Malaysia’s capital of cronyism - Bloomberg

Written by Yoolim Lee Bloomberg News

Tuesday, 29 September 2009 19:25

After a stomach-churning takeoff from a 550-meter runway at Long Banga airstrip on the Malaysian side of the island of Borneo, the 19-seat plane soars over a green tropical wilderness. This is one of the world’s last remaining virgin rain forests. About 30 minutes into the flight to the bustling oil town of Miri, the lush landscape changes, and neatly terraced fields of oil palms take the place of jungle. Twenty years ago, this was forestland. Now, those forests are lost forever. The shift from rain forest to oil palm cultivation in Malaysia’s Sarawak state highlights the struggle taking place between forces favoring economic development, led by Sarawak state’s chief minister, Abdul Taib Mahmud, and those who want to conserve the rain forest and the ways of life it supports. During Taib’s 28-year rule, his government has handed out concessions for logging and supported the federal government’s megaprojects, including the largest hydropower site in the country and, most recently, oil palm plantations. The projects are rolling back the frontiers of Borneo’s rain forest, home to nomadic people and rare wildlife such as orangutans and proboscis monkeys. At least four prominent Sarawak companies that have received contracts or concessions have ties to Taib or his family. The government of Malaysia plans to transform the country into a developed nation by 2020 through a series of projects covering everything from electric power generation to education. The country’s gross domestic product, which has been growing at an average 6.7-percent annual pace since 1970, shrank 6.2 percent in the first quarter. In Sarawak, Taib’s government is following its own development plans that call for doubling the state’s GDP to 150 billion ringgit ($42 billion) by 2020. Sarawak Energy Bhd., which is 65 percent owned by the state government, said in July 2007 it plans to build six power plants, including hydropower and coal-fired generators. The state government also wants to expand the acreage in Sarawak devoted to oil palms to 1 million hectares by 2010, from 744,000 at the end of 2008, according to Sarawak’s Ministry of Land Development. Companies that formerly chopped down hardwood trees and exported the timber are now moving into palm plantations. A PLANE flies over oil palm plantations, where virgin forest once stood, on the Malaysian side of the island of Borneo on April 27, 2009. The shift from rain forest to oil palm cultivation in Malaysia’s Sarawak state highlights the struggle taking place between forces favoring economic development, led by Sarawak state’s chief minister, Abdul Taib Mahmud, and those who want to conserve the rain forest and the ways of life it supports. MUNSHI AHMED/BLOOMBERG MARKETS VIA BLOOMBERG Meanwhile, many of the ethnic groups who have traditionally lived from the land in Sara­wak—known as Dayaks—have filed lawsuits that aim to block some projects and seek better compensation. Sarawak’s ambitions could be hindered by a lack of good governance, which would shut out overseas investors, says Steve Waygood, head of sustainable and responsible investment research at Aviva Investors in London, which manages more than $3 billion in sustainable assets. “Even just the perception of corruption can lead to restricted inflows of capital from the global investment community into emerging markets such as Sarawak,” says Waygood, who wrote about reputational risk in a 2006 book, Capital Market Campaigning (Risk Books). “The largest and most responsible financial institutions are very careful to avoid funding unsustainable developments,” he says. Unilever, which buys 1.5 million tons of palm oil a year—4 percent of the world’s supply—for use in products such as Dove soap and Flora margarine, announced in May that it would buy only from sustainable sources. “Unilever does not source any palm oil directly from Sarawak,” says Jan Kees Vis, Unilever’s director of sustainable agriculture. “We buy from plantation companies and traders located elsewhere.” He says Unilever has committed by 2015 to buy all of its palm oil from sources certified by the Roundtable on Sustainable Palm Oil (RSPO), a group representing palm oil producers, consumers and nongovernment organizations that seeks to establish standards for sustainably produced palm oil. The Malaysian Palm Oil Association, a government-supported group of Malaysian plantation companies, is a member of the RSPO. About 35 percent of the world’s cooking oil comes from palm—more than any other plant, according to the US Department of Agriculture. And 90 percent of the world’s palm oil comes from Malaysia and Indonesia. The oil is an ingredient used in everything from Skittles candy to Palmolive soap to some kinds of biodiesel fuel. Palm oil futures have climbed 45 percent this year as of August 24 on concern that dry weather caused by El Niño may reduce output. Crude oil prices rose to a 10-month high of $74.24 a barrel, spurring demand for biodiesel. Malaysia lost 6.6 percent of its forest cover from 1990 to 2005, or 1.49 million hectares, the most-recent data available from the United Nations Food and Agriculture Organization show. That’s an area equivalent to the state of Connecticut. Neighboring Indonesia lost forestland at the fastest annual rate among the world’s 44 forest nations from 2000 to 2005, Amsterdam-based Greenpeace says. “Palm oil is the new green gold after timber,” says Mark Bujang, executive director of the Borneo Resources Institute in Miri, a city of about 230,000 people in Sarawak. “It has become the most destructive force after three decades of unsustainable logging.” While Malaysia’s palm oil exports have more than doubled to a record 46 billion ringgit in 2008 from 2006, according to the country’s central bank, the gain has come at a price. Development projects and palm plantations have displaced thousands of people, some of whom have lived for centuries by fishing, hunting and farming in the jungle. Almost 200 lawsuits are pending in the Sarawak courts relating to claims by Dayak people on lands being used for oil palms and logging, according to Baru Bian, a land rights lawyer representing many of the claimants. A handful of activists have been found dead under mysterious circumstances or disappeared, including Swiss environmental activist Bruno Manser, who vanished in the jungle in 2000. Cutting down rain forests to cultivate palms in Sarawak has consequences far beyond Malaysia, says Janet Larsen, director of research at the Washington-based Earth Policy Institute. The forests that are being destroyed help modulate the climate because they remove vast stores of carbon from the atmosphere. Chopping down the trees ends up releasing greenhouse gases. “These last remaining forests are the lungs of the planet,” Larsen says. “It affects us all.” Chief Minister Taib, 73, has multiple roles in Sarawak. He’s also the state’s finance minister and its planning and resources management minister—a role that gives him the power to dispense land, forestry and palm oil concessions as well as the power to approve infrastructure projects. Until last year, Taib held the additional role of chairman of the Sarawak Timber Industry Development Corp., which fosters wood-based industries in the state. Anwar Ibrahim, the former Malaysian finance minister who’s the head of the country’s opposition alliance, sees parallels between Taib’s rule and those of other long-standing leaders in Southeast Asia, such as former Indonesian President Suharto and former Philippine leader Ferdinand Marcos. “It’s an authoritarian style of governance to protect their turf and their families,” says Anwar, who was fired as deputy prime minister by then Prime Minister Mahathir Mohamad in 1998 and jailed on charges of having homosexual sex and abusing power. The sodomy conviction was overturned in 2004. Sim Kwang Yang, an opposition member of parliament for Sarawak’s capital city of Kuching from 1982 to 1995, agrees with Anwar’s assessment. “It is crony capitalism driven by greed without any regard for the people,” he says. Taib’s adult children and his late wife, Lejla, together owned more than 29.3 percent of Cahya Mata Sarawak Bhd., the state’s largest industrial group, with 40 companies involved in construction, property development, road maintenance, trading and financial services, according