ISSN 2502-0722Issue 23/ May 2017

Rohingya Cannot Wait

for More Reports

Partnering for Change. Engaging the World? – An Analysis of the 30th

ASEAN Summit

Tax Avoidance – What it is, how it’s

done, and what to do

+INFOGRAPHIC

ASEAN ROUND-UP

A Note From the Editor

Articles

Rohingya Cannot Wait for More Reports

Partnering for Change. Engaging the World? – An Analysis of the 30th ASEAN Summit

Tax Avoidance – What it is, how it’s done, and what to do

ASEAN Round-Up

What is an Asean film?

As ASEAN turns 50, focus turns to region’s shaky civil liberties plight

Infographic

ASEAN’s Best Cuisine

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1

2

7

14

15

14

10

16

16

Project Supervisors Rahimah AbdulrahimExecutive Director,The Habibie Center

Hadi KuntjaraDeputy Director for Operations,The Habibie Center

Editor in ChiefA. Ibrahim Almuttaqi

Thinking ASEAN Team Agustha Lumban TobingAskabea FadhillaFina AstrianaMuhamad ArifHana Hanifa BastamanRahma SimamoraTongki Ari WibowoWirya Adiwena

A note from the editorDear readers:

Welcome to the May 2017 issue of the monthly Thinking ASEAN!

This month we cover three different topics so there should be something for everyone. First up is our lead article by Ms. Yuyun Wahyuningrum, PhD Researcher at the International Institute of Social Studies of the Erasmus University, Rotterdam. Her article, which is entitled ‘Rohingya Cannot Wait for More Reports’, is a call for the international community to immediately take action to end the long-standing suffering of the Rohingya in Myanmar. Focusing on the aftermath of the 9 October 2016 attacks in Rakhine State, her article looks at the UN Resolution that was issued and the response to it before detailing what ASEAN should do.

The second article is from none other than myself, where I look at the recent 30th ASEAN Summit that was held in Manila . In my article, ‘Partnering for Change. Engaging the World? An Analysis of the 30th ASEAN Summit’, I try to explore whether the gathering of ASEAN Leaders could be considered a success or not, particularly looking at how the Philippines tried to address the South China Sea question in the Chairman’s Statement.

Lastly, in his article, ‘Tax Avoidance – What is is , how it’s done, and what to do’, Mr. Agustha Lumban Tobing, Researcher, The Habibie Center provides an explanation of the issue of tax avoidance, describing the ways in which multi national corporate entities exploit ‘loop-holes’ in a country’s tax code together with different tax-rates worldwide. Noting that ASEAN member states such as Indonesia and the Philippines have each lost at least around US$ 6.5 to 7.5 billion dollars in tax revenue, the article goes on to look at the policies that are currently used to tackle tax avoidance, and provides some policy recommendations which may be helpful in cracking down on tax avoidance.

As usual, we present a short infographic, this time looking at the ASEAN best food, and a summary of the goings-on in selected countries from around Southeast Asia.

Don’t hesitate to drop me a line at thinkingasean@habibiecenter.or.id if you have comments, input, or prospective submissions.

Happy reading!

Best regards from Jakarta

Thinking ASEAN is a monthly publication that aims to provide insightful, cogent and engaging perspectives on issues central to contemporary Southeast Asia and the ASEAN member states. It is a product of The Habibie Center, with the generous support of the Republic of Korea’s Mission to ASEAN.

The content of Thinking ASEAN does not reflect the official opinion of The Habibie Center or institutions related to the publication. The Habibie Center was founded by Indonesian President Bacharuddin Jusuf Habibie in 1999 as an independent, non-governmental and non-profit organization to promote the democratization and modernization of the country.

Responsibility for the information and views expressed in Thinking ASEAN lies entirely with the author(s). For comments, suggestions and prospective contributions, the Managing Editor of Thinking ASEAN can be reached at thinkingasean@habibiecenter.or.id.

The Habibie Center was founded by Bacharuddin Jusuf Habibie and family in 1999 as an independent, non-governmental, non-profit organisation. The vision of The Habibie Center is to create a structurally democratic society founded on the morality and integrity of cultural and religious values.

The missions of The Habibie Center are first, to establish a structurally and culturally democratic society that recognizes, respects, and promotes human rights by undertaking study and advocacy of issues related to democratization and human rights, and second, to increase the effectiveness of the management of human resources and the spread of technology.

2Issue 23/ May 2017

Rohingya Cannot Wait for More Reports

Rohingya Muslim women look out from their home at Aung Mingalar quarter in Sittwe, Myanmar, August 13, 2013

Source: Soe Zeya Tun/Reuters

Yuyun Wahyuningrum is Senior Advisor on ASEAN and Human Rights at the Human Rights Working Group (HRWG) based in Jakarta, Indonesia and PhD Researcher at the International Institute of Social Studies (ISS) of the Erasmus University, The Hague, Netherlands

T he title of this paper is inspired by the last sentence in the Editorial of the Guardian on 3 May 2017, which reflects the current

situation, “Rohingya cannot wait for Aung San Suu Kyi or yet more reports”1. The sentence implies a call for international community to immediately take action to end the long-standing discrimination and persecutions against Rohingya. Since 2007, the United Nations (UN) and human rights groups have roundly condemned the human rights violation committed by Myanmar government against Rohingya. On 24 March 2017, the UN Human Rights Council adopted a Resolution (A/HRC/34/L.8/Rev.1) to establish a fact-finding mission to investigate the alleged human rights violation and ensure the full accountability of the perpetrators and justice for human rights violations by military and security forces, and abuses in Myanmar, in particular in Rakhine State.

The Aftermath of 9 October Attacks in Rakhine State

To put it in the perspective, it is important to recognise the trigger of the issuance of this Resolution that was rooted on the aftermath of the 9 October 2016 attacks in Rakhine State.

