Saturday, March 23, 2013

Soldiers patrol riot-hit Myanmar town

Myanmar firefighters battle fires in burning buildings following communal unrest between Buddhists and Muslims in Meikhtila. (AP Photo/Khin Maung Win)
Troops patrolled the streets of a central Myanmar town Saturday after Buddhist-Muslim unrest tore through the area leaving at least 20 dead and spurring the government to declare emergency rule.

Around 50 military trucks were deployed in Meiktila, where homes and mosques have been torched by mobs armed with with knives and sticks in three days of communal rioting.

The clashes are the latest sign of worsening tensions between Muslims and Buddhists, presenting a serious challenge for the quasi-civilian regime as it looks to reform the country after decades of iron-fisted military rule.

Violence in Meiktila, located 130 kilometres north of the capital Naypyidaw, began on Wednesday after an apparent argument in a gold shop spiralled into pitched battles.

Mosques have been reduced to ashes, while gangs of young men, including monks, have roamed the streets.

The town's sports ground has become a makeshift refuge for at least a thousand local Muslims, according to a journalist at the scene.

Kyaw Kyaw, a 27-year-old Muslim religious leader who has lived in the town since his childhood, said some Buddhist monks and local people had helped them escape.

"We could not take anything when we left our homes. We had to run for our lives," he said, adding that he was not sure what was behind the sudden explosion of violence.

"We are humans as well... We have been living with Buddhists for many years. I am very upset about what has happened," he said on Friday.

Meiktila remained tense on Saturday, although no new clashes were reported overnight.

The president's office said the state of emergency would enable the military to help restore order -- a significant move in a country trying to emerge from the legacy of junta rule, which ended two years ago.

Journalists in the town have seen the charred remains of bodies on the roadside, while one group of reporters was threatened at knife-point by a group of men and monks who forced them to hand over their camera memory sticks.

The United Nations, US, Britain and rights groups have called for calm and dialogue between communities amid fears that the violence could spread.

It is the worst communal violence since a wave of clashes between Buddhists and Muslims in the western state of Rakhine last year that left at least 180 people dead and more than 110,000 displaced.

Myanmar's Muslims -- largely of Indian, Chinese and Bangladeshi descent -- account for an estimated four percent of the population of roughly 60 million, although the country has not conducted a census in three decades.

Religious violence has occasionally broken out in the past in some areas across the country, with Rakhine state a flashpoint for the tensions.

Since violence broke out there last year, thousands of Muslim Rohingya -- including a growing number of women and children -- have fled the conflict in rickety boats, many heading for Malaysia.-Channel News Asia (March 23, 2013)

42 die in fire at refugee camp in Thailand–official

The toll from a blaze that swept through a camp in northern Thailand has risen to 42, a Thai official said Saturday, after hundreds of temporary homes for refugees from Myanmar were reduced to ashes.

Dozens of people were injured in the fire, which broke out on Friday at the Mae Surin camp in Mae Hong Son province, with women, children and the elderly believed to make up the majority of the victims.

Rescue workers were on the scene at the remote mountainous camp area, Mae Hong Son provincial governor Narumol Paravat told AFP by telephone.

“The latest death toll we can confirm through military walkie-talkies is 42,” she said, adding the toll was likely to rise further as rescue workers search the area.

Authorities believe the fire was sparked by an unattended cooking flame.

A local district official said hot weather, combined with strong winds caused the fire to spread quickly among the thatched bamboo shelters.

Police on Saturday said around 400 temporary homes had been incinerated, while the Disaster Prevention and Mitigation Bureau said a school, clinic and two food warehouses had also been destroyed.

The Thai government pledged an investigation into the fire at the camp, which houses roughly 3,700 refugees.

Ten camps strung out along the Thai-Myanmar border house a total of about 130,000 people, who first began arriving in the 1980s.

Many of the refugees have fled conflict zones in ethnic areas of Myanmar, also known as Burma.

Families often live cheek-by-jowl in simple bamboo-and-thatch dwellings.

Many of the camp residents have been registered with the UN as refugees, and an ongoing resettlement programme has allowed tens of thousands to move to third countries.

After a new quasi-civilian government replaced the long-ruling junta in Myanmar two years ago, Thailand announced it wanted to shut the border camps, raising concern among their residents.

But so far the displaced residents have been allowed to stay and the Thai government has stressed that it will only send them back when it is safe.

Many of the refugees are from Myanmar’s eastern Karen state, where a major rebel group, the Karen National Union (KNU) signed a ceasefire deal with the new regime last year after decades of civil war.

Vast numbers of people fled the former Myanmar junta’s counter-insurgency campaign, which rights groups say deliberately targeted civilians, driving them from their homes, destroying villages and forcing them to work for the army.

Years of war have left the Karen region littered with landmines while development has been held back, leaving dilapidated infrastructure and threadbare education and health services.

Hundreds of homes were destroyed at a different border camp in February last year by a fire that the authorities also blamed on cooking.-Philippine Daily Inquirer (March 23, 2013)

Philippines could be next Singapore, Bahraini execs say

Bahraini businessmen are looking to the Philippines as more than just a source of labor, but also a viable investment destination, a visiting member of the royal family of Bahrain said on Friday.

“We’re looking at the Philippines’ potential, with promising economic growth, to make it a top destination for trade and investment,” Shaikh Abdullah Bin Khalifa Al Khalifa told participants of the pre-business summit orientation for the upcoming 1st Arab-Philippines Business Summit.

Shaikh Abdullah is a first cousin of King Hamad Bin Isa Al Khalifa of the Kingdom of Bahrain and sits on the board of a Bahraini holdings firm.

An estimated 50,000 Filipinos work in Bahrain, but is ranked only 79th as the Philippines' trading partner, 65th as export destination, and 101st as source of imports.

“The government of Bahrain and the royal family is looking at the Philippines as the next Singapore, because of the Filipinos’ aptitude as well as our country’s natural resources. For them, this makes our country the prime candidate for business and economic ties with their private and government organizations,” Bahrain World Economic Summit (Philippines) Inc (BWESPI) chairman Roa Jacob Sevilla said in a statement.

BWESPI is the local partner of Bahrain World Economic Summit, an investment and consulting company that promotes the Bahraini business sector.

“In the Philippines, Middle East investors are most likely to invest in infrastructure and agriculture,” said BWESPI spokesman Edward Keith G. Capoy.

BWESPI is behind the Arab-Philippines Business Summit 2013, which will be held in Manama City, Bahrain in May. The summit aims to boost trade and investments between the Philippines and the member-countries of the Gulf Cooperation Council, namely Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates.

