In this issue:

India To Seek Military Cooperation with Myanmar

Indian Parliament Passes Product Patent Bill

Indian Navy Says 'No' to U.S. Hawkeye Jets

Philippine Capital on High Alert

Indonesia Moving Ahead with Plans for Nuclear Power

Water Shortage: Thousands of Thai Villages Face Crisis

Malaysia, Indonesia: No U.S. Patrols in Malacca Strait

Ringgit Not Strong Enough for Peg Review

'Hot Money' Is Causing China Economic Problems

China, S. Korea Demand U.S. Concessions on N. Korea

India To Seek Military Cooperation with Myanmar

Indian External Affairs Minister Natwar Singh's visit to Myanmar March 24-27, was to discuss a $500 million proposal, known as the Kalandan Project, to build a road-and-sea linkage between India's resource-rich northeastern states and Myanmar, skirting Bangladesh.

Also on the agenda is an offer by New Delhi to open up military-to-military links between the Indian and Myanmarese armies, and to work out a plan to help the Myanmar army to dismantle camps set up by India's northeastern rebels inside Myanmar along the western border with India. The Myanmarese army has already moved an army division to its western borders to counter the rebels. It is expected that Natwar Singh will discuss the Indian help to the army division in the form of funds and weapons for them.

Indian Parliament Passes Product Patent Bill

Aggressively pushed by the Left parties, who support the ruling Congress-led United Progressive Alliance (UPA) coalition, and by the BJP in the opposition, the Indian Parliament adopted a product patent bill which pleased the domestic companies—and dismayed the multinationals and the World Trade Organization, Indiadaily.com reported March 23.

The Product Patent Law includes patents in pharmaceuticals, agricultural products, and embedded software. The Left-BJP combine had demanded 12 amendments to the bill presented by the UPA. Seven have been accepted, and the experts believe that the rest will also be negotiated and finally accepted in some form. There is no chance that the UPA can pass the bill without support of the Left parties. The Left parties had threatened the UPA that if the amendments were not accepted, it would join the BJP-led National Democratic Alliance (NDA) and defeat the bill, endangering UPA's survival.

Indian Navy Says 'No' to U.S. Hawkeye Jets

After weighing the pros and cons for over a year, the Indian Navy turned down purchase of the U.S. Hawkeye jets, because the "design was too bulky." Instead, the Navy has announced that it is working with the Indian Air Force (IAF) for a home-grown solution with early warning and control (AWACS) capabilities.

The U.S. Hawkeye manufacturer, Northrop Grumman, had assured the Indian Navy that the Hawkeye 2000 could take off from the Indian aircraft carrier INS Virat's angular deck without a catapult. However, the test failed to prove that it could do so without the steam catapult.

Philippine Capital on High Alert

Some 15,000 policemen will be deployed in malls, churches, and vital installations in Manila to prevent attacks during the long Easter break, police said March 21. Authorities warned that Abu Sayyaf members may stage attacks in Manila and key cities on the southern island of Mindanao after a recent, failed jailbreak, which left 22 Abu Sayyaf members dead.

Officials said up to seven escaped militants from the Abu Sayyaf and the Jemaah Islamiyah were still at large. "All security measures are in place. We remain on full alert," national police chief Arturo Lomibao said, adding that "all members of the PNP [national police] will not be allowed to take their [vacation] leave and will be on post 24 hours a day."

Indonesia Moving Ahead with Plans for Nuclear Power

Indonesia plans for a civilian nuclear-power program in the next decade, Jakarta's ambassador to the International Atomic Energy Agency, Thomas Aquino Sriwidjaja, told a conference on nuclear energy in Paris March 21-22 (See Europe). He said that the world's largest Muslim country, Indonesia, was "preparing to operate a nuclear-power plant most likely in the next decade."

Sriwidjaja said Indonesia is having difficulties meeting its domestic energy demand. "The oil and gas reserves in Indonesia are insufficient to balance the rapidly increasing demand for energy, particularly in the form of electricity," he said.

