Wednesday, March 31, 2010

The People's Revolutionary Army of Singapore

The Singapore government should be afraid, very afraid. A video (below) has appeared on YouTube in which a woman with a strong Singaporean accent claims to be the "leader of the revolutionary army known as the Reapers" and vows to lead a violent campaign to overthrow the repressive government.

This militant revolutionary, called Bolo Santosi, says that the people must "break the chains of oppression and rise up as one". She threatens to use nerve gas against the government and its "thugs" who want to "subdue the people".

In case you've haven't realised by now, this is not a real video but a series of clips from a new computer game, Just Cause 2.

But Bolo Santosi's camp Singapore-style drawl is not the only aspect of the game that may seem remarkably familiar to residents of the Lion City.

The game is set on a fictional island in Southeast Asia called Panau, which is ruled by an oppressive dictator called Pandak Panay.

The game's official website mentions a fictitious newspaper called the Panau Tribune, which proclaims that it is "proudly supporting Pandak Panay, our beloved president" and carries the brilliant sub-title "News you will trust".

The website also links to a spoof blog that says it is written by a journalist who is traveling round Panau. The blog links to a Flickr page of photos taken from around Panau, which includes a picture of a wok full of Char Kway Teow, which is described as a "local specialty".

Back in the real world, Char Kway Teow is a well-known Singapore specialty.

I'm sure that Just Cause 2 is pure fiction and that any resemblance to real Southeast Asian island states is purely coincidental.

Hat-tips to The Online Citizen and Mr Brown.

Tuesday, March 30, 2010

What Singapore doesn't want to happen in its casinos

Late last autumn, a Hong Kong jury convicted four men of a conspiracy to commit bodily harm and a fifth of soliciting a murder.

At first, the men had been ordered to break the arms and legs of a dealer at Sands Macau suspected of helping a patron cheat millions of dollars from the business. Later, a call went out to murder the dealer, court records show. But then one of the gangsters balked and reported the plans to authorities.

So begins a fascinating investigation into the links between organized crime and Macau's casinos by Reuters and the Investigative Reporting Program at University of California, Berkeley.

As the authors note, the link between Macau's gambling industry and triads is something of an open secret - I've heard many tales of VIP gamblers chased down and beaten almost to death or shot and killed after failing to repay debts to junkets, the middlemen who extend crucial lines of credit to mainland Chinese gamers and get commission from the casinos for bringing in these high rollers.

The Reuters piece lays out the connections between the VIPs, the junkets and casinos such as the Sands Macau, owned by America's Las Vegas Sands group. It goes some way to explaining why the Singapore government has decided not to allow Macau-style junkets to operate in the Lion City, as I wrote in a recent piece for Asia Sentinel.

The Reuters story notes that when Macau first opened up to international casino operators, the big US players, such as LVS and Wynn Resorts, were reluctant to allow junkets to control their VIP rooms because of fears that they would be taken over by triads.

But, it notes, "the US companies realized soon enough that they could not compete with local casinos without junkets".

It will be interesting to see how Singapore does without junkets and whether the city-state's organised crime syndicates, which do exist contrary to popular external perception (just read details of this near-riot that occurred after a police raid on a gambling den in the red light district of Geylang), manage to muscle in on the casino business successfully.

Hat-tip to The Economist's online Asia editor.


Monday, March 29, 2010

Is Singapore working with Israel on a missile defence system?

Both small states haunted by the fear (real or imagined) that they are encircled by volatile and hostile neighbours, Singapore and Israel have long cooperated on military matters, trading arms and helping to train each other's forces.

In an intriguing story, Israel's most influential newspaper, Haaretz, claims that their latest joint project is a missile defence system that is being developed by an Israeli company with Singaporean financing.

The story claims that Singapore has helped to fund the $250m Iron Dome, which is designed to intercept short-range missiles and rockets, in exchange for several of the systems, which it intends to deploy in the Lion City.

Haaretz has picked the story up from Intelligence Online, a paid-for industry news publication. (You can read the original here for the bargain price of 7 euros - I haven't.)

The Intelligence Online story begins: "Some Israeli arms programs are too costly for the local market and are developed principally for export. The anti-missile system Kipat Barzel (Iron Dome), is a typical example. The system is currently being tested in the field by the Israeli Army before being delivered to Singapore."

If true, it is hardly surprising that Singapore and Israel are continuing to further their close military relationship.

But I can't imagine what Singapore would want with a short-range missile defence system.

Despite the similarities between Singapore and Israel, the security threat is mostly imagined in the case of the former.

If Malaysia or Indonesia ever want to get at Singapore - and it's highly unlikely given how many members of the Indonesian and Malaysian elite secrete their personal wealth there - they need only cut off the water or gas supply.

But, on the off chance that rogue Islamists or unhinged nationalists ever fire Qassam rockets at Singapore from Pulau Bintan or Johor, Singapore will soon be protected (if this story is true).

Sunday, March 28, 2010

China not massaging growth statistics: World Bank

Many journalists, researchers and investors who cover China have long believed that the government massages the GDP figures.

But Gao Xu, a World Bank economist in Beijing, is among the growing number of experts who insist that this is not the case.

In a recent posting on the World Bank's East Asia blog, he argues that China's economy is so large and the data-gathering process so broad, that it would be impossible to cook the books without leaving a trace.

Any attempt to manipulate data—say, flattering the GDP number a little bit—requires concerted efforts of various government departments as well as private sector institutions. If there are some participants in the circle not doing this kind of massage to their own data, inconsistency arises, leaving footprints of manipulators in statistics.

