Thursday, July 9, 2015

The Irrawaddy Magazine

The Irrawaddy Magazine

Developer Defends Dagon City, but ‘Respects’ Govt Kibosh

Posted: 09 Jul 2015 08:36 AM PDT

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RANGOON — The international consortium behind one of five projects canceled this week by the Burmese government defended the development while stating that it "respects" the decision to terminate the project.

In a statement released late on Wednesday, Marga Landmark denied claims that its Dagon City 1 development would have negative impacts on the Shwedagon Pagoda, considered the crown jewel of the former capital and Burma's most sacred religious site.

The developer asserted, however, that it would honor the government's decision to halt Dagon City 1 and four other projects in the vicinity, which had previously been approved by the Myanmar Investment Commission (MIC).

Construction had already commenced on Dagon City 1, a US$300 million multi-use development including luxury condominiums and retail space, though all five of the projects went on hiatus in January pending an assessment by the Myanmar Engineers Society and the municipal High-Rise Inspection Committee.

Opposition to the developments grew over the following months, as a group of well-known monks added their voices to the chorus of criticism. A Society to Protect the Shwedagon was established by the Buddhist nationalist group Ma Ba Tha, or the Association for the Protection of Race and Religion, which organized rallies and threatened nationwide protests if the projects were allowed to continue.

The Burmese government conceded to complaints this week after a series of negotiations between developers and the MIC, announcing on Tuesday that he had ordered a "complete shutdown" based partly on the concerns of "people and experts" that the project could affect the structural integrity of Shwedagon Pagoda.

Both the MIC and the Ministry of Defense—the original owner of the 71-acre property—recommended cancellation, according to the government's announcement.

Marga said on Wednesday that it was "absolutely certain" the project posed no risk to the sacred monument.

"Our intended use of [a] diaphragm wall, an advanced, proven technology used by many developed countries and cities, will not affect any building within 3 feet away. Shwedagon Pagoda, which is 3,000 feet away from the project, will certainly not be affected," Marga's statement read.

"Although the project will not continue, we want to clarify these misconceptions about our previous plans."

On Thursday, The Irrawaddy observed that workers had already dismantled advertisements draped across the fences surrounding Dagon City 1. Signage and advertising for Dagon City 2, a sister project being developed by Marga's local partner, Thukha Yadanar, was also being removed.

The President's Office told The Irrawaddy on Wednesday that negotiations are underway to compensate the five firms affected by the sudden cancellation and find suitable alternate locations for the developments.

Marga Landmark Development is a multi-national firm comprising partners from Hong Kong, Australia, South Korea, the United Kingdom and Burma.

The post Developer Defends Dagon City, but 'Respects' Govt Kibosh appeared first on The Irrawaddy.

Charter Push for Decentralization, Stronger Parliament Falters

Posted: 09 Jul 2015 07:59 AM PDT

Lawmakers vote on proposed amendments to Burma's Constitution at the Union Parliament chamber in Naypyidaw on Wednesday. (Photo: MNA)

Lawmakers vote on proposed amendments to Burma's Constitution at the Union Parliament chamber in Naypyidaw on Wednesday. (Photo: MNA)

RANGOON — A second raft of proposed constitutional amendments largely met the same fate as a first set of changes put to Parliament last month, with unelected military lawmakers again exercising their effective veto power on Wednesday to block efforts to reform the controversial charter.

Amendments to 21 articles of the Constitution failed to meet the 75 percent threshold required for enactment, while a series of additions to two sections of the charter passed muster and will ostensibly empower regional legislatures in the realms of lawmaking and taxation.

The amendments that failed to pass would have given Parliament enhanced prerogatives in helping shape the composition of Burma's executive branch and judiciary, as well as elevate the status of parliamentary committees.

Several of the proposed changes would have weakened the power of the presidency, including one failed amendment that had been pushed by ethnic minority lawmakers in particular: allowing state and divisional legislatures to elect their own chief minister, rather than granting the president the power to appoint an individual to the post as is currently the case.

That provision, under Article 261, garnered 66 percent of votes in favor.

A total of 34 addendums to Schedule Two of the Constitution and 20 addendums to Schedule Five were approved by lawmakers, broadening the scope of matters on which regional legislatures can enact laws and levy taxes.

But Sandar Min, a member of the National League for Democracy (NLD) from Naypyidaw's Zabuthiri constituency, said in order for regional parliaments' enhanced role in governance to be realized, more substantive decentralization would need to take place in terms of political power, state budgeting and civil administration.

Sandar Min said that furthermore, even the amendments to Schedules Two and Five still left regional governments subject to constitutional provisions that ensure the Union government maintains preeminence.

The 34 additions to Schedule Two cover a variety of legislative domains including hotels and tourism, industrial zones and wildlife protection.

Schedule Five, enumerating regional governments' taxation powers, was extended to allow those governments to bolster their state and divisional funds via taxes on 20 new potential revenue streams, including levies on income, commerce and customs.

Htay Yal, a Union Solidarity and Development Party (USDP) lawmaker, said he supported regional governments' new taxation powers, calling them an "imperfect" but noteworthy initial effort to decentralize political power in Burma.

Responding to criticism of the Constitution's enduring Union government primacy, Htay Yal said the hierarchy was appropriate "because regions and states are in a Union system."

"It's appropriate to discuss power, resource [sharing] and tax distribution related to regions and states in this Parliament, made up of all ethnicities," he said.

A military representative, Brig-Gen Maung Maung, spoke in support of most of the 20 addendums to Schedule Five, but argued that some tax realms, such as in air transportation and oil and gas, should remain the prerogative of the Union government.

The power to tax oil and gas revenues could prove a major boon in particular for Burma's coastal states and divisions, where there are estimates of large untapped offshore reserves.

Several other natural resources, however, were not included in the amended Schedule Five, including teak and other hardwoods, and mineral deposits.

Political commentator Yan Myo Thein said Wednesday's rejection of Article 261 was the biggest blow for constitutional reform advocates.

