassumingoffice.Electedofficialswhofailtofiletheir statementswillinitiallyfacefinesof$25to$1,400.Asecondoffensewill resultinbeingpermanentlydisqualifiedfromholdingpublicoffice.The resolution is part of President Benigno Aquinos larger anticorruption movement. Asian Development Bank approves $350 million loan to enhance Philippinecompetitiveness.TheAsianDevelopmentBank(ADB)June26 approved a loan of $350 million to fund a Philippine program designed to improvethecountrysbusinessenvironment.Theprogramfocusesonthe developmentofyouthlaborskills,includingaprojectcalledMyFirstJob. The project aims to provide 1,600 youth with career counseling services andinternshipopportunities.ThePhilippineswasoneoftheADBstop10 loanrecipientsin2011. U.S.submarinevisitsSubicBay.AU.S.nuclear-poweredattacksubmarine, theUSSLouisville,dockedJune26atthePhilippinesSubicBay.Thevisit wasaroutineportcalltoreplenishsuppliesandallowrestforthecrew. TheU.S.embassyinthePhilippinessaidthemissionhighlightsthestrong historicandmilitaryconnectionsbetweenthetwocountries.TheUSS LouisvilleisthesecondU.S.attacksubmarinetovisitthePhilippinessince theUnitedStatesannouncedplanslastyeartorebalancetowardtheAsiaPacificregion.

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Southeast Asia from the Corner of 18th & K Streets

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south china sea

CSIShostsSouthChinaSeaconference.The CSIS Southeast Asia ProgramhostedaconferenceJune2728titledTheSouthChina SeaandAsiaPacificinTransition:ExploringOptionsforManaging Disputes.ExpertsfromtheUnitedStatesandtheregiondiscussed recent developments in the South China Sea and options for managing andresolvingdisputes.AssistantSecretaryofStateforEastAsiaandthe PacificKurtCampbellandSenatorJosephLiebermanpresentedkeynote speechesduringtheconference.Moreinformation,includingtranscripts, audio, and video of the event, is available here. PhilippinestoliftScarboroughShoalfishingban.The Philippine governmenthasannouncedthatasofJuly15itwillliftthefinishingban itimposedlastmonthindisputedwatersnearScarboroughShoal.The ArmedForcesofthePhilippines(AFP)saidJuly1itplanstocoordinate withthePhilippinecoastguardtoensurethesafetyoffishermen retuningtothearea.AnAFPspokespersonsaidthemilitarywillpursue allnecessarymeanstosecurethesafetyofPhilippinecitizensexercising their maritime rights, but did not say whether the government plans to sendnavyorcoastguardshipsbacktothedisputedshoal. Vietnam passes maritime law reiterating claim to Paracel and Spratly Islands.VietnamsNationalAssemblyJune21passedanewLawonthe Sea,reiteratingitssovereigntyovertheParacelandSpratlyIslands. The law immediately drew criticism from Beijing, which summoned Vietnams ambassador to China, Nguyen Van Tho, and called the law a seriousviolationofChinasterritorialsovereignty.ChinasStateCouncil responded by approving the establishment of a new prefecture-level city, Sansha(ThreeBanks),toadministertheislandsoftheSpratlys(Nansha orSouthBanks),theParacels(Xisha,orWestBanks),andMacclesfield BankandScarboroughShoal(Zhongsha,orMiddleBanks). Chinasstate-ownedoilfirmopensnineblocksindisputedwatersto foreignbids.ChinaNationalOffshoreOilCorporation(CNOOC)June 23invitedinternationalbidsfornineoil-explorationblockswithinthe 200-nautical-mileexclusiveeconomiczoneclaimedbyVietnamunderthe UnitedNationsConventionontheLawoftheSea.Theannouncementdrew strongprotestsfromVietnam,whichaskedChinatostoptheerroneous bid.ChineseForeignMinistryspokespersonHongLeisaidJune27the biddingisanormalbusinessactivityinlinewithChineselawsand internationalpractices.About200Vietnamesedemonstratorsmarched