to the company’s 2008 annual report. Local residents jokingly say that the company’s initials, CMS, stand for “Chief Minister and Sons.” In total, CMS has won about 1.3 billion ringgit worth of projects from the state and the federal government since the beginning of 2005, according to the firm’s stock exchange filings. Taib declined to comment for this article. In an interview he gave to Malaysia’s state news agency, Bernama, on January 13, 2001, Taib said CMS’s ties to him had nothing to do with its winning government jobs. “I am not involved in the award of contracts,” he said. “No politician in Sarawak is involved in the award of contracts.” He told Bernama he doesn’t ask for special treatment of his sons. “I never ask anybody to do any favors,” he said. Mahmud Abu Bekir Taib, the elder of Taib’s two sons, is CMS’s deputy chairman and owns 8.92 percent of the firm, according to the annual report. Sulaiman Abdul Rahman Taib, the younger son and CMS’s chairman until 2008, holds an 8.94-percent stake. Taib’s two daughters and his son-in-law are also listed in the annual report as “substantial shareholders.” Taib, a Muslim who belongs to the Melanau group—one of about 27 different ethnic groups in Sarawak—entered politics at the age of 27 after graduating from the University of Adelaide in Australia with a law degree in 1960. He held various ministerial positions in Sarawak and Malaysia before taking over in 1981 as the chief minister from his uncle, Abdul Rahman Yaakub. Rahman, now 81, ruled Sarawak for 11 years. Taib, who has silver hair, appears almost daily on the front pages of Sarawak newspapers, sometimes sporting a goatee and a pair of rimless glasses, at the opening of new development projects or local events. He lives in Sarawak’s capital city of Kuching, an urban area of about 600,000 people on the Sarawak River. Its picturesque waterfront is dotted with colonial buildings, the legacy of British adventurer James Brooke, who founded the Kingdom of Sarawak in 1841 and became known as the White Rajah. Brooke’s heirs ruled the kingdom until 1946, when Charles Vyner Brooke ceded his rights to the UK. Sarawak joined the Federation of Malaysia on September 16, 1963, along with other former British colonies. At Taib’s mansion, which overlooks the river, he receives guests in a living room decorated with gilt-edged European-style sofa sets, according to photos in the July to December 2006 newsletter of Naim Cendera Holdings Bhd., which changed its name to Naim Holdings Bhd. in March. Naim is a property developer and contractor whose chairman is Taib’s cousin, Abdul Hamed Sepawi. He is also chairman of state power company Sarawak Energy and timber company Ta Ann Holdings Bhd., and is on the board of Sarawak Timber Industry Development Corp. and Sarawak Plantation Bhd. Naim and CMS jointly built Kuching’s iconic waterfront building, the umbrella-roofed, nine-story Sarawak State Legislative Assembly complex. Naim has won more than 3.3 billion ringgit worth of contracts from the state and the federation since 2005, its stock exchange filings show. Ricky Kho, a spokesman for Naim, said the company declined to comment for this article. Naim’s deputy managing director, Sharifuddin Wahab, said in an interview with Bloomberg News in July 2007 that the chairman’s family ties weren’t why the company won government contracts. “We have been able to execute our projects on time, we stick to the budget and the quality of what we hand over to the government is up to their expectations, if not more,” he said. “Our teams have always acted professionally” when working with the government, whether on large or small projects, CMS’s group managing director, Richard Curtis, said in an e-mail. “CMS is governed by the strict listing regulations of the Malaysian stock exchange,” he said, adding that the chairman and the group managing director are both independent. “The large projects carry with them an equally large risk, including a huge reputational risk, particularly for crucial projects by the government,” he said. “It is the government’s prerogative and discretion to award projects using a variety of approaches that includes open and closed tenders as well as directly negotiated processes, to the contractors and developers they feel will deliver the project as promised.” Malaysia’s reputation as a place to conduct business has deteriorated in recent years, according to Transparency International, the Berlin-based advocacy group that publishes an annual Corruption Perceptions Index. Transparency ranked the country 47th out of 180 in 2008, down from 43rd in 2007. Transparency also has singled out the Bakun Hydroelectric Dam, under construction on the Balui River in Sarawak, as a “monument of corruption.” The index lacks fairness, says Ahmad Said Hamdan, chief commissioner of the Malaysian Anti-Corruption Commission, because it doesn’t take into consideration the size of the population of the countries in the ranking, for example. “I’ve seen a lot of improvement in civil service in the past 10 years,” he says. Early this year, hundreds of dead fish started floating on the muddy river near the Bakun dam site. The fish were killed by siltation, which was triggered by uncontrolled logging upstream, Sarawak’s assistant minister of environment and public health, Abang Abdul Rauf Abang Zen, says. He says the Bakun dam has very strict environmental assessments and isn’t to blame for the siltation. In January, Tenaga Nasional Bhd., Malaysia’s state-controlled power utility, and Sarawak Energy said they won approval from the national government to take over the operation of the hydropower project through a leasing agreement. Sarawak Energy also won preliminary approval to export about 1,600 megawatts of electricity from the 2,400-megawatt Bakun project, once it begins operating, to Peninsular Malaysia. The remaining power will go to Sarawak. Taib announced a plan called New Concept in 1994. The aim was to bring together local people, with their customary rights to the land, and private shareholders, who would provide capital and expertise to create plantations. The plan called for companies to hold a 60-percent stake in the joint ventures, the state to own 10 percent and the remaining 30 percent to go to local communities in return for a 60-year lease on their land. That time period equals about two complete cycles of oil palm development. An oil palm typically matures in 3 years, reaches peak production from 5 to 7 years and continues to produce for about 25 years, says Nirgunan Tiruchelvam, a commodities analyst at Royal Bank of Scotland Group Plc in Singapore. The policy has led to some disagreements. In his interview with Bernama in 2001, Taib said land acquisitions by the state have led to “emotional” disputes because some people seek too much compensation. “We are not allowed to pay more than market value,” he told Bernama. He said people need to prove that they have traditionally lived in an area—for example, by providing an aerial photograph—in order for the state to grant them title to the land. “If there are disputes, they go to the court,” Taib told Bernama. Some local people say they received no compensation at all for their land. In Kampung Lebor, a village about a two-hour drive from Kuching, 160 families, members of the Iban group that was formerly headhunters, live in longhouses and survive by fishing and some farming. The Iban are Sarawak’s largest single group of Dayaks, who make up about half of the state’s 2.3 million population. In mid-1996, the state handed out parcels of land that overlapped with the community’s customary hunting and fishing areas to the Land Custody and Development Authority and Nirwana Muhibbah Bhd., a palm oil company in Kuching. In mid-1997, the authority and the company cleared the land with bulldozers and planted oil palm seedlings, according to a copy of Kampung Lebor’s writ of summons filed to the High Court in Kuching. “The government is cruel,” says Jengga Jeli, 54, a father of five in Lebor. “Fruit trees have been cut down. It’s become harder to hunt and fish. Now we are forced to get meat and vegetables from the bazaar, and we are very poor.” Jengga’s village filed a lawsuit in 1998 against Nirwana, LCDA and the state government in a bid to get compensation. The case was finally heard in 2006 and is now awaiting judgment, according to Baru Bian, who is representing the Iban in Kampung Lebor. Reginal