In the early morning of 9 October 2016, the facilities of the Myanmar Border Guard Police (BGP) in Rakhine State were attacked by a group of armed-people. The briefing of the Myanmar government that was released by the President Office on 17 December 2016, said that the attack was carried out by the Aqa Mul Mujahidin, an organised and well-funded terrorist group which has a link with Rohingya Solidarity Organisation (RSO). Myanmar’s Security forces responded by immediately launching ‘clearance operations’ in Maungdaw, Buthidaung and Rathedaung townships targeting Muslim Rohingya in the Rakhine State.

Human Rights Watch (HRW) claimed that Muslim residents in Rakhine State were pushed to cross the border with Bangladesh to save their lives and families due to this operation2. In its Joint Letter to UNHRC on 2 March 2017, HRW argued that “the ‘clearance operations’ involved human rights violations against women, men, and children, including: extrajudicial killings; enforced disappearances; torture and other ill-treatment, notably rape and other crimes of sexual violence; arbitrary arrests and detention; forced displacement; and destruction and looting

of homes, food, and other property”3. The UN Special Rapporteur on the Human Rights Situation in Myanmar, Yanghee Lee, reported during the thirty-fourth session of the UNHRC in March 2017 (A/HRC/34/67) that around 3,000 Rakhine communities were displaced as a result of series of attack happening since 9 October 2016. She also said that the situation further deteriorated due to the suspension of humanitarian aid to enter Rakhine State.

The Myanmar government refuted the allegations on human rights violations and defended the clearance operation and put the blame to Aqa Mul Mujahidin or Harakah al-Yaqin4 as the responsible party for the systematic and organised attack in Maungdaw Township in Rakhine State as stated in the State Counsellor Office Information Committee briefing on 17 December 20165. Aye Aye Soe, government spokesperson, said that “the instigators are using this situation to portray a disproportionate picture of ‘genocide’ and ‘ethnic cleansing’” over the security clearance operation to the armed groups in the area”6 on 22 March 2017.

According to the Crisis Group, Harakah al-Yaqin is said to be driven by a Rohingya Committee based in Saudi Arabia but has no relation with RSO. Although, Harakah al-Yaqin has no religious interest, it often sought religious legitimacy for its attacks, and sometimes shared the modus of operandi with RSO (as well as with many ethnic armed groups in Myanmar)7. Crisis Group considers Harakah al-Yaqin as an emerging well-funded Muslim insurgent group in Rakhine State aiming to establish a strong connection with similar groups in Asia.

The team of the Office of High Commissioner of Human Rights (OHCHR) staff conducted a fact-finding mission in Cox’s Bazar in Bangladesh from 12 to 21 January 2017, and gathered testimonies from more than 220 persons who fled from the Northern Rakhine State as a result of the aftermath on 9 October 2016 attacks. The report (A/HRC/32/18)

that was submitted to HRC, documented human rights violations against Rohingya to include extra-judicial killings, enforced disappearances, torture and inhuman treatment, rape and other forms of sexual and gender-based violence, arbitrary arrest and detention, deportation and forced transfer as a result of violence and persecution.8 The OHCHR Report entitled Interviews with Rohingyas fleeing from Myanmar since 9 October 2016: Flash

Report, indicated a commission of crimes against humanity toward Rohingya.9

There has been mounting concerns expressed by different groups demanding the international community to stop the persecution against Rohingya, especially after the 9 October attacks. On 24 October 2016, the Special Rapporteur and several UN experts publicly expressed their concerns and called for thorough and impartial investigations of all alleged cases of arbitrary and summary executions as well as guarantee access for humanitarian actors to undertake a needs assessment, delivering assistance, and ensure the protection of affected populations.10

A Group of Nobel Laureates and global leaders through their open letter sent to the UN Security Council on 28 December 2016 called for Commission of Inquiry (hereafter “Commission”) to establish the truth about the situation in Rakhine State.11 Additionally, more than 40 Myanmar-based civil society groups also called for the establishment of the Commission to “fully assess the totality of the situation in Rakhine State and provide clear recommendations for the current government to effectively address and prevent further problems” in a statement addressing the Foreign Ministers of the Organization for Islamic Cooperation (OIC) meeting in Kuala Lumpur.12

At the same time, Myanmar formed an Investigation Commission led by Vice-President U Myint Swe on 1 December 2016. The Rakhine State Parliament also appointed its own “investigative commission,” of 11 state-level legislators who purported to look into the situation in Maungdaw Township with a view to “help the indigenous people who fled from the clashes” in the late of October 2016. Nevertheless, both Commissions revealed that no human rights abuses committed by state security forces were found in Rakhine State13.

UN Resolution and the Responses

The Resolution (A/HRC/34/L.8/Rev.1) that was backed by the European Union (EU) and supported by some of the UN member states, tasked the Human Rights Council (HRC) to:

“Dispatch urgently an independent international fact-finding mission to be appointed by the President of the Human Rights Council to establish the facts and circumstances of the alleged recent human rights violations

by military and security forces, and abuses, in Myanmar, in particular in Rakhine State, including but not limited to arbitrary detention, torture and inhuman treatment, rape and other forms of sexual violence, extrajudicial, summary or arbitrary killings, enforced disappearance, forced displacement and unlawful destruction of property, with a view to ensuring full accountability for perpetrators and justice for victims”14.

