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Manmohan and Asif Do Lunch

The Singh-Zardari luncheon was more productive than many expected.  But the bonhomie will eventually run into stark political realities. Although the timing was coincidental and neither man professes the Christian faith, it was appropriately symbolic that Indian Prime Minister Manmohan Singh and Pakistani President Asif Ali Zardari broke bread in New Delhi on Easter Sunday.  After all, both are responsible for the resurrection of bilateral affairs from the deep chill that followed the 2008 terrorist strikes in Mumbai.  As a New York Times editorial today notes, “both deserve credit for their sensible, workmanlike effort over the past year to improve relations between the two nuclear rivals.” Their luncheon, billed as an informal get-together but which had all the trappings of a mini-summit, was the first trip to India by a Pakistani head of state in seven years.  It not only gave further momentum to the peace dialogue the two countries launched a year ago, which has already resulted in growing trade links.  But it also imparted new optimism that the talks could move on to such contentious matters like the perennially-inflamed dispute over the Kashmir region. The annals of India-Pakistan relations are filled with numerous false dawns and the current moves could well founder upon the sharp historical animosities that regularly bedevil bilateral affairs.  But things may be different this time.  Reports out ofIslamabad indicate that the Pakistani government realizes the country is in desperate economic straits and that closer ties with its ever-richer sibling constitute a much needed lifeline.  The military establishment is also said to understand that the eastern border needs to be stabilized so resources can be focused on combating rising internal security threats.  Significantly, General Ashfaq Parvez Kayani, the powerful army chief who is deeply suspicious of Indian intentions, met with Zardari just before his departure to New Delhi, seemingly giving his blessing to the journey. Up until this point, the warming in bilateral relations has occurred on the economic engagement front.  The two sides have pledged to more than double their two-way trade flows – to the $6 billion annual level – by 2015.  They agreed to ease visa rules for business travel and tomorrow will open a new customs facility at the Attari-Wagah border crossing that lies midway between Lahore and Amritsar which will be able to handle about 1,000 trucks a day, up from the present 25.  Islamabad has also extended “most favored nation” trade status to New Delhi, reciprocating the status India conferred upon Pakistan years ago.  This last development promises to enliven the 2006 South Asia Free Trade Agreement which up until this point has been all but a dead letter. The Indian and Pakistani central banks have announced plans to open branch offices in the other country, a move that will help facilitate cross-border transactions.  Both countries have also advanced initiatives to enhance energy cooperation, including joint development of a natural gas field inTurkmenistan.  And expert talks on expanding commerce in the electrical power and petroleum sectors have taken place in recent weeks. If enhanced trade ties were to develop between South Asia’s largest economies, they would produce significant commercial and (eventually) security dividends for both countries.  According to various studies, a more liberalized trade regime would increase bilateral exchange at least 20 times above current figures as well as boost general prosperity in both countries.  A new report by the Confederation of Indian Industries argues that cross-border trade could easily quadruple in just a few years if both governments moved to increase economic linkages. In his session with Prime Minister Singh, President Zardari agreed to an Indian proposal that the two countries pattern their ties along the lines of the India-China relationship, which combines broadening economic integration, frequent interactions between the national leaderships, and pragmatic diplomacy focused on incremental gains. The so-called “Chinese model” has so far proven its utility.  In an interview yesterday with the Wall Street Journal, Indian Foreign Secretary Ranjan Mathai stated that the politically-difficult decision to open Pakistani markets to Indian goods has convinced New Delhi that Islamabad is serious about better relations.  “I wouldn’t have been as optimistic six months ago,” he commented.  “The fact the government is able to move on the trade track shows there’s a greater willingness to take things forward by all the players.” Mathai also announced that India is now ready to reopen discussions on Kashmir, picking up where the intensive back-channel peace process both sides undertook in 2004-07 left off.  Although those negotiations ultimately collapsed due to Pervez Musharraf’s political travails, they may have come tantalizing close to defusing the volatile Kashmir issue. Officials in both New Delhi and Islamabad also have put the word out that other long-running territorial contestations might be ripe for discussion, too, including the one over Sir Creek, a patch of marshland dividing the Indian state of Gujarat and the Pakistani province of Sindh. The de-militarization of the Siachen Glacier, an uninhabitable stretch of the Himalayas that is filled more with political symbolism than strategic value, also might be on the agenda.  Although a ceasefire there has been in effect since 2003, the rigors of fierce climate and rugged terrain still exact a heavy toll on each side’s military.  On the eve of Zardari’s trip, an avalanche wiped out the base camp of a Pakistani army battalion, claiming the lives of some 135 soldiers and civilians.  Since the beginning of the year, avalanches have likewise taken the lives of some 20 Indian army and border security personnel.  The financial costs of maintaining garrisons in such an inhospitable environment also runs into the tens of millions of dollars for both countries. These issues are likely to be given greater treatment when Indian Foreign Minister S.M. Krishna visits Islamabad in June or July, followed by a possible visit by Mr. Singh toward the end of the year. But it is unlikely the bonhomie flowing from the Singh-Zardari luncheon will be enough to significantly advance the discussion on these sensitive questions.  Both governments are weak and lack the political capital to make fundamental breakthroughs on issues that have defied solution for decades.  (On this, see Myra MacDonald’s analysis of the prospects for a quick accord on Siachen.)  Battered by allegations of scandal and ineptitude, Singh’s government is seemingly consigned to lame duck status as it waits for its term to expire in two years.  In Islamabad, the government is within sight of its own electoral contest and in any case Prime Minister Yusaf Raza Gilani might soon find himself in jail on contempt of court charges.  Moreover, General Kayani, unlike his predecessor Musharraf, is reportedly much less ready to make peace with India. A larger, if a bit more distant, danger resides in the sharper security competition that is sure to erupt between the countries as the United States and its NATO allies hasten their departure from Afghanistan.  Both India and Pakistan regard the country as a key theater of their strategic rivalry and the current defrosting in relations will likely become a casualty as the situation in Afghanistan deteriorates into a new civil war that has regional powers scrambling for influence. Still, the present stirrings of peace demonstrate that despite its singularity intensity the India-Pakistan rivalry has always been a fluid admixture of cooperative impulses and competitive dynamics.  Both governments would be wise to do what they now can to accentuate the workings of the Chinese model before strategic distrust returns to the fore. This commentary was originally posted on Chanakya’s Notebook.  I invite you to follow me on Twitter.