Kevin Akeu, a lawyer at Abdul Rahim Sarkawi Razak Tready Fadillah & Co. Advocates, which is representing Nirwana and LCDA, declined to comment. The cases show that the development projects, including plantations and dams, haven’t helped poverty among the local people, many of whom live without adequate electricity or schools, says Richard Leete, who served as the resident representative of the United Nations Development Program for Malaysia, Singapore and Brunei from 2003 to 2008. “This is the paradox of Sarawak—the great wealth it has, the natural resources in such abundance, and yet such an impoverishment and the real hardship these communities are suffering,” says Leete, who chronicled Malaysia’s progress since its independence from Britain in his book Malaysia: From Kampung to Twin Towers (Oxford Fajar, 2007). “There has no doubt been a lot of money politics,” he says. In the rugged hills about 150 kilometers south of Kuching, some 160 Bidayuh families, known as the Land Dayaks, are clinging to their traditional habitat, while a dam is under construction nearby. They live by farming and fishing. With only a primary school in the village, children have to go to boarding schools outside the jungle to get further education, crossing seven handmade bamboo bridges and trekking two hours over the hills when they return home. The state has offered the Bidayuhs 7,500 ringgit per hectare, 80 ringgit per rubber tree and 60 ringgit per durian fruit tree in compensation for their native land, says Simo ak Sekam, 48, a resident of Kampung Rejoi, one of four villages in the area. In Rejoi, about half of 39 families have refused. “We don’t want to move because we are happy here,” Simo says. “We feel very sad because our land will be covered with water. The young generations won’t know this land. They won’t see the bamboo bridges.” The builder of the local reservoir is Naim Holdings—the company headed by Chief Minister Taib’s cousin. The government awarded Naim the 310.7-million-ringgit contract without putting it out for bids. Naim’s statement announcing the deal in July 2007 said it won the job on a “negotiated basis.” One of the most threatened groups is the Penan, nomadic people who live deep in the jungle on the upper reaches of the Baram River. On a steamy equatorial morning in late October 2007, Long Kerong village leader Kelesau Naan and his wife, Uding Lidem, walked two hours to their rice-storing hut. Kelesau, who was in his late 70s and who had protested logging activity in their area, told Uding he’d go check on an animal trap he had set nearby. He never came back. Two months later, his skull and several pieces of his bones, along with his necklace made of red, yellow and white beads, surfaced on the banks of the Segita River. Inspector Sumarno Lamundi at the regional police station says the investigation is ongoing. It was just the latest tragedy among activists working for the Penan since the early 1990s, when rampant logging took place. At least two other Penan were found dead, including Abung Ipui, a pastor and an advocate for land rights for his village. His body was found in October 1994 with his stomach cut open. Manser, the Swiss activist for the rights of the Penan, vanished without a trace from the Borneo rain forests in May 2000 and was officially declared missing in March 2005. Kelesau’s death has made the Penan willing to stand up for their survival. “We are scared of something terrible happening to us if we don’t resist,” says grim-faced Bilong Oyoi, 48, headman of Long Sait, a Penan settlement close to Long Kerong. Bilong, who wears a traditional rattan hat decorated with hornbill feathers, says his group is setting up blockades to resist logging activities. They are also working with NGOs to get attention for their plight and filing lawsuits. With the help of the Basel, Switzerland-based Bruno Manser Fund, an NGO set up by the late activist, Bilong and 76 other Penan sent a letter—which some signed using only thumb prints—to Gilles Pelisson, the chief executive officer of French hotel chain Accor SA. The letter urged Accor to think twice about partnering with logging company Interhill Logging Sdn. to build a 388-room Novotel Interhill in Kuching. The Penan community says Interhill’s operations in Sarawak have a devastating effect on them. Accor responded by sending a fact-finding mission to Sarawak to investigate Interhill’s logging activities. “If the worst-case scenario occurs and if no action plan is implemented, we will not continue with our partnership,” Helene Roques, Accor’s director for sustainable development in Paris, said in June. In mid-August, she said she expects “good results” by the end of September. No foreign investor has made a larger bet on Taib’s development plans than Rio Tinto Alcan, a unit of London-based mining company Rio Tinto Plc. A joint venture between Rio Tinto and CMS for a $2-billion aluminum smelter has been negotiating power purchase agreements with Sarawak Energy for more than 12 months, according to Julia Wilkins, a Rio Tinto Alcan spokeswoman in Brisbane, Australia. CMS meets Rio Tinto’s requirements as a joint-venture partner, she says. “CMS is a main-board-listed company with its own board of directors,” she says. “It has a free float of shares in excess of the minimum market requirement. The chairman and the group managing director are both independent.” Malaysia grants special economic advantages to the country’s Malay majority and the local people of Sabah and Sarawak states on Borneo, collectively referred to as Bumiputra—literally, sons of the soil. Still, the country is leaving behind many of its ethnic minorities, says Colin Nicholas, a Malaysian activist of Eurasian descent who has written a book about the mainland’s oldest community, The Orang Asli and the Contest for Resources (IWGIA, 2000). One person trying to help the Dayaks is See Chee How, 45, a land rights lawyer who became an activist after meeting Sim, the former opposition member of parliament in Kuching. In 1994, See witnessed an attack on Penan demonstrators who’d erected a roadblock to prevent logging trucks from driving through their land. A six-year-old boy died after security forces used tear gas on the demonstrators, he says. “They were completely powerless,” recalls the soft-spoken, crew-cut See, sporting a white T-shirt and a pair of jeans, in his office above a bustling market in Kuching. “They were depending on logging trucks to move around because their passageways had been destroyed by logging trails.” See now works with Baru Bian, 51, one of the first land rights lawyers representing the Dayaks in Sarawak. Nicholas says Sarawak’s people have to fight for their rights not only through lawsuits but by voting. “The biggest problem we have with indigenous people’s rights is that we have the federal government and state government run and dictated by people who have no respect or interest for indigenous people,” he says. “We need a change of government.” The prime minister’s office declined to comment. Opposition leader Anwar says change is possible. His alliance won control of an unprecedented five states in Peninsular Malaysia in a March 2008 election. Malaysian Prime Minister Najib Razak’s ruling coalition has lost at least four regional polls held this year. “I think this is a turning point,” Anwar says. Still, Taib’s coalition won 30 of Sarawak’s 31 seats in March 2008 parliamentary elections. That helped the ruling National Front coalition led by then Prime Minister Abdullah Ahmad Badawi retain a 58-seat majority, ahead of Anwar’s People’s Alliance. Sarawak is due to hold the next election by 2011. Taib defended his government’s program to turn forestlands into oil palm plantations as a way of improving living standards for the Dayaks at a seminar on native land development in Miri on April 18, 2000. “Land without development is a poverty trap,” he said, according to his Web site. Many Dayak people, who have seen their land transformed as a result of Taib’s policies and companies linked to him, say they are still waiting to see their share of wealth. IN PHOTO -- A PENAN man in traditional garb hunts using darts and a blowpipe on April 29, 2009, in the Sarawak region of Malaysia. Penan people have lived for centuries by fishing and hunting in the forest, but their way of life is now threatened by rampant logging and dam construction. MUNSHI AHMED/BLOOMBERG MARKETS VIA BLOOMBERG