Assistant Secretary of State for Asia and the Pacific Kurt Campbell delivered the lunch keynote speech June 27 at the CSIS conference on the South China Sea. (Photo: CSIS Southeast Asia Program)

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Southeast Asia from the Corner of 18th & K Streets

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throughdowntownHanoiJuly1shoutingDownwithChina!Thenine blocks overlap with several blocks already leased to foreign oil companies byVietnam.

vietnam
Vietnam,Japanlaunchrareearthsfacility.Vietnam and Japan June 16 inaugurated a rare earths research and technology transfer center inHanoi.Vietnamconstructedthecenterwithequipmentprovidedby Japan.Operationsaresettobegininthesecondhalfof2013.Thetwo countriessignedanagreementonjointdevelopmentlastOctober.Japans determination to reduce its dependence on China for rare earths has prompted cooperation with Vietnam, which has one of the worlds largest reservesofrareearths.Rareearthsareusedinthemanufactureof electronicsincludinglightbulbs,cellularphones,andcomputers. Prime minister approves urban development project in Greater Mekong Subregion.Vietnamese prime minister Nguyen Tan Dung June 18 approved a$147milliondevelopmentprojectintheGreaterMekongSubregion.The Asian Development Bank will supply close to 90 percent of the required funds.Theprojectissettobeginin2013andisdueforcompletionin2018. Itfocusesonexpandingroads,improvingwatersupplyandtreatment systems,andurbanization.Vietnamaimstotransformtheregionfroma transportcorridorintoavibranteconomiczone. Vietnam,UnitedStatesholdfifthPolitical,Security,andDefense Dialogue.U.S.assistantsecretaryofstateforpolitical-militaryaffairs AndrewShapiroattendedthefifthU.S.-VietnamPolitical,Security,and DefenseDialogue(PSDD)June20inHanoi.Thetwosidesdiscussed cooperation in nonproliferation, counterterrorism, maritime security, humanitarian assistance and disaster relief, law enforcement and information sharing, and legacy issues such as the remaining effects ofthetacticalherbicideAgentOrangeusedbytheU.S.militaryduring theVietnamWar.Thetwocountriesagreedtostrengthentheirbilateral partnership and emphasized the importance of cooperation in regional organizations.ThesixthPSDDwilltakeplaceinWashingtonnextyear. Vietnamtotightencontrolonforeigndirectinvestmentloans.Vietnams centralbankJune23askedlendinginstitutionstoexercisestrictercontrol offoreigndirectinvestment(FDI)loans.Thisincludes,amongother measures, reporting regularly to the central bank on the status of FDI loans.ManybusinessessetupaspartofFDIprojects,especiallythose

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Southeast Asia from the Corner of 18th & K Streets

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inremoteprovinces,haveoperatedinefficientlyinrecentyearsandhave negativelyaffectedthecountrysinvestmentenvironment.Bankshave saidsupervisionofFDIloansisdifficultbecausethecapitalisoftenused topurchaseimportedrawmaterials.

malaysia
ViolentprotestsagainstMalaysianembassy,studenthallinJakarta. Crowds gathered June 22 at the Malaysian embassy and a hall for MalaysianstudentsinJakartatoprotestKualaLumpursmovetodeclare twotraditionaldancespartofMalaysiasculturalheritage.Theprotesters, allegedly organized by the nationalistic group Pemuda Pancasila, turned violentandbeatseveralMalaysians.Malaysiasforeignminister,Anifah Aman, said Malaysia wants only to preserve the tor-tor and gordang sambilan dances, which Indonesians claim as their own, not to assert that theyoriginatedinMalaysia. GovernmentrejectsappealtohaltLynasrareearthsrefineryproject. The Malaysian government has rejected an appeal to revoke the operating permitofAustralian-ownedLynas,whichisbuildingtheworldslargest rareearthsprocessingplantinKuantanprovince.Therejectionsparked fresh protests June 25 by local residents and activists concerned about theenvironmentalandhealtheffectsoftheplant.PrimeMinisterNajib Razak has said the plant will attract other large projects and help Malaysia realizeitsgoalofattainingindustrializedstatusby2020.Opposition leader Anwar Ibrahim has made closing the plant a key part of his political platformfortheupcominggeneralelection. MalaysiansprotestpresenceofSingaporeandiplomatsatBersihrally. Three hundred Malaysians participated in a half-hour demonstration June26outsidetheSingaporeHighCommissioninKualaLumpur. Theprotestorsdemandedanofficialapologyandtherecallofthree SingaporeandiplomatswhoattendedtheApril28Bersih3.0rallyfor electoralreforminKualaLumpur.SingaporesForeignAffairsMinistry saidtheofficialscametotherallyasobserversandhadnointentionof interferinginMalaysianpolitics.