In her press conference in Brussels on 2 May 2017, Frederica Mogherini, the High Representative of the European Union for Foreign Affairs and Security Policy, stated that the Resolution focuses on establishing the truth about the past and to help Myanmar clear up uncertainty about allegations of killings, torture and rape against Rohingyas.15 Civil society groups welcomed the adoption of the Resolution, dubbing it as a landmark resolution and a step forward to prevent further abuses and bring justice for the victims.16

Myanmar government responded strongly to the issuance of the UN Resolution. Myanmar’s ambassador in Geneva argued that it does not reflect the actual situation on the ground and call the international community to let Myanmar people choose the best and the most effective course of action to address the challenges in the country17. The Presidential Spokesperson18, Zaw Htay, expressed his disappointment to the UN, which he believes disrespected the two available national mechanisms that were set up to deal with issues in Rakhine States19. He added that the Resolution does not help Myanmar towards the process of achieving national peace and reconciliation after decades of ethnic civil wars20. Myanmar’s State Counsellor21, Daw Aug San Suu Kyi, denied the accusation related to ethnic cleansing against Rohingya in Rakhine State, and said “It is a matter of people on different sides of the divide, and this divide we are trying to close up.” She further reiterated the statement during her visit to the EU in Brussels on 2 May 2017.22

The Myanmar’s disassociation to the Resolution disappoints civil society groups. Kyaw Win, secretary general of the Burma Human Rights Network based in Yangon, said that the Myanmar’s failure to cooperate with the UN indicates the potential repetition of similar human rights abuse in the future.23 In its open letter dated on 27 April 2017, 23 international organizations called for Myanmar to cooperate with the UN Mission to Rakhine State, arguing that

“it’s an opportunity for the government to demonstrate a commitment to the rule of law and preventing atrocity crimes in ethnic states24. At the same time, civil society also worries that Military will continue to use the pretext of maintaining national security in order to supress civilians.

Key Elements in the UN Resolution (A/HRC/34/L.8/Rev.1)

While establishing a Commission is commonly desired, the HRC opted for the fact-finding mission (hereafter the “Mission”) for the UN Resolution (A/HRC/34/L.8/Rev.1). According to the OHCHR’s Commissions of Inquiry and Fact-finding Missions on International Human Rights and Humanitarian Law: Guidance and Practice, both shared the same weight which can be established with an increased demand by the UN Security Council, the General Assembly, the Human Rights Council, the Secretary-General and the High Commissioner for Human Rights, to address violations in a growing variety of contexts (2015:1). In the last 20 years, both mechanisms have been prominent tool to assess the most serious situations of human rights and humanitarian law violations across the world (OHCHR, 2015:2).

It is equally important to have members of the Mission that are independent and impartial, recognized by his/her personal integrity and high moral standing, acquired substantial knowledge and experience regarding international human rights and humanitarian laws including gender issues as they have a crucial role in dictating the content of the report. Ensuring gender and geographical balance is also important to increase credibility of the team. Procedurally, they have to be appointed by the President of the HRC, who seek the views from States, non-governmental organizations (NGOs) and OHCHR regarding possible candidates.

The key word in the Resolution is the “full accountability for perpetrators and justice for victims”. The term ‘accountability’ should be defined more broadly than only limited to the investigation and prosecution on the alleged human rights violation identified in the Resolution. It should rather be perceived as a process that address political, legal and moral responsibility of institutions and individuals on the past violations of human rights. It is paramount that accountability includes the state’s recognition on the committed violation as well as the achievement of

truth, justice and reparations for victims.

Nevertheless, the Resolution excludes the mandate to come up with recommendation regarding accountability measures required to ensure justice for victims. The 1985 UN Declaration of Basic Principles of Justice for Victims of Crime and Abuse of Power (A/RES/40/34) made four avenues to redress for victims to include, a) access to justice and fair treatment, b) restitution, c) compensation and d) assistance. Furthermore, the 1986 United Nations Commission on Human Rights, Sub-Commission on Prevention of Discrimination and Protection of Minorities (A/RES/41/143)25 provides a set of proposed basic principles relating to reparations for victims under international law. First principle emphasised on the state, as opposed to individual that is responsible for restitution, which require the restoration of liberty, family life and citizenship, to name of few. Second is the introduction of the term “reparations” to be generally used to describe all forms of redress, including but not limited to, restitution, compensation, rehabilitation and satisfaction and guarantee of non-repetition. It is also important to note that the Resolution does not explicitly recognise the culture of impunity in Myanmar.

This Resolution also limits the category of perpetrators involved in committing human rights violation to only be military and security forces. This fact disregards the complex issue that is currently developing in Rakhine State. Myanmar government is in agreement with number of scholars and analysists that the attack on 9 October in Rakhine State had extremism dimension committed by (transnational) non-state actors. 26

The inclusion of the term “recent” in the scope of mandate as stated in the Resolution, to “establish facts and circumstances of the alleged recent human rights violations” implies that it does not include the facts and circumstances which may amount to such violations that occurred in the past. The attack on 9 October 2016 could be the result of how the State of Myanmar has intentionally aimed at destroying Rohingya people in the Rakhine State by formulating, pursuing and executing national and state-level policies and plans since 1978.27

Crimes against humanity?

The Resolution has been carefully restrained from labelling the atrocities

4Issue 23/ May 2017

as against Rohingya. According to Luban (2004) the notion of “crimes against humanity” consists of two distinct offenses. First offence that deals not only with the victims and their communities, but all human beings; and offense that attacks the core humanity that we all share and that differentiate us from other natural being. It is important to note that the concept of the crimes against humanity was developed by the products of customary international laws, there have been the discrepancies of definitions as reflected in the status of the Nuremberg, International Criminal Tribunal for the former Yugoslavia (ICTY), International Criminal Tribunal for Rwanda (ICTR), and International Criminal Court (ICC) (Bantekas and Oette, 2016: 709).