Boris Sullivan

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The Singh-Zardari luncheon was more productive than many expected.  But the bonhomie will eventually run into stark political realities. Although the timing was coincidental and neither man professes the Christian faith, it was appropriately symbolic that Indian Prime Minister Manmohan Singh and Pakistani President Asif Ali Zardari broke bread in New Delhi on Easter Sunday.  After all, both are responsible for the resurrection of bilateral affairs from the deep chill that followed the 2008 terrorist strikes in Mumbai.  As a New York Times editorial today notes, “both deserve credit for their sensible, workmanlike effort over the past year to improve relations between the two nuclear rivals.” Their luncheon, billed as an informal get-together but which had all the trappings of a mini-summit, was the first trip to India by a Pakistani head of state in seven years.  It not only gave further momentum to the peace dialogue the two countries launched a year ago, which has already resulted in growing trade links.  But it also imparted new optimism that the talks could move on to such contentious matters like the perennially-inflamed dispute over the Kashmir region. The annals of India-Pakistan relations are filled with numerous false dawns and the current moves could well founder upon the sharp historical animosities that regularly bedevil bilateral affairs.  But things may be different this time.  Reports out ofIslamabad indicate that the Pakistani government realizes the country is in desperate economic straits and that closer ties with its ever-richer sibling constitute a much needed lifeline.  The military establishment is also said to understand that the eastern border needs to be stabilized so resources can be focused on combating rising internal security threats.  Significantly, General Ashfaq Parvez Kayani, the powerful army chief who is deeply suspicious of Indian intentions, met with Zardari just before his departure to New Delhi, seemingly giving his blessing to the journey. Up until this point, the warming in bilateral relations has occurred on the economic engagement front.  The two sides have pledged to more than double their two-way trade flows – to the $6 billion annual level – by 2015.  They agreed to ease visa rules for business travel and tomorrow will open a new customs facility at the Attari-Wagah border crossing that lies midway between Lahore and Amritsar which will be able to handle about 1,000 trucks a day, up from the present 25.  Islamabad has also extended “most favored nation” trade status to New Delhi, reciprocating the status India conferred upon Pakistan years ago.  This last development promises to enliven the 2006 South Asia Free Trade Agreement which up until this point has been all but a dead letter. The Indian and Pakistani central banks have announced plans to open branch offices in the other country, a move that will help facilitate cross-border transactions.  Both countries have also advanced initiatives to enhance energy cooperation, including joint development of a natural gas field inTurkmenistan.  And expert talks on expanding commerce in the electrical power and petroleum sectors have taken place in recent weeks. If enhanced trade ties were to develop between South Asia’s largest economies, they would produce significant commercial and (eventually) security dividends for both countries.  According to various studies, a more liberalized trade regime would increase bilateral exchange at least 20 times above current figures as well as boost general prosperity in both countries.  A new report by the Confederation of Indian Industries argues that cross-border trade could easily quadruple in just a few years if both governments moved to increase economic linkages. In his session with Prime Minister Singh, President Zardari agreed to an Indian proposal that the two countries pattern their ties along the lines of the India-China relationship, which combines broadening economic integration, frequent interactions between the national leaderships, and pragmatic diplomacy focused on incremental gains. The so-called “Chinese model” has so far proven its utility.  In an interview yesterday with the Wall Street Journal, Indian Foreign Secretary Ranjan Mathai stated that the politically-difficult decision to open Pakistani markets to Indian goods has convinced New Delhi that Islamabad is serious about better relations.  “I wouldn’t have been as optimistic six months ago,” he commented.  “The fact the government is able to move on the trade track shows there’s a greater willingness to take things forward by all the players.” Mathai also announced that India is now ready to reopen discussions on Kashmir, picking up where the intensive back-channel peace process both sides undertook in 2004-07 left off.  Although those negotiations ultimately collapsed due to Pervez Musharraf’s political travails, they may have come tantalizing close to defusing the volatile Kashmir issue. Officials in both New Delhi and Islamabad also have put the word out that other long-running territorial contestations might be ripe for discussion, too, including the one over Sir Creek, a patch of marshland dividing the Indian state of Gujarat and the Pakistani province of Sindh. The de-militarization of the Siachen Glacier, an uninhabitable stretch of the Himalayas that is filled more with political symbolism than strategic value, also might be on the agenda.  Although a ceasefire there has been in effect since 2003, the rigors of fierce climate and rugged terrain still exact a heavy toll on each side’s military.  On the eve of Zardari’s trip, an avalanche wiped out the base camp of a Pakistani army battalion, claiming the lives of some 135 soldiers and civilians.  Since the beginning of the year, avalanches have likewise taken the lives of some 20 Indian army and border security personnel.  The financial costs of maintaining garrisons in such an inhospitable environment also runs into the tens of millions of dollars for both countries. These issues are likely to be given greater treatment when Indian Foreign Minister S.M. Krishna visits Islamabad in June or July, followed by a possible visit by Mr. Singh toward the end of the year. But it is unlikely the bonhomie flowing from the Singh-Zardari luncheon will be enough to significantly advance the discussion on these sensitive questions.  Both governments are weak and lack the political capital to make fundamental breakthroughs on issues that have defied solution for decades.  (On this, see Myra MacDonald’s analysis of the prospects for a quick accord on Siachen.)  Battered by allegations of scandal and ineptitude, Singh’s government is seemingly consigned to lame duck status as it waits for its term to expire in two years.  In Islamabad, the government is within sight of its own electoral contest and in any case Prime Minister Yusaf Raza Gilani might soon find himself in jail on contempt of court charges.  Moreover, General Kayani, unlike his predecessor Musharraf, is reportedly much less ready to make peace with India. A larger, if a bit more distant, danger resides in the sharper security competition that is sure to erupt between the countries as the United States and its NATO allies hasten their departure from Afghanistan.  Both India and Pakistan regard the country as a key theater of their strategic rivalry and the current defrosting in relations will likely become a casualty as the situation in Afghanistan deteriorates into a new civil war that has regional powers scrambling for influence. Still, the present stirrings of peace demonstrate that despite its singularity intensity the India-Pakistan rivalry has always been a fluid admixture of cooperative impulses and competitive dynamics.  Both governments would be wise to do what they now can to accentuate the workings of the Chinese model before strategic distrust returns to the fore. This commentary was originally posted on Chanakya’s Notebook.  I invite you to follow me on Twitter.

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Manmohan and Asif Do Lunch

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Economics

Sluggish vaccine campaign threatens Thailand’s economic recovery

The latest baseline scenario issued by the bank of Thailand predicts a GDP growth of 2%, assuming that vaccine procurement and distribution reaches 100 million doses this year and leads to herd immunity in the first quarter of 2022.

Olivier Languepin

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The Bank of Thailand (BoT) slashed again Thailand’s economic growth forecast for 2021 for the second time this year targeting a mere 1 to 2% growth, depending mainly on the procurement and distribution of Covid-19 vaccines.