"If regional and state parliaments cannot select their chief ministers, it's impossible for states and regions to see their own government emerge in the post-2015 election [period]. In other words, there is no possibility for self-administration to emerge in ethnic regions. Without self-government and self-administration, the political path to a federal union is weakening."

The provisions subject to Wednesday's vote fell under Article 436(b) of the Constitution, which requires more than 75 percent of votes for amendments to all provisions of the charter not enumerated in Article 436(a). The military's guaranteed allotment of 25 percent of seats in Parliament ensures that it holds an effective veto on constitutional reform.

On June 25, lawmakers failed to meet that threshold on five of six articles under Article 436(a), which specifies that a set of provisions must also be put to a national referendum if they first meet the 75 percent parliamentary threshold.

The vote last month included an effort by opposition parties and the ruling USDP to lower the threshold for Article 436 to 70 percent.

The June vote's lone successfully amended article—a change of negligible practical significance—will require a national referendum, which Union Parliament Speaker Shwe Mann has said will be held concurrently with Burma's general election on Nov. 8. That provision, Article 59(d), was changed from the current requirement that candidates for president and vice president be familiar with "military" affairs, to instead requiring that said candidates be well-versed in "defense" affairs.

The post Charter Push for Decentralization, Stronger Parliament Falters appeared first on The Irrawaddy.

Inside Thailand’s Trafficking Crackdown

Posted: 09 Jul 2015 07:44 AM PDT

Patchuban Angchotipan, a suspected kingpin of a human trafficking network, is escorted by policemen at Hat Yai police station on May 18, 2015. (Photo: Reuters)

Patchuban Angchotipan, a suspected kingpin of a human trafficking network, is escorted by policemen at Hat Yai police station on May 18, 2015. (Photo: Reuters)

BANGKOK — Sheltering in the backroom of a provincial Thai police station is a 35-year-old street vendor who triggered a human trafficking investigation that has reverberated across Southeast Asia.

He is a Rohingya Muslim, a mostly stateless group from western Burma. He had scraped a living for the past decade selling fried bread, or roti, from a push cart in Nakhon Si Thammarat, a city in southern Thailand.

Then his nephew fell into the hands of murderous human traffickers.

The roti seller's desperate bid to save him ultimately led to the discovery of scores of jungle graves on the Thai-Malaysia border in May and sparked a regional crisis over boatloads of unwanted Rohingya.

Now the roti seller fears traffickers could target him. His new home in the police station is a primitive form of witness protection. (Reuters has withheld his identity at the request of police.)

His predicament raises questions about the long-term effectiveness of Thailand's crackdown on resilient and lucrative trafficking syndicates. Witnesses have been intimidated, police say. Key suspects are represented by lawyers with powerful political connections. And while 72 people have been arrested, police are still seeking many others.

Thailand's investigation comes ahead of a new US report card on its anti-trafficking efforts, due out in mid-July. Police spearheading the campaign on the ground told Reuters they encountered official indifference about the evidence they had gathered on trafficking networks—even after the US State Department identified Thailand in June 2014 as one of the world's worst trafficking offenders.

Katrina Adams, a spokeswoman for the State Department's East Asia and Pacific Bureau, said this year's report only covers the year to March 2015, and thus would not include Thailand's latest crackdown.

"We welcome Thailand's law enforcement actions, including the arrests of dozens believed to be involved in migrant smuggling and abuses against migrants, which may include human trafficking, in southern Thailand," Adams added.

Indifference

Police Major General Thatchai Pitaneelaboot, who led early anti-trafficking efforts in southern Thailand was told his investigation was damaging Thailand's image, though he declined to be more specific about who was telling him that.

"No one cared," he said.

Thatchai felt otherwise. "If we want to eradicate human trafficking, we can't hide it. We must put it on the table."

Deputy National Police Chief Aek Angsannanont, who is in charge of the anti-trafficking crackdown in Thailand, said the military government that came to power in a coup last May took the issue seriously.

"I don't know what the policy was of previous administrations," Aek said. "I took up this trafficking issue under the military government and the military government has given this issue importance."

After last year's coup, Thailand's military junta promised what it called a "zero tolerance" policy to human trafficking. Yet Thailand convicted fewer perpetrators of human trafficking last year than in 2013, according to the government's own anti-trafficking report.

Aek said he could not "give an opinion on this. But I can say that since the June 2014 [US anti-trafficking] report, everyone woke up and has taken this issue seriously."

The Thai crackdown has disrupted the region's trafficking infrastructure for now but some experts question how lasting that will be.

The investigation has "made trafficking in Thailand a bit harder," said Steve Galster, director of FREELAND Foundation, an anti-trafficking NGO that has given technical help to the Thai police. "The question remains, however, if anyone higher up the chain… will be investigated." If that doesn't happen, Galster warned, "trafficking in this region will remain a big problem."

Preying on Rohingya

The trafficking syndicates have particularly preyed on the Rohingya, who are fleeing poverty and oppression in Burma. The number of people leaving on boats from Burma and Bangladesh has nearly tripled in three years—from 21,000 in 2012 to 58,000 last year, according to The Arakan Project, a Rohingya advocacy group based in Bangkok. Most of them came ashore in Thailand and were moved to trafficking camps.

The camps along the jungly border between Thailand and Malaysia had been exposed as early as 2013. But they became impossible to ignore in May after police from both countries found the graves of 175 suspected migrants at dozens of hastily vacated trafficking camps on both sides of the border.

The ensuing crackdown meant traffickers could no longer bring their human cargoes ashore so they simply abandoned them at sea. The boats eventually washed ashore in Malaysia, Indonesia and Burma, their passengers sick and thirsty. At least 1,200 remained stranded at sea, according to a June 16 United Nations report.

The roti seller, who Reuters interviewed at the police station, said his nephew fell into the hands of traffickers during last year's smuggling season.