China's V-shaped recovery last year aroused widespread suspicions that the Communist Party bean counters had been fiddling the figures to ensure growth above the politically important level of 7 percent, below which the country is not creating enough jobs to accommodate the expansion in its workforce. China grew by 8.7 percent in the end, rebounding strongly after a sluggish first quarter.

But Gao plots the government GDP figures alongside other economic indicators (VAT revenue, electricity production and value added to industry) and shows that the uptick in GDP in the second half of last year is corroborated by the other data.

His conclusion:

As a consumer of a wide range of Chinese statistics, I carry out exercises like what is shown above fairly frequently. I personally haven’t found any significant inconsistency in Chinese data over the last decade. It makes me believe that data manipulation is not a big problem in China in recent years. Indeed, this is the consensus in the academic field as most researchers on this topic agree that there is little sign that China is manipulating its economic data.

Friday, March 26, 2010

Indonesian govt may allow jailed terrorists to have 'cell phones'

No-one seems to have picked up the on Jakarta Globe's equally bizarre and alarming story about the government's plan to allow convicted terrorists to have access to mobile phones.

The apparent move comes after a number of jailed terrorists were found to be in possession of mobile phones and laptops in their prison cells and communicating with active militant networks.

Well-respected terrorism analyst Sidney Jones is among those who argue that Indonesia's prisons have become a breeding ground for terrorism.

The response from Justice and Human Rights Minister Patrialis Akbar was to announce on Wednesday that, in future, all convicted terrorists would be allowed to have mobile phones in prison, according to the Globe.

“I am confirming that we will allow all terrorist suspects to have cellphones inside their cells as long as they ask permission from us,” he said.

However, he refused to explain this controversial policy. “I can’t talk about the reason because it is related to national secrets,” he said.

Given that there are documented cases of jailed terrorists helping plan militant activities using smuggled cell phones, this is either an incredibly stupid policy or a very clumsy attempt to get terrorists to use bugged phones.

I doubt there are many hardened jihadists who are naive enough to conduct illicit business on a phone given to them by the police.

The best explanation I can come up with is that the minister is merely inventing a policy to vindicate the status quo. Terrorists, drug dealers and fraudsters incarcerated in Indonesia's corrupt prisons can already get their hands on phones, laptops, TVs, prostitutes and whatever else they want for the right price.

The Globe has a more detailed analysis of the issue in today's paper.

Disclosure: I'm currently working as an editor at the Globe.


Thursday, March 25, 2010

Singapore outplays the international media again

At first sight, Singapore's decision to pursue a libel action against one of the world's great newspapers over an inoffensive remark appears counter-productive.

By forcing the International Herald Tribune to apologise and pay US$114,000 in damages for merely including founding prime minister Lee Kuan Yew and his son, the current prime minister, Lee Hsien Loong, in a list of Asian political dynasties, the government appears to tarnish the image of Singapore, not defend it.

(The offending article - which the Lees say implies nepotism - has been removed from the IHT website but is available on the Asia Sentinel website. The whole episode reads like a re-run of the IHT's 1994 set-to with the Lees, which cost it S$950,000.)

However, the canny Lees know more than anyone else when they must lose the short-term public relations battle in order to win the long-term war for control of the international media.

Doubtless, this latest in a long line of libel victories by Singapore's rulers will be condemned by press freedom campaigners and human rights groups. On message boards and blogs, some Singaporeans will mock "old man" Lee and his son for their thin skins.

But, after a few days, it will be forgotten. And all that will remain is the fact that the Singapore government has once again cowed one of the world's leading publications.

The IHT, owned by the New York Times, will think even harder before publishing anything vaguely critical of Singapore again. Other publications will take heed, particularly in these straitened times.

Papers like the IHT are simply not willing to risk being barred from distributing in Singapore or losing the crucial advertising revenue from Singapore government-owned companies such as Singapore Airlines.

So they toe the line, in cloying fashion. Here is the IHT's "Apology" in full:

In 1994, Philip Bowring, a contributor to the International Herald Tribune’s op-ed page, agreed as part of an undertaking with the leaders of the government of Singapore that he would not say or imply that Prime Minister Lee Hsien Loong had attained his position through nepotism practiced by his father Lee Kuan Yew. In a February 15, 2010, article, Mr. Bowring nonetheless included these two men in a list of Asian political dynasties, which may have been understood by readers to infer that the younger Mr. Lee did not achieve his position through merit. We wish to state clearly that this inference was not intended. We apologize to Prime Minister Lee Hsien Loong, Minister Mentor Lee Kuan Yew and former Prime Minister Goh Chok Tong for any distress or embarrassment caused by any breach of the undertaking and the article.

Read it and weap. And then, replace "Singapore" with any other country in the world and the Lees with any other political dynasty and imagine how ridiculous it would look.

If I was a lawyer in Singapore, I would be on the phone now to the members of the other political dynasties mentioned in Philip Bowring's IHT aritcle: Pakistani Prime Minister Asif Ali Zardari, Bangladeshi Prime Minister Sheikh Hasina, Malaysian Prime Minister Najib Razak and North Korea's Supreme Leader Kim Jong-il.

Think how much money you could make bringing a class action defamation lawsuit against the IHT on their behalf in Singapore.

Wednesday, March 24, 2010

Malaysian PM's double standards on justice

The Economist's full transcript of its interview with Najib Razak, the prime minister of Malaysia, is worth a read for those interested in the ongoing turbulence in Malaysia.