Thailand wins praise for AIDS vaccine trial - Reuters

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Mon Sep 28, 2009 5:53am EDT

By Tan Ee Lyn and Martin Petty

HONG KONG/BANGKOK, Sept 28 (Reuters) - An experimental AIDS vaccine that appears to be the first to protect people was mired for years in controversy, and credit for its success must go to Thailand where the trial was conducted, experts said.

The trial was criticised five years ago by 22 prominent U.S. scientists who doubted it would have any effect. Washington was accused of wasting more than a $100 million by funding it.

But Thai health authorities and their U.S. partners at the National Institutes of Health and the Walter Reed Army Institute of Research pressed on with the trial involving 16,000 volunteers in a country at the forefront of the battle against HIV.

"It was a tough decision. I am glad we made it," said Dr. Anthony Fauci, director of the U.S. National Institute of Allergy and Infectious Diseases, who defied the criticism and continued the trial.

The trial vaccine was made using two failed products -- Sanofi-Pasteur's (SASY.PA: Quote, Profile, Research, Stock Buzz) ALVAC canary pox/HIV vaccine and AIDSVAX, made by a San Francisco company called VaxGen and now owned by the non-profit Global Solutions for Infectious Disease.

Donald Burke, dean of the University of Pittsburgh's Graduate School of Public Health, said the trial was controversial from the start and had been dismissed by prominent U.S. scientists because of the failure of previous vaccine tests.

"But given the importance of the AIDS epidemic, the decision was made to go forward regardless of these criticisms. It was a difficult choice, but a courageous choice," said Burke, who was head of AIDS research at Walter Reed before retiring in 1997.

Burke isolated the AIDS virus taken from a young HIV-infected Thai soldier in 1989 after Thai army doctors discovered an HIV outbreak among young recruits in Chiang Mai in northern Thailand. That virus sample went on to become one of the seed viruses in the experimental vaccine, Burke said.