A June 2011 demonstration against Lynass planned rare earths processing plant in Kuantan province, Malaysia. The government has rejected an appeal by local residents to revoke Lynass operating permit. http://www.flickr.com/photos/ avlxyz/6346169920/

laos
Laos,UnitedStatesholdfourthComprehensiveBilateralDialogue.Lao viceforeignministerBounkeutSangsomsakandU.S.assistantsecretary ofstateKurtCampbellcochairedthefourthU.S.-LaosComprehensive

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BilateralDialogueJune27inWashington.ThetwosidesdiscussedLaoss expectedentryintotheWorldTradeOrganizationlaterthisyear,theLower MekongInitiative(LMI),landmineremovalandsearcheffortsformissing U.S.servicemeninLaos,andbilateralcooperationinhealth,education,and security.CampbellreaffirmedU.S.supportforASEANcentralityinEast Asian regional architecture and welcomed Myanmars induction into the LMI. Laos,Vietnamexchangehigh-levelvisits.LaoPeoplesRevolutionary Party secretary Chansy Phosikham visited Hanoi June 14 and stressed the special relationship between his party and the Vietnamese Communist Party.Thetwopartiesagreedtocooperatecloselyinpersonneltraining andpartybuilding.LaovicepresidentBounnhangVorachitJune18hosted hisVietnamesecounterpartNguyenThiDoaninVientiane.Vorachit reaffirmedLaosssupportforVietnamsforeignpolicyandpledgedto strengthen bilateral and party ties despite internal challenges facing both countries. LaosmaynotreachMillenniumDevelopmentGoals.LaossMinistry ofPlanningandInvestmentsaidJune21thatLaosmaynotachieveits MillenniumDevelopmentGoalsby2015asplanned.Laoshasmadelittle progressineradicatingextremepovertyandhungerandinimproving maternalhealth.Morethan20percentofthepopulationstilllivebelowthe povertylinedespite8percentannualeconomicgrowth.Laosestimatesit will need $990 million in development assistance and $27 million in private investmenttoachieveitstargetgoals. Laoshaltsnewinvestment,landconcessionsuntil2015.Laosannounced June 26 it will freeze mining licenses and land concessions until 2015 at the earliest in response to complaints about land encroachment and environmentalproblems.Thegovernmentisscheduledtoconductland surveys,reviewexistinginvestmentpolicies,andinspectallapproved developmentprojects.Mostprojectsapprovedsince1998areforeign funded and concentrated in the mining, hydropower, and agricultural sectors. WorldBanklaunchesnewaidstrategyforLaos.The World Bank June 26 launchedanewaidprogramforLaostohelpitachievethreedevelopment objectivesbytheendof2016.Theobjectivesaregreatercompetitiveness and connectivity, sound management of natural resources, and inclusive development.TheWorldBankexpectstomobilize$60millionin developmentassistancetoLaosperyear,contingentontheperformance

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oftheprogram.TheprogramslargergoalistohelpLaospositionitselfas a transit hub and investment destination in the planned ASEAN Economic Community, which seeks to boost economic integration in the region by 2015.

