ASEAN CHARTER ON TRACK, SINGAPORE MFA TELLS EAP

C O N F I D E N T I A L SECTION 01 OF 02 SINGAPORE 001637 SIPDIS SIPDIS E.O. 12958: DECL: 09/04/2017 TAGS: PREL PGOV ECON PTER ETRD EFIN SN SUBJECT: ASEAN CHARTER ON TRACK, SINGAPORE MFA TELLS EAP DAS MARCIEL REF: SINGAPORE 1591 Classified By: Ambassador Patricia L. Herbold for reasons 1.4(b)(d) ¶1. (C) Summary: The ASEAN Charter should be ready for leaders to sign at the group's November Summit in Singapore, MFA Second Permanent Secretary Bilahari Kausikan told EAP DAS Scot Marciel and the Ambassador August 25. Kausikan offered a downbeat assessment of developments in Indonesia, Malaysia, and Thailand. In a separate meeting, academics told DAS Marciel it appeared the United States was disinterested in the region, but the United States could still do much to promote growth and stability. Ministry of Trade and Industry (MTI) Deputy Secretary NG How Yue expressed his concerns regarding the SIPDIS practical implications of the United States, 100 percent scanning legislation. He noted that ASEAN was making good progress in its free trade agreement talks with other countries in the region. End Summary. ¶2. (U) Visiting Singapore on August 25, EAP Deputy Assistant Secretary Scot Marciel met with MFA Second Permanent Secretary Bilahari Kausikan and MTI Deputy Secretary Ng How Yue. He met separately with financial SIPDIS analysts based in Singapore and participated in a roundtable discussion with academics and economists at the Rajaratnam School of International Studies (RSIS). ASEAN Charter Nearing Completion -------------- ¶3. (C) MFA Second Permanent Secretary Bilahari Kausikan told DAS Marciel and the Ambassador that ASEAN was making steady progress on completing the Charter and it should be ready for the leaders to sign at the November Summit in Singapore. Out of necessity, the Charter will be a "compromise," but will include a "Review Clause" to ensure that the Charter will be a dynamic document that can accommodate change. A key unresolved issue still being debated was how much power would be granted to the ASEAN Secretariat. ¶4. (C) Turning to internal developments in other ASEAN countries, Kausikan commented that Indonesia was not doing well economically. Despite its stronger macroeconomic performance, job growth was poor. The central government faced many difficulties in implementing its policies due to the devolution of authority to the regional governments. He also voiced concern over Indonesia's plans to construct a nuclear power plant directly on a fault line. Kausikan worried that Malaysia was suffering from poor economic and political trends, including a trend toward pronounced "Islamization," which was increasing ethnic tension. In Thailand, the new constitution seemed designed to bring in a weak government that would be unable to implement the policies needed to deliver strong economic growth. ¶5. (C) DAS Marciel and Kausikan also held a discussion on Singapore's involvement in Provincial Reconstruction Teams (PRTs) in Afghanistan, reported reftel. Perceptions of U.S. Disengagement -------------- ¶6. (SBU) Academics from the Rajaratnam School of International Studies (RSIS) expressed their dismay over what they characterized as an apparent lack of U.S. interest in Southeast Asia. They noted that there were two important factors at work that fed this perception: the rise of other major powers in the region such as China and U.S. distraction by events in the Middle East, particularly the situation in Iraq. The United States was still well respected in the region; it should remain actively involved and could do much to strengthen ASEAN countries economically, they argued. In particular, the United States should provide more support for education in the poorer ASEAN countries to help foster economic growth and stability. DAS Marciel responded that the USG remained intensively engaged in the region, both bilaterally and, increasingly, with ASEAN as an institution. He briefed the academics on the U.S.-ASEAN Enhanced Partnership and on strengthened bilateral relations with most ASEAN member states. ¶7. (SBU) The academics also spoke of a belief by some in SINGAPORE 00001637 002 OF 002 the region that the United States was seeking to downplay the role of religion in society -- especially Islam -- in an attempt to combat religious extremism. DAS Marciel explained that the USG has engaged in many public diplomacy programs to show that religion can flourish in a pluralistic society. The academics maintained that the public diplomacy message of the United States was not reaching its target audience. 100-Percent Cargo Scanning, ASEAN Integration -------------- -- ¶8. (SBU) MTI Deputy Secretary Ng How Yue expressed his concerns regarding the practical implications of future screening of 100 percent of all cargo bound for the United States under recently passed legislation. Referencing his Customs background, DepSec Ng observed that it would impose significant logistical problems as Singapore moved from inspecting two to three percent of containers to 100 percent. However, he said Singapore would work with the United States and suggested a detailed plan of action for Customs agents might be necessary before the program could be implemented efficiently. ¶9. (U) DAS Marciel stressed that the United States welcomed and encouraged the development of a strong ASEAN. Ng responded that the GOS believed ASEAN integration was in Singapore's strategic interest. He added that negotiations on ASEAN's myriad free trade agreements with other countries in the region were progressing well. ¶10. (U) According to DepSec Ng, the United States should expect a greater focus from ASEAN on environmental issues such as deforestation and energy efficiency. There was a firm belief that technology could bring better solutions to energy security, along with conservation and an increased reliance on renewable energy sources. With its advanced technology, the United States would be a valued partner for the region. Crisis in U.S. Markets Did Not Spill Over to Asia -------------- -------------- ¶11. (U) DAS Marciel queried Singapore-based regional financial analysts about the impact of the recent sub-prime lending crisis in the United States on the region. The consensus was that the impact was limited for two reasons: the limited direct exposure of regional economies to the U.S. sub-prime market; and the offset by the still-strong China and India markets. However, Southeast Asian economies were likely to show strain if the United States were to go into a recession. ¶12. (U) DAS Marciel cleared this message. Visit Embassy Singapore's Classified website: http://www.state.sgov.gov/p/eap/singapore/ind ex.cfm HERBOLD