Last October, he said his family paid 95,000 baht (US$2,800) in ransom money to free their 25-year-old nephew from a camp in southern Thailand. Traffickers typically held boat people for ransom and often tortured them until their relatives, who had settled in Thailand or Malaysia, paid up. Some of those whose relatives couldn't pay were left to die in the camps. Police say some were sold into slavery on Thai fishing boats.

Despite getting the ransom payment, the roti seller said the alleged operator of the camp his nephew was in, a Burmese man known as Anwar, refused to release his nephew. It was unclear to him why.

Two months later in December, the roti seller filed a complaint against Anwar with local police. "They didn't take me seriously," he said.

Police Colonel Anuchon Chamat, deputy commander of Nakhon Si Thammarat Provincial Police, admitted they were "not that interested" in the complaint at the time.

That was about to change.

Transportation Network

On Jan. 11, just before dawn, Anuchon's men intercepted five trucks at a routine checkpoint in Nakhon Si Thammarat. Hidden inside were 98 tired and malnourished Rohingya. One woman had suffocated to death; two more later died in hospital.

Police interviews with the survivors confirmed what the roti seller had described: "That there was buying and selling of humans," Anuchon said.

He said he sought help from the anti-trafficking group FREELAND, which analyzed data from mobile phones seized from two of the truck drivers.

This helped Anuchon map out a transportation network that led from Ranong, a port city on the Andaman Sea, to jungle camps on the Malaysian border, an overnight's drive away. He concluded that the malnourished Rohingya and the roti seller's nephew were in thrall to the same syndicate. Bank transfer slips from the roti seller showed he had paid the money to suspected syndicate members.

Anuchon's discovery, however, was too late to save the roti seller's nephew.

On Jan. 27, camp guards called the roti seller and placed a phone to his nephew's face. The roti seller wept as he described what happened next. The traffickers, he said, had found out he had gone to the authorities. Anuchon confirmed the roti seller's story.

"They're going to kill me," his nephew said. "What did you do?"

The roti seller heard the phone drop and his nephew screaming. Then a voice said, "He's dead already," and the line was cut.

Inactive Intelligence Unit

Still, Anuchon did not think he had enough evidence to convince his superiors about the growing scale and sophistication of the trafficking networks. "We did not dare talk to Bangkok because our evidence was insufficient. If our information was wrong, we would have lost face with our bosses."

Yet one Thai police unit was well-placed to help monitor the Ranong-based syndicates, including the one that had held the roti seller's nephew captive. The Port Intelligence Unit in Ranong was set up in 2013, with help from the United Nations Office on Drugs and Crime (UNODC), to gather intelligence on people smuggling, human trafficking and transnational crime. But, lacking the go-ahead from Bangkok, it remained inactive.

The unit is "the right solution in the right place," said Jeremy Douglas, the UNODC's Regional Representative in Southeast Asia and the Pacific. "It has not become fully operational and it needs a [Thai] leadership push to get going."

Aek, the deputy national police chief, declined to comment about the status of the unit.

Shallow Graves

After intercepting the truck convoy, Col. Anuchon enlisted the roti seller's help in tracking down a Rohingya witness who had survived 10 months at the same camp as the nephew. At the request of police, Reuters has agreed not to reveal the survivor's name for safety reasons.

The Rohingya survivor said Anwar, the alleged camp operator, had ordered the nephew killed. On April 28, police grabbed Anwar after staking out his house and took him to Nakhon Si Thammarat's main police station.

The roti seller was already at the station, where earlier that day he had recounted how he had tried to tell police in four different cities about his nephew's plight. Anwar, flanked by policemen, walked past him in a corridor. "I wanted to hit him for what he did to my nephew," the roti seller said.

Anwar, 40, also known as Soe Naing from Burma's Arakan State, is himself a Rohingya. During an hour-long interview at the police station, Anwar insisted he was not a human trafficker, but a rubber tapper—and a roti seller himself.

"They say I killed. I am not worried. I did not do anything and I don't know anything about this," Anwar said. "I'm rich enough selling roti."

Three days after Anwar's arrest, the Rohingya survivor led police to the camp a few hundred meters from the Malaysian border on a hill local people called Khao Kaew or "Glass Mountain." Police believed it had been hurriedly evacuated just days before. They discovered shallow graves marked with bamboo sticks.

A somber mood descended as police and rescue volunteers unearthed 26 corpses on May 1. Some were shrouded in cloth or simple bamboo mats. Others were little more than skeletons.

When asked if there were more graves yet to be discovered along Thailand's border, Police Maj. Gen. Thatchai replied: "Absolutely."

Establishment Lawyers

After Anwar came other big-name arrests. Patchuban Angchotipan—a wealthy businessman from Satun province known as Ko Tor or "Big Brother Tor"—gave himself up at a Bangkok police station on May 18. Patchuban, the former chairman of Satun's provincial administration, has been charged with a range of offences, including human trafficking, holding people for ransom and detention leading to bodily harm.

Patchuban was unavailable for comment. Fighting his case in court will be Wirat Kalayasiri, the chief legal advisor of Thailand's Democrat Party, which has close links to the military and royalist establishment. Wirat is also representing another key suspect, Anas Hajeemasae, who police describe as Patchuban's right hand man.

Pakkapon Sirirat, another Democrat Party member, is representing Lieutenant General Manus Kongpan, who surrendered to police on June 2. "I'm a lawyer and I have the right to be a member of a political party," Pakkapon said. "My job as a lawyer is to look after the accused."

Manus denies all charges, which include human trafficking, holding people for ransom and hiding corpses.

Manus previously headed an operation to intercept migrants in the Andaman Sea for the Internal Security Operations Command, Thailand's powerful, military-run equivalent to the US Department of Homeland Security. "If Manas really is involved in trafficking, he won't escape it and will have to accept the truth," Pakkapon said.

The trials could be lengthy and convictions are far from certain, police said.