singapore
Singapore,Thailandcentralbankssigncooperationpact.The Monetary Authority of Singapore and the Bank of Thailand signed an agreement June25allowingfinancialinstitutionsineachcountrytoincreasetheir liquidity by pledging currency or securities issued by the others central bank.Theagreementaimstofortifyfinancialstabilityandfacilitatethe increasingtradeandinvestmentbetweenthetwocountries. SingaporeandMalaysiasignagreementonantinarcoticscooperation. Singapores minister for home affairs, Teo Chee Hean, and his Malaysian counterpart, Hishammuddin Hussein, signed an agreement June 26 tocombatcross-borderdrugcrimes.Theagreementpledgesthetwo countries enforcement agencies to cooperate in joint training and investigations. UnitedStatesexemptsSingaporefromsanctionsforIranoilimports. TheUnitedStatesJune28exemptedSingaporeandChinafrom Washingtons unilateral sanctions on countries that purchase Iranian oil, citingtheireffortstosignificantlyreducetheirimports.U.S.secretaryof stateHillaryClintonsaid20countrieshavequalifiedforanexemptionto thesanctions.All20havedecreasedtheiroilimportsfromIranenoughto help pressure Iran to stop enriching uranium and open its nuclear program forinspection.

Singaporean dollars (left), Malaysian ringgit (middle), and Thai baht (right). Singapore and Thailand have signed an agreement allowing their banks to pledge currency or securities issued by one anothers central bank. http://www.flickr. com/photos/stevec77/4444437097/

cambodia
CambodiarefusestoextraditeFrencharchitectlinkedtoBoXilai scandal.Cambodian authorities June 13 arrested Patrick Devillers, a FrencharchitectlinkedtooustedChongqingpartybossBoXilai.Devillers is suspected of involvement in the murder of Neil Heywood, a British national,allegedlybyBoswife.Cambodiasdeputyprimeministerand foreign minister, Hor Namhong, announced June 21 that Cambodia will not extraditeDevillerstoChinaorFranceunlessthereisclearevidenceofhis crime.Cambodiaisscrutinizingitsnationallawsaswellasinternational lawsregardingextraditionincasesinvolvingthreeparties.

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CambodiareleasesBoengKakprotesters.A Cambodian court June 27 released 13 women who were arrested in May for demonstrating against the forced eviction of their community from the area surroundingPhnomPenhsBoeungKakLake.The womenhavevowedtocontinuetheirprotests.Their case made international headlines and elicited condemnation from human rights groups and foreign officials,includingU.S.secretaryofstateHillary Clinton.AmnestyInternationalandHumanRights Watch,amongothers,welcomedthewomensrelease.
Boeng Kak Lake in Phnom Penh. A Cambodian court has released 13 women who spent more than a month in prison for protesting their communitys forced eviction from the lake. http://www.flickr.com/photos/ morethanfootprints/4162690480/

timor-leste
Ministerofjusticesentencedtofiveyearsforcorruption.The Dili DistrictCourtJune20sentencedMinisterofJusticeLuciaLobatotofive yearsinprisonforcorruptionandfinedher$4,000.Lobatowasabsolvedof several charges but was found guilty of corruption in a case involving the purchaseofuniformsforprisonguards.Lobatosaidshewouldnotappeal and would abide by the decision, although her lawyer said he may appeal despitethewishesofhisclient. Campaignseasonforparliamentaryelectionsbegins.Twenty parties arecompetingfor65seatsinTimor-Lestesparliamentaryelections,set totakeplaceJuly7.Thetwomostviablepartiesaretherevolutionary FRETILIN,whichhasseendecliningsupportsinceTimor-Lestegained independence in 2002, and the Congresso Nacional de Reconstruo de Timor-Leste,orCNRTParty,whichisheadedbycurrentprimeminister XananaGusmoandleadsthemajoritycoalition.Therehasbeenrelatively littleviolenceinthecampaigningsofar,furtherindicatingTimor-Lestes transitiontoastabledemocracy. Massgravefoundongroundsofprimeministersoffice.Workers June 20 found a mass grave containing more than 50 bodies on the grounds of the primeministersoffice.Theworkerswerediggingtolaypipesforawater fountainwhenthebodieswerediscovered.Thegraveisbelievedtobefrom theeraofIndonesiasoccupationofTimor-Leste,possiblyfromtheinitial invasion in 1975 or the violence stemming from Indonesias withdrawal in 1999.TimoreseinvestigatorssaidthebodiesdonotappeartobeTimorese. AnAustralianforensicsexpertwillassistwiththeidentificationofthe bodies.