Luban (2004) summarises the five features that define crimes against humanity: a) perpetrated on victims based on their group membership rather than their individual characteristics, b) a crime committed against fellow nations as well as foreigners, c) an international crime and their criminality overrules state sovereignty, d) committed by politically organised groups acting under the various policies, and e) consisted of the most severe and abominable acts of violence and persecution. While according to Article 7 of the Rome Statue, crimes against humanity is distinguished from an ordinary crime by the fact that it comprises of certain enumerated acts such as murder, extermination, enslavement, deportation or forcible transfer of population, imprisonment or other severe deprivation of physical liberty, torture, rape and sexual violence, persecution, enforced disappearance, apartheid, or other inhumane acts which are committed as part of a ‘widespread or systematic attack directed against any civilian population’.

Based on the ICTR v. Kaiyshema and Ruzindana and the case on ICC prosecutor v. Ruto and Others (on the situation in the Republic of Kenya), Bantekas and Oette (2016: 710) reasoned that the ‘systematic’

element of the crimes against humanity does not necessarily entail a written plan or official state policy related to the event, which declares such crimes may be committed by non-state entities. The ‘widespread’ element, argued Bantekas and Oette (2016:711) is less complicated to define as it refers to the scale of crimes and quantity of victims. Another important aspect in the definition is the ‘individual liability’ which required that the perpetrators have knowledge related of which an underlying crime is committed, combined with the intention to supplement the overall situation (Bantekas and Oette, 2016:711)

Applying the above definition, the UN Special Adviser on the Prevention of Genocide, Adama Dieng called the atrocities that occurred in Rakhine State as crimes against humanity, “If people are being persecuted based on their identity and killed, tortured, raped and forcibly transferred in a widespread or systematic manner, this could amount to crimes against humanity, and in fact be the precursor of other egregious international crimes”28. Similarly, the previous UN Special Rapporteur on the Situation of Human Rights in Myanmar, Thomas Ojea Quintana, stated in his 2014 report that the attacks against Rohingya have been “widespread” and “systematic” which “may constitute crimes against humanity” (A/AHRC/25/64). Additionally, the current UN Special Rapporteur on Human Rights Situation in Myanmar, Yanghee Lee, said that the ill-treatment against Rohingya may escalate to crimes against humanity29.

On the other hand, scholars such as Zarni and Cowley (2014) argued strongly that genocide is already happening in Myanmar against Rohingya, while Szurlej (2016) indicated that Myanmar government has nearly committed genocide.

What should ASEAN do?

Rohingya is not an internal affair of Myanmar. It also concerns regional

stability, security as well as economic and political progress in ASEAN. As indicated by President Joko Widodo during the 30th ASEAN Summit, Rohingya issue will affect peace and stability in the country as well as in the region if it remains unsolved.30 There is a greater risk when the alleged crimes against humanity in the region or elsewhere can proceed unchecked as it will allow everyone to be the object of persecution on the basis of group affiliations or who they/we are.

Nevertheless, the way ASEAN states engaged with Myanmar on Rohingya varies. Indonesia consistently maintain relations with Myanmar since 2009 on the issue of democracy, including on Rohingya issue. On the side line of the 30th ASEAN Summit in Manila in April 2017, Aung San Suu Kyi assured Indonesia that the country is committed to solve the problem in Rakhine State.31 She also said that Myanmar had partly complied with recommendations issued by the Advisory Committee for Rakhine State, including to open the access for humanitarian aid workers to reach the affected areas in northern Rakhine and for an independent and impartial investigation into the allegations of crimes committed on and since 9 October 2016.32

Meanwhile, Cambodia decided to take distance from any attempts to internationalise Rohingya issue33. On the other hand, Malaysia’s harsh criticism over the way Myanmar treats Rohingya in the beginning of the year, has led to diplomatic confrontation and war of words between the two governments. Myanmar accused Malaysia of using the issue to distract Malaysians from criticizing the Prime Minister on the on-going corruption scandal34 and call for Malaysia government to respect the non-interference principle.35 Singapore was in the position that ASEAN can work together to tackle serious problems, but cannot compel its members to act in certain way as ASEAN uphold the non-interference principle36.

W A N T T O K N O W M O R E A B O U T A S E A N ?V I S I T T H C A S E A N . O R G

The aftermath of 9 October attack has introduced a different dimension of human rights violation, where the violation against Rohingya has been capitalised by transnational extremist groups to gain sympathy, recruit new members, raise funds and establish a movement inside Rakhine State.

Unless ASEAN can relax with its mode of operation, especially on the application of the non-interference principle and invite more constructive engagement in dealing with issue, ASEAN can not prevent the crisis from fuelling more extremism in the region. ASEAN can also function as a platform of countries involved in Rohingya issues, such as Myanmar, Malaysia, Singapore, Indonesia, Thailand and Bangladesh and formulate a long-term settlement policy and economic empowerment programmes for Rohingya.

The Indonesia’s Foreign Minister, Retno Marsudi, proposed a new constructive engagement with Myanmar through ASEAN37, which deals with the concerns to tackle the sensitive political issues in the region and demand a cohesive and collective position among ASEAN states. For the proposal to work effectively, Myanmar has to recognize the Rohingya issue as humanitarian crisis as the first step, and express willingness to address it. Myanmar government needs to minimise the risk of radicalisation in the wake of the Rohingya humanitarian crises.

Rohingya may not need more reports to describe their suffering. They need Myanmar government to take actions to change the anti-Muslim public sentiment and promoting the conciliatory narratives as well as addressing citizenship law and other discriminatory laws can be the vital starting point. It is better to accommodating rather than alienating Rohingya in rebuilding a strong Myanmar nation-state.

References

Bantekas, I. and L. Oette (2016) International Human Rights Law and Practice. Cambridge: Cambridge University Press.