On June 16, three men were arrested for intimidating a witness not to testify in the trials. Other witnesses have been threatened by "subordinates" of the accused against testifying, said Aek, the deputy national police chief. "The suspects are powerful people," he said.

Hundreds Involved

Moreover, the scores of arrests so far may only represent a fraction of those involved, police say. "There could be hundreds of people involved, including many officials," Thatchai said.

And despite the investigation and crackdown that began in late April, the traffickers' finances seem largely intact. The United Nations estimates people-smuggling across the Bay of Bengal has generated about $250 million since 2012. Thailand has so far seized assets worth only $3.5 million.

Aek said Thai authorities "only froze assets of those we suspected of wrong-doing."

The roti seller dares not leave his new home in the provincial police station. He recently stopped praying at a nearby mosque after he heard that some men had turned up to look for him there.

Many known traffickers remained at large, which was why he hoped to be relocated to another country after the trial. "Otherwise," he said, "I will be killed."

The post Inside Thailand's Trafficking Crackdown appeared first on The Irrawaddy.

Clashes Continue on Asia Highway Between DKBA, Govt Troops

Posted: 09 Jul 2015 02:36 AM PDT

Border Guard Force troops patrol the Asia Highway in Karen State. (Photo: Kyaw Kha / The Irrawaddy)

Border Guard Force troops patrol the Asia Highway in Karen State. (Photo: Kyaw Kha / The Irrawaddy)

RANGOON — Conflict continues along the Asia Highway in southeastern Burma's Karen State, as ethnic rebels clashed with Burmese troops again near an unauthorized toll station on Thursday.

Fighting broke out late last week between the Burma Army and the Democratic Karen Benevolent Army (DKBA) a breakaway faction of the state's dominant Karen National Liberation Army (KNLA).

Locals said they heard gunfire again at around 3 am, and that it continued well into the afternoon. No casualties have been reported from the new clashes, which took place near Kaw Moo village of Karkaweik Township.

Stretches of the Asia highway, which links Burma to Thailand via the Myawaddy border crossing, were again temporarily shut down in light of the conflict. Local sources said the old Dawna mountain road was also closed to civilian vehicles on Thursday.

The clashes involved troops from a Border Guard Force (BGF) that had seized DKBA bases along the highway to prevent unauthorized taxation by rebel soldiers.

Col. Saw Chit Thu, commander of the Karen BGF, defended the group's presence in the area during a press conference in the village on Wednesday.

"It is our duty to clear this road as the public has a problem from [the DKBA] demanding taxes from them," he said. "This road belongs to the public."

The commander said the BGF would henceforth take charge of security along the highway.

Col. Saw Chit Thu said DKBA commander Col. San Aung did not agree to negotiations with the BGF, despite attempts by community and religious leaders to facilitate talks.

Last week's initial clashes reportedly broke out when government troops tried to secure the area ahead of the Burma Army Southeastern Division Commander Gen. Tin Maung Win's visit to Myawaddy.

DKB troops said they came under fire by the Burma Army at around 11 am near Klo Htoo Wah gate on June 29, claiming government forces used 105 and 120 mm artillery shells to attack their positions.

Rebel sources said government troops entered Kawkareik without prior notice and demanded that the DKBA remove security and toll stations.

The post Clashes Continue on Asia Highway Between DKBA, Govt Troops appeared first on The Irrawaddy.

‘Elections Are the End of the Beginning’

Posted: 09 Jul 2015 01:48 AM PDT

Swiss diplomat Christoph Burgener. (Photo: Nyein Nyein / The Irrawaddy)

Swiss diplomat Christoph Burgener. (Photo: Nyein Nyein / The Irrawaddy)

The Swiss government is among a number of European donors supporting development and human rights in Burma, particularly in the conflict-affected southeastern region. Since opening an Embassy in the former capital Rangoon in 2012, Switzerland has primarily focused its assistance on support for Burma's peace process and upcoming general election. Switzerland is also the current chair of the Peace Donor Support Group, an aid coordination network formed by foreign governments and NGOs.

Outgoing Swiss Ambassador to Burma, Laos and Cambodia, Christoph Burgener, spent his last day in the post in Chiang Mai, Thailand, catching up with leaders of ethnic armed groups and discussing the nation's prospects for peace. The Irrawaddy spoke with him at length about his country's support for peace building, elections and his views on the state of politics in Burma.
Christoph Burgener presented his credentials to then-head of state Sen-Gen Than Shwe on Dec. 1, 2009.

What kind of support does Switzerland provide in Burma?

We opened our Embassy in November 2012 and I had the privilege to be the first resident Ambassador of Switzerland to Myanmar. It's probably the most exciting posting you can have as a diplomat. From my Government I received the mandate to support the democratization process in this country. We do this through supporting the peace process, the elections, and through our instruments of humanitarian aid and development cooperation with a portfolio of about US$30 million.

How would you assess the recent developments in Burma, with regard to peace, federalism and democratization?

We have to say it again and again that a transition from dictatorship toward democracy is a long process. Democracy doesn't come overnight. Confidence neither. The expectations are very often too high and that is and will be a challenge for the existing and the new government. Six years ago, when I mentioned the name of Daw Aung San Suu Kyi, everybody in the tea shop felt embarrassed. Today the openness, the controversial dialogue and the space for more critical opinions is much broader. I can talk to ministers about everything and I can enter into serious and lively discussions. This is already an achievement, even if more space has to be opened within a framework of a new strong system of rule of law. I further hope that the culture of constructive dialogue between government, Parliament and the opposition will be strengthened and the legislation regarding, for example, manifestations and media created under the dictatorship will be adapted in the near future.

How would you evaluate Burma's peace process?

