Archive for July, 2014

July 24, 2014

Interview: Laos Prime Minister in Exile

Interview: Laos Prime Minister in Exile

July 24, 2014

China’s EximBank Suspends Loans For Roads, Bridges in Laos

China’s EximBank Suspends Loans For Roads, Bridges in Laos


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Chinese President Xi Jinping (R) greets Laotian Prime Minister Thongsing Thammavong before talks in Beijing, April 11, 2014.

Export-Import Bank of China (EximBank), the official export credit agency of the Chinese government, has suspended loans for infrastructure and construction projects in Laos, saying it would prefer to only finance mining and hydro-power ventures, according to Lao sources.

The move is seen by some as an indication of Beijing’s concern over its neighboring communist ally’s ability to repay loans for such projects as roads and bridges in the absence of immediate guarantees.

In the mining sector, for example, natural resources act as ready collateral.

EximBank, a top financier of projects that have been awarded to Chinese companies, conveyed the decision on the suspension of loans to the Lao government recently, the sources said.

Last month, the Laos-China Cooperation Commission, an agency under the Lao Ministry of Planning and Investment which manages bilateral relations, explained in a note to the Lao Ministry of Public Works and Transport the reasons behind EximBank’s decision.

The bank said it would only support projects in the mining and hydro-power sectors “that give maximum economic results,” according to the notice by the commission, one source told RFA’s Lao Service.

Nine projects shelved

The notice resulted in the Ministry of Public Works and Transport suspending nine road and bridge projects in the country that were linked to Chinese firms with potential financing from EximBank.

A commission official confirmed with RFA that the Chinese bank had suspended the loans but refused to provide details.

But Santisouk Simmalavong, the head of the Ministry of Public Works and Transport, sounded uncertain when asked to comment on the issue.

“It is not clear yet,” he said. “We have to wait and see. We do not know.”

He also said he was in the dark about the ministry’s order to halt the nine projects.

Lao news reports have said that the country has great potential for development of the hydro-power and mining sectors but faces a shortage of financial and engineering companies investing in such areas.

China is the top investor in Laos and most of its money has been pumped into the mining and hydro-power sectors. But it is not financing any of the two controversial dams in Laos— the Xayaburi and Don Sahong dams.

Rail project

It is not clear whether EximBank’s decision might also impact the planned U.S. $7.2-billion rail project linking the Lao capital Vientiane to southwestern China. Laos is banking on a Chinese loan for the ambitious project.

“If the bank is going to suspend loans to smaller projects such as road and bridge projects, the assumption is that it would also not finance the mammoth rail project,” one source said.

During Lao Prime Minister Thongsing Thammavong’s April visit to China, the two sides agreed that the railway project was crucial to boosting economic and trade cooperation and vowed to look for an “effective method of cooperation” on the project.

Reported by Ounkeo Souksavanh for RFA’s Lao Service. Translated by Ounkeo Souksavanh. Written in English by Parameswaran Ponnudurai.

July 24, 2014

Almost 150 million USD lost to corruption in Laos

Almost 150 million USD lost to corruption in Laos

VIENTIANE, July 22 (Xinhua) — More than 1.2 trillion Lao kip ( 149.40 million U.S. dollars) has been misappropriated from 2012 to the present day through corruption, according to state-run daily Vientiane Times on Tuesday.

The announcement was made by Head of the Government Inspection Authority Bounthong Chitmany during his report to the National Assembly (NA) on the status of inspection and anti-corruption activities.

According to Bounthong, the authority has inspected more than 300 targets since 2012. The main forms of corrupt activity were personal abuse of power for personal benefit, bribery, forgery of documents, illegally modifying technical standards and designs, and delaying document approval for personal gain.

“The corruption activities in the country are circulating in these five ways, with the abuse of power and delaying document approval the most widespread among them,” Bounthong said.

According to Bounthong, abuse of power was often exercised for the benefit of friends and family, while delaying the approval of documents was practiced to induce bargaining to speed approval.

Approximately 41.6 percent of the funds and assets gained by corrupt means have been recovered and restored to the National Treasury, amounting to some 505 billion Lao kip (62.87 million U.S. dollars).

Bounthong reminded the NA that state assets were being lost due to incomprehensive project management of developments including incomplete design works.

Officials were also guilty of overloading the price of projects and forging documents suggesting that projects were complete in order to receive payment.