His comments about Anwar Ibrahim, the opposition leader who is currently on trial on sodomy charges, were particularly revealing.

Najib says that, despite foreign criticism, Anwar's trial is "not a political trial to begin with", that it is "a private matter for Anwar" who "just happens to be the leader of the opposition".

However, he warns that Anwar "will try to politicise it".

Najib then goes on to compare Anwar's predicament to that of Bill Clinton over the Monica Lewinsky affair, saying that Anwar's alleged homosexual fling with a 23-year-old aide would be considered "politically untenable" in the West, not just in Malaysia.

Then, he accuses Anwar of failing in his duty of care to his employee by sexually harassing him. This despite the fact that Anwar strenuously denies the allegations against him and that the trial is currently in progress.

Who is politicising the trial here?

Even though he has just made detailed allegations about Anwar's conduct, Najib has the temerity to claim that "if we are seen to be manipulating the trial, and he doesn't get a fair trial, I'm sure the people will react against us".

If this public presumption of Anwar's guilt, coming from the prime minister no less, is not prejudicial to the trial, then what is?

Meanwhile, when it comes to the legal difficulties faced by one of Najib's main advisers, who was cleared of involvement in the murder of a Mongolian translator, Najib emphasizes the importance of not interfering in the justice system:

"If you want to sentence anyone, it has to be on the basis of beyond reasonable doubt. As long as you can introduce reasonable doubt nobody can be found guilty in our system."

It's a shame Najib didn't pick up on that other commonly accepted legal concept: innocent until proven guilty.

Indonesian military deny Aceh killing accusations

As predicted yesterday, the Indonesian military has strongly denied claims by American journalist Allan Nairn that it carried out a campaign of political assassinations in Aceh last year.

The Jakarta Globe today reports Sagam Tamboen, a spokesman for the armed forces (TNI), as saying: "We would like the public to ignore any rumors being spread by certain people who want to divide our country by saying negative things about our military institutions."

Sagom said that the military had not investigated the killings of nine members of the Aceh Party last year because it had not received any complaints. He cast doubt on Nairn's sources and suggested that the military may consider taking legal action.

"If he is a good journalist and if he does have evidence, then he should come forward with the information that he has,” the TNI spokesman said. "But the problem is that [Nairn] hasn’t been able to give us any clear evidence or tell us who his sources are. So how can we believe him?”

Separately, campaign group Human Rights Watch has written to the Wall Street Journal, opposing the WSJ's call in an editorial for the US Congress to lift a ban on training the Indonesian special forces, or Kopassus.

"Since Suharto's ouster in 1998, Kopassus has been implicated in numerous serious human-rights abuses in East Timor, Aceh, and Papua," Brad Adams, Asia director of Human Rights Watch, wrote in the letter. "Of the few Kopassus soldiers who have been convicted of human-rights abuses, the majority continue to serve, and some have been promoted to senior ranks. Until the Indonesian government holds abusers accountable, and Kopassus shows that it can act as a professional force, Senator Leahy and other members of Congress are right to reject it as a counterterrorism partner and to focus on strengthening the capacity of the Indonesian police."

 Disclosure: I'm currently working as an editor at the Jakarta Globe.

Tuesday, March 23, 2010

Political murder claims may threaten US-Indonesia military co-operation

Allan Nairn, an American investigative journalist, has done his best to derail attempts by the Indonesian military to lift a US ban on the training of the country's special forces or Kopassus.

Those who want the ban lifted and US-Indonesia military ties enhanced (such as the Wall Street Journal) believe that Indonesia should be rewarded for its progress on human rights since the ban was implemented by US congress in 1997 because of the alleged involvement of Indonesian special forces in a series of massacres in East Timor.

But, in a hard-hitting article in left-leaning US magazine The Nation, Nairn claims that the Indonesian military (TNI) is still practising the dark arts and was involved in a series of assassinations of political activists in the run up to local elections in Aceh last year.

According to senior Indonesian officials and police and details from government files, the US-backed Indonesian armed forces (TNI), now due for fresh American aid, assassinated a series of civilian activists during 2009.

The killings were part of a secret government program, authorized from Jakarta, and were coordinated in part by an active-duty, US-trained general in the special forces unit called Kopassus who has just acknowledged on the record that his TNI men had a role in the killings.

The news comes as President Barack Obama is reportedly due to announce that he is reversing longstanding US policy--imposed by Congress in response to grassroots pressure--of restricting categories of US assistance to TNI, a force which, during its years of US training, has killed hundreds of thousands of civilians.

The revelation could prove problematic for Obama, since his rationale for restoring the aid has been the claim that TNI no longer murders civilians. Secretary of State Hillary Clinton told Congress that the issue is whether there is a "resumption" of atrocities, but in fact they have not stopped. TNI still practices political murder.

Most of the sources for Nairn's key allegations are, unsurprisingly, anonymous. He speaks to some of the key players that he alleges were behind the killings and all they all seem to give him sketchy answers that neither prove nor disprove his claims.

The allegation that the Indonesian military has been systematically taking out civilian activists as recently as last year is a shocking one.

If true, it would clearly make it much harder for the Obama administration to persuade Congress to consent to closer military ties with Indonesia.

It would also have serious implications for relations between the central government, the military and the self-governing province of Aceh, where the Free Aceh Movement (GAM) was fighting a separatist insurgency until a 2005 peace deal.

No word yet from the Indonesian military or government on these claims but I suspect they will deny them strenuously.