When I started my term as Ambassador on December 1, 2009, there was a different political landscape, totally different. Nobody spoke about transition, it was dark. I would not have dreamed that in 2015 the transition to democracy and the peace process would come that far. Regarding the peace process, we have to say that the serious negotiations and a confidence building process are going on in an encouraging way. It is complex and therefore I am not surprised that it takes time. Switzerland tries to build up capacities for all the stakeholders. We are supporting not only ethnic minority parties, but also the government and all the actors in the peace process. When I say support, it is not so much with money. We try to bring in ideas and expertise: How does a peace process work? What exactly is federalism, what is an army in a federal context? Our experts also contribute practical experiences from other peace negotiations elsewhere in the world.

I have to commend the government and the ethnic minority parties for having started such an intense and solid dialogue about peace in this country. After 60 years of war and military dictatorship you cannot build trust within such a short period of time. Whether we end up with a nationwide ceasefire now or not, it's important that the achievements of this peace process will spill over to the next Parliament and government.

What are the main challenges in the peace process?

I think at the beginning of the process it was very important to find a structure for the peace process, to have first a nationwide preliminary ceasefire agreement, to create space for a political dialogue. The political dialogue has to be structured in a so-called framework agreement beforehand. The experiences of a lot of peace processes show that. Of course, it is much more difficult to build trust and to have a constructive dialogue when there is still fighting in the country. So I think it is important to create space for the dialogue, by that I mean the weapons are silent and there is a nationwide ceasefire in the country. I know the people on both sides personally and I see that everybody knows that peace is the priority for this country. My thoughts are with the millions of affected people in the war zones and with the hundreds of thousands of internally displaced people all over the country in need of basic food, health care and education.

Could you tell us about how Switzerland has been involved in election preparation support?

We have supported a "Code of Conduct for Political Parties and Candidates." It's a Code that was created by the political parties with the help of Swiss facilitation. I'm personally very proud that nearly all the political parties were able to reach consensus for such a code of conduct. I'm confident that this code will contribute to peaceful elections: so that there is no hate speech, there are no personal attacks, and a free and fair campaign is possible for all the political parties. This process was very significant for the political parties themselves. It showed them that they can establish such ethical norms themselves. The UEC [Union Election Commission] Chairman [Tin Aye] gave space to political parties to create that. That's as well a significant symbol of the changes in the country, which would not have been possible four years ago. The elections are the end of the beginning of the transition towards democracy. A credible election is crucial for the further steps in this challenging process. Switzerland furthermore gives financial support to IFES, the International Foundation for Electoral Systems, which provides technical advice to the Union Election Commission on how to organize credible elections. We have also been supporting civil society for voter education and media training, as well as training and preparation of smaller political parties.

How will the Code of Conduct be implemented, as it is not legally binding?

There are different legal frameworks in Myanmar for the campaign. This Code contains ethical principles. It is true that they are not binding. But it is a moral obligation to behave ethically during the campaign and to follow this code of conduct. If there is a breach of Code, it will harm the reputation of a political party. If you find now in the Internet or during a rally that there is hate speech against a candidate or against a religion by party members, that's a breach of code of conduct. Even if you cannot punish the party, the voters probably will think twice if they want to support the political party that is not following fundamental ethical principles during a campaign.

In light of irregularities and errors on the voter lists, what would you like to see happen in terms of assurances that elections will be free and fair?

The elections are very important now to provide the political composition of the new Parliament, and the new government. It is crucial that these elections are fair and transparent and inclusive. They must be credible. In Switzerland we had our first elections of our Parliament more than one hundred years ago. We have our infrastructure, we have our processes, we have our experiences. Myanmar is now preparing for the second election. The infrastructure and the overall capacity will most likely not be at a standard that would allow for one hundred percent perfect elections to take place. The UEC is leading the process, but the political parties have to make efforts as well to contribute to a fair election. It is very important that there is an election without manipulation and politically motivated irregularities, and that the outcome of these elections is reflected honestly in the composition of the Parliaments, and therefore reflect the will of the people.

You recently met with the Burma Army Chief, Snr-Gen Min Aung Hlaing. What was that meeting about?

It's a matter of diplomatic courtesy. When you end your term as ambassador, you go to the Government and to the authorities of the host country, as well as to major stakeholders, to say farewell. It is very confidential and it's not a discussion that goes out to the press. But what I can say is that I had very frank discussions with the Senior General and different ministers. That is symbolic for me when I compare it with my first discussion in 2009, when the dialogue was rather difficult. The Commander-in-Chief, as you could read in the press, explained the importance of the Tatmadaw [Burmese armed forces] in the still not very stable process, and that the trust building process between ethnic minority parties and the government needs to continue. I replied that ongoing fights in different parts of the country are not conducive for a trust building atmosphere. I think that Switzerland can in the near future extend its supporting activities in the democratization and peace process as well more directly to the Tatmadaw leaders that are also important stakeholders in the country, as you know.

You said in an interview last year that the Burmese government's efforts on improving FDI were "excellent," do you still see it that way?

Last year when they established the foreign direct investment law, that was a huge and significant step. Now we have to see as well with the Swiss economy, which is still watching Myanmar very closely, but just before the election. With the peace process, where we are until the stable ceasefire is not in place, Swiss companies are still reluctant to come to Myanmar. When once we have ceasefire, once the government comes out of credible election, that situation could be more stable. Now we can't clearly see what will be in 2016, 2017. That could be a more conducive environment for investors to come to Myanmar.

The post 'Elections Are the End of the Beginning' appeared first on The Irrawaddy.

Thein Sein Vows Elections Will Be Free and Fair

Posted: 09 Jul 2015 01:29 AM PDT

Burma's President Thein Sein attends a session of the 21st Asean and East Asia summits in Phnom Penh in 2013. (Photo: Reuters)

Burma's President Thein Sein attends a session of the 21st Asean and East Asia summits in Phnom Penh in 2013. (Photo: Reuters)

RANGOON — Burmese President Thein Sein vowed on Thursday to "try" to carry out free and fair elections, which will be held later this year.

"Our government vows that we will try our best to have clean, free and fair 2015 general elections, the first one held under a civilian government after many years," Thein Sein said during his monthly radio address to the nation.