The majority of state assets lost were due to deliberate conspiracies between groups of officials who created plans to embezzle money from the state budget. Other groups of officials conspired to sell state-owned land for unrealistically low prices for personal benefit.

According to Vientiane Times, Bounthong also decried the implementation of projects which had not been approved by the National Assembly as required by law. Such projects were a huge loss of state revenue as they violated not only financial discipline but often saw price blowouts due to a lack of transparency.

Projects implemented without the approval of the NA were also more likely to be a burden on the budget as they were often of a lower quality and more expensive.

Illegal logging and the illegal trade of wood were also a major factor in the loss of state property. Illegal or unmanaged logging has not only resulted in the destruction of forestry assets but has also brought less revenue from trade despite a rapidly increasing number of wood processing factories, Bounthong said.


July 24, 2014

New Constitution Gives Thai Junta Sweeping Powers

New Constitution Gives Thai Junta Sweeping Powers

Thailand’s new temporary constitution that gives the military government sweeping powers in the run-up to a planned October 2015 election also allows the leader of the current ruling junta to become interim prime minister, a senior army official said Wednesday.

The document adopted Tuesday is the first step toward restoring electoral democracy in Thailand, two months after the army took power in a coup, but the junta will continue to hold substantial power even after an interim Cabinet and legislature take office in September.

Although the interim charter is supposed to pave the way for civilian rule, it gives the junta — officially called the National Council for Peace and Order — what amounts to supreme power over political developments. It also legalizes all actions the junta has taken since the coup, as well as the takeover itself.

The members of the National Legislative Assembly will be appointed by the junta, and in turn will nominate a prime minister. The prime minister will then pick a Cabinet, which must be confirmed by the assembly.

The 48-article charter also lays out the process by which a permanent constitution will be drafted and adopted.

While the charter gives the military rulers almost supreme authority over politics, Wissanu Krea-ngam, a legal adviser to the junta, said Wednesday that the military would handle only peacekeeping and security matters, even though the interim constitution clearly gives it the final word on all important issues.

“There are not any provisions in the interim charter that give the power for the NCPO to oust the Cabinet or the prime minister, as people alleged,” Wissanu told reporters. “The NCPO will only exist to share the burdens of the Cabinet on security matters and peacekeeping, so that the Cabinet can run the country without getting distracted with other problems that could arise.”

According to deputy army commander Gen. Paiboon Kumchaya, junta leader and army commander-in-chief Gen. Prayuth Chan-ocha can serve as interim prime minister under the new rules. The junta previously said the interim government would operate until a general election is held by October 2015, if no problems interfere.

“Personally, I don’t see that Gen. Prayuth lacks any qualifications. At this period, it’s like he’s already working as the prime minister,” Paiboon said. “In the past few months, Gen. Prayuth has been doing the job thoroughly, chairing every meeting by himself and running every ministry smoothly.”

The temporary constitution mandates that members of the legislative assembly as well as the prime minister and the Cabinet be at least 40 years old and not have been active members of a political party for the past three years.

Critics have charged that the military is seeking to weaken the power of political parties. One idea being discussed is having a portion of the lawmakers be chosen by occupational groups and different social sectors.

Article 44 of the charter gives Prayuth, as junta chief, the power “to order, suspend or do any actions he sees necessary for the benefits of the reforms, the unity and reconciliation of people in the country, or to prevent, suspend or suppress any actions that will destroy the peace and order, the national security and monarchy, the country’s economy or the country’s governance, no matter if such actions are taking place in or outside the kingdom.” It declares that such actions are automatically legal.

Analysts have raised concerns about the enormous power granted to the junta chief.

“This gives the power for the NCPO to commit any actions that might contradict or even go beyond the power given under this constitution,” said Ekachai Chainuvati, a law lecturer at Bangkok’s Siam University. “It states explicitly that he can perform any actions, such as reshuffling civil servants, drafting any laws or even punishing people judicially.”

Abhisit Vejjajiva, the leader of the Democrat Party, which is normally aligned with the establishment and the military, called for the junta leader to quickly clarify how he will exercise the power under Article 44 to “prevent conflict or chaos that could arise.”

“While I believe the society can accept the existence of the special powers in case there is going to be any chaos, it is not clear how necessary it is to extend the special authority to include legislative and judicial powers, or to claim that the power will be used for reforms or reconciliation,” Abhisit, a former prime minister, wrote in a Facebook post.