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asean
EUambassadortoMalaysiasaysEuropean-styleintegrationmaywork forASEAN.HeadoftheEuropeanUniondelegationtoMalaysiaVincent Piket said June 22 that despite its faults, aspects of European integration couldworkforASEAN.HeurgedtheorganizationtolookattheEuropean experiencecriticallyandtakefromEuropeonlywhatfitshereanddo awaywithwhatisinappropriate.Piketwasrespondingtogrowingworries in ASEAN that the eurozone crisis has demonstrated the folly of being overzealousaboutpursingintegration. ASEANandUnitedStateshostjointcooperationcommitteemeeting. TheASEANSecretariathostedthefourthmeetingoftheU.S.-ASEANJoint CooperationCommitteeJune20inJakarta.Participantsreviewedprogress onaplanofactiontoenhancetheU.S.-ASEANpartnership,discussed outcomes from the Eminent Persons Group meeting held in Manila last month,andtalkedaboutpreparationsforthefourthU.S.-ASEANLeaders MeetingtobeheldinPhnomPenhinNovember.Themeetingwasheldin conjunctionwiththe35thanniversaryofU.S.-ASEANdialoguerelations. ASEANcountriesimprovehumantraffickingrankings.The U.S.StateDepartmentreleaseditsannual Traffickingin Persons(TIP)report June19.AmongASEANcountries,Brunei, Myanmar, Indonesia, and Vietnam all improved by one notch, withIndonesiareachingthefirsttier,signifyingagovernment fullycomplyingwiththeTraffickingVictimsProtectionActs minimumstandards.Countriesthatfalltothethirdtieronthe TIPreportfaceautomaticsanctionsbytheUnitedStates.With Myanmarmovingtothetier-twowatchlist,ASEANforthefirst timehasnomemberswithatier-threeranking.

trans-pacific partnership
President Ma says Taiwan cannot improve its competitiveness without Trans-PacificPartnershipmembership.Taiwanese president Ma Ying-jeou said June 25 that Taiwan cannot improve its competitiveness if it does notjointheTrans-PacificPartnership(TPP).MatoldaforuminTaipei onTaiwanseconomicchallengesthatthecountryrisksbeingtheonly one left out as other countries push for increased regional economic integration.HealsonotedthatitwillbeverydifficultforTaiwantojoin theTPPwithoutresolvingtradedisputeswiththeUnitedStatesinvolving
Brunei, Myanmar, Indonesia, and Vietnam all improved in this years Trafficking in Persons Report, with Indonesia becoming the only ASEAN country with a tier-one ranking. http://www.flickr.com/photos/ csisseap/7487864462/in/photostream

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theexclusionofU.S.beef.AnotherroundofTPPtalksbetweenthenine existingmembersoftheTPPbeganJuly2inSanDiego.Canadaand Mexicorecentlyreceivedauthorizationfromtheexistingmemberstojoin the talks later this year, increasing the number of participating countries to11. PetersonInstitutereleasesTrans-PacificPartnershipreport.The Peterson Institute of International Economics released a new policy brief June16arguingthattheimportanceofAsia-Pacificintegrationcallsfor anearlyconclusionoftheTPPnegotiationswithoutjeopardizingother futureregionalorglobaltradeagreements.Thereportcalledforanew dialogueconnectingtheTrans-PacificandAsiantradeagreementtracks toreducepoliticaltensionbetweenthem.ItalsocalledontheUnited States and China to cooperate directly on trade and investment through forumssuchastheirbilateralStrategicandEconomicDialogue.