Burma's Union Election Commission UEC) announced on Wednesday that the highly anticipated polls will be held on Nov. 8.

The country's main opposition party, the National League for Democracy (NLD), has not yet committed to contest the election, but said it will make an announcement following a central committee meeting on Saturday.

In his address, the President also said his administration will continue pushing for a nationwide ceasefire agreement before the polls, a pact that has been years in the making and toward which progress has slowed in recent months.

The peace deal would be a precursor to political dialogue between the government and ethnic armed groups, which have been at war for decades.

Regarding efforts to amend key sections of the nation's military-drafted Constitution, which were recently voted down by Parliament, Thein Sein said changes should be made at the appropriate time with regard to political developments.

"Results from the political dialogue will also be a part of the constitutional changes. I want to say that the current ongoing [parliamentary] attempts to make changes to the charter are a big political shift," he said.

The post Thein Sein Vows Elections Will Be Free and Fair appeared first on The Irrawaddy.

Time to Set the Kyat Free

Posted: 09 Jul 2015 12:07 AM PDT

Piles of Burmese kyat are counted in Rangoon. (Photo: JPaing / The Irrawaddy)

Piles of Burmese kyat are counted in Rangoon. (Photo: JPaing / The Irrawaddy)

Much excitement, and no little panic, has accompanied the recent fall in value of the Burmese kyat. Down around 13 percent this year, and 26 percent since the instigation of the "managed float" arrangements in 2012, the decline in the kyat has also brought with it a return of many of the economically repressive impulses of the old regime—commands, controls, restrictions, rationing—and even the arrest of some of those pesky informal foreign exchange dealers.

In the view of this author, all of this is misplaced. The falling exchange rate of the kyat is not, in itself, a problem—and certainly not a reason for the return of a mindset that for fifty years ground Burma's economy into penury.

Exchange rate fluctuations naturally accompany managed float regimes and reflect changes in economic fundamentals, in sentiment, and a whole range of matters that routinely drive "prices" in a market economy.

Thus exchange rate movements are sometimes a barometer of how a country is faring, but equally they move in response to factors beyond a country's control such as fluctuations in the prices of its principal exports, imports and so on.

In Burma's case, the country has relatively high inflation, and the prices of its commodity exports have fallen. Meanwhile, global insecurities have driven something of a flight to the US dollar, causing the exchange rates of most countries to depreciate against it. In this environment, a fall in the exchange rate of the kyat might be expected and, ordinarily, welcome.

Why welcome? A lower exchange rate makes Burma's exports cheaper (and thus more competitive in international markets) and has a similar effect for the country in terms of being a favored location for foreign investment.

Of course, imports become more expensive for the same reason. This has some negative aspects (higher imported input costs primarily) but equally "protects" domestic producers by allowing them to also be more competitive against foreign suppliers.

It is true that a lower exchange rate increases the domestic currency value of foreign currency debt but in aggregate, Burma has little of this (even as some individual "crony" firms are exposed in this manner—which might go some way to explaining the current panic in some circles).

Burma is a low-cost labor location, but in other ways, including relatively high inflation rates and higher costs from degraded and inefficient infrastructure, it is at a cost disadvantage vis-à-vis rival investment locations such as Vietnam, Laos, Cambodia and so on. A lower kyat helps compensate for these costs and risks and so evens up the score a little.

An instructive example of the potential benefits of a lower exchange rate here is the case of Australia. The fall of the Australian dollar (down 25 percent against the $US since 2012, and 13.5 percent since the start of 2015) tracks almost precisely the downward movement of the kyat. Yet, this has been the cause of much relief in Australia rather than angst.

Compensating for lower commodity prices (exports priced in $US now have a higher $A value), mainly from a slowing China, the fluctuating $A has effectively shielded the Australian economy (now, and on numerous prior occasions) from international downturns and volatility.

A Reversion to Command and Control

But if a falling exchange rate is no bad thing, this does not mean that this most recent episode of kyat decline has been met with relief, or even equanimity, in government circles. Rather, an air of crisis, panic, and impulsive reversion to old measures of command and control have been the order of the day.

Instead of letting the kyat fall in the market, and in this way allowing a "price" (exchange rate) that brings kyat demand and supply into equality, the monetary authorities have intervened in the market in the ways of old.

Declaring an official exchange rate (currently hovering around K1,100: $US1) that is above that prevailing in the free market, they are artificially creating an excess of demand for $US over supply, leading to shortages of that currency and restrictions on how much of it can be withdrawn from banks: at present, up to $US5,000 per transaction, with a maximum of two transactions per week.

These restrictions are in place even for designated foreign currency accounts and apply both to individuals as well as large corporations—the latter aspect leading to very significant difficulties for foreign investors, especially in meeting payroll and other routine payments. But whatever the activities and access being blocked, the message sent is that once again Burma's financial sector is riddled with broken contracts, doubtful property rights and inherent instability.

Naturally, the "black market" for foreign currency has also been reinvigorated from all of this, alongside an "informal" exchange rate at growing variance to the official rate. Into this market have poured speculators, not the least of which are Burma's own banks.

In short, what is fast being created amounts to Burma's old monetary regime; parallel markets and multiple exchange rates, while speculators, spivs and connected entities profit from the chaos.

What Needs to be Done?

Burma's exchange rate problems have their own Gordian Knot solution, just waiting to be cut simply by holding the current government to its commitment of allowing the kyat to float. A genuine managed float in which government intervention is limited and rare, would see the kyat fluctuating according to fundamentals and circumstances and would no longer be a vehicle for rent-seekers and speculators to make one-way bets against the public good.

No exchange rate regime is without risk or cost, but a genuinely managed floating exchange rate regime's costs are transparent and, given reasonable development of Burma's financial sector, insurable against by real traders and investors.

Of course, with access to the formal foreign exchange markets long denied them, most people in Burma have long lived with the informal exchange rate. Properly floating the formal exchange rate will simply bring the informal and formal exchange rates and markets back together—precisely the stated intention back in 2012, but undone in 2015.

