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Audio Overview of East Asia Pacific Issues, Thursday, 14 March 2019

APAC Assistance Director Paul Quaglia discusses Main Issues in East Asia Pacific.

 

Main Issues in East Asia Pacific

Firstly in INDONESIA

  • According to Police, the wife of a suspected terrorist blew herself and their children up yesterday in the Sibolga city in North Sumatra. Police had not entered the scene suspecting the presence of more explosives. One police officer was injured during the blast.
  • The suspected terrorist allegedly belonged to the Jamaah Ansharut Daulah terror group which has pledged its allegiance to the Islamic State.
  • President Joko Widodo is scheduled to visit Sibolga on March 17 to inaugurate a port. Clients are advised to be aware of security measures in the city for Widodo’s visit.

Also in INDONESIA

  • Political pressure groups such as the Pancasila Youth and the Betawi Brotherhood Forum have declared their support for President Widodo. President Widodo’s closeness with the people and the perception he is not from the now old “New Order” could be the reason for the support.
  • Opposition candidate Prabowo Subianto has played down the announcement by the groups saying it is a normal thing during presidential election.
  • The pressure groups have large followings spread across Indonesia as they have members at the district and sub-district level, which can have significant influence on the local population.

Also in INDONESIA

  • Six foreign-controlled mining operations in Indonesia intend to divest shares in the future to meet Indonesian regulations. According to the Indonesian mining rules, foreign-controlled miners are required to reduce their ownership after five years of production and by ten years, it should be reduced to 49 % or lower.
  • The companies include PT Vale Indonesia- a unit of Newcrest Mining, PT Nusa Halmahera Minerals, PT Kasongan Bumi Kencana, PT Ensbury Kalteng Mining and PT Galuh Kencana.
  • However, it is not specified yet when the companies will start divesting their shares.

THAILAND

  • Two insurgents dressed like women hurled a pipe bomb at the living quarters of a police protection unit yesterday at the Subotasae village in the
  • Yi-ngo district of southern Narathiwat province.

PAPUA NEW GUINEA

  • The K92 Mining Company has announced the commencement of the expansion of the Kainantu gold mine in the Eastern Highlands province, to double current capacity up to 400,000 tonnes per annum. It will increase annual production to approximately 120,000 ounces of gold equivalent.
  • K92’s total capital expenditure for 2019 is projected to be USD 30 million. It aims to increase its employees from 650 to 750 by the end of 2019, and to 800 by the end of 2020 with over 96% of all positions being filled by Papua New Guinea nationals.
  • K92 is liable to pay the government USD 300 million as corporate tax and salaries during the entire expansion period. The company is aiming for a total revenue of USD 2 billion during the expansion period.

THE PHILIPPINES

  • The Philippines cut its 2019 GDP growth target from between seven and eight percent to between six and seven percent, citing a delay in final legislative approval of the budget. The chief of economic planning said that the growth may fall to below five percent.
  • The Finance Secretary said yesterday that the reduced GDP growth targets reflected major issues such as the absence of a 2019 government budget and the ongoing US-China trade dispute, which are both key Philippine trading partners.
  • Differences between the Philippines Senate and House of Representatives over fund realignments in the ratified 2019 budget has delayed approval of the budget by President Rodrigo Duterte. It has forced the government to operate on last year’s budget. In 2018, the Philippines economy grew by 6.2%.

Also in THE PHILIPPINES

  • President Rodrigo Duterte said yesterday the the peace talks between the government and the communist New People’s Army will not resume without his conditions being met. President Duterte said, if they want to have peace during his term, they have to drop the arms and stop extortion and collecting revolutionary taxes.
  • President Duterte added, that the government is willing to incur the costs for the resumption of the talks, which collapsed in November 2017.
  • The New People’s Army is the armed wing of the Communist Party of the Philippines, it was formed in 1969. According to estimates, it had approximately 3,200 members in 2015 operating in rural areas throughout the Philippines.

MALAYSIA

  • The Minister of Resources said yesterday that bauxite miners must each conduct a study on the environmental impact of their sites in Malaysia before receiving licenses to restart their operations. The temporary bans are due to end on March 31. It is estimated that each study will take at least six months to complete.
  • Slower bauxite exports from Malaysia will increase the global prices of aluminum. Before the ban Malaysia was one of the biggest suppliers of Bauxite to China, exporting nearly 3.5 million tons a month.
  • Bauxite mining was banned in 2016 after illegal and unregulated mines in the eastern state of Pahang contaminated water sources. Stricter rules for mining are expected in Malaysia.