Crisis Group (2016) ‘Myanmar: A New Muslim Insurgency in Rakhine State’, Report 283, 15 December 2016, https://www.crisisgroup.org/asia/south-east-asia/myanmar/283-myanmar-new-muslim-insurgency-rakhine-state

Human Rights Council (2016) ‘Situation of Human Rights of Rohingya Muslims and other Minorities in Myanmar: Report of the United Nations High Commissioner for Human Rights’ 29 June 2016, A/HRC/32/18.

Human Rights Council (2017) ‘Human rights Situations that Require Council’s Attention’ 27 February–24 March 2017, A/HRC/34/L.8/Rev.1

Irish Centre for Human Rights (2010) ‘Crimes against Humanity in Western Burma: The Situation of the Rohingya’, http://burmaactionireland.org/images/uploads/ICHR_Rohingya_Report_2010.pdf

Luban, D (2004) ‘A Theory of Crimes Against Humanity’, Yale Journal of International Law, 29: 85-167.

Office on High Commission on Human Rights (2016) ‘Interviews with Rohingyas fleeing from Myanmar since 9 October 2016: Flash Report’

Rakhine Advisory Commission (2017) ‘Interim Report and Recommendations’, March 2017, http://www.rakhinecommission.org/app/uploads/2017/03/Advisory-Commission-Interim-Report.pdf

Szurlej, C. (2016) ‘Preventing Genocide Against the Rohingya Muslim Minority in Myanmar’, Atlantic Human Rights Centre, St Thomas University, 11, 2: 90-115. http://cwf.ug.edu.pl/ojs/index.php/JSR/article/view/565

Zarni, M. and A. Cowley (2014) ‘The Slow-Burning Genocide of Myanmar’s Rohingya’, Pacific Rim Law & Policy Journal Association 23, 3: 684-754.

Endnotes1 Please see, https://www.theguardian.com/

commentisfree/2017/may/03/the-guardian-view-on-myanmar-some-humans-have-more-rights-than-others#img-1

2 Please see https://www.hrw.org/news/2017/03/02/joint-letter-unhrc-members-re-human-rights-violations-rakhine-state

3 Please see https://www.hrw.org/news/2017/03/02/joint-letter-unhrc-members-re-human-rights-violations-rakhine-state

4 based on the interview to the people living in Rakhine State, Crisis Group explained that the group actually refers to itself as Harakah al-Yaqin or HaY (which means “Faith Movement” in Arabic), please see https://www.crisisgroup.org/asia/south-east-asia/myanmar/283-myanmar-new-muslim-insurgency-rakhine-state

5 Please see http://www.president-office.gov.mm/en/?q=briefing-room/news/2016/12/17/id-6979

6 Please see, http://edition.cnn.com/2017/03/21/asia/myanmar-un-crimes-against-humanity/

7 Crisis Group (15 December 2016) Myanmar: A New Muslim Insurgency in Rakine State: Report 283, https://www.crisisgroup.org/asia/south-east-asia/myanmar/283-myanmar-new-muslim-insurgency-rakhine-state

8 OHCHR. 2017. Interviews with Rohingyas fleeing from Myanmar since 9 October 2016: Flash Report http://www.ohchr.org/Documents/Countries/MM/FlashReport3Feb2017.pdf

9 The interview involved 220 Rohingyas among 75,000 who fled from Northern Rakhine State to Bangladesh in the aftermath of the 9 October 2016 attacks, http://www.ohchr.org/Documents/Countries/MM/FlashReport3Feb2017.pdf

10 http://www.ohchr.org/en/NewsEvents/Pages/DisplayNews.aspx?NewsID=20742&LangID=E#sthash.

11 Please see, http://www.muhammadyunus.org/index.php/news-media/news/1630-open-letter-to-the-president-of-the-security-council-and-member-countries-of-the-council-to-end-the-human-crisis-of-rohingyas-in-myanmar

12 Please see, http://reliefweb.int/report/myanmar/myanmar-civil-society-calls-international-investigation-rakhine-state

13 Please see, http://reliefweb.int/report/myanmar/myanmar-civil-society-calls-international-investigation-rakhine-state

14 Please see, http://www.un.org/ga/search/view_doc.asp?symbol=A/HRC/34/L.8/Rev.1

15 Please see, https://www.usnews.com/news/world/articles/2017-05-02/myanmar-eu-at-odds-over-rohingya-rights-mission

16 Please see, http://www.rfa.org/english/news/myanmar/un-

council-apots-resolution-to-launch-investigation-of-rights-abuses-in-myanmar-03242017161616.html

17 Please see http://www.unmultimedia.org/tv/unifeed/asset/1855/1855515/

18 Radio Free Asia (2017) ‘UN Council Adopts Resolution to Launch Investigation of Rights Abuses in Myanmar’, 24 March 2017, http://www.rfa.org/english/news/myanmar/un-council-apots-resolution-to-launch-investigation-of-rights-abuses-in-myanmar-03242017161616.html

19 Which include: a) the national-level Investigation Commission led by the Vice-President U Myint Swe and b) the Rakhine Advisory Commission headed by the former U.N. chief Kofi Annan

20 Radio Free Asia (2017) ‘UN Council Adopts Resolution to Launch Investigation of Rights Abuses in Myanmar’, 24 March 2017, http://www.rfa.org/english/news/myanmar/un-council-apots-resolution-to-launch-investigation-of-rights-abuses-in-myanmar-03242017161616.html

21 Aung San Suu Kyi: No ethnic cleansing of Myanmar Muslim minority, April 6, 2017, http://www.bbc.com/news/world-asia-39507350