US ambassador rows back from Singapore democracy comments

Last month, David Adelman, the nominee to be the next US ambassador to Singapore, appeared to have a rush of blood to the head during his Senate confirmation hearing.

"Make no mistake, currently Singapore is not a multiparty democracy, and I intend, if confirmed, to use public diplomacy to work towards greater press freedoms, greater freedom of assembly and ultimately more political space for opposition parties in Singapore to strengthen Singapore into a multiparty democracy," he said, using the kind of oppositional tone the US rarely employs when talking about its key strategic and commercial ally in Southeast Asia.

Given the Singapore government's distaste for foreigners who "interfere in domestic politics" and the strong US-Singapore relationship, some, including myself and regular commenter "Derek Davies", doubted whether Adelman would stick to his guns once he was in situ.

Sure enough, weeks before his arrival in the Lion City, Adelman appears to have begun rowing back from his comments.

When asked by Singapore's Straits Times what his response was to the suggestion that the US should not interfere in Singaporean politics, he said:

"'There's no question. I want to make it very clear that those issues are for Singaporeans to decide for themselves."

I do wonder, though, how much the Straits Times is spinning this comment, while giving less emphasis to his next point, that "it's longstanding US policy to promote democracy and there's nothing extraordinary about that statement."

Sunday, March 21, 2010

Quote of the week: Singapore needs creative messiness

To become a great centre for the arts and culture, like New York or London, Singapore needs unbridled freedom of speech and expression, and some tolerance for the creative messiness that accompanies it. It is freedom of speech in all its manifestations that enables a nation to generate an abiding grand narrative or a myth that binds its people.

Narain Batra, a professor of communications at Norwich University in the US, arguing in the Times of India that the Singapore government needs to loosen up if it is to fulfill its goal of becoming a "leading cultural capital".   

Hat-tip to The Online Citizen.

Friday, March 19, 2010

Obama's Indonesia trip delay: the silver lining

Perhaps the best comments I've read so far on Barack Obama's decision to delay his trip to Indonesia, Guam and Australia for the second time in a week have come from Aaron Connelly, a researcher at the Centre of Strategic and International Studies in Jakarta, and Ernest Bower of the unrelated Center for Strategic and International Studies in Washington DC.

Aaron commented last night on Twitter that, thinking positively, the delay of his trip until June "might give everyone more time to improve deliverables".

Ernest Bower echoed Aaron's comments, arguing that there would now be more time to ensure that Obama's progress will involve more than just the usual glad-handing.

And the bureaucracies in all three countries -- the US, Indonesia and Australia -- were working day and night to prepare the substantive elements of the trip. To be honest and fair, a visit next week was going to be a challenge to produce concrete deliverables. Given an extension to June, I expect to see a lot more meat on the bone of the US Indonesia Comprehensive Partnership and President Obama can turn to the US Senate and demand passage of the US Australian Defense Trade Treaty as a return payment for his remaining in DC to finish health care.

Still, there's no escaping the fact that a second delay in the space of a week is somewhat embarassing for the Obama administration.

In Indonesia, there'll doubtless be some disappointment and a nagging concern that the US might not be as serious about rebuilding its relationship with Southeast Asia as it once seemed.

But the most disappointed party has to be Time magazine, whose Asian edition this week feature's a cover story, complete with batik design, on "Obama's return: what Obama's visit to Indonesia means for Asia".

Time will not be best pleased but such are the vicissitudes of publishing a weekly magazine in an era of global 24-hour news. The Economist's Banyan columnist is another of the many disappointed foreign correspondents who had already flown into Jakarta ahead of Obama's expected arrival on Tuesday.

Thursday, March 18, 2010

Change afoot in Myanmar?

While the first wave of commentary about the new election laws in Myanmar largely condemn them as a blatant attempt by the generals to rig the upcoming polls, a more subtle critique has emerged over the last few days.

There's no doubt that the exclusion of Aung San Suu Kyi and more than 2,000 other political prisoners from participating in the polls means they will be about as far from "free and fair" as you can get.

But it was always obvious that the generals would hold sham elections. What's interesting is that journalists and other commentators are arguing that the elections will still presage a transition of sorts, with power slowly dissipating from the tight grip of senior general Than Shwe and his immediate cabal.

As The Economist noted, scores of state-owned assets including telecoms firms and part of the national airline are being sold off, albeit to cronies:

This is hardly a gesture to economic reform—the sales are cooked-up deals benefiting junta cronies. But nor does it seem just the desperation of a cash-strapped regime. Rather, in the analysis of Yeni, of the Irrawaddy, a magazine published by émigrés in Thailand, it is the “formal transfer of the nation’s wealth into the hands of an entrenched elite”, ahead of an election and the implementation of a new constitution which, in theory, should allow greater competition for assets.

A New York Times piece argues that change is indeed coming to Myanmar, as the generals seek to show that they are trying to stimulate Myanmar's crestfallen economy:

Signs of change abound. The military, which has been in power for close to five decades, has issued permits for private hospitals and schools, neither of which were officially allowed before. It has sold a raft of state-run factories and assets to cronies in the private sector and appears to be lifting some of the punitive restrictions on the ownership of cars and motorcycles. The country is taking steps to revive its troubled but potentially lucrative rice exports.

The NYT quotes Thant Myint-U, a historian and advocate of more engagement with Myanmar, as saying "Burma is at a critical watershed. We’re clearly moving towards something other than a strict army hierarchy with just one general at the top".