The coup on May 22 followed months of deep-rooted political conflict that virtually paralyzed the government.


July 23, 2014

Thailand: Revolution by Motorcycle?


Thailand: Revolution by Motorcycle?

Reporting for this article was supported by a grant from the Pulitzer Center on Crisis Reporting.
July 23, 2014, 1:12 p.m
Apichart Weerawong/AP Photo
Supporters of Thailand’s Red Shirt movement in a protest against the Constitutional Court, Bangkok, May 8, 2013 

In the spring of 2010, when as many as 300,000 political protesters from Thailand’s Red Shirt movement occupied Bangkok’s main commercial district, they were helped by an unusual ally: tens of thousands of motorcycle taxi drivers. With their ability to navigate obstructed streets, the motorcycle taxis transported Red Shirt leaders through otherwise barricaded parts of the downtown. And they carried messages, money, and materials to the protesters, including the makings of Molotov cocktails. Eventually the military used lethal force to chase the Red Shirts from the streets, killing about seventy of them. But the remarkable involvement of the motorcycle taxi drivers signaled a deep change in Thailand, a new willingness on the part of previously disenfranchised groups to defy authority.

After a couple of years of relative quiet, Thailand’s political turmoil resumed again a few months ago when the Red Shirts’ mortal foes, the Yellow Shirts, mounted protests that effectively prevented the government from functioning, and this time the army took over in a coup d’état. The resilience of groups like the motorcycle taxi drivers, however, is likely to make it difficult, and perhaps impossible, for the new junta to maintain undisputed control—or to turn the government over to any civilian party that the drivers and others like them view as deadly rivals.

Motorcycle taxis are a large and, more important, representative constituency. If you want to get someplace quickly in traffic-choked Bangkok, your best bet is to take a two-wheeled motorcycle taxi, even if it doesn’t feel entirely safe to weave through traffic the way they do, squeezing in the tight spaces between slowly moving cars. There are some 200,000 motorcycle taxi drivers in Bangkok, most of them licensed, some of them not, recognizable by the orange vests they wear as they infiltrate the traffic, or wait for customers under corrugated metal awnings. They make four to six million trips a day, which means that the motorcycle taxis carry ten times as many passengers as Bangkok’s smooth-as-silk rapid transit system.

These drivers are, in other words, indispensable for local transportation.They also have some political significance in a country now under military rule for the second time in the past eight years, and, by some counts, the nineteenth time since Thailand became a constitutional democracy in 1932.The junta is promising a restoration of civilian rule, but it wants this to occur somehow without the eventual reelection of the democratically elected party it just forcibly removed from office. The motorcycle taxi drivers show that this might not be easy to do.

Like Bangkok’s waitresses, factory workers, chambermaids, domestic servants, and prostitutes, most of the motorcycle taxi drivers come from Isan, the northeastern provinces bordering on Laos. The people from Isan are darker complexioned than the predominantly Sino-Thai population of Bangkok. They speak with a recognizable accent. In the past they were the butt of country-bumpkin jokes. Bangkok mothers would tell their children that if they didn’t work hard in school, that’s how they would end up—as motorcycle drivers waiting at sweltering intersections to take passengers places for the equivalent of a dollar or two a trip.

According to an Italian anthropologist, Claudio Sopranzetti, who wrote his Harvard Ph.D. thesis on the Bangkok motorcycle drivers, they perfectly illustrate the coming to political awareness of Thailand’s rural people, whose demands for inclusion and enfranchisement are at the heart of the country’s continuing political crisis.For years, driving the streets of Bangkok, ferrying goods that they couldn’t afford and passengers whose material lives were vastly superior to their own, these drivers had what Sopranzetti calls a daily experience of inequality, though this awareness didn’t matter much politically in Thailand where, perhaps encouraged by a certain Buddhist quiescence, the tendency of the poor upcountry people was to assume that little could be done to change their lot in life.While their condition, like that of the rural poor in general, was not a matter of indifference to the country’s various governments, nor was it a major priority.

But, as in other countries, as large numbers of migrants left rural areas for the cities, where wealth was concentrated, consciousness of inequality grew and it began to matter politically. In Thailand it did so rather abruptly, in 2001, when the telecommunications billionaire Thaksin Shinawatra successfully ran for prime minister on a populist program. Born and raised in an upcountry town, Thaksin began diverting resources that had previously gone to Bangkok to the rural provinces—in the form of micro-loans, new health care benefits, and one-time infusions of cash for village projects, like paved roads.