“A wide array of businesses will be covered in the summit, including infrastructure and geo-resources, real estate, tourism, manpower, skills, handicraft, agriculture and the food industry,” BWESPI said.-Interaksyon (March 23, 2013)

Thursday, March 21, 2013

Indonesian city tears down church in front of worshippers

An Indonesian city government demolished a church in front of its weeping congregation Thursday, as Muslim protesters egged on workers and branded the Christians "infidels".

Dozens in the 100-strong congregation wailed as a digger tore down the brick walls, with worshippers accusing the government of "criminalising our religion", in a sign of increasing intolerance in the world's largest Muslim-majority nation.

"My heart is aching and I feel numb watching my church collapse. I went to this church for 11 years," Megarenta Sihite, 46, told AFP, wiping away tears as fellow worshippers, dressed in black, hugged each other.

"Our church can collapse but not our faith. We will continue to come here for Sunday mass."

As the walls of the Taman Sari Batak Christian Protestant Church -- at the centre of a planning row -- crumbled, police in Bekasi city on the outskirts of Jakarta, dispersed 200 Muslim women who sneaked onto the church land chanting Koranic verses.

Along the road Muslim protesters held back by a police cordon had chanted "Knock the church down now", and "Allahu Akbar" (God is greater).

One man shouted through a loudspeaker: "They're infidels and they've built their church without permission."

Members of the congregation had earlier begged the Bekasi city government to halt the demolition, with children clutching signs reading "please do not dismantle our church".

Reverend Advent Nababan shed tears as the building was pulled down. "You just witnessed the government criminalising our religion," he said.

The local government had ordered the demolition of the church for being built, in October 2012, without a legal permit.

However the congregation said the permit was repeatedly and unfairly rejected after they had spent 13 years worshipping at the site unopposed in a temporary shelter.

Nababan said the church had obtained broad support from the Muslim community before building started. Several neighbours confirmed with AFP they had no problem with a church in the vicinity.

Ninety percent of Indonesia's 240 million people identify themselves as Muslim and the country's constitution guarantees freedom of religion.

The Setara Institute of Peace and Democracy, however, says cases of intolerance are on the rise, with 543 incidents reported in 2011, up from 491 cases in 2009. More than 300 incidents were recorded in the first half of 2012.

Christians are among the main targets, along with worshippers who follow the Ahmadiyah and Shiite Islamic minority sects.

Setara deputy director Bonar Tigor Naipospos said the permit issue was being used as an "excuse".

"The problem is the government has shown no political will to stop cases of intolerance in the country. It does not demand the law be upheld and that perpetrators are brought to account," he said.

The Batak Protestant Church has been at the forefront of attacks in the greater district of Bekasi. One congregation was pelted with rotten eggs and urine by Muslim hardliners who denied them entrance to their land, forcing them onto the street.

Naipospos said more of the 39 Batak Christian Protestant houses of worship in Bekasi were likely to face trouble as only 10 had been granted building permits.-ABS-CBN News (March 21, 2013)

Vietnam Bank Revamp Faces Execution Test as Debt Manager Planned

Vietnam to Form Asset Management Firm This Month to Resolve Debt
Vietnam’s resolve to clean up its banking system will be tested by how the government executes plans to set up a debt asset management company this month that will take over bad loans from lenders.

The company will be established before the end of the month and will be managed by the central bank, Le Xuan Nghia, a member of the National Financial and Monetary Policy Advisory Council, said in a telephone interview yesterday. The firm will issue bonds to finance the acquisition of debt from lenders, said Nghia, who didn’t provide a value.

“Everything depends on the implementation,” said Alain Cany, Ho Chi Minh City-based co-chairman of the Vietnam Business Forum Consortium. “If they are serious about finding ways to capitalize this asset management company, and they describe what banks will have to do and what they will receive in exchange and how the government will mobilize funds, that would be great news and may get banks lending again.”

Vietnam’s government is under pressure to tackle bad debt at banks that curbed domestic consumption and dragged economic growth to a 13-year low in 2012, with Prime Minister Nguyen Tan Dung announcing last week a steering committee to restructure banks by 2015. The Southeast Asian nation would be emulating neighbors including Malaysia and China in setting up entities to acquire loans from struggling lenders.

To help rescue banks hurt by the 1997-98 Asian financial crisis, Malaysia formed a state-run bad-loan management company that sold bonds to help fund the purchase of bad loans from lenders as defaults rose. China created several funds including China Cinda Asset Management Co. to buy bad debt from banks as part of efforts to clean up a 1990s bad-loan crisis.

Troubled Lenders

Ho Chi Minh City Stock Exchange’s benchmark VN Index (VNINDEX) advanced 1.4 percent yesterday to the highest close since Feb. 20. Joint-Stock Commercial Bank for Foreign Trade of Vietnam, or Vietcombank, rose 0.6 percent and Military Commercial Joint Stock Bank (MBB), or Military Bank, gained 0.8 percent.

Dung in February approved a master plan to revamp the economy, and the central bank last week said it will monitor troubled lenders, with the option of asking them to submit restructuring plans or forcing them to merge with other banks.

“The debt asset management company will help clean up banks’ balance sheets and that will definitely spur banks’ lending to fuel the economy,” Nghia said. “The Politburo has already approved it, and preparation work is almost finished.”

The World Bank said in December the health of Vietnam’s lenders is a growing concern, citing their deteriorating asset quality and slow progress in restructuring. A resolution of the situation faces many challenges, said Vishnu Varathan, a Singapore-based Mizuho Corporate Bank economist.

“The central bank is trying to get a sense of the scale and pervasiveness of the bad debt,” said Varathan. “Publicly, there doesn’t appear to be a consensus yet on what the numbers are. Without that, you’re just taking steps in the dark.”

Estimated Cost

The bad-debt ratio at Vietnam’s banks dropped to 6 percent of total outstanding loans as of Feb. 28, from “about 8 percent” last year, Vu Duc Dam, Chairman of the Government Office, told reporters last month. The government said last year it aims to lower the ratio to below 3 percent by 2015.

Fitch Ratings said in October that it believes the ratio of non-performing loans is higher than 10 percent and could worsen, “given the downside risks.” It estimates the cost of recapitalization of banks may reach 10 percent of the country’s 2012 gross domestic product.

Vietnam’s bank lending dropped 0.28 percent in the January- to-February period from the end of last year, according to a posting on the government’s website this week.