There's also a fascinating story in the Wall Street Journal that suggests there is a "Third Force" emerging in Myanmar of moderate activists who favour the sort of cautious reform that will not rankle the military men. Unlike Suu Kyi's National League for Democracy, these Third Force politicians are willing to play by the junta's skewed rules:

Unlike Ms. Suu Kyi, who is widely perceived as taking a hard line against compromising with Myanmar's military, they generally believe there is significant room to negotiate with the regime in pursuit of gradual change, according to interviews with activists and others familiar with the country's political landscape.

Among the ideas some are pursuing: Liberalization of the rice trade in Myanmar, once the world's largest rice exporters before hit with years of stagnation due to weak investment and government restrictions. Some of the activists think they can convince Myanmar's next government to allow a bigger role for private traders and investors, which could energize the sector and boost rural incomes.

This fits with what I've been told by Burmese activists who say that some Western diplomats and NGO workers in Yangon have been trying to tap up reform-minded people within or close to the military and the bureaucracy.

Interestingly, the WSJ suggests that the models for these middle-way activists are countries like Indonesia and South Korea, which have transitioned to multi-party democracy after decades of rule by strongmen.

The idea that Indonesia, which moved from military dictatorship to democracy in a decade despite fears of ethnic and religious conflict, could offer a "roadmap" for Myanmar is also proposed by Hamish McDonald, Asia-Pacific editor of the Sydney Morning Herald, in an opinion piece.

We may learn more about how interested Myanmar is in following the Indonesian model when Indonesia's foreign minister, Marty Natalegawa, visits later this month.

All this gives an impression that the wheels of change are, ever so slowly and under the junta's total control, starting to turn. But what concerns me is how much of this is just wishful thinking and the need to replace the tired old narrative about the evil junta vs saint Suu Kyi with a fresh approach?




Wednesday, March 17, 2010

Barack Obama in Indonesia: the real itinerary

Barack Obama will arrive in Indonesia on Tuesday for a three-day visit, returning to the country where he lived for four years as a boy.

There's been lots of bluster spewed forth about the trip by foreign correspondents, foreign policy experts, hard-line Islamists, school children and others.

For those more interested in the cold, hard facts, this is what Obama will actually be doing in Indonesia, according to a White House press briefing given late on Monday:

Tuesday March 23 - Jakarta

  • Arrival ceremony in Jakarta and "several events associated with that arrival ceremony".

  • Meeting with Indonesian President Susilo Bambang Yudhoyono.

  • Joint press conference with Obama and Yudhoyono.

  • State dinner in the evening.

Wednesday March 24 - Jakarta

  • Keynote speech by Obama looking at US partnership with Indonesia, Obama's personal connections to Indonesia and relations with the Muslim world following on from his big speech in Cairo last year.

  • Undisclosed "cultural stops".

  • Meetings with business leaders.

  • Meetings with Indonesian parliamentary leaders as part of drive to "reach out and speak to a broad cross-section of Indonesia’s government and society".

Thursday March 25 - Bali

  • Obama will host a "civil society event"  where he will "meet with a group of civil society leaders in order to highlight the important role of civil society in the emergence of Indonesia’s democracy".

  • He'll also meet civil society groups from elsewhere in Southeast Asia "to discuss issues related to political participation, freedom of information, and human rights".

  • Departure for Canberra.

Although there's been much speculation that Obama may visit his old school in the Jakarta suburb of Menteng, his press secretary Robert Gibbs said on Friday that the President was not planning to revisit the school or his old house.

"Even under the old itinerary, the President was not scheduled to stop at the house that he spent time in when he lived in Indonesia nor was he scheduled to go to the school that he attended," Gibbs said.

So the little kids at Obama's old school that have been practicing their best traditional dance routines to show the US President may well be disappointed. Unless, that is, this is all a cunning ploy by the Secret Service to throw potential terrorists off the scent.

A guide to doing business in Vietnam

Nexus Technologies Inc is a Philadelphia-based export company that helped connect American suppliers with Vietnam-based firms that needed to procure imported machinery and parts.

It is one of scores of such businesses that help companies negotiate their way through the complex and opaque process of exporting to a market like Vietnam, where government red tape is stifling and corruption is rife.

The company says on its website that "doing business in Asia requires relationships, trust, and the time to build them". That's a point echoed by many businesspeople I've spoken to.

Thankfully for US exporters, the website continues, "Nexus is proud to have established, through its consistent presence and reliable performance, trusted relationships with customers."

There's no doubting the quality of its relationships, at least according to Nexus' Vietnam client list, which includes the likes of British oil giant BP, mobile phone operator VinaPhone and Saigon's Tan Son Nhat Airport.

The emerging question is over how Nexus managed to achieve these "trusted relationships".

The company and its owner have just pleaded guilty in a US court to paying bribes of more than $250,000 to Vietnamese government officials between 1999 and 2008.

According to a statement from the US Department of Justice, Nam Nguyen, the company's president and owner, "negotiated the contracts and bribes with the Vietnamese government agencies and employees". Meanwhile, his two siblings - An Nguyen and Kim Nguyen - handled the US side of the business, identifying American vendors and dealing with finances.

As part of its guilty plea Nexus admitted that it "operated primarily through criminal means" and has agreed to cease operations.

At sentencing in July, the company faces a maximum fine of $27m, while Nam and An Nguyen each face maximum prison sentence of 35 years and Kim Nguyen faces a maximum sentence of 30 years.