22 Please see, http://www.voanews.com/a/aung-san-suu-kyi-refuses-un-probe-into-alleged-myanmar-war-crimes/3835128.html

23 Please see, http://www.voanews.com/a/aung-san-suu-kyi-refuses-un-probe-into-alleged-myanmar-war-crimes/3835128.html

24 Please see, http://progressivevoicemyanmar.org/2017/04/27/myanmar-cooperate-with-u-n-fact-finding-mission/

25 Please see, http://www.un.org/documents/ga/res/41/a41r143.htm

26 Please also see the analysis by Jasminder Singh of RSIS, at http://www.rsis.edu.sg/wp-content/uploads/2017/04/CO17069.pdf?utm_source=getresponse&utm_medium=email&utm_campaign=rsis_publications&utm_content=RSIS+Commentary+069%2F2017+Rohingya+Crisis+in+Southeast+Asia%3A+The+Jihadi+Dimension+by+Jasminder+Singh+

27 Please see, Mepham, David, Dispatches: Burma: Excuse Me, Mr. President …” Human Rights Watch, July 19, 2013, https://www.hrw.org/news/2013/07/19/dispatches-burma-excuse-me-mr-president

28 http://www.un.org/apps/news/story.asp?NewsID=56117#.WOOG9Rhh3wc

29 Please see, http://edition.cnn.com/2017/03/21/asia/myanmar-un-crimes-against-humanity/

30 Please see, http://www.thejakartapost.com/news/2017/04/29/rohingya-crisis-could-affect-asean-stability-jokowi.html

31 Please see, http://www.thejakartapost.com/news/2017/04/29/jokowi-suu-kyi-discuss-rohingya-crisis.html

32 Please see, http://www.thejakartapost.com/news /2017 /04 /29 /myanmar-compl ie s -w i th - in t l -recommendations-on-rohingya-crisis-suu-kyi.html

33 Please see, http://www.akp.gov.kh/?p=95774

34 Please see, http://www.asiaone.com/asia/myanmar-rebukes-malaysia-pm-over-rohingya-defence

35 Please see, http://www.mmtimes.com/index.php/national-news/24018-myanmar-tells-malaysia-not-to-interfere-in-internal-issues.html

36 Please see, http://www.straitstimes.com/singapore/pm-lee-asean-can-discuss-rohingya-issue-but-countries-have-to-tackle-hardships-trafficking

37 Please see, http://www.channelnewsasia.com/news/asiapacific/constructive-engagement-needed-to-help-resolve-rakhine-crisis-in-7570766

6Issue 23/ May 2017

Partnering for Change. Engaging the World? – An

Analysis of the 30th ASEAN Summit

A. Ibrahim Almuttaqi is the Head of the ASEAN Studies Program, The Habibie Center in Jakarta. The views expressed are his own.He can be reached at Ibrahim@habibiecenter.or.id

President Rodrigo Duterte walks past the honor guards at the NAIA Terminal 2 in Pasay City prior to his departure for Vietnam on September 28

Source: Rey Baniquet/ Presidential Photo

W hen the Philippines took up the chairmanship of ASEAN earlier this year, there was much

disquiet over the direction that Manila would take the regional organization. As ASEAN marks an important milestone, celebrating its 50th anniversary, Manila chose ‘Partnering for Change. Engaging the World’ as its theme for the year. On the one hand, the theme was considered to aptly reflect the Philippines’ drive to promote unity and growth within and among ASEAN’s member states and its global partners.1 Nevertheless, on the other hand it should be asked: Who does Manila intend for ASEAN to partner with? What changes do Manila wish to bring to ASEAN? In what ways will Manila engage ASEAN with the world?

Indications prior to the ASEAN Summit were arguably not too promising. With President Rodrigo Duterte at the helm, many observers looked on with apprehension and unease. For example, having assumed office in June 2016, the former mayor of Davao City has at best shown himself to be a maverick leader and at worst a murderous authoritarian. One only needs to look at his controversial war on drugs that has left some 8,000 people dead, his repeated insults of then-U.S. President Barack Obama, and his pledge to realign Manila’s ‘ideological flow’ with that of China, adding, “There are three of us against the world: China, Philippines and Russia.”2 The Philippines’ reluctance to leverage the favorable ruling of the Permanent Court of Arbitration (PCA) on the South China Sea dispute against Beijing has in particular raised eyebrows around the region.3

Writing in the run up to the Philippine

takeover of the ASEAN chairmanship, a hard hitting editorial from The Bangkok Post described Duterte as causing ‘massive and unncessary diplomatic upheaval’, leaving the region ‘in complete confusion’, and ‘doing a disservice’ to ASEAN.4 The editorial went on to say that with regards to the South China Sea, ‘ASEAN policy now means nothing’ as a result of Duterte’s statements.5

As such, one could reasonably ask if these were the partners that the Philippines intended to work with, was this the type of change that it wished to bring, and was this the ways that Manila would engage ASEAN with the world?

Returning to the ASEAN Summit itself, much has been made of the Chairman’s Statement that was released more than six hours after the conclusion of the gathering. The long waiting time was seen as an indication that not all was well among the ten ASEAN member states. Upon the release of the Chairman’s Statement, the press reaction was largely damning. The Philippines Daily Inquirer highlighted ASEAN’s silence on China’s island-building and militirazation of the South China Sea as ‘a major concession to Beijing.’6 Meanwhile, The Philippine Star noted, ‘Rody gives China free pass on sea row.’7 Indeed experts criticized the final Statement, which was seen as a ‘big departure from the language of the earlier draft statement’, for failing to at least reiterate the previous year’s Statement when Lao PDR was the chairman.8 The 2016 document had called out China’s militarization and reclamation activities whilst emphasizing the need to follow the rule of law. Indeed it is worth noting that the Philippine-produced Statement only dedicated two paragraphs to the South China Sea issue whereas the Lao-produced Statement of the previous

year had dedicated eight paragraphs.9 According to one Filipino expert, “The Philippine leadership of Asean is now overshadowed by its deference to China on the disputes” whilst another simply remarked that Manila had “dropped the ball on this one.”10