A meeting of Trans-Pacific Partnership (TPP) leaders in November 2010. With Mexico and Canada recently joining the TPP negotiations, Taiwanese president Ma Ying-jeou has warned that his country risks being left behind if it does not join. http://www.flickr.com/photos/ gobiernodechile/5178312541/

mekong river
OfficialsaysXayaburidamconstructiontoresumethisyear.Xaypaseuth Phomsoupha,thedirector-generalofLaossEnergyandMinesIndustry, saidJune20heisconfidentconstructiononthecontroversialXayaburi damwillbeginattheendoftherainyseasonthisyear.Vientianelast Decemberpostponedplansforthe$3.8billiondollarprojectpending further environmental assessments after strong opposition by neighboringVietnam,Thailand,andCambodia. HSBCbanklaunchesprogramtotacklewaterrisksinriverbasins.The HSBC banking group launched an initiative June 11 to analyze and tackle waterrisksinkeyriverbasinsincludingtheMekongRiver.Thefive-year, $100 million dollar project is being pursued in partnership with the World WildlifeFund,WaterAid,andEarthwatch.ItfollowsareportbyHSBCthat by the worlds 10 largest river basins will produce a quarter of total global GDPby2050,makingthemakeycenterofeconomicactivity.

brunei darussalam
U.S.assistantsecretaryofstatevisitsBrunei. Assistant Secretary of StateforPolitical-MilitaryAffairsAndrewJ.ShapiroarrivedinBrunei June21aspartofatripthroughSoutheastAsia.Duringtheone-dayvisit inBandarSeriBegawan,Shapiroexchangedviewswithseniorcivilianand militaryofficialsonbilateralrelations,defensetrade,andpolitical-military topics.U.S.ambassadortoBruneiDanielShieldssaidthishigh-levelvisit offeredaplatformfordeepeningU.S.-Bruneirelations.

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BruneisignsoilandgasagreementwithRussia.Bruneis state-owned PetroleumBruneiandRussianstate-ownedcompanyZarubezhneftJSC signedanagreementJune24tocooperateonoilandgasprojects.The agreementseekstoexpandexistingjointventuresintheenergysector, includingdevelopmentofnewpowerplantsandrenewableenergysources. Bruneis energy minister, Mohammd Yasmin, and his Russian counterpart, AlexanderNovak,attendedthesigningceremony.Theydiscussedinviting RussianexpertstobepartoftheInternationalAdvisoryBoardatthe BruneiNationalEnergyResearchInstitute.

apec
APEC ministers discuss energy security and efficiency.Energy ministers from APECs 21 member economies issued a wide-ranging declaration June 25 acknowledging their countries surging energy demands and emphasizing the need to develop green technologies.Theministersalsopledgedto ensure the safe use of nuclear energy through knowledgesharingandcooperation.The declaration was released at the end of a two-day meetinginSt.Petersburg,Russia.

New Zealands Te Apiti wind farm. Energy ministers from the 21 APEC economies emphasized the need for more green technologies at a recent meeting in St. Petersburg, Russia. http://www.flickr.com/ photos/91508656@N00/4959206433/