The proposed asset management company is an important first step toward reviving investor confidence in Vietnam, said Pham Ngoc Bich, managing director of institutional sales at Saigon Securities Inc. (SSI)

“This is very positive information for the market, as investors have been waiting for it for a very long time,” Bich said. “It will help strengthen the banking system and once the financial system is strong, it will support the economy.”-Bloomberg (March 21, 2013)

Indonesia urges Asia Pacific countries to boost strategic trust

Asia pacific countries should make efforts to boost strategic trust in a bid to maintain the regional stability and peace which are being challenged by territorial disputes, Indonesian president said here Wednesday.

President Susilo Bambang Yudhoyono made the remarks while addressing the opening ceremony of the third Jakarta International Defense Dialogue, an international forum on how to promote intergovernmental cooperation to meet common threats and challenges.

Yudhoyono said the most pressing challenges in Asia Pacific region are to deal with territorial and jurisdictional disputes which are at the core of flash points.

"Our main challenge in promoting the regional security is how to build strategic trust among countries in our region," he said.

"Strategic trust is what we need to consistently evolve, spread and strengthen across the region," Yudhoyono said, adding that strategic trust is a key challenge in the evolving U.S.-China relations and a major factor in the present state of relations between China and Japan.

Talking about the South China Sea disputes between China and several ASEAN countries, Yudhoyono said he hoped a legally binding Code of Conduct can be finalized and strategic trust can be built and strengthened.

Qi Jianguo, Chinese Deputy Chief of the General Staff of the People's Liberation Army said in a panel discussion after the opening ceremony that strategic mutual trust is a prerequisite to solve the problems among Asia Pacific countries.

"Only with sincerity and trust can we jointly cope with challenges, manage crises, defuse threats and fundamentally guarantee our survival, development and security." Qi said.

The annual event, with the theme "defense and diplomacy in the Asia Pacific region", lasts for two days and drew 1,300 defense officials, security specialists and military leaders from 38 nations.-Philippines News Agency (March 21, 2013)

Philippines named 26th friendliest country

The Philippines is the 26th friendliest country in the world.

Based on the World Economic Forum (WEF)’s 2013 Travel and Tourism Competitiveness Report, the Philippines has made significant improvement in the travel and tourism industry, from rank 94 in 2011 to 82 in 2013.

The top 10 friendliest countries were Iceland, New Zealand, Morocco, Macedonia, Austria, Senegal, Portugal, Bosnia and Herzegovina, Ireland and Burkina Faso.

The 2013 Travel and Tourism Competitiveness Index has ranked 140 countries according to a number of things, including competitiveness and attractiveness to the tourism and travel industries.

In the category “Attitude of population toward foreign visitors,” the Philippines ranked 26th with a score of 6.5.

By region, the Philippines obtained an overall ranking of 16th with a score of 3.3.

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The WEF report said: “The Philippines is the most improved country in the region, ranking 16th regionally and 82nd overall, up 12 places since the last edition.-The Philippine Star (March 21, 2013)

Myanmar, Vietnam boost relations to new heights

Myanmar's Vice President Nyan Tun visits the Temple of Literature in Hanoi yesterday. Photo by An Dang/Viet Nam News
Vietnam President Truong Tan Sang yesterday met with Myanmar Vice President Nyan Tun, who is making his first official visit to the country.

Sang spoke highly of the vice president's visit and said it was a positive step in the burgeoning relationship between the countries.

The Vietnamese leader stated his belief that Myanmar will continue its strong and stable recent development.

For his part, Nyan Tun said that Myanmar is in a process of extensive economic development and is interested in attracting foreign investment, including from Vietnam.

Sang praised the outcomes of talks between the vice president and his Vietnamese counterpart Nguyen Thi Doan and said that the agreements reached will raise traditional relations and comprehensive cooperation between the two countries to new heights.

Tun headed a delegation of experts for the visit and widespread and fruitful discussions have been held with Vietnamese departments. The two sides hailed progress in areas as varied as defence, investment, agriculture, aviation and tourism.

It has also been declared that the two nations will work together extensively in petroleum and mineral exploitation.

Tun pledged to speed up the implementation of high-level agreements between the countries to ensure development continues without delay. He also stated that Vietnam and Myanmar will work together intensely at regional and international forums including meetings of the Greater Mekong Sub-region (GMS), the Ayeyawady-Chao Phraya-Mekong Economic Cooperation Strategy (ACMECS) and the Cambodia-Laos-Myanmar-Vietnam (CLMV).

The Myanmar leader thanked the President for Vietnam's support of his country taking on the role of Asean Chair in 2014, and pledged to work closely with all Asean nations to prepare for the position.

Sang also told his visitor that Vietnam is willing and able to share its experience with Myanmar to help them organise the 2013 SEA Games.

Following her talks with Tun earlier in the day, Vice President Nguyen Thi Doan applauded the achievements of Myanmar and its people in the development of the nation.

Tun spoke of his recognition of Vietnam's achievements and his respect for the country's growing position in the region and the world.

He promised that the bilateral partnership and mutual development with his country would continue in all fields, with more visits being organised by delegations from both sides.

Existing partnership bodies such as the Vietnam-Myanmar Joint Committee and the Joint Sub-Committee on Trade and Political Consultation will also continue, with the former meeting later this month.

The two sides committed to enhancing investment so that two-way trade would rise to at least US$500 million by 2015, while expanding cooperation in many promising areas such as agro-forestry, fisheries, banking, telecommunications, transport, oil and gas and tourism.

Doan said she hopes Myanmar's government will continue creating favourable conditions for Vietnamese businesses to invest in Myanmar and shorten the licensing process for Vietnamese projects there.

They agreed on the importance of maintaining peace, stability, security, maritime safety and freedom in the East Sea and called for the settlement of disputes through peaceful means on the basis of international law - especially the 1982 United Nations Convention on the Law of the Sea - and the implementation of the Declaration of the Conduct of Parties in the East Sea (COC).

Vietnam – Myanmar

The business communities of Vietnam and Myanmar set a bilateral trade value target of $500 million by 2015, Tran Bac Ha, chairman of the Bank for Investment and Development of Vietnam (BIDV) told Myanmar vice president Tun.

The Myanmar leader was meeting yesterday with the Association of Vietnamese Investors in Myanmar (AVIM) to seek measures to boost two-way trade.

Currently, there are 18 Vietnamese companies registered to do business in Myanmar.

Tun said Myanmar had received an investment of $40 billion from 30 countries up to February, with Vietnam ranked ninth due to a combined capital of $370 million, accounting for nearly 1 per cent of Myanmar's total foreign investment.