"To their credit the Thais did a remarkable job on this," Dr. Eric Schoomaker, the Surgeon General of the U.S. Army, told reporters. "They did remarkable job of recruiting volunteers and conducting this trial almost flawlessly."

The $105 million trial was sponsored and paid for by the U.S. government and results showed it cut the risk of infection by 31.2 percent among 16,402 volunteers over three years.

THAI TRIUMPH

Those results mark a triumph for Thailand, a country of 67 million people where a booming sex industry had stoked fears of a major epidemic. Local authorities battled hard against a disease that threatened to spiral out of control some 20 years ago.

Experts had predicted that 4 million people would be infected by 2000 if nothing was done to slow the spread of HIV. But a massive government-led Aids education and prevention campaign in the early 1990s had an enormous effect.

HIV prevalence among injecting drug users in Thailand was as high as 30-50 percent in 1991, and 33.2 percent among female sex workers in 1994, according to UNAIDS. The number of infections has since been reduced to 20,000 annually from 140,000 in 1991.

Billboards and airwaves were bombarded with safe sex messages while health workers promoted condom use in the country's notorious sex trade. Leading the campaign was "Mr Condom", family planner-turned Public Health Minister, Meechai Viravaidya.

Health check-ups were made available to sex workers for free. Men were discouraged from visiting prostitutes and condom usage in Bangkok's brothels rose from 15 percent in the early 1990s to 98 percent by 2000.

Infection rates fell and the exercise remains widely cited as a model in disease prevention among health experts -- although numbers have shown signs of creeping up in the last few years among some high risk groups, such as gay and bisexual men.

Today, about 610,000 people in Thailand are now living with AIDS, according to UNAIDS.

"We are still strengthening a very strong platform," said Punnee Pitisuttithum, head of the HIV/AIDS research unit at Bangkok's Mahidol University, which has been involved in vaccine trials since 1994. "Before this trial, we had many disappointments but with this result, we see some light at the end of the tunnel." (Additional reporting Maggie Fox in Washington; Editing by Jason Szep)

Singapore Wealth Fund Says Investments Fell 20% in Year - NYTimes.com

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By REUTERS

SINGAPORE — G.I.C., a sovereign wealth fund of Singapore, said Tuesday that its investments fell more than 20 percent in the year that ended in March, but recovered more than half that loss during the rally on financial markets since then.

G.L.C., or the Government of Singapore Investment Corp., the larger of the city-state’s two wealth funds, said it had increased exposure to alternative investments like real estate and natural resources but was bearish on bonds. The fund said its managers were optimistic about emerging markets and Asia.

The fund’s portfolio shrank by more than a fifth in the year that ended March 31, but it has ridden the financial meltdown better than its sister fund Temasek by paring its exposure to equities before the crisis and through a well-timed sale of part of its Citigroup holding.

G.I.C., headed by Lee Kuan Yew, the former prime minister, is the largest sovereign fund in the world after those of Abu Dhabi, Saudi Arabia and Norway, according to Deutsche Bank.

The fund says it manages more than $100 billion; analysts estimate the figure at $200 billion to $300 billion.

It said in the annual report that cash represented 8 percent of its holdings at the end of March, up from 7 percent a year earlier. The fund appears eager to put that money to use soon.

“In normal circumstances, we should not be holding cash, particularly now when cash earns you close to zero interest,” the fund’s chief investment officer, Ng Kok Song, said in a statement accompanying the report.

Mr. Ng also said bonds had become riskier because of the threat of rising inflation, as Western governments and central banks faced political constraints in an environment of high unemployment that could prevent them from unwinding stimulus measures.

“Global economic growth will be higher in the emerging than the developed economies,” he said. “The developed economies will undergo further deleveraging, while the emerging economies will be compelled to engender domestic demand.”

Sovereign wealth funds, like most investors, were badly hit by the meltdown in global financial markets. The funds, which together manage an estimated $3 trillion, were big investors in Western banks at the start of the financial crisis but many have since pared their stakes.

G.I.C. said its investment in UBS was still showing a loss. This month, it said it had made a $1.6 billion profit from halving its stake in Citigroup.

G.I.C.’s annual performance and subsequent recovery resemble that of Temasek, which said this month that its portfolio slumped by 55 billion Singaporean dollars, or $38.8 billion, in the year that ended in March, a 30 percent decline, before recouping most of its losses.

The Associated Press - Video shows Jakarta bombers before hotel attacks

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By NINIEK KARMINI (AP) – 7 hours ago

JAKARTA, Indonesia — Two Indonesian suicide bombers lounged and casually snacked in a grass field near luxury Jakarta hotels weeks before they attacked them, videos released by police Tuesday showed.

The footage was pulled from a laptop found in a backpack on regional al-Qaida commander Noordin Top, a Malaysian who was shot dead two weeks ago during a police raid in Central Java.

The video, taken in the last week of June, also shows the men jogging on a road that passes the hotels and trying on clothing to wear on the day of their deaths.

Three weeks later, the men walked into the lounges of the Ritz-Carlton and J.W. Marriott and blew themselves up. The July 17 explosions killed seven people and wounded more than 50, ending a four-year pause in terrorist attacks in the world's most populous Muslim-majority nation.

"This is our target," one of the bombers, Dani Permana, an 18-year-old high school graduate, says on the video, pointing to the hotels. "This is a very noble way to destroy the enemies of Islam. This is not suicide." He detonated explosives inside the J.W. Marriott, where four Westerners were killed.

The second bomber was Nana Maulana, 28. He is seen in the video footage wearing a baseball cap and eating a shrimp cracker as the men sit cross-legged in a grass field in downtown Jakarta. The two hotels are in the background.

"America has to be destroyed. Australia has to be destroyed. Indonesia has to be destroyed," says a voice on the video, which police believe is that of Syaifuddin Zuhri, who allegedly shot the footage and recruited the bombers. He remains at large.