Burma's Central Bank has some very capable people (especially at the Vice-Governor level). Nevertheless, at present Burma's monetary authorities, in the broadest sense, lack the capacity to properly operate and police an administratively intensive and corruption-inducing quasi-fixed exchange rate arrangement.

We have seen this movie before. Time now to really set the kyat free.

Sean Turnell is Associate Professor in Economics at Sydney's Macquarie University.

The post Time to Set the Kyat Free appeared first on The Irrawaddy.

Vietnam: Human Rights Should Not Obstruct Deeper US Ties

Posted: 08 Jul 2015 11:44 PM PDT

US President Barack Obama, right, listens to remarks by Vietnam's Communist Party chief Nguyen Phu Trong after their meeting in Washington on July 7, 2015. (Photo: Reuters)

US President Barack Obama, right, listens to remarks by Vietnam's Communist Party chief Nguyen Phu Trong after their meeting in Washington on July 7, 2015. (Photo: Reuters)

WASHINGTON — The head of Vietnam's ruling Communist Party said Wednesday that differences with the United States on human rights should not be allowed to obstruct the deepening of relations between the former enemies.

Nguyen Phu Trong, the one-party state's de facto leader, spoke at a Washington think tank after an unprecedented meeting Tuesday with President Barack Obama at the White House.

Trong's visit comes 40 years after the end of the Vietnam War and 20 years after Washington and Hanoi restored diplomatic relations. On Capitol Hill, meanwhile, lawmakers honored American veterans at a ceremony commemorating the 50th anniversary of the arrival of US ground troops in Vietnam.

Trong called for the two nations to take relations "to the next level" after declaring a comprehensive partnership in 2013. He said they have a common interest in peaceful resolution of disputes and freedom of navigation in the disputed South China Sea.

US officials see stronger ties with Vietnam as a linchpin in Obama's Asia policy. Last fall, the United States eased restrictions on sales of lethal weaponry to Vietnam for maritime security as concern grows over Chinese expansionism in the South China Sea, an important conduit for international trade.

Human rights have remained a sore point, although the United States says Vietnam's prosecution of dissidents has decreased. According to the State Department, Vietnam was holding about 125 political prisoners at the end of 2014.

On the eve of Trong's visit, a bipartisan group of nine US lawmakers urged Obama to call on the party leader to release a number of detainees, saying the United States must send "a clear message to the Hanoi authorities that respect for human rights is essential for a closer economic and security relationship."

Trong said Vietnam wants to promote and protect the human rights of all people but added that the rights of each individual must be put in the context of the wider community. He said people are not detained because of their religion or background, but because they violated the law.

He said dialogue was needed because each country has a different understanding on the issue.

"But we should not let this human rights issue be an obstacle to our relationship," Trong told the Center for Strategic and International Studies.

After Tuesday's meeting, Obama said he and Trong spoke candidly about human rights and religious freedom.

The post Vietnam: Human Rights Should Not Obstruct Deeper US Ties appeared first on The Irrawaddy.

US Upgrades Malaysia in Annual Human Trafficking Report: Sources

Posted: 08 Jul 2015 10:24 PM PDT

Policemen monitor as forensic experts dig out human remains near an abandoned human trafficking camp in the jungle at Bukit Wang Burma in Malaysia on May 26, 2015. (Photo: Reuters)

Policemen monitor as forensic experts dig out human remains near an abandoned human trafficking camp in the jungle at Bukit Wang Burma in Malaysia on May 26, 2015. (Photo: Reuters)

WASHINGTON — The United States is upgrading Malaysia from the lowest tier on its list of worst human trafficking centers, US sources said on Wednesday, a move that could smooth the way for an ambitious US-led free-trade deal with the Southeast Asian nation and 11 other countries.

The upgrade to so-called "Tier 2 Watch List" status removes a potential barrier to President Barack Obama's signature global trade deal.

A provision in a related trade bill passed by Congress last month barred from fast-tracked trade deals Malaysia and other countries that earn the worst US human trafficking ranking in the eyes of the US State Department.

The upgrade follows international scrutiny and outcry over Malaysian efforts to combat human trafficking after the discovery this year of scores of graves in people-smuggling camps near its northern border with Thailand.

The State Department last year downgraded Malaysia in its annual "Trafficking in Persons" report to Tier 3, alongside North Korea, Syria and Zimbabwe, citing "limited efforts to improve its flawed victim protection regime" and other problems.

But a congressional source with knowledge of the decision told Reuters the administration had approved the upgraded status. A second source familiar with the matter confirmed the decision.

Some US lawmakers and human rights advocates had expected Malaysia to remain on Tier 3 this year given its slow pace of convictions in human-trafficking cases and pervasive trafficking in industries such as electronics and palm oil.

This year's full State Department report, including details on each country's efforts to combat human trafficking, is expected to be released next week.

State Department spokesman John Kirby said the report was still being finalized and that "it would be premature to speculate on any particular outcome."

Obama visited Malaysia in April 2014 to cement economic and security ties. Malaysia is the current chair of the 10-nation Association of Southeast Asian Nations (Asean). It is seeking to promote unity within the bloc in the face of China's increasingly assertive pursuits of territorial claims in the South China Sea, an object of US criticism.

In May, just as Obama's drive to win "fast-track" trade negotiating authority for his trade deal entered its most sensitive stage in the US Congress, Malaysian police announced the discovery of 139 graves in jungle camps used by suspected smugglers and traffickers of Rohingya Muslims from Burma.

Malaysia hopes to be a signatory to Obama's legacy-defining Trans-Pacific Partnership (TPP), which would link a dozen countries, cover 40 percent of the world economy and form a central element of his strategic shift toward Asia.

On June 29, Obama signed into law legislation giving him "fast-track" power to push ahead on the deal.

Lawmakers are working on a compromise that would let Malaysia and other countries appearing on a US black-list for human trafficking participate in fast-tracked trade deals if the administration verified that they have taken concrete steps to address the most important issues identified in the annual trafficking report.