Back in Bangkok, the motorcycle taxi drivers had largely existed in the shadows of the informal economy, where they were prey to organized criminals and corrupt police to whom they paid protection money.But Thaksin started issuing licenses for them, and that’s when they began wearing the orange vests so familiar in Bangkok today, each vest something like a taxi medallion, with a market value to it. In exchange, the drivers pay an annual tax, which, in Sopranzetti’s view, was an important step in their emerging political awareness because it gave them a sense of entitlement that they didn’t have before.

Hiroji Kubota/Magnum Photos
Motorcycle taxi drivers with Red Shirt protesters in front of a barricade in central Bangkok, May 20, 2010 

Sopranzetti, who is now a visiting scholar at Bangkok’s Chulalongkorn University, cites one of his motorcycle taxi driver informants, a man he calls Adun, on the psychological effect of Thaksin’s licensing and taxation scheme. “Thaksin told us that we pay taxes and, therefore, state officials work for us,” he wrote in a paper he presented at a recent university colloquium. Thaksin “rephrased poverty as a lack of state support. He recognized the motorcycle taxi drivers as economic actors to whom the state had to offer a structure of inclusion.” The drivers were grateful. More important for national politics, they were part of a much more profound shift in voters’ interests, one that was propelled by large majorities of rural people whose lives had been changed by Thaksin’s policies. In 2005, with overwhelming support in the rural provinces, he was reelected in the biggest landslide in Thailand’s history.

But many others in Thailand, generally referred to as the Bangkok elite, worried, not without some reason, that Thaksin, who further enriched himself while in office and tended to run roughshod over opposition, was a kind of elected dictator in the making. His strong backing by rural voters who had previously stayed out of politics lent urgency to this worry. Many from the country’s traditional centers of power—the political and military leaders and people close to the royal family—feared that, with his enormous appeal to the rural masses, Thaksin could never be voted out of office.

Thaksin’s opponents, known as the Yellow Shirts, staged large demonstrations against him in Bangkok. Then, in 2006, he was removed from office in the first of the country’s two recent military coups. The pattern followed by Thai politics ever since was set: Thaksin or, since the 2006 coup, a stand-in for him (he was forced into exile in 2008 and lives mostly in Dubai) has won every election to be held in Thailand since 2001, only to be removed by non-electoral means—most recently by the current junta.

In reaction, each time a pro-Thaksin government is removed from power, there has been an angry mass reaction in the form of protests by what have come to be called the Red Shirts, consisting largely of the newly enfranchised rural people, including the motorcycle taxi drivers, calling for their democratically-expressed will to be respected. The Red Shirt demonstrations culminated in the 2010 occupation of central Bangkok, in which the motorcycle taxi drivers provided the crucial logistical support. This involvement marked another step in their awakening to the political process. For the first time in their lives, as Sopranzetti puts it, the motorcycle taxi drivers “challenged state power.”

When, in May, 2010, the military moved decisively against the Red Shirt protesters with tanks and guns, their rivals hoped it be the end of this mass movement. But when new elections were held the following year, the pro-Thaksin party easily won yet again.Thaksin’s sister, Yingluck Shinawatra, became the latest of several Thaksin proxies to serve as prime minister.She served for three years and then, after a complicated sequence of maneuvers, she was removed from power and the current junta took control.

The motorcycle taxi drivers have long since returned to their orange vests and busy intersections. I spoke to a dozen or so of them, and their main complaint was that the coup has harmed the tourist trade, so they have fewer customers. The junta has essentially banned criticism of itself—curbing the press and threatening to punish open dissent—and the drivers, like many Thais, are maintaining a discreet silence. But the underlying problem faced by Thailand’s new leaders would seem to be the same as the one faced by the junta of 2006, and the one faced by the caretaker government after the crackdown of 2010.It is that people like the motorcycle taxi drivers are no longer the country bumpkins who used meekly to submit to authority.They are a politically-engaged population spread across the heart of the capital, on every street corner—part of an electoral majority that has challenged the power of unelected governments again and again, and they aren’t going away.

Reporting for this article was supported by a grant from the Pulitzer Center on Crisis Reporting.

July 23, 2014, 1:12 p.m.


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