The prosecution is part of a wider crackdown by the US authorities on the payment of overseas bribes by US companies, which is rampant in many developing countries such as Vietnam.

While it is good to see the US authorities taking action against such corrupt practices (prosecutors in countries like the UK are much more timid about such issues), the problem remains that if you want to break into Vietnam as a capital goods exporter or contractor, it's nigh on impossible to do so without paying bribes.

The challenge is to find "consultants" who can vicariously oil the wheels of corrupt commerce on a plausibly deniable basis.

That's where companies like Nexus come in.

Sunday, March 14, 2010

Quote of the week: Obama's hands are full of blood

"There are two types of visitors, good and bad. Obama is bad. He might be of a different skin colour from George Bush, but he still oppressed the Muslims. He might have grown up in Indonesia, but that's no basis for not rejecting him. He is a cruel figure, his hands are full of blood and he has no sympathy."

Nur Alam, a spokesman for Hizbut Tahrir, a hardline Islamic group in Indonesia, proffers his opinion on the upcoming visit of US President Barack Obama. Several thousand Muslim Indonesians rallied across the country over the week in protest at Obama's trip.

But the bilious anti-Obama campaigners, who are angry about the ongoing conflicts in Iraq and Afghanistan and US support for Israel, are definitely in a tiny minority. Many Indonesians are looking forward to Obama's return to the country where he lived for four years as a boy.

Saturday, March 13, 2010

Appeal hearing on Monday for Malaysian drug mule facing gallows in Singapore

The final appeal for Yong Vui Kong, the convicted Malaysian drug trafficker facing a death sentence in Singapore, will be heard on Monday, according to The Online Citizen, an alternative news website that has been following Yong's story closely. (Background here)

Andrew Loh of TOC has written a powerful piece looking at Yong's story. Here's a brief extract:

He found a friend in prison – a 22-year-old from Malaysia, who also received the death penalty for drug trafficking. The boy would die just three months before Vui Kong’s scheduled execution. He was a trembling mess the day before the hanging. Vui Kong would later tell his brother that he stayed up all night comforting his friend, urging him to meditate so he could face his final moments with inner peace.

The next morning, the boy had to be dragged from his cell to the execution chamber, crying, wailing and begging to be freed and to be forgiven.


Friday, March 12, 2010

Temasek's Malaysian governance problem: what happened next

One of the joys of blogging is that you can follow up on stories, as opposed to the fire-and-forget approach of conventional journalism.

Back in January, I wrote about the problems that Temasek, the Singapore sovereign wealth fund, was facing at a Malaysian bank called Alliance Bank, of which Temasek owns 29%.

Alliance Bank's chief executive Bridget Lai, who was headhunted by Temasek, had gone on leave pending an investigation by the board of directors into a corporate governance issue believed to be related to refurbishment contracts.

Since then, the company has announced that Lai will resign on April 1 "in view of the differences of opinion between the board of directors and Lai that have arisen over the last few months".

Alliance Bank made no mention of the outcome of its months-long investigation and stressed that Lai's departure was the result of a mutual decision and was "not in any way a reflection of Lai".

Shim Kon Teck, the bank's chief operating officer, who was also under investigation, will also resign on April 1, with no further explanation provided.

A "sourced" story in Malaysia's Business Times earlier this month claimed that Lai would not be receiving any compensation, which is hardly surprising in the circumstances.

Whatever transpired, both the company and the outgoing executives obviously felt it was in their mutual interests to maintain radio silence.

All very mysterious and not very reassuring for any investors who are concerned with governance issues.

In an amusing but all-too-typical example of self-censorship, Singapore's Business Times newspaper neglected to mention in its 402-word story on Lai's resignation that Temasek owned a key stake in Alliance Bank, had a number of directors on the board and had handpicked Lai to lead the bank. (Sadly, the story is only available to subscribers)

Proof, it it were needed, that the whole unsavoury episode leaves just a big of egg on the face of Temasek.

An article in The Edge Malaysia (also not availalbe online) noted that Lai isn't the only chief executive of a Temasek-backed Asian bank to have suddenly departed recently, pointing to the exit of Sebastian Paredes from Indonesian's Bank Danamon and G S Sundararajan from the Fullerton India Credit Company.

The magazine went on to speculate that Temasek may look to roll up its various Asian banking assets under one umbrella, namely that of Singapore's DBS Bank. It is an interesting idea as I'm sure Temasek would like the idea of creating a unified, large Asian banking giant, with reduced overheads and increased influence.



Thursday, March 11, 2010

Rupert Murdoch looking to invest in Indonesia?

In his speech in Abu Dhabi on Tuesday, Rupert Murdoch made an intriguing reference to a recent dinner he had with Mari Elka Pangestu, the Indonesian trade minister, where she told him of her desire to double the size of her nation's creative industries.

It's hard to imagine that Murdoch and Mari merely bumped into each other in the supermarket and decided to go for dinner, so I decided to dig a little.

By the power invested in me by Google, I soon discovered that the dinner Murdoch was likely referring to took place in Washington D.C. on September 30th last year.

On that day, Murdoch's News Corporation hosted an "Evening Celebrating Indonesia" and Mari was the guest-of-honour. In her speech that evening (PDF online here), she described the event as a "tribute to Indonesia’s democracy and unique culture, food, music, and film".

Accompanied by a delegation of government officials and businessmen, Mari spoke about her desire to attract more US investment into Indonesia's emerging film and entertainment industry.