The graves were found in an area long known for the smuggling of Rohingya and local villagers reported seeing Rohingya in the area, but Malaysia's Deputy Home (Interior) Minister Wan Junaidi Tuanku Jaafar has said it was unclear whether those killed were illegal migrants. The discovery took place after the March cut-off for the US report.

The State Department would have needed to show that Malaysia had neither fully complied with minimum anti-trafficking standards nor made significant efforts to do so to justify keeping Malaysia on Tier 3, which can lead to penalties such as the withholding of some assistance.

In its report last year, the State Department said Malaysia had reported 89 human-trafficking investigations in the 12 months to March 2014, down from 190 the previous year, and nine convictions compared with 21 the previous year.

In the latest year to March, Malaysia's conviction rate is believed to have fallen further, according to human-rights advocates, despite a rise in the number of investigations. That reinforced speculation Malaysia would remain on Tier 3.

"If true, this manipulation of Malaysia's ranking in the State Department's 2015 TIP report would be a perversion of the trafficking list and undermine both the integrity of this important report as well as the very difficult task of confronting states about human trafficking," said Democratic Senator Robert Menendez, who had pushed to bar Tier 3 countries from inclusion in the trade pact.

Phil Robertson, deputy director of Human Rights Watch's Asia division, said he was "stunned" by the upgrade.

"They have done very little to improve the protection from abuse that migrant workers face," he said. "This would seem to be some sort of political reward from the United States and I would urge the US Congress to look long and hard at who was making the decisions on such an upgrade."

Malaysia has an estimated 2 million illegal migrant laborers, many of whom work in conditions of forced labor under employers and recruitment companies in sectors ranging from electronics to palm oil to domestic service.

Last year's report said many migrant workers are exploited and subjected to practices associated with forced labor. Many foreign women recruited for ostensibly legal work in Malaysian restaurants, hotels, and beauty salons are subsequently coerced into prostitution, the report said.

An administration official told Reuters in June that the White House had been working closely with the Malaysian government and stakeholders to fight the problem.

Among the 12 TPP countries, Brunei has also come under attack by human rights groups for adopting Islamic criminal law, which includes punishing offenses such as sodomy and adultery with death, including by stoning. Vietnam's Communist government has been criticized for jailing dissidents.

The post US Upgrades Malaysia in Annual Human Trafficking Report: Sources appeared first on The Irrawaddy.

Chinese Brokers Woken from Global Dreams by Market Emergency

Posted: 08 Jul 2015 10:00 PM PDT

An investor watches an electronic board showing stock information at a brokerage office in Beijing, China, July 9, 2015. (Photo: Reuters)

An investor watches an electronic board showing stock information at a brokerage office in Beijing, China, July 9, 2015. (Photo: Reuters)

HONG KONG — The business plans and overseas ambitions of Chinese brokerages are being shelved as Beijing pushes them to use their resources to arrest a dramatic plunge in domestic equity markets that is threatening China's economic stability.

Twenty-one of China's biggest brokerages were pressed into service last weekend, pledging to spend 15 percent of their net assets, roughly 120 billion yuan (US$19 billion), to buy stocks as part of a broad government-led effort to calm what the securities regulator has called panic.

Securities companies, which have raised $29.4 billion through international and local share sales this year, are expected to pump more of their own cash into the market if share prices fall further, executives and analysts say.

"The top priority for Chinese brokers now is to protect the stock market," said an executive at a Chinese securities firm in Shanghai.

Chinese brokers had been looking to use some of the cash they raised this year to expand their global reach and offer a full range of products and services abroad, complementing China's internationalization of its currency.

Haitong Securities, China's second-biggest brokerage, in December agreed to pay 379 million euros for Portuguese investment bank Banco Espirito Santo de Investimento SA, while its Hong Kong-listed firm this year closed a deal to buy Asian brokerage Japaninvest Group Plc.

Now Haitong's attention is squarely on domestic matters, as its share price has tumbled about 35 percent since end-June. It has spent at least HK$313 million ($40 million) buying its own shares in Hong Kong in that period, according to company filings.

Haitong suspended its shares on Wednesday after a unit of state-backed investment firm Haixia Capital offered to sell a block of its shares at a discount of up to 20 percent.

In February, Citic Securities Co said it spent HK$780 million for KVB Kunlun Financial Group to build its international capabilities and expand its currency trading business.

"Those who haven't set up offices in overseas markets may have to slow down their plans, and those with offshore branches also won't have energy or time to expand at present," said the Shanghai-based securities executives.

Shares Plunge

The market rout has been particularly brutal for shares in Chinese brokers this week.

"Investors are extremely unimpressed with their sudden conscription into national service, and you can see that in their share prices," said Matthew Smith, a strategist who covers the China financials sector for Macquarie.

Citic Securities stock is down more than 23 percent in Hong Kong since Monday. Shares in Guotai Junan International Holdings, the offshore arm of China's biggest securities firm, have fallen more than 28 percent.

Shares in Guolian Securities, which started trading on Monday, have dropped about 40 percent.

Bond spreads for securities houses have also widened.

All the brokers mentioned in the article declined to comment on the specifics of their market intervention plans.

At some mainland brokerages, those plans include only giving customers information that will "stabilize the market," said another Shanghai-based brokerage employee.

An employee at Shenwan Hongyuan Securities said that at morning meetings operations departments were being told by managers to help stabilize markets, which have lost more than $4 trillion since the start of June—or four times what the German stock market is worth.

"Especially our bigger investors, we're being told to comfort them," the worker said.

Shenwan Hongyuan could not immediately be reached for comment.

Brokerages are also helping themselves by helping the market, said the employee.

"It's not just a government request," the employee said. "In the bull market, the brokerages benefited a lot. This is something we must do."

The post Chinese Brokers Woken from Global Dreams by Market Emergency appeared first on The Irrawaddy.
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