Ha, who is also AVIM chairman, said Vietnam paid much attention to Myanmar because it was an emerging and potential market, especially for goods consumption, agricultural products and processing technology.

Recently, 25 Vietnamese entrepreneurial delegations from prestigious corporations and groups made fact-finding tours of Myanmar. They explored co-operation, investment and business opportunities in the country.

Referring to obstacles that Vietnamese investors are facing in Myanmar, Tun said the host country had recognised the significance of foreign investment and had made policies conducive for absorbing the funds.

Accordingly, Myanmar had developed many industrial and economic zones, linking with partners in the Indian Ocean, the East-West Economic Corridor and Mekong river regions to create an efficient inter-regional network.

Appreciating the investment in Myanmar from Vietnamese enterprises, the vice president affirmed that Myanmar's government would continue improving the investment environment with a view to assisting them to maintain their long-term operations in the country.-Asia News Network (March 21, 2013)

Two dead, mosques destroyed in Myanmar unrest: police

Two people including a Buddhist monk were killed and at least three mosques were destroyed after riots broke out in a town in central Myanmar, police said on Thursday.

Around 200 people fought in the streets after an argument in a gold shop turned violent in Meiktila on Wednesday, according to a post on Myanmar Police Force's Facebook page.

"One injured monk and Than Myint Naing, 26, who were being treated for their injuries died from their burns at hospital," it said.

Police imposed a curfew from evening to early morning to control the situation.

"People tried to burn down the mosques," one local police officer told AFP.

The unrest comes amid heightened concerns over unrest in Myanmar, where communal conflict in the western state of Rakhine has left at least 180 people dead and more than 110,000 displaced since June 2012.

An initial report on the police Facebook page late Wednesday said anger spread after one man was injured during the row in the gold shop.

The report said a mob then descended on the area and destroyed some buildings.

It said six people were hospitalised, and that the two men later died from their injuries.-Channel News Asia (March 21, 2013)

US, Japan review worst-case plans for island dispute

US and Japanese officers are discussing worst-case contingency plans for retaking disputed islands in the East China Sea if China moves to seize them, US officials said Wednesday.

Japan’s Nikkei newspaper first reported the talks, which prompted a strong reaction from China.

“We have contingency plans and we discuss them with allies,” a US official told AFP speaking on condition of anonymity, saying it was “natural” that the two governments would confer on emergency scenarios given recent tensions.

A Pentagon official, who also asked not to be quoted by name, confirmed the discussions, saying “we’re a planning organization.”
But both sources said the US government did not want to fuel tensions, and that the contingency planning would be only one of many topics on the agenda when top US and Japanese officers meet in Hawaii later this week.

Admiral Samuel Locklear, head of US Pacific Command, is scheduled to host General Shigeru Iwasaki, chief of the Japanese Self Defense Forces Joint Staff, for Thursday’s talks.

Officially, the Pentagon would neither confirm nor deny whether the contingency plans were under discussion.

“As a matter of policy, we do not discuss our military planning efforts,” said Lieutenant Colonel Catherine Wilkinson.

“The US policy on the Senkaku Islands is long-standing. We encourage the claimants to resolve the issue through peaceful means,” she said, using the Japanese name for the islands.

The United States has made clear that its alliance with Tokyo applies to the islands, raising the possibility of US military action in support of Japan if China moves to seize them.

Beijing and Tokyo both claim the islands, which the Chinese call the Diaoyu.

The dispute has escalated in recent months, with Beijing repeatedly sending ships to waters around the islands to back up its claims. Tokyo has alleged that a Chinese frigate locked its radar on a Japanese destroyer in January.

In a faxed response to a query, China’s defense ministry said it had seen the Nikkei report and reiterated Beijing’s stance that the islands belong to China.

“The determination and will of Chinese military forces to safeguard China’s sovereignty and territorial integrity are steadfast,” the ministry said.
“We firmly oppose any action that could further complicate and magnify the situation.”

China’s newly installed President Xi Jinping is vowing to fight for a “great renaissance of the Chinese nation.” Xi has close ties to China’s expanding military, and called for the armed forces to strengthen their ability to “win battles.”

Japan too has expressed a new strain of nationalistic rhetoric under its hawkish prime minister, Shinzo Abe, who has urged new graduates of the National Defense Academy to guard the country against “provocations.”

Abe’s Liberal Democratic Party pledged at its annual convention on Sunday to accelerate efforts to reform Japan’s pacifist post-war constitution and create a fully fledged military.-Philippine Daily Inquirer (March 21, 2013)

Chinese ship intrudes into Kalayaan Island

Military sources said on Wednesday that a Chinese “landing ship” was seen intruding and unloading construction materials in one of the islets of the Kalayaan Island Group in Palawan.

The presence of the Chinese ship was confirmed by local fishermen, who described the vessel as “large” and bearing “Chinese markings.”

The military said China’s latest provocative action could worsen the territorial dispute between the Philippines and China, which started in April when Chinese maritime officials prevented Philippine authorities from arresting Chinese fishermen caught poaching in Bajo de Masinloc, also known as Panatag Shoal.

The intrusion happened while the country’s navy ships were deployed in Southern Mindanao to serve as blocking force against Muslim fighters who had planned to reinforce the members of the “Royal Army,” an armed group led by Raja Mudah Agbimuddin Kiram, brother of Sulu Sultan Jamalul Kiram.

The Sultanates’ forces were being hunted by Malaysian forces for several days now after the standoff in Sabah.

“These intrusions were monitored during the night and these vessels believed to be Chinese were unloading construction materials on the island that we owned because it is part of the KIG,” said a source, who spoke in condition of anonymity because he was not authorized to speak on the matter.

A separate source said the BRP Gregorio del Pilar rushed early this week to Pagasa Island to check on the report and conduct sovereignty patrols in the area.

The four-decade old ship, formerly a Hamilton-class high-endurance cutter, was so far the most modern patrol vessel which the Navy acquired for almost P500 million in 2011 from the United States Coast Guard.

Pagasa is the center of political power of the KIG led by Mayor Eugenio Bito-non. The island-barangay has an airstrip and a military garrison.

It is composed of seven islets and two reefs that straddle the oil-rich Spratly Islands in the West Philippine Sea (South China Sea).. Since Beijing established Sansha City in June last year supposedly to “administer” the three major islands in the West Philippine Sea (South China Sea), the Chinese had been building several “permanent” structures in the disputed territories to stake their claim, aside from conducting patrols on the waters to prevent “foreign” ships from passing by their territorial waters.