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Looking Ahead
U.S.ChamberofCommercemeetingsinJakarta.TheU.S.Chamberof Commerce will host Myron Brilliant, the chambers senior vice president, international,July911inJakarta.Brilliantwillmeetwithhigh-level IndonesiangovernmentandU.S.embassyofficialsandwilladdressissues raisedbytheIndonesianandU.S.businesscommunities. LowerMekongInitiativemeeting.ThefifthLowerMekongInitiative(LMI) MinisterialMeetingwilltakeplaceJuly12inPhnomPenh.Itwillfollowthe Mekong-Japan and Mekong-Republic of Korea Ministerial Meetings that willbeheldJuly10.TheLMIisaU.S.-sponsoredgroupingoftheUnited States,Thailand,Laos,Cambodia,andVietnamthatpromotessustainable developmentandconservationintheMekongDelta.Myanmarwas recentlyinvitedtojointheorganization.Moreinformationisavailableat www.lowermekong.org. ASEAN Regional Forum and ASEAN Ministerial Meeting/Post Ministerial Conferences.The19thASEANRegionalForum(ARF)and45thASEAN Ministerial Meeting/Post Ministerial Conferences will take place July 913 inPhnomPenh.TheARFDefenseOfficialsDialoguewillalsotakeplace July1112inPhnomPenh.TheARFfeatures27membercountriesandisthe largestregionalsecuritymeetingofitskind.U.S.secretaryofstateHillary Clintonwilljoinfellowforeignministersatthisyearsmeetings.Secretary ClintonwillthenjoinanASEAN-U.S.business-to-businesssummitinSiem ReaponJuly13. U.S.-IndonesiaTIFAtalkswithCraigAllenandBarbaraWeisel.Deputy Assistant Secretary of Commerce for Asia Craig Allen and Assistant U.S.TradeRepresentativeforSoutheastAsiaandthePacificBarbara WeiselwilladdressthePrivateSectorConsultationsattheU.S.-Indonesia TradeandInvestmentFrameworkAgreement(TIFA)talksJuly16inBali, Indonesia.U.S.commercialattachDavidGossackandDirectorGeneralof ForeignTradeDeddySalehwillalsobeonthepanel.Formoreinformation, contactdfumagalli@usasean.org. TalkontheAustralia-U.S.allianceintheAsiaPacific.The Heritage Foundation will host Tony Abbott, a member of Australias House of RepresentativesandleaderoftheoppositionLiberalParty,July17.Abbott willdiscusstheUnitedStatesglobalrole,theAustralia-U.S.relationship, andtheroleoftheAustralia-U.S.securityallianceintheAsia-Pacific region.TheeventwilltakeplaceattheHeritageFoundationsLehrman Auditorium,214MassachusettsAve,NE,from2:00p.m.to3:00p.m.Please RSVP hereorcall(202)675-1752.

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DiscussionofU.S.navalandairpowerintheAsiaPacific.The CSIS MilitaryStrategyForumwillhostadiscussionJuly25titledAir-Sea BattleandtheAsia-PacificRe-BalancewithNortonA.Schwartz,chief ofstaffoftheU.S.AirForce,andAdmiralJonathanW.Greenert,chief ofnavaloperations.Theeventwilltakeplacefrom9:00a.m.to10:30 a.m.inCSISsB1ConferenceRoom.Formoreinformation,contact MilitaryStrategyForum@csis.org. TalkatCSISonHillaryClintonseconomiclegacy.The CSIS Simon Chair in Political Economy will host an Economic Statecraft Series event July 25onSecretaryofStateHillaryClintonseconomiclegacy.Theeventwill featureJakeSullivan,directorofpolicyplanningattheStateDepartment. CSISSimonChairMatthewGoodmanwillmoderate.Theeventwilltake placefrom2:00p.m.to3:00p.m.inCSISsB1ConferenceRoom.E-mail simon.chair@csis.orgtoRSVP.

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southeast asia from the corner of 18th & k streets

CSIS Southeast Asia Program contributors:
Ernest Bower, Senior Adviser and Director Murray Hiebert, Senior Fellow and Deputy Director Gregory Poling, Research Associate Kathleen Bissonnette, Researcher Prashanth Parameswaran, Researcher Bao Chiun Jing, Researcher Anh Do, Researcher Phuong Nguyen, Researcher For more details on our programs and to follow CSIS with real-time updates, followtheCSISSoutheastAsiaProgram: OnFacebookathttp://www.facebook.com/CSISSoutheastAsia OnTwitterat@SoutheastAsiaDC. Onourblog, cogitASIA at http://cogitASIA.com ThankyouforyourinterestinU.S.policyinSoutheastAsiaandCSIS SoutheastAsia.Jointheconversation!

This newsletter is published by the Southeast Asia Program at the Center for Strategic and International Studies (CSIS) in Washington, D.C., a private, tax-exempt institution focusing on international public policy issues. CSISs research is nonpartisan and nonproprietary. CSIS does not take specific policy positions; accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s). 2012 by the Center for Strategic and International Studies. All rights reserved.