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Asean

COVID-19 Vaccine Roll Outs in ASEAN Live Updates by Country

Thailand is currently expecting vaccines to be delivered in mid-2021. The doses would cover 13 million people in a population of about 69 million. Thailand’s National Vaccine Institute signed a non-refundable advance market commitment contract worth 2.38 billion baht (US$79 million) with AstraZeneca to reserve the supplies

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ASEAN coronavirus Covid-19 live updates by country

Brunei

Brunei has joined the global Covax scheme and is expecting to have the COVID-19 vaccine in Q1 2021, having sourced enough supplies to cover 50% of the population. Discussions are on-going with other suppliers.   

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  • Brunei recorded one new case on May 8, bringing the total to 330 cases amid three deaths.
  • Brunei saw one new case on May 7, taking the total to 229 cases amid three deaths.
  • Brunei recorded one new case on May 4, taking the total to 228 amid three deaths.

Cambodia

Cambodia is expected to import vaccines from both China and Russia. China’s vaccines are still undergoing clinical trials while Russia has already commenced production. Australia has offered financial support to aid vaccine coverage in several southeast Asia countries including Cambodia.  

  • Cambodia recorded 538 new cases on May 8, bringing the total to 18,717 cases amid 114 deaths.
  • Cambodia recorded 558 new cases on May 7, taking the total to 18,179 cases and 114 deaths.
  • Cambodia reported 650 new cases and four deaths on May 6, bringing the tallies to 17,621 cases and 114 deaths.

Indonesia

Indonesia has commenced vaccinations with just over nine million doses being given to front line workers from last month. China’s Sinovac is in discussions with Indonesia to provide supplies, however, the Government faces difficulties with a large population of 268 million and price sensitivity at Sinovac’s estimated costs at 200,000 rupiah (US$20) a dose.

Indonesia’s Health Ministry’s Disease Control and Prevention Director-General Achmad Yurianto said that vaccinations would only be provided to citizens aged 18-59. The vaccine has also been required to pass halal certification prior to use and it is uncertain how the country can source enough vaccines to reach a sizeable part of its population.  Australia has stated it will also provide financial support to solve these issues.  

  • Indonesia recorded 6,130 new cases and 179 deaths on May 8, bringing the totals to 1,709,762 cases and 46,842 deaths.
  • Indonesia saw 6,327 new cases and 167 deaths on May 7, bringing the tallies to 1,703,632 cases and 46,663 deaths.
  • Indonesia reported 5,647 new cases and 147 deaths on May 6, bringing the totals to 1,697,305 cases and 46,496 deaths.

Laos

Laos has been trialing the Russian Sputnik V vaccine and is also in discussions with China about acquiring supplies. 

  • Laos recorded 28 new cases on May 8, bringing the total to 1,233.
  • Laos saw 28 new cases on May 7, taking the total to 1,205.
  • Laos saw 105 new cases on May 6, taking the total to 1,177.

Malaysia

Malaysia is to provide vaccines free of charge to its nationals, but foreigners will need to pay for the treatment, according to the Malaysian Minister of Health, Tan Sri Muhyiddin Yassin, who has signed a deal with Pfizer for 12.8 million doses.

These will be administered in two stages of 6.4 million people each, with the program to commence in Q1 2021. The country aims to inoculate between 80-100% of its citizens. 

  • Malaysia reported 4,519 new cases and 25 deaths on May 8, taking the tallies to 436,944 cases and 1,657 deaths.
  • Malaysia saw 4,498 new cases and 22 deaths on May 7, bringing the tallies to 432,425 cases and 1,632 deaths.
  • Malaysia recorded 3,551 new cases and 19 deaths on May 6, taking the totals to 427,927 cases and 1,610 deaths.

Myanmar

Myanmar is seeking assistance from the Gavi and Covax programs to acquire vaccines, while Australia is also providing financial relief. At present, the Government aims to treat 20 percent of the ‘most at risk’ in the country with vaccines. The Government is struggling with finances and logistics and is also under US sanctions, while cases are surging. The Government has banned the celebration of Christmas and other seasonal celebrations.   

  • Myanmar recorded 31 new cases on May 8, taking the total to 142,934 amid 3,210 deaths.
  • Myanmar saw 29 new cases on May 7, taking the total to 142,903 amid 3,210 deaths.
  • Myanmar recorded 16 new cases and one death on May 5, bringing the total to 142,874 amid 3,210 deaths.

Philippines

The Philippines aims to commence vaccinations from June 2021 and expects to inoculate about 25 million people (about 25 percent of its population) over the course of the year. The country has been badly affected by the virus and has the second-highest rate in Southeast Asia.

The business community has reacted, more than 30 local companies signed an agreement to purchase at least 2.6 million vaccine doses from AstraZeneca in the country’s first such deal to secure coronavirus vaccines, ten days ago. They plan to donate a large part of the doses to the government for its planned vaccination program and use the rest to inoculate their employees. 