And she was most grateful to Murdoch for sponsoring the event, saying: "I want personally to congratulate the Chairman of News Corporation, Mr. Rupert Murdoch and CEO of News Corporation, Mr. James Murdoch who make this important event happened. May you have continued success and hope this is a starting point for Indonesia and US film cooperation."

Call me a cynic but Murdoch does not normally entertain political leaders just for fun. It can never hurt to keep the government of the world's fourth most populous country, which has a large and rapidly growing domestic media market, on side.

But I wonder if the wily old fox has some more specific investment plans for Indonesia.



Wednesday, March 10, 2010

What Singapore could learn from Rupert Murdoch

Yesterday, Rupert Murdoch spoke at a media conference in Abu Dhabi, where he warned Gulf states that they must cut regulation and end censorship if they want their creative industries to truly flourish. (PDF of full speech courtesy of Media Guardian)

Much of what he said could apply to another city-state that tightly controls the media landscape while insisting that it aspires to become "a leading cultural capital" and "a hub for the arts": Singapore.

Putting aside the social and political cases for a free media, Murdoch argued that it makes economic sense to ease media restrictions.

Limits on the operations of foreign media companies in Abu Dhabi, Dubai and Singapore put off some investors - although the governments of these city-states often successfully counter this by offering attractive tax breaks and other financial incentives.

But, more importantly, censorship and government control kills creativity, which is vital for the media industry to flourish.

As Murdoch put it: "Human creativity flourishes in freedom. By making the decision for greater openness, you will signal the importance you have assigned to creativity in your plans for the future – and declare your confidence in your people."

Murdoch said that he had had his fair share of "blistering newspaper attacks … unflattering television coverage … and books that grossly distort my views or my businesses or both".

The owner of The Times and the Wall Street Journal said he accepted that this was the price of success in a modern society but that "for a nation, the stakes are even higher".

"In face of an inconvenient story, it can be tempting to resort to censorship or civil or criminal laws to try to bury it," he said.

However, he warned that government attempts to boss the media were counter-productive, "promoting the very panic and distrust that they had hoped to control".

There was evidence for that in the furore caused by self-exiled Singaporean blogger Gopalan Nair, who claimed in a not-very-convincing hoax blog post that Lee Kuan Yew had suffered a heart attack.

Although he is based in California and has a track-record for anti-government rants rather than breaking stories, the extreme distrust in the government-controlled media meant that some otherwise sensible people thought there might be something in Nair's claims.

Tuesday, March 9, 2010

Bank bailout furore shows limits of reform in Indonesia

Around the world, central bankers have been lauded for bailing out troubled banks and saving the global financial system. The uninspiring Ben Bernanke was even made Time magazine's person of the year.

But, in Indonesia, the $730m bailout of a small-ish lender called Bank Century in 2008 has become a millstone around the government's neck.

Despite a distinct lack of evidence, political opponents have hurled allegations of wrongdoing at President Susilo Bambang Yudhoyono and, in particular, his two reform-minded lieutenants, Vice President Boediono and Finance Minister Sri Mulyani Indrawati.

A lengthy, farcical parliamentary inquiry into the bailout failed to come up with any hard evidence of corruption. But it did prove to be a massive political distraction that has limited Yudhoyono's ability to push ahead with the reform agenda on which he was elected for a second term last summer. (For a fuller background piece, check out Aaron Connelly's blog)

Some political and business leaders hoped that the Bank Century furore would fade with the closing of the parliamentary inquiry. However, the Corruption Eradication Commission has taken up the Bank Century baton and it looks likely that the affair will continue to be a drag on the Yudhoyono government for some time to come.

But the Bank Century issue is less a cause than a sympton of the wider political problem that is holding up the vital drive to reduce the endemic corruption, rent-seeking and red tape.

Those threatened by the anti-corruption fight led by the likes of Sri Mulyani and Boediono are fighting back by labelling their accusers as the real "Koruptors".

As Ross McLeod of the Austrlian National University points out in a blog post on the East Asia Forum: "The innocent are wrongly branded as thieves; but the accusation is made by the real thieves, precisely in order to hide their own activities."

So eight months in to Yudhoyon's second and final term, which begun with a large popular mandate and high hopes, where does this leave the reform agenda? Not in a very good place, according to McLeod.

"Although the reformist Vice President and Minister of Finance now seem safe in their positions, it is difficult now to imagine how the second SBY administration can recover the momentum of reform, given the shabby manner in which the parties that comprise the ‘rainbow coalition’ cabinet continue to behave."



Monday, March 8, 2010

Australia-Indonesia relations need to be reinvigorated

With Indonesian President Susilo Bambang Yudhoyono visiting Australia this week, lots of ink will be spilt about the need to improve relations between the countries.

But there will probably not be many more incisive and critical analyses of the relationship between Australia and Indonesia than that penned by Fergus Hanson of the Lowy Institute, a Sydney-based think tank.

While Australian Prime Minister Kevin Rudd is busy holding conferences on the supposed need for yet another Asia-Pacific multi-lateral institution, Hanson argues that relations with Indonesia, which should theoretically be a key partner for Australia in Asia, have plateaued.

While government-to-government ties have been getting stronger, Hanson points out that these are focused around a mostly negative set of security-related issues, such as counter-terrorism, illegal fishing, people smuggling, bird flu, climate change and interfaith dialogue (i.e. soft counter-terrorism).

He also argues that business links are underdeveloped, with Australia's two-way trade with Indonesia, a market of 230m people, only half the size of its two-way trade with New Zealand, which has less than 2 percent of Indonesia's population and a fifth of its GDP.