A letter recovered from Noordin's laptop, believed to have been written to Zuhri's family, says Zuhri joined an al-Qaida affiliated group called Salafi Jihadi during studies in Yemen. He has held a prominent position in Tanzim Qaidat al-Jihad — a group that was headed by Noordin — since 2005, said the typed note shown to journalists.

Police believe that Zuhri sought funding overseas for terrorist attacks in Indonesia with a militant suspect detained last month in connection with the July bombings.

The suspect, Mohamad Jibril Abdurahman, calls himself the "Prince of Jihad" on his Web site, anti-terror investigator Tito Karnavian told reporters.

"There are indications that they traveled to Saudi Arabia in order to find individual donors for terrorism acts in Indonesia," Karnavian said. Police said the pair flew to other countries but didn't name them.

Police continue to hunt for several fugitive suspects in the hotel bombings, the first terror attack in Indonesia since triple suicide blasts on the resort island of Bali in 2005.

Regional terror network Jemaah Islamiyah and the splinter faction headed by Noordin have been linked to a series of bombings that killed more than 250 people in Indonesia. Most of the victims were foreigners who died in devastating 2002 blasts at Bali nightclubs.

Noordin's group had hundreds of pounds (kilograms) of chemicals needed to make explosives and was plotting new attacks, Karnavian said. He declined to give details, saying inquiries were ongoing.

Noordin's family is due to collect his remains from a police morgue in Jakarta this week and return them to his Malaysian hometown for burial.

Indonesia Limits Corruption Court - WSJ.com

Image by Ikhlasul Amal via Flickr

By TOM WRIGHT

JAKARTA -- Indonesia's efforts to weed out corruption took a step backward on Tuesday when the country's Parliament passed a new bill diluting the powers of the nation's popular Corrupt Crimes Court.

The Court was set up in 2003 as a special body to try graft cases and has sentenced scores of politicians, central bank officials and regional governors to jail. That crackdown has won President Susilo Bambang Yudhoyono praise at home and abroad for battling graft, a problem which has seriously dented foreign investor confidence in Indonesia over the past decade.

But some lawmakers and police have argued the Court's powers are too wide-ranging and could lead to abuses. The Court has a reputation for handing down harsher sentences than Indonesia's regular justice system, and its sister body, the Anti-Corruption Commission, also formed in 2003, has broad powers to investigate and prosecute corruption cases -- including setting up wiretaps without a warrant -- before passing them off to the Court for sentencing.

Anti-corruption advocates say politicians simply fear the dragnet will move their way and want to hobble the anti-corruption drive before it does.

Either way, the backlash against the Court and the Anti-Corruption Commission among some of Indonesia's elite is picking up speed, just as Mr. Yudhoyono is touring the United States after the meeting of G20 nations in Pittsburgh to drum up investment in Indonesia, one of the few world economies widely expected to post positive economic growth this year.

Investors generally have grown more favorable towards Indonesia over the past year amid signs that the vast archipelago nation is finally getting a handle on its biggest problems, including corruption and terrorism. But any backtracking on those successes could curtail investor interest at a time when other Asian economies are recovering from the worst effects of the global economic slowdown. A spokesman for Mr. Yudhoyono was not immediately available for comment.

The new bill, effective immediately, potentially weakens the Court significantly by allowing judges from the country's regular judicial system -- which is often cited by Indonesians and outside groups such as Transparency International as one of the nation's most graft-ridden institutions, with a poor record in trying corruption cases -- to form a majority on panels hearing cases at the Court. Advocacy groups say that will reduce its effectiveness.

Under previous laws, the Court had to be staffed by a majority of non-career judges recruited from among practicing lawyers, university professors and retired prosecutors.

"The reputation of career judges for corruption cases in Indonesia is not good," said Eryanto Nugroho, a researcher at the Center for Indonesian Law and Policy Studies, an independent legal advocacy group.

The bill was drafted by Indonesia's Ministry of Law and Human Rights and then debated in a parliamentary committee whose meetings are not open to the public. No politicians have publicly taken credit for the bill and attempts to reach Law and Human Rights Minister Andi Mattalata were not successful.

Acording to Nursyahbani Katjasungkana, a politician from the Islamic-based National Awakening Party, some politicians attempted to insert a clause into the bill that would have stripped the Anti-Corruption Commission of its powers to prosecute graft cases at the Court. She said her party and the Prosperous Justice Party, another Islamic-based party which has a reputation for battling graft, opposed the moves and that the clause was eventually dropped from the final law. It wasn't possible to independently confirm her account.

Opponents of Indonesia's corruption campaign have made other moves in recent weeks to hobble the Commission, which is also known as the KPK. Two weeks ago, Indonesian police named two senior officials of the KPK as suspects in a bribery case. Neither of the KPK deputy commissioners has been charged of a crime and both deny any wrongdoing. One of the commissioners, Chandra Hamzah, a former litigation lawyer, is well-respected among anti-corruption activists and is widely viewed as the driving force behind much of the KPK's successful work in recent years.

Police have confirmed the two are suspects but have not made further comments about the case.

Tensions between the police and the KPK intensified in July after Susno Duadji, the national police's head of criminal investigations, was wiretapped by the KPK, according to people familiar with the matter.

Write to Tom Wright at tom.wright@wsj.com

Al Jazeera English - Malaysia caning sentence upheld

Kartika Sari Dewi Shukarno would be the first Muslim woman to be caned in Malaysia [AFP]

A Malaysian Islamic court has upheld the caning sentence for a Muslim woman convicted of drinking beer at a hotel, local media reports have said.

If the punishment is carried out, Kartika Sari Dewi Shukarno, a 32-year-old mother of two, will become the first Muslim woman to be caned in the country.

She had originally been due to be caned late last month, but at the last minute the sentence was put on hold during the Islamic holy month of Ramadan.