  • The country saw 6,979 new cases and 170 deaths on May 8, taking the totals to 1,094,849 cases and 18,269 deaths.
  • The Philippines reported 7,733 new cases and 108 deaths on May 7, bringing the tallies to 1,087,885 cases and 18,099 deaths.
  • The Philippines saw 6,637 new cases and 191 deaths on May 6, bringing the totals to 1,080,172 cases and 17,991 deaths.

Singapore

Singapore has been working on producing its own ‘Lunar’ vaccine, in a joint venture between the US company Arcturus together with the Duke-NUS medical school. It is a single dose, mRNA shot, developed from genetically engineering COVID-19 genes into an otherwise harmless virus. This technique is marginally safer than other vaccines which rely on dead Covid-19 material to provoke an immune response. The vaccine is expected to be available from Q1 2021. High-risk personnel will receive the vaccine first in a process to be determined by the government.     

  • Singapore recorded 20 new cases on May 8, taking the total to 61,331 cases amid 31 deaths.
  • Singapore saw 25 new cases on May 7, taking the total to 61,311 cases amid 31 deaths.
  • Singapore saw 18 new cases on May 6, bringing the total to 61,286 cases amid 31 deaths.

Thailand

Thailand is currently expecting vaccines to be delivered in mid-2021. The doses would cover 13 million people in a population of about 69 million.

Thailand’s National Vaccine Institute signed a non-refundable advance market commitment contract worth 2.38 billion baht (US$79 million) with AstraZeneca to reserve the supplies. Discussions are also on-going with Oxford University in the UK to secure a vaccine that could be available in Q1 if trials are completed in time.   

  • Thailand reported 2,419 new cases and 19 deaths on May 8, taking the tallies to 81,274 cases and 382 deaths.
  • Thailand recorded 2,044 new cases and 27 deaths on May 7, taking the totals to 78,855 cases and 363 deaths.
  • Thailand reported 1,911 new cases and 18 deaths on May 6, taking the tallies to 76,811 cases and 336 deaths.

Vietnam

Vietnam’s National Institute of Hygiene and Epidemiology (NIHE), a division of Vietnam’s Ministry of Health, has signed an agreement with Medigen Vaccine, a Taipei, Taiwan-based vaccine company to secure the supply of 3 million to 10 million COVID-19 vaccine doses in 2021. Medigen is currently conducting Phase II studies of the vaccine, co-developed with the USA’s National Institutes of Health (NIH), in Taiwan and Vietnam with a view to a Q1 2021 rollout.  

Vietnam is also working on producing its own vaccine, with the Institute of Vaccines and Medical Biologicals (IVAC) in Nha Trang City, partnering with New York City-based Icahn School of Medicine and the global health non-profit organization PATH. Phase 1 trials are already underway in Vietnam, while Phases 2 & 3 will be conducted at the beginning of 2021. The institute plans to submit documents for approval to the health ministry as early as April next year and claims to be capable of producing 30 million doses a year, expecting that a national vaccine could be distributed to the general population in October 2021.

  • Vietnam saw 15 new cases on May 8, taking the total to 3,152 cases amid 35 deaths.
  • As of May 7, 2021, Vietnam’s Ministry of Health confirmed a total of 3,091 cases of COVID-19. However, 2,560 of the affected patients have recovered and been discharged from hospitals. Vietnam has also recorded 35 deaths due to the pandemic. The latest community transmission cases have been reported from Hanoi, Vinh Phuc, Thai Binh, Bac Ninh, and Da Nang among others. 16 local cases are linked to the National Hospital of Tropical Diseases in Hanoi’s Dong Anh district.
  • As of May 6, 2021, Vietnam’s Ministry of Health confirmed a total of 3,030 cases of COVID-19. However, 2,560 of the affected patients have recovered and been discharged from hospitals. Vietnam has also recorded 35 deaths due to the pandemic. The latest community transmission cases have been reported from Hanoi’s outskirts district of Dong Anh.

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Economics

Thailand’s Consumer Confidence Drops to Record Low in April

The University of the Thai Chamber of Commerce (UTTC) estimated an economic loss of 400-600 billion baht if the outbreak continues beyond this month

National News Bureau of Thailand and Headline Editor

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BANGKOK (NNT) – The University of the Thai Chamber of Commerce (UTTC) said consumer confidence hit a record low in April, dropping to 46.0 from 48.5 in March, dented by a new wave of COVID-19 infections.

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