"Mutual public distrust and stereotypes are so entrenched that dramatic leadership gestures are needed to produce a step-increase in relations," Hanson writes.

He proposes a number of ways to move things forward, which you can read in his full paper, online here.


Saturday, March 6, 2010

Reuters to launch Vietnamese news service?

Reuters appears to be setting up a Vietnamese language news service, a move that would be in defiance of the dominant atmosphere of censorship in the communist-ruled nation and that points to a maturing in Vietnam's nascent capital markets.

According to its careers website, Thomson Reuters is recruiting a translator for its Hanoi bureau "to convert English-language financial news stories from around the globe into Vietnamese."

In addition to its main English news service, Reuters operates more than 20 foreign language news services, including Chinese, Japanese and Turkish wires.

But the Vietnamese government is no friend of the media. In addition to its almost total control of the domestic media and its regular detention of the more enterprising Vietnamese journalists, the government places tight restrictions on the few accredited foreign correspondents in Hanoi.

Moreover, the government is particularly sensitive about foreign news organisations publishing stories in Vietnamese. The BBC Vietnamese website is often blocked by censors, alongside the likes of Facebook.

While most people wouldn't find anything controversial in translated Reuters stories about US jobless figures or Chinese motorbike sales, it doesn't take much to arouse the concern of Vietnam's paranoid government censors, particularly with the five-yearly Party congress just a year away.

I presume that Reuters have applied for and obtained clearance from the Vietnamese government for their latest venture. Otherwise they may be storing up some trouble.

Intellasia, an Australian-run website that provided straight-up English translations of news stories culled from Communist Party-owned newspapers, was closed down in 2008 and its founder forced to flee Vietnam after he was accused of publishing without a license.

Regardless of what the Vietnamese government thinks, Reuters' apparent desire to set up a Vietnamese service points to the fact that a capital market culture is starting to become more deeply-embedded in Vietnam. Much of the trading on the main Ho Chi Minh Stock Exchange remains driven by a combination of cheap borrowing, rumour and insider dealing.

But if there is a demand for a Vietnamese language financial wire, it's evidence that the market culture is maturing.

Wednesday, March 3, 2010

InterContinental Hotels hands ugly PR people a reprieve

Although most sizable public companies have some sort of Corporate Responsibility policy and department in place, it's hard not to be suspicious of construction contractors or soap manufacturers that claim to be governed by anything other than the profit motive.

Even if the corporate responsibility staff are genuine, the department is often used by the company as  little more than an additional public relations department.

But, by holding companies up against the standards they claim to follow, you can sort the wheat from the chaff. Like last year, when I pointed out that building airports for the Burmese generals rather undermined the claim of Downer EDI, one of Australia's biggest engineering groups, that it upheld a "no harm" policy. To its credit, Downer EDI subsequently withdrew from the project.

Earlier this week, it was brought to my attention that InterContinental Hotels, the UK-based global hotel group, was advertising for a "good looking" public relations manager to join the staff of its Hanoi Westlake hotel.

This seemed to go against InterContinental's rather pompous Corporate Responsibility policy regarding its own staff, which is called "The Deal". This policy supposedly "celebrates difference" and offers employees "room to be yourself".

What about ugly public relations professionals? Are they not part of The Deal?

I contacted Eric Lee, InterContinental's head of communications in Asia (presumably he must be a handsome chap), who in turn checked with the Hanoi hotel management.

"They regret that description in the job profile," he said in an email. "They are making arrangements to remove that description from the profile as soon as possible." (the ad, online here, has already been changed)

He also stressed that "our hotels would never place appearance above other criteria and that all hotels are committed to our equal opportunities policies".

So they've changed the wording but will the actual recruitment process change?

It's not uncommon to see job ads in Southeast Asia that stipulate that the successful candidate must be a looker. Perhaps they should just use the Western HR euphemism of choice: "well-presented".

Hat-tip to Our Man in Hanoi, who drew the initial job ad to my attention via Twitter.


Tuesday, March 2, 2010

Indonesia's Kit Kat economy

If you want to understand what's wrong with the Indonesian economy - and why it's now perhaps moving in the right direction -  you need look no further than the tortuous journey that brings the humble Kit Kat to this country.

So says Gita Wirjawan, the smooth-talking former banker who heads up Indonesia's Investment Coordinating Board (BKPM).

Indonesia exported about $1.8bn worth of cocoa last year but most of this was in the form of dried, unfermented beans, that were processed abroad and then re-exported back to Indonesia in the shape of chocolate and other finished goods.

So Indonesian farmers make some money from growing the beans but the bulk of the profits are generated by the processors and chocolate manufacturers overseas.

But, an optimistic Gita told a gathering of the Jakarta Foreign Correspondents' Club earlier today, "the days of coca being taken from Indonesia and us buying Kit Kats from Switzerland should be finished".

The government has already announced plans to help develop a local chocolate industry and Gita believes Indonesia needs much more of this "value-added" manufacturing if it is to keep growing at more than a relatively unexciting 6 percent per annum.

The US-educated official was a convincing prophet of change, although you have to wonder how many members of the government, particularly the non-technocrats, share his enthusiasm for further liberalisation of what remains a very restrictive market.

Gita, who is a former head of JP Morgan Indonesia, did look slightly out of a place in a black safari suit that was more Bandung Conference 1955 than 21st century Indonesia.

But, ever silver-tongued, he had an adequate explanation: "I've started to wear really cheap clothes because I took a massive pay cut when I joined the government."