At the time the government asked the Sharia High Court Appeals Panel in Kuantan, the capital of the eastern state of Pahang, to review the verdict.

But late on Monday a chief judge with the court announced that the sentence would be upheld.

Reacting to the news Kartika's father, Shukarno Abdul Muttlib, said that while the family had yet to be informed of the court's decision, his daughter "accepts the punishment" and would like it to be carried out as soon as possible.

"We obey the law [and] it's a challenge ... [but] it's the way of my life," he told the Associated Press.

No date has yet been set for the caning.

Guilty plea

Kartika, a former nurse turned part-time model, was sentenced in July to six strokes of the cane and a fine of $1,400 for drinking beer in 2007 at a beach resort.

She had pleaded guilty in her original trial and had refused to appeal her sentence, despite an intervention from the Malaysian prime minister who said she would likely receive a sympathetic hearing if she did so.

The case had caused an uproar in the media and among rights activists.

Malaysia has a large Chinese and Indian community, but uses a dual-track legal system where sharia courts can try Muslims for religious and moral offences under Islamic law.

Alcohol is widely available in the country but is forbidden for the majority Muslim community, who make up just over half the population.

Symbolic

The actual caning is expected to be carried out using a thin stick on the back and would be largely symbolic rather than aimed at causing pain.

Caning under Malaysia's criminal law, used in the case of convicted rapists and drug smugglers, uses a thick rattan stick applied with heavy force on bare buttocks that causes the skin to break and leave scars.

Nonetheless rights groups have said that even a gentle caning raises the broader question of the role of Islam in the justice system and whether Islamic laws should intrude into people's private lives.

Far Eastern Economic Review | Message to current subscribers

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If you are an existing FEER subscriber, you will be soon receiving a personal letter, outlining the details of your subscription suspension. FEER will continue to publish up to and including the December 2009 issue. Thank you for your support.
=======================================

DOW JONES & COMPANY TO FOCUS ON CORE PRODUCTS AND KEY MARKETS TO CATAPULT GROWTH IN ASIA

Key Markets include India, China and Japan;
Far Eastern Economic Review to Cease Publication in December

HONG KONG (Sept. 22, 2009) —This fall, Dow Jones & Company will focus on its core publications to better serve readers and advertisers in key markets, both in print and online, to catapult the company's growth in the burgeoning Asian marketplace.

As a result, the Far Eastern Economic Review will cease publication in December so opinion and commentary resources from Asia can be expanded across all Dow Jones properties. Unfortunately, despite several attempts at invigorating the brand, the REVIEW’s continued losses in advertising revenue and readers is now unsustainable.

Dow Jones has expanded local content from Asia in The Wall Street Journal print and online editions with an expanded news hole, redesigned WSJ.com, expansion of chinese.WSJ.com, new mobile content delivery via BlackBerry and iPhone devices, and the launch of a Japanese-language Web site coming this fall.

These investments into Dow Jones Asia have translated into an increased print circulation of 6.3% year-over-year for the Jan.-June period, led by a substantial increase in subscriptions, with particularly significant growth in Hong Kong, India, Malaysia and Taiwan. Average daily circulation also increased to 85,822 copies from 80,706 year-over-year.

“By increasing resources into growth areas at Dow Jones, we'll better serve a diverse group of readers and advertisers across Asia," said Christine Brendle, publisher of The Wall Street Journal Asia and managing director, Asia, Dow Jones Consumer Media Group.

"The decision to cease publication of the REVIEW is a difficult one made after a careful study of the magazine’s prospects in a challenging business climate," said Todd Larsen, chief operating officer at Dow Jones Consumer Media Group. "It has a rich history of pioneering journalism and helped to set the standard for the press in Asia in the post-World War II era when local publications often lacked the freedom to report honestly. Dow Jones is proud to have been associated with the REVIEW and its invaluable contributions to the understanding of the Asia region.”

Hugo Restall, the REVIEW's editor since Oct. 2004, will remain a member of The Wall Street Journal editorial board, which he joined in Feb. 2004. Mr. Restall served as editorial page editor of The Wall Street Journal Asia from 1999 to 2003.

Current REVIEW subscribers will be offered a one-year subscription to asia.wsj.com, the regionally dedicated edition of the leading provider of business and financial news and analysis on the Web.
The Far Eastern Economic Review was launched in 1946.

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About Dow Jones
Dow Jones & Company (www.dowjones.com) is a News Corporation company (NASDAQ: NWS, NWS.A; ASX: NWS, NWSLV; www.newscorp.com). Dow Jones is a leading provider of global business news and information services. Its Consumer Media Group publishes The Wall Street Journal, Barron's, MarketWatch and the Far Eastern Economic Review. Its Enterprise Media Group includes Dow Jones Newswires, Dow Jones Factiva, Dow Jones Client Solutions, Dow Jones Indexes and Dow Jones Financial Information Services. Its Local Media Group operates community-based information franchises. Dow Jones owns 50% of SmartMoney and 33% of STOXX Ltd. and provides news content to radio stations in the U.S.

BBC - Six jailed for Vietnam baby fraud

Image by Shootingsnow via Flickr

Six Vietnamese have been sentenced to jail for arranging more than 300 fraudulent adoptions, an official said.

The six were jailed for two to four-and-a-half years for "abuse of power", court official Nguyen Tien Hung said.

Among those convicted were two heads of provincial welfare centres, doctors, nurses and local officials.

They were found to have filed false papers to allow babies from poor families to be adopted, many by parents in France, Italy and the US.

Ten other people received suspended sentences of 15 to 18 months.

They came from the province of Nam Dinh, south of Hanoi.

The falsified papers said the babies had been abandoned, making them eligible for adoption by foreign parents, the prosecutors said.

The group was operating from 2005 to July 2008, when the two key suspects were arrested.

The case came to light last year after the US embassy in Hanoi accused Vietnam of failing to police its adoption system, allowing corruption, fraud and baby-selling to flourish.

The US report led Vietnam to end a bilateral adoption agreement.