Recently, in its aim to resolve the issue peacefully, Manila brought its case before international arbitration.  It invited Beijing to participate, but Chinese officials declined and stood firm on its position that it owned virtually the entire West Philippine Sea based on its nine-dash claim.

The Chinese intrusion in the KIG also came at a time when the outspoken commander of the Western Commander (Westcom), Lt. Gen. Juancho Sabban, was set to retire on April 1.

Sabban, a general of the Marine Corps, has been vocal in exposing and denouncing such intrusions and even suggested concrete steps on how to effectively monitor and prevent intrusions by foreign vessels into Philippine maritime territory.

Reports said that another general of the Marine Corps, incumbent Commandant Maj. Gen. Rustico Guerrero, would replace Sabban.

The report also came out at a time when US Deputy Secretary of Defense Ashton Carter was visiting the Department of National Defense and the Armed Forces of the Philippines.

The Defense Department refused to go into details on the meeting between Carter and DND Secretary Voltaire Gazmin except to say that the visit could signal a more “frequent and energized consultations with the US Defense Department in the coming months to boost the defense cooperation between the Philippines and the US.”

“This was discussed during the call of US Deputy Secretary of Defense Dr. Ashton Carter to Defense Secretary Voltaire Gazmin during his visit here in the Philippines Tuesday morning.  Secretary Gazmin and Dr. Carter also talked about the central role of the Philippines in the region and how to promote and enhance the existing peace and stability, the US support to the AFP’s capability upgrade, as well as the training of AFP personnel. Dr. Carter also explained that the rebalancing of US forces is a broad engagement geared towards the promotion of economic stability in the region,” the DND said.

Carter serves as Undersecretary of Defense for Acquisition, Technology and Logistics from 2009 to 2011 under the administration of President Barrack Obama. He is a national security expert with a doctorate degree in theoretical physics from the University of Oxford.

Since China became more aggressive in pressing its claim on the islands against smaller claimant-nations over the, the US government has refocused its strategy in the Asia Pacific Region.-Manila Standard Today (March 21, 2013)

Wednesday, March 20, 2013

Philippines in an 'enviable position', says Bloomberg chief

The Philippines’ growing momentum in economic growth is due to a large degree to the Aquino administration, whose policies have given local and foreign businessmen fresh impetus to invest in the country, according to the head of one of the world’s biggest and most influential financial news organisation.

Bloomberg L.P. chair Peter Grauer said the Philippines was in an “enviable position” vis-a-vis other countries around the world that lacked leadership at a time of great economic uncertainty.

“But I think leadership is a key differentiator and the [Philippines] today has quite a strong leadership,” he said in an interview with the Inquirer. “This will allow [the country] to move forward in a very thoughtful and solid pace of growth.”

The New York-based chief of Bloomberg —whose computer terminals are described as the gold standard of financial market news and analytics—visited the country on Monday and Tuesday to meet with government officials and business leaders amid the Philippines’ rising prominence in the international investment scene.

“I talk a fair amount about the leadership vacuum that exists in a lot of countries around the world,” Grauer said, when asked about what makes the Philippines attractive to the foreign business community.

“And I think you are in a very enviable position to have a President who is focused on driving the country forward, creating transparency in the markets and building the economy with a solid and sustainable foundation.”

Bloomberg is a 15,000-member organisation (which includes 2,300 news personnel in various media platforms) and has 172 bureaus in 72 countries. Its Bloomberg terminals —leased for approximately US$1,700 a month per unit—is used by 310,000 subscribers in 174 countries.

Grauer noted that a significant part of Bloomberg’s revenue growth in recent years has been occurring in Asia as both the United States and Europe struggle with their economic difficulties. And within Asia, he said the Philippines was particularly promising.

“The economies are bumping along at zero or very little growth [in other advanced economies],” he said. “It’s much more fun here. It manifests itself. People walk with a little more spring in their step. It’s very intangible, but you see it and you feel it.”

In general, the growth of Bloomberg’s business in the Asean region—at an average 14 per cent in 2012 for Indonesia, Malaysia, Philippines and Singapore—has outstripped the financial service organisation’s global average growth rate of 0.5 per cent. Grauer said he believed that the growth rate reflected the actual and potential expansion of the local economy as well.

“It’s matter of sustaining [the growth] and that’s a function of the quality of the leadership that you have,” the Bloomberg chief said when asked about challenges facing the Philippines going forward. “You seem to be in a very good position today, with a President who is leading the country in the right direction. And that’s not always the case in other countries.”

Apart from growing Bloomberg’s footprint in the Philippines, Grauer said his organisation was also interested in helping the country’s capital markets mature and grow further.

In particular, he said Bloomberg was working toward providing more “localised” services that would help clients value government and corporate bonds more accurately on the Bloomberg system; developing a system to facilitate the trading of interest rate swaps, as well as partnering with the local bourse to develop exchange-traded funds, futures and options.

“A lot of these things take time to develop, but we think that the Philippines will be a very attractive market for us, going forward,” Grauer said. “We want to be partners with both the local market participants and regulators and other players like the finance ministry and the central bank.”-The Philippine Daily Inquirer (March 20, 2013)

Hong Kong, Indonesia to strengthen cruise tourism

The governments of Hong Kong and Indonesia are set to strengthen their collaboration in the cruise tourism sector to bring more cruise liners to both countries. 

Hong Kong commissioner for tourism Philip W. H. Yung recently met with officials from the Tourism and Creative Economy Ministry and the Youth and Sports Ministry in Indonesia to boost this sector. 

“We will have a new cruise terminal in Hong Kong that will open in the middle of June and it will be able to berth the largest cruise ship in the world. With this infrastructure, we believe that Hong Kong and Indonesia can work together as Indonesia is a great market,” Yung told The Jakarta Post recently. 

He said that the Asia Pacific was becoming a more attractive region for cruise liners, and Indonesia and Hong Kong could become partners by creating a joint destination promotion. 

“We can create an interesting cruise tour package such as from Hong Kong to Vietnam, Thailand, Singapore and then Indonesia. This will be a new attraction for people who enjoy on a cruise,” he said. 

The new US$1 billion Kai Tak Cruise terminal would be much bigger than the existing Ocean Cruise Terminal in Tsim Sha Tsui. The new terminal would also be able to accommodate 3,000 passengers per hour, he said. 