Government officials have attempted to deflect criticism of the final Statement by pointing out that none of the ASEAN Leaders raised the issue of China’s militarization and reclamation activities in the South China Sea during the Summit.11An unnamed diplomat even noted that neither Vietnam nor Malaysia – two countries that have taken strong stances against Beijing in recent months both publicly and privately – had raised the issue.12 While this may be true, it could also be argued that Hanoi and Kuala Lumpur felt that such an attempt would have been futile given that Duterte had already made it clear that the South China Sea was not a regional issue for the Philippines. The Philippine President told reporters that the PCA’s ruling ‘was an issue between China and the Philippines and did not concern other members of the 10-nation bloc.’13 Duterte further argued that to discuss the issue at the Summit would be ‘pointless’ as ‘no one dared to pressure Beijing anyway.’14 The comment could be seen as both a criticism of ASEAN’s limitations as well as a reference to the United States’ policy towards the region (or lack of) which remains uncertain under the Trump administration.

Whether Duterte took a realistic view of the region’s balance of power or not, it was notable that the day after the Summit, the Philippine leader welcomed Chinese naval ships to his hometown in the first visit of its kind. A former Philippine ambassador, Apolinario Lozada Jr., suggested the naval

8Issue 23/ May 2017

visit was Beijing’s way ‘to express its gratitude to the Philippines for the non-mention of its arbitration win.’15 He added, “The greater message behind the three powerful warships of China is ‘Thank you, Philippines.’”16

At the same time, Duterte has reportedly cast doubt on whether he would take up US President Trump’s personal invitation to visit Washington D.C. later this year, telling reporters, “I am tied up. I cannot make any definite promise. I am supposed to go to Russia, I am supposed to go to Israel.”17 This was despite the fact that no date has yet been discussed for the proposed visit, inviting question on whether the Philippine President was trying to find a convenient excuse not to go.

Arguably the region has never before seen an ASEAN Chair so openly siding with one major power over the others in the way it is under the Philippines. Even when Cambodia – often accused as Beijing’s ‘puppet’ - chaired in 2012, it at least attempted to maintain an outwardly image of neutrality. That Duterte is making little effort to be non-partisan in the contestation of major powers is problemmatic as it shakes one of the core purposes of ASEAN; purposes that have not only helped to bind ASEAN’s ten member-states together but also in their relations with the wider region. Article 1 of the ASEAN Charter, which lays out ASEAN’s purposes, calls on the Association to play a central and proactive role as the primary driving force in its relations with external partners in “a regional architecture that is open, transparent and inclusive.”18

The notion of ASEAN Centrality that the Association has worked so hard for the major powers to recognize is thus arguably being seriously undermined,

not least because it depends heavily on ASEAN’s ability to be an impartial and honest broker that bridges all the different powers in the region. As a diplomatic source once said, “ASEAN can play a central role because it is a friend to all the major powers.” Clearly this is not the case with the openly pro-China, anti-US Duterte at the helm of ASEAN. While 2012 was seen as a historic setback for ASEAN that called into question the Association’s credibility, one can legitimately ask if the events of the recent ASEAN Summit have not done the same thing. While ‘Partnering for Change. Engaging the World’ is this year’s theme, the events surrounding the 30th ASEAN Summit was certainly not the type of partners, change or engagements that many wanted to see. ASEAN should therefore take a closer look again at the partners it wishes to work with, the changes it wants to bring, and the ways it wants to engage with the world.

Endnotes1 The Nation (2017). ‘What can we expect from today’s

Asean summit.’ April 29. Retrieved from: http://www.nationmultimedia.com/news/opinion/30313719

2 Lindsay Murdoch (2016). ‘’Three of us against the world’: Duterte announces ‘separation’ from the US.’ The Sydney Morning Herald October 21. Retrieved from: http://www.smh.com.au/world/there-are-three-of-us-against-the-world-philippine-president-rodrigo-duterte-announces-separation-from-the-us-20161021-gs7l2x.html and Reuters (2017). ‘Philippine drugs war gets complex as Duterte creates new superagency.’ March 10. Retrieved from: http://www.reuters.com/article/us-philippines-drugs-idUSKBN16H1YV

3 Ben O. De Vera (2016). ‘Duterte foreign policy ‘unfortunate,’ says ex-DFA chief Del Rosario.’ Philippine Daily Inquirer September 28. Retrieved from: http://globalnation.inquirer.net/145660/duterte-foreign-policy-unfortunate-says-ex-dfa-chief-del-rosario

4 The Bangkok Post (2016). ‘Duterte fails credibility test.’ October 26. Retrieved from: http://www.bangkokpost.com/print/1119341/

5 Ibid.

6 Christin O. Avendano (2017a). ‘Asean final statement silent on China island-building.’ Philippine Daily Inquirer May 1. Retrieved from: http://globalnation.inquirer.net/155909/asean-final-statement-silent-china-island-building#ixzz4fuy33Y9K

7 Pia Lee-Brago (2017). ‘Rody gives China free pass on sea row.’ The Philippine Star May 1. Retrieved from: http://www.philstar.com/headlines/2017/05/01/1695661/rody-gives-china-free-pass-sea-row

8 Christin O. Avendano (2017a). Op.cit.

9 Christin O. Avendano (2017b). ‘South China Sea issue not raised by Asean leaders during summit – envoy.’ Philippine Daily Inquirer May 1. Retrieved from: https://globalnation.inquirer.net/155892/south-china-sea-issue-not-raised-asean-leaders-summit-envoy