Sacrifice: Child Prostitutes from Burma | BrunoFilms.com

Each year thousands of young girls are recruited from rural Burmese villages to work in the sex industry in neighboring Thailand. Held for years in debt bondage in illegal Thai brothels, they suffer extreme abuse by pimps, clients, and the police.

The trafficking of Burmese girls has soared in recent years as a direct result of political repression in Burma. Human rights abuses, war and ethnic discrimination has displaced hundreds of thousands of families, leaving families with no means of livelihood. An offer of employment in Thailand is a rare chance for many families to escape extreme poverty.

Sacrifice examines the social, cultural, and economic forces at work in the trafficking of Burmese girls into prostitution in Thailand. It is the story of the valuation and sale of human beings, and the efforts of teenage girls to survive a personal crisis born of economic and political repression.

AWARDS

Gold Apple
National Educational Film Festival

Grand Prize
Religion Today Film Festival, Italy

Golden Spire Award
San Francisco International Film Festival

Documentary Film Competition
Sundance Film Festival

Jury Award
Charlotte Film Festival

REVIEWS

"Sacrifice counterpoints forthright tales of four young prostitutes with mesmerizing images: a woman standing in a door frame awaiting her fate juxtaposed with farmers cultivating the fields. The images make a poignant plea for survival, both of the exiled women and the tormented land."
— Andrea Alsberg, Sundance Film Festival

"Sacrifice offers a view of the terrible odds faced by women born into poverty where the only commodity for sale are their bodies. These are complicated stories that get beneath tabloid headlines to capture, with great visual invention, the dignity and damaged nobility of young Burmese victims. The lives of these women are revealed to be the stuff of fairy tale…
the magic goes bad and the witch, the ogre, and the monster win the day in this chilling view of sexual exploitation…one we have never seen before."
— B. Ruby Rich, San Francisco Bay Guardian

"Compelling interviews and beautiful photography create a complex portrait of economic conditions in Burma, and the impact this has on families, rural villages and the young women themselves."
— San Francisco International Film Festival

" Unflinching in its account of abuse and corruption, SACRIFICE derives much of its power from the testimonies of four girls, who speak directly to viewers with a painful directness beyond their young years. Bruno demonstrates an exceptional knack for conveying the complex facts and emotional upheaval of globally relevant true stories. In the sobering yet poetic Sacrifice, Bruno presents the terribly moving first-person accounts of four young girls from Burma who were virtually kidnapped from their homes and forced into a life of prostitution in Thailand. As with all her films. Bruno approaches difficult issues with the intent of uncovering hard truths and giving voice to people who are too often marginalized or misrepresented by mainstream media."
— Steven Jenkins, FILM/TAPE WORLD

"Sacrifice illuminates a difficult subject of major social consequence with integrity and objective attachment. Told with delicate simplicity, Sacrifice paints a picture of an unfamiliar reality that is, by turns, unbelievably ugly and startlingly beautiful. The heartbreakingly eloquent words of the girls leads viewer into a society whose more are almost completely alien to our own."
— Laurence Vittes, The Hollywood Reporter

Resources on Burma

Take Action on Burma

Samsara - Survival and recovery in Cambodia | BrunoFilms.com

SAMSARA: (Sanskrit) Perpetual repetition of birth and death from the past through the present to the future, through six illusory realms: Hell, Hungry Spirits, Animals, Fighting Spirits, Man and Heaven.

Samsara documents the struggle of the Cambodian people to rebuild a shattered society in a climate of war and with limited resources. Ancient prophecy Buddhist teachings, and folklore provide a context for understanding the Cambodian tragedy, bringing a humanistic perspective to a country in deep political turmoil.

Samsara moves at a deliberate, reflective and sometimes dreamlike pace. Meditative voices intermingle descriptions of the mundane realities of daily life in war-torn Cambodia with the enduring spiritual and philosophical beliefs of the Khmer people. The music and stunning photography enhance the narrative and evoke an awesome respect for these people who persevere — though they have been tested to the limits of human endurance.

AWARDS

Gold Apple,
Best of Northern California
National Educational Film Festival

Blue Ribbon Award,
American Film Festival

John Grierson Award

Edward R. Murrow Award

Special Jury Award
Sundance Film Festival

Student Academy Award
Academy of Motion Picture Arts and Science

Gold Special Jury Award
Houston International
Film Festival

Asahi Shinbu Award
Hiroshima International Film Festival

Best Cinematography,
Best Documentary
Focus Awards

REVIEWS

"Samsara invites the viewers to stand with the Cambodian people as they strive to understand their past—in their religious and philosophical way—and rebuild—on their own terms. Samsara prepares the audience to analyze the political forces that shape Cambodia by forcing them to look at death and rebirth through Cambodian eyes."
—Third World Resources

"A brilliant work...a straightforward film about universal values and the human condition."
— Bob DeVecchi, International Rescue Committee

"A heartbreaking, poetic documentary which explores the ravages of the murderous Pol Pot regime and the shadows that haunt each and every Cambodian living today."
— Judy Stone, San Francisco Chronicle

"An excellent work, with great sensitivity and visual immediacy. Samsara gives an excellent sense of urban and rural life and the manifold problems of a country recovering from two decades of dislocation and radical transformation."
— May Ebihara, City University of New York

"An outstanding work. Personalizing the fate of the Cambodians from the destructive Pol Pot regime, this is an evocative presentation of a beleaguered people. Artful cinematography melds with effective personal statements in relating the suffering, survival and reconstruction of a decimated society.
—Nancy McCray, BOOKLIST

"SAMSARA is not a political document. It is a poignant record, a deeply affecting and effective human document about the people of Cambodia. There is no aim to shock, but a quiet dignity to the presentation. Samara is a natural for Asian studies, ethnologists, students in comparative religion, as well as social science classes from high school through college. This film should be seen.
—Sightlines Magazine

Resources on Cambodia

Take Action on Cambodia