An IAEA-supported study found that Indonesia needs an energy mix "in which the contribution of oil should be reduced and replaced by gas, coal, renewable energy, and other alternative energy, including nuclear energy," Sriwidjaja said.

He said Indonesia was seeking help from developed nuclear states in technology, investment, and research, and would fight anti-nuclear sentiment with a public information program.

Water Shortage: Thousands of Thai Villages Face Crisis

The Permanent Secretary of the Thai Agriculture Ministry, Banphot Hongthong, warned March 21, that more than 12,000 villages will run out of water in ten days, while promising some water would be provided within 24 hours.

A taskforce operating under the ministry's authority, surveyed 45,032 villages between March 17 to 19.

Of the more than 45,000 villages surveyed, 12,742 villages were running out of water for daily use; 16,616 others were short of water for farms and livestock; and 15,662 villages remained unaffected by the drought.

Malaysia, Indonesia: No U.S. Patrols in Malacca Strait

Despite unqualified rejections from Malaysia and Indonesia, Singapore and the U.S. continue to push for outside military forces to patrol the Strait of Malacca, the Straits Times reported March 19. In response to press queries on Japan's recent offer to help patrol the Strait of Malacca after a kidnapping incident (a cat's paw for the U.S. quest to get its warships into the Strait), a spokesman for Singapore's Ministry of Foreign Affairs said: "The Strait of Malacca and Singapore is an international waterway important to international trade and global energy security. All stakeholders should contribute to the security of the Strait." Although Singapore sits on the Strait, the entire area falls within the sovereign territory of Indonesia and Malaysia, who have clearly refused any U.S. or Japanese military presence in their territory.

The Bush Administration policy is only slightly less direct. U.S. Ambassador to Malaysia, Christopher LaFleur, said March 18 that, "It is important that these countries, which have the responsibility to take the initiative, do what they can, and if there are ways that we can help, than certainly we are prepared to talk. The U.S. obviously has various sorts of military capability and, if asked, of course we will be happy to consult with countries in the region on this issue.... We must be concerned about potential for terrorists to also operate somehow in the Strait."

Ringgit Not Strong Enough for Peg Review

The ringgit, which is fixed against the U.S. dollar, hasn't fallen enough against other currencies in Asia to warrant changing the pegged exchange rate, Second Finance Minister Datuk Nor Mohamed Yakcop told the Malaysia Star March 19.

"Certainly, we have not made a decision to re-peg," Nor Mohamed said in Putrajaya March 22. While the ringgit is about 5-7% "undervalued" according to most estimates, "it's not significant enough to see the benefit" of any change in the fixed currency rate.

'Hot Money' Is Causing China Economic Problems

Guo Shuqing, Director of China's State Administration of Foreign Exchange, made his second warning this month about the dangers that inflows of speculative "hot money" poses for China. In an interview with Xinhua, Guo warned that "indiscriminate support of exports and foreign capital influx has created short-term economic problems." These include "excessive speculation in the property market and the economic decoupling of the fast-growing coastal areas with the rest of China."

The income gap between China's coastal cities and its much poorer interior is a growing, critical problem. Guo said that his administration has detected foreign investors buying up large numbers of houses in coastal cities. "This is apparently speculative activity," he said.

Guo may soon become head of the China Construction Bank, one of the four big state banks in China. The previous head, Zhang Enzhao, had to resign last week due to charges of corruption.

China, S. Korea Demand U.S. Concessions on N. Korea

"Although it is unlikely that Washington will make any major changes to its hard-line position, there is a chance the Six-Party talks [on North Korea] may see some progress if there are any concessions from either side," Beijing's China Daily wrote March 18. "And it may also be what Pyongyang hopes for."

The article revealed Chinese anger at criticism from the U.S. that China is not doing enough by pushing its leverage over North Korea. "Recently we have heard some U.S. and Japanese media commentators say that China is not being helpful enough because China is friendly with both the U.S. and North Korea," Wang Yizhou, deputy director of the Institute of World Economics and Politics at the Chinese Academy of Social Sciences, was quoted as saying.