10 Nikko Dizon (2017). ‘Experts dismayed by Asean skipping of South China Sea issue.’ Philippine Daily Inquirer April 30. Retrieved from: https://globalnation.inquirer.net/155880/experts-dismayed-aseans-skipping-south-china-sea-issue

11 Christin O. Avendano (2017b). Op.cit.

12 Ibid

13 Jim Gomez and Teresa Ceroiano (2017). ‘No sign Philippines raised sea feud win vs China in summit.’ The Washington Post April 29. Retrieved from: https://www.washingtonpost.com/world/asia_pacific/duterte-opens-asean-summit-with-oblique-swipe-at-us-eu/2017/04/29/ff7e3bb0-2c99-11e7-9081-f5405f56d3e4_story.html

14 Today Online (2017). ‘Asean takes soft stance against Beijing over S China Sea issue.’ May 1. Retrieved from: https://www.pressreader.com/singapore/today/20170501/281526520953709

15 ABS-CBN News (2017). ‘Chinese ships in Davao a sign of thanks for ASEAN ‘pass’: ex-envoy.’ May 1. Retrieved from: http://news.abs-cbn.com/news/05/01/17/chinese-ships-in-davao-a-sign-of-thanks-for-asean-pass-ex-envoy

16 Ibid.

17 The Jakarta Post (2017). ‘Philippines’ Duterte hesitant on US visit, warm on China.’ May 3. Retrieved from: https://www.pressreader.com/indonesia/the-jakarta-post/20170503/281827168667272

18 ASEAN (2007). The ASEAN Charter

Arguably the region has never before seen an ASEAN Chair so openly siding

with one major power over the others in the way it is under the Philippines.

Tax Avoidance – What it is, how it’s

done, and what to do

Full-frame Shot of EyeSource: Pexels

Agustha Lumban Tobing is a researcher at The Habibie Center’s ASEAN Studies Program

10Issue 23/ May 2017

“I like to pay taxes. With them, I buy civilization” – Oliver Wendell Holmes Jr.

“Income from illegal activities, such as money from dealing illegal drugs, must be included in your income on Form 1040, line 21” – Actual Internal Revenue Service (IRS) tax form

Introduction

I t was estimated that in 2013 both Indonesia and the Philippines each lost at least around US$ 6.5 to 7.5 billion dollars in tax revenue due to

tax avoidance by multinational corporate entities (MNEs).1 Developing countries as a whole (excluding those that fit strong definitions of tax havens) may have lost at least around US$ 100 billion in tax revenue.2 It is important to note that these figures are likely lower bounds as their estimation methods assume only profit-shifting through off-shore hubs as the only tactic MNEs use to reduce their tax bill, whereas in reality there are a plethora of practices MNEs may use to decrease the amount of tax they pay.

Although many people—whether legal or natural—avoid (and even evade) taxes in order to retain the money they earned that would otherwise have been given to the government, the act of tax avoidance is both irrational in the long-run and simply unfair. Tax money is used to fund public goods and services such as building infrastructure or providing public education--both of which are necessary to develop a well-functioning economy. Yet, we hear investors complain about high taxes as much as they complain that developing countries lack talent and good infrastructure.

Without the sufficient provision of public goods and services, countries would struggle to further attract investment and thus grow and develop their economy. Tax is the government’s way to redistribute resources and when it is correctly taken and spent it is one of the few ways to create a more equitable society in which

the income produced by the whole of society is enjoyed not only by the few. In short, paying taxes is important and it is critical for governments to enact policies that reduce tax avoidance.

In this article, I will try to explain what tax avoidance is along with the ways with which MNEs exploit ‘loop-holes’ in a country’s tax code together with different tax-rates worldwide, the policies that are currently used to tackle tax avoidance, and some policy recommendations which may be helpful in cracking down on tax avoidance.

What is tax avoidance and how do they do it?

Unlike tax evasion, tax avoidance is legal (at the very least, it is not easy to show that certain forms of tax avoidance are not illegal). Tax avoidance takes place within the confines of the tax code yet exploits legal ‘loopholes’ with the purpose of minimizing their tax bill, as opposed to tax evasion which may be done to hide illegal sources of income. Tax avoidance is still in accordance with the letter of the law that taxpayers are obliged to follow but not necessarily in line with its spirit—which they are not. To be sure, the boundary between tax avoidance and evasion is opaque, particularly when the tax code is itself ambiguous. In this article, I will only focus on the rather clearer cases of tax avoidance and the various ways in which it is done; the obvious modes of tax evasion

(e.g. undeclared financial assets, VAT fraud, or outright bribery) will not be discussed here.

Tax avoidance by MNEs can be grouped into either those that exploit loopholes that inadvertently give MNEs the option of structuring their own tax base (and thus the amount of taxable income) or those that ‘shop’ around for favorable tax regimes.3 The first mode of tax avoidance, commonly called profit shifting exploit

the fact that an MNE’s parent company (which reside in their home of typically rich countries) is regarded as a legally

distinct entity from that MNE’s subsidiary (which reside everywhere else).

Because of the fact that an MNE’s parent company and foreign-based subsidiary are legally separated even though they are strategically united, MNEs can strategically allocate their resources according to where it would result in the smallest amount of taxation. MNEs may do this either through transfer pricing, intra-group loans, or favorable allocation of their intangible assets. Transfer pricing refers to when MNEs do cross-border goods or services transactions among themselves and have the discretion to set the price of said transactions themselves. This practice is a legitimate tool that was meant to avoid double taxation and to assign profits to the MNE’s affiliates. Yet the discretion that

is allowed to companies to price their own transactions can be abused to avoid tax.4 These transactions are either overpriced when high-taxed affiliates buy from low-

taxed affiliates and underpriced when they flow the other way