SOUTH KOREA

  • Possible economic sanctions on South Korea by Japan over a legal dispute concerning wartime labor cases has raised anxiety in Seoul and Tokyo and is causing tensions for companies in the two countries. Representatives of foreign ministries from both sides are scheduled hold talks today to discuss the issue.
  • Earlier, Japanese companies Mitsubishi Heavy Industries and Nippon Steel & Sumitomo Metal, were ordered by a South Korean court, to compensate Koreans who were forced to work for them during World War II. The court had approved the seizure of Nippon Steel assets in South Korea and a similar petition has been filed against Mitsubishi Heavy Industries. The Japanese government has expressed its displeasure over the issue.
  • Japan is the fifth-largest export destination for South Korea. By sanctioning South Korea, it can have adverse effect on Japan because 85% of Japanese companies operating in South Korea show profits from their Korean operations.

 

Main Issues in South Asia

Firstly in PAKISTAN

  • Prime Minister Imran Khan yesterday in a meeting decided to amend the Anti-Money Laundering Act, 2010, with stricter punishments. As per the proposed amendment to the Anti Money Laundering Act, the punishment for money laundering crimes will be increased to 10 years imprisonment and a fine of USD 35,000.
  • The Law Minister briefed the meeting on the proposed amendments in the Foreign Exchange Regulations Act, 1947, Anti-Money Laundering Act, 2010 and the Anti-Terrorist Act, 1997.
  • According to Customs and Inland Revenue Intelligence of Pakistan, a total of 335 suspicious transactions were reported in 2018 and inquiries have started against 510 people. The Customs have recovered more than USD 47 million from the suspects.

Also in PAKISTAN

  • The Civil Aviation Authority of Pakistan has extended the closure of eastern airspace of the country until further notice. Airports in Sialkot, Bhawalpur, Rahim Yar Khan and D.G. Khan will remain closed.
  • According to a senior official, the closure of flight operation at fifteen airports of Pakistan is expected to continue until tomorrow and could be extended further. Pakistani airspace was closed on February 27 for commercial flight operations after Indian fighter aircrafts conducted air strikes in Pakistan.
  • Closure of eastern airspace has affected air travelers severely. Clients are advised to make alternative travel plans by road or train to travel to the Eastern part of Pakistan.

BANGLADESH

  • The left-leaning parties of Bangladesh have threatened to go on strikes if the government raises gas tariff. The Bangladesh Energy Regulatory Commission has been holding a public hearing on proposals for raising gas prices by 80 % for households and 211 % for commercial users.
  • The Left Democratic Alliance party claimed that the hike in gas prices is illogical and unlawful, and they accused the government not being people friendly. Consumer rights groups and energy experts opposed the hike in gas prices saying the gas companies can avoid the possible loss in business by improving their operations and management.
  • The Consumers Association of Bangladesh has filed a petition at the High Court and the High Court is expected to rule on March 31.

SRI LANKA

  • Nurses in Kurunegala, the capital of North Western province launched a strike yesterday. The strike was called after a nurse was assaulted by a doctor in Kurunegala Teaching Hospital.
  • The President of Government Nursing Officers Association claimed that the doctor has been involved in three similar incidents in the past where he had threatened and verbally abused nurses at the hospital. The Health Ministry is conducting an investigation in the assault case.
  • Strikes are likely to affect medical services in the city. Clients are advised to seek alternative hospitals.

Also in SRI LANKA

  • The Sri Lankan government has decided to phase out para-tariffs on imports in five years. However, products related to tourism, manufacturing, and construction will be free of para-tariffs in three years.
  • Finance Minister Mangala Samaraweera said yesterday that the government will abolish para tariffs but will also help the domestic industries to reach international markets. The Treasury Department expects to lose USD 33.6 million by phasing out the para tariffs.
  • Sri Lanka currently stands at 100 out of 190 countries in Ease of Doing Business rank released by World Bank for the year 2018.

INDIA

  • India’s bid to designate Pakistan-based Jaish-e-Mohammed’s chief Masood Azhar as a global terrorist was stalled further yesterday after China put a technical hold on the proposal in the UNSC to ban Masood after his alleged involvement in various terror acts in India. The proposal was the fourth such bid at the UN since 2009.
  • The proposal was moved under the 1267 Al Qaeda Sanctions Committee by France, the UK, and the US on February 27, after Jaish-e-Mohammed claimed responsibility for a suicide attacked which killed 44 Indian soldiers in a suicide attack on February 14. China has asked for more time to examine the proposal.
  • A spokesperson for the Ministry of External Affairs said yesterday that India will continue to work in all available avenues to designate Masood Azhar as a global terrorist.

Also in INDIA

  • A group of 20 suspected Maoists allegedly killed a farm supervisor and burnt two vehicles on March 11 in Kukurkundi village in the Malkangiri district in the eastern state of Odisha. The violence was triggered by the Maoists to protest the road construction between Temurapali and Kukurkundi village.
  • It is suspected that Darva Division of Communist Party of India (Maoist), which operates in Chhattisgarh state, Malkangiri, and Koraput districts of Odisha is behind the crime. Search operations have been intensified by the security forces in the area.
  • Clients are advised to avoid traveling to the Malkangiri district of Odisha.
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