He said that Hong Kong and Indonesia’s governments would continue to talk with cruise liners independently and together so that the operators could see the potential major market in Asia Pacific cruise tourism. 

Contacted separately, Tourism and Creative Economy Ministry’s meeting, incentives, convention and exhibition (MICE) director Rizky Handayani welcomed the new partnership. 

“This will help promote cruise destinations in Indonesia and will definitely expand our network to cruise operators,” Rizky told the Post, adding that Hong Kong is one of the world’s favorite cruise destinations. 

She also said the Transportation Ministry and state-owned port operator Pelindo III was committed to deepening the access channel of Benoa Port in Bali, Tanjung Perak Port in Surabaya and Tanjung Emas Port in Semarang to up to 12 metres this year. 

The commitment, announced during the world’s largest sea trade, Cruise Shipping Miami 2013, has increased cruise calls to Indonesia in 2014 to 320 calls, up from 306 calls confirmed throughout this year, according to government data so far. 

“The number of passengers is increasing quite significantly, from 147,000 to 200,000 passengers next year as there will be more ships [with each ship] bringing more than 2,000 passengers into Indonesia,” she added. 

In addition to that, current data shows that the cruise liners will be visiting 115 different locations in Indonesia. 

Yung said he went to Lombok during his visit to Indonesia to explore the island’s potential because Hong Kong travelers were seeking a new holiday destination besides Bali. 

According to the Central Statistics Agency (BPS) data, the number of Hong Kong visitors to Indonesia rose by almost 10 per cent annually over the past several years. 

The agency recorded 75,302 tourists from Hong Kong throughout last year, up by 9.26 per cent from 68,923 people in 2011. 

Meanwhile, Hong Kong Tourism Board (HKTB) data showed that the city welcomed about 512,000 visitors from Indonesia in 2012, roughly the same as in 2011.

Although the full year figure is not yet available, spending by Indonesian visitors recorded a strong growth of 15.6 per cent to HK$6,900 ($889) in the first nine months of 2012, HKTB regional director for Southeast Asia Simon Wong said.

“They also spent more than 50 per cent of their trip expenses on shopping,” Simon said.-The Jakarta Post (March 20, 2013)

How Thailand can benefit from its Asean links

With the arrival of the Asean Economic Community (AEC) in 2015, the social, political and economic landscape of Thailand and other member countries will be profoundly altered.

However, if the ambitious objectives of the AEC are to be realised, connectivity will be key. This was affirmed by leaders of the 10 Asean countries during their meeting at Cha-am Hua Hin in 2009, and subsequently developed into a master plan. While it places emphasis on the physical aspects of connections and integration - the necessary hardware of road, rail, air and shipping infrastructure - it also recognises "soft" linkages that must also occur at a social and institutional level.

Asean has enormous potential as a centre of transportation, trade, logistics, communications and tourism. As well as being an economic powerhouse in its own right, it also enjoys close proximity to India, China, Australia and New Zealand.

Yet in a context of rapid globalisation and the emergence of free trade areas (FTAs) across Asia, Asean must continue to play a leading role by accelerating and merging its individual member states into a united bloc. This can be best achieved by strengthening and expanding relationships with partner countries, both within the region and outside Asean.

In terms of physical connectivity, though logistical and technological connections within Asean are already considerable, a number of far-reaching schemes are underway that will dramatically enhance accessibility within the region. One example is the Singapore-Kunming Railway, a line looping thousands of kilometres through Malaysia, Thailand, Laos, Cambodia, Vietnam and Myanmar to China. 

Then, extending beyond Asean, there is the ongoing development of the Asian Highway Network that, once completed, will greatly improve access by road between member countries and facilitate better connections across the continent. There has also been productive cooperation in the strengthening of growing technological fields such as ICT, most notably the Asean Broadband Corridor. In these and other critical areas such as energy security, there is a clear space for Asean to play a leading role in improving the future wellbeing of the region.

Yet connectivity cannot be achieved solely through physical development. An important complement to this shared investment in infrastructure is greater institutional links. This can be achieved in part by harmonising fragmented regulation among Asean countries in areas such as trade and customs. 

One positive example of this is the Asean Single Window. Once it has been fully implemented at a regional level, this integrated regulatory framework will allow for a much smoother journey of goods and materials across Asean. Similarly, in finance and specialist expertise, we need to clear mechanisms to enable collaboration with international agencies and other partnerships with private and public stakeholders.

The final consideration, however, is the degree of civic connectivity within Asean - the sense of collective cooperation between citizens of member states. If the AEC is to be a truly participatory entity, then this issue of "hearts and minds" is key. The distance between countries in Asean will be substantially smaller from 2015. 

Consequently, we must ensure that this increased proximity serves to enhance rather than undermine relationships with other nations. Through education and well-informed media coverage, cultural harmony and mutual understanding can be achieved. We must also seek to maximise the potential for well-managed migration through the region by liberalising visa restrictions between Asean states. This will allow for the open flow of professionals across the region, paving the way for greater collaboration and innovation.

Of course, there will also be serious challenges for Asean to confront. In particular, the dismantling of national barriers could, if carelessly managed, result in a range of adverse effects like illegal entry, environmental degradation, health risks and the spread of criminal networks. For these, we must be ready with a clear response - but without obstructing our ability to connect creatively with the rest of the region. 

With its established infrastructure of airports, roads and harbors, its excellent geographic location and well-developed service industry, the potential is considerable. Yet for this to be realised, Thailand must ensure it remains aligned with the changing political and economic currents in the region, leading rather than following the latest trends in technology and commerce.

In particular, Thailand should strengthen its position as a major centre for logistics, tourism and city planning, as well as a magnet for foreign investment. The future prosperity and stability of the country may be determined by our willingness to engage, rather than evade, the powerful forces of change currently reconfiguring the entire region.-The Nation (March 20, 2013)

Philippines to grow near 7% in Q1 - think tank

Benign inflation and election spending are expected to boost the country's economic growth close to 7% in the first quarter, according to the FMIC-UA&P Capital Market Research Center.

In its Market Call report released on Wednesday, March 20, the local think tank said inflation may not go beyond 3.3% in the first quarter while the May 13 polls will likely increase consumption and spending in both the public and private sectors.

These will be a good complement to the disclosure of the Department of Public Works and Highways (DPWH) that it has already bidded out 86% of its projects for 2013.

"On the back of manageable inflation, strong government and private election spending, booming construction, and a modest rebound of exports, we expect GDP (Gross Domestic Product) to expand at close to 7% in the first quarter," the think tank said.

Poor fiscal performance

Against this backdrop, the think tank expressed concern over the country's fiscal performance saying that while the Philippines was successful in keeping its deficit to GDP ratio at 2.3% in 2012, continuing this practice may again result in hampering economic growth.

In 2011, the Philippine economy only grew 3.7% mainly due to the government's underspending and the dismal exports performance. The government underspent on much-needed infrastructure projects that would have spurred consumption and economic growth.

The FMIC-UA&P Capital Market Research Center said government spending, while higher than in 2011, has still not helped boost economic growth in 2012.

"Last year, the collected revenue totalled P1.52 trillion, of which P1.35 trillion comes from tax and the remaining P170 billion from non-tax revenue. This was 11.8% higher than the collected revenue in 2011. On the other hand, government spending reached P1.75 trillion, 12.2% up than in 2011," the think tank explained.

"Given these figures, the government received lots of praises thinking that these are the cause of 6.6% GDP growth last year. Unfortunately, it is not since both revenue collection and government spending fell short of their targets," it said.

The think tank said the government's revenue collection fell by 2.56% mainly because the Bureau of Customs (BOC) failed to generate revenue, falling below its target by 16%. Government spending, meanwhile, reached P1.75 trillion or 12.2% higher than the P1.56 trillion spent in 2011.

However, the think tank said the disbursed infrastructure and capital outlays was just P186 billion, below the P298 billion budget. This means that the deficit was contained in a lower than expected level. - Rappler (March 20, 2013)

Singapore economy to grow by 2.8% in 2013: MAS survey

File Photo of Singapore's financial district.
Private sector economists expect the Singapore economy to grow by 2.8 per cent this year -- slightly higher than their previous estimate of 2.7 per cent released in December 2012.

The latest median estimate is at the higher end of the government's gross domestic product (GDP) growth forecast of around one to three per cent in 2013.

In a quarterly survey conducted by the Monetary Authority of Singapore (MAS), private sector forecasters expect a 0.8 per cent growth for the Singapore economy in the first quarter of 2013 -- a slight downgrade from an earlier estimate of 1.2 per cent growth.

Meanwhile, full-year inflation is expected to come in at 3.8 per cent for 2013. That is within the central bank's estimated CPI All-Items inflation range of between 3.5 and 4.5 per cent for the year.

The respondents also expect MAS Core Inflation, which excludes the costs of accommodation and private road transport, to come in at 2.0 per cent. This is slightly lower than the 2.2 per cent reported in the previous survey.

Meanwhile, the unemployment rate is seen at 2.0 per cent by year-end.

For 2014, economists expect Singapore's gross domestic product to reach 4.0 per cent, while inflation is pegged at 3.4 per cent. 

Around 21 economists and analysts, who closely monitor the Singapore economy, participated in the latest MAS survey.-Channel News Asia (March 20, 2013)

Vietnam exports to some Africa nations fall

Workers of Southern Food Corporation transport rice for export to Africa. Photo by VNA/VNS
Vietnam's exports to some large African countries plunged in February, the Ministry of Industry and Trade said.

Exports to Senegal plummeted 75 per cent against the same month last year to hit US$4.38 million.

Export earnings from Egypt, the Ivory Coast and Ghana plunged 40 per cent to $34 million, 59 per cent to $4.8 million and 13 per cent to $13.2 million respectively.

Rice exports to the Ivory Coast slumped 83 per cent to $1.68 million while to Senegal it slumped 87 per cent to $1.6 million.

The fall in rice exports was partly due to fierce competition from cheaper Indian and Thai rice with which it was difficult to compete because of the distance to Africa increasing transport costs, Nhuan said.

Conversely, export turnover to four other Africa markets showed stable growth across a range of goods. South Africa continued to be Vietnam's largest trade partner in the bloc, importing $97 million worth of goods, including mobile phones and components, footwear, chemical products and garments – up 24 per cent year-on-year.

It was followed by Algeria $35.2 million (up 5 per cent), Angola $16.5 million (up 42 per cent) and Nigeria $16 million (up 15 per cent). Eight countries accounted for 65 per cent of total export value to the African bloc.-Asia News Network (March 20, 2013)

Pope gets first taste of simmering China-Taiwan dispute

President Ma Ying-jeou of Taiwan met with Pope Francis in St Peter's Basilica on Tuesday in a first taste for the new pontiff of a long-running dispute that pits the island against its giant neighbor China.

China has called on the Vatican to cut diplomatic relations with Taiwan, with foreign ministry spokeswoman Hua Chunying on Sunday saying the Vatican should "recognize the Chinese government as the sole legal representative of all China."

The Holy See is one of only 23 states in the world that recognize Taipei instead of Beijing.

Hua also said China hoped Francis would "take concrete steps to create conditions for the improvement of China-Vatican relations."

The last time a Taiwanese leader visited the Vatican was in 2005, when then president Chen Shui-bian attended the funeral of John Paul II.

An incensed Beijing at the time refused to send a representative and filed a protest to Italy for issuing Chen a visa.

This time around, Li Xiaoyong, spokesman for the Chinese embassy in Rome, told AFP: "There will be no delegation from China. China has expressed its congratulations.

"We hope that with the guidance of the new pontiff, the Vatican side can take a step towards us for a dialogue with mutual respect," he said.

Bernardo Cervellera, director of AsiaNews in Rome, a Catholic news agency specializing in Asian affairs, said: "The Vatican cannot block Taiwan from coming. It is a public ceremony."

He said the Chinese reaction was "like a broken record -- it masks the fact that they do not really know what to do."

"They are stuck in their own succession," he said, referring to the nomination last week of new President Xi Jinping.

China's communist regime broke ties with the Vatican in 1951 and six years later set up the Chinese Catholic Patriotic Association, which does not recognize the pope as its head, while the Vatican continued to direct its own unofficial flock in China.

Anthony E. Clark, an expert on the faith in the country, who teaches Chinese history at Whitworth University in the United States, said: "China's official stance toward the Vatican is that the pope should have no governing role in China's Catholic community."

Relations worsened under Benedict XVI, with the Vatican excommunicating at least three bishops ordained by the official church in China.

The dispute is reminiscent of historical rows between the Vatican and the lay governments of Europe. The Vatican alone reserves the right to name bishops, while China sees this as interference in its internal affairs.

Close to Asians

Cervellera said the Argentine pope would be well equipped to deal with Asian affairs because of his experience of working under Argentina's authoritarian regime and his advocacy on poverty issues during an economic crisis there.

"Asians feel him very close," he said.

Cervellera said the Vatican had signalled it was willing to sever diplomatic ties with Taiwan and that the ball was in China's court.

Cardinal Joseph Zen, the archbishop emeritus of Hong Kong, agreed.

"All the popes have been very understanding with Beijing. Now it is up to China's new leadership," he was quoted by Italian media as saying earlier.

The dispute has left China's Catholics -- a minority among the estimated 67 million Christians of all denominations -- feeling vulnerable.

There are believed to be up to 12 million Catholics in China.

Bishop John Fang Xingyao, chairman of the Chinese Catholic Patriotic Association, was quoted by Hong Kong's South China Morning Post as saying he hoped the new pope would "turn over a new leaf" in relations.

"Given that God has chosen the new pope as a leader, I'm sure he would grant him the ability to build better relations," Fang said.

In negotiating the difficult diplomatic waters, Francis could take inspiration from Matteo Ricci, a fellow Jesuit and a fluent Mandarin speaker who became a famous missionary in China at the end of the 16th century.

Ricci's book "The True Meaning of the Lord of Heaven" argued that Confucianism -- the great Chinese philosophy -- and Christianity were not opposed but in fact quite similar.-ABS-CBN News (March 20, 2013)

Tuesday, March 19, 2013

Bank of Thailad issues alert as economy heats up

Despite comforting signs of continuing growth, there were words of caution yesterday about possible overheating in the economy - and "bubbles" in the financial and property markets.

"Foreign money flows in because of the higher interest rate. If a bubble bursts, everything that we see as good will come to an end or will not happen," Virabongsa Ramangkura, chair of the Bank of Thailand, warned yesterday. 

The massive inflow of foreign capital has caused the stock market index to approach the 1,600-point mark. Also, more than 15 per cent of government bonds are now held by foreign investors, said Virabongsa, who is also chairman of the government-appointed Strategic Committee for National Reconstruction and Development.

All parties should work together to find a way to prevent an economic bubble from forming, given Thailand's exposure as an open market.

However, the central bank would probably not lower the policy interest rate to stem the flood of foreign capital, he said.

Fitch Ratings said that despite recently upgrading Thailand's sovereign rating, it will keep a close watch for overheating of the economy without prompt corrective policy action, as well the possibility of renewed serious political instability.

At the company's "Global Economic Briefing", Andrew Colquhoun, head of Asia-Pacific Sovereigns, gave an overview of the Thai economy.

He said the upgrade of the sovereign rating to "BBB+" from "BBB" on March 8 reflected macro resilience underpinned by a strong policy framework and greater confidence in the area of political stability.

The global sovereign-credit picture remains one of a narrowing differential between the higher-income economies and emerging markets. This reflects both a deterioration in high-income sovereigns' credit profiles and fundamental improvements in many emerging markets, he said.

There was always a debate about the correct policy path for Thailand, but if Fitch saw that inflation was continuing to accelerate, the trade deficit was expanding, lending increasing very rapidly, and that asset and stocks prices were rising, the economy could be overheating, he said.

Overheating without appropriate corrective action from the regulators would affect economic stability and the financial sector, he warned. 

Yet, if the government could manage the public debt better than expectations, the country's ratings would benefit as well, Colquhoun said.

Rebalancing was important, he said, adding that economic growth with an imbalance in terms of higher inflation, higher lending growth and an increased trade deficit would put pressure on the country's rating. 

Colquhoun said that even though Fitch was upbeat about Thailand's public finances, macroeconomics and external finances, which are its strengths, the status of the Kingdom's structural issues was still a weakness.

Structural issues include the per capita income, the health of the banking system and tangible political instability, he said, adding that he did not think that political tension in Thailand would go away completely.

Finance Minister Kittiratt Na-Ranong said he saw no signs of foreign investors speculating in the property market. He was responding to a concern by the Asian Development Bank over possible bubbles in the sector following an influx of funds.

Sompop Manarungsan, president of the Panyapiwat Institute of Management, said the baht could strengthen to 25-26 against the US dollar within a couple years due to strong fundamentals. He was speaking at a seminar on the "Baht's strengthening: impact and solution", hosted by Charoen Pokphand Group.

Sompop said the baht was expected to be stronger this year. Thai enterprises should invest more overseas to offset lower returns due to the baht's strength, as well as ensure competitiveness with strong inflow of investment from Chinese and Japanese investors. To offset losses from the baht, he suggested: more value-added products, more variety in products, more markets, more investment-based, and more currencies for trade.-Asia News Network (March 19, 2013)

US flies B-52s over South Korea amid North rhetoric

The US is flying nuclear-capable B-52 bombers over South Korea, in what it says is a response to escalating North Korean rhetoric.

US officials said the B-52 flights demonstrated "extended deterrence capabilities" amid rising tension on the peninsula.

The aircraft, which can also carry conventional weapons, flew on 8 March, with another mission set for Tuesday.

Regional tension remains high after the North's third nuclear test last month.

This is not the first time that B-52 bombers have been used as part of regular military drills between the US and South Korea.

"We're drawing attention to the fact that we have extended deterrence capabilities that we believe are important to demonstrate in the wake of recent North Korean rhetoric," US Pentagon press secretary George Little said.

"As North Korea threatened to attack South Korea with nuclear weapons, the exercise involving B-52s is meaningful, as it shows US commitment to provide its nuclear umbrella on the Korean peninsula," said Kim Min-seok, spokesman for South Korea's Defence Ministry.

US Deputy Defence Secretary Ashton Carter affirmed this commitment on Monday during a visit to Seoul.

'Wasted resources'
The US last week also announced plans to boost its own missile defences in the face of a growing threat from North Korea, a move over which both China and Russia have expressed concern.

A spokesman for China's Foreign Ministry said it would "intensify antagonism", rather than improving regional stability.

The United Nations imposed fresh sanctions against North Korea following its nuclear test on 12 February.

Pyongyang has responded with strong rhetoric to this and the US-South Korea joint military drills, which it bitterly opposes.

It says it has scrapped the Korean War armistice and ended non-aggression pacts with Seoul. It has also cut off a hotline that connects the two countries.

The two Koreas remain technically at war because the 1950-53 conflict ended in an armistice, not a treaty.

South Korea says North Korea cannot unilaterally dissolve the armistice and has called on Pyongyang to tone down its language.

South Korean President Park Geun-hye on Tuesday called for North Korea to take a different approach.

"North Korea is wasting resources for nuclear development while its people are living very difficult lives," she said.-British Broadcasting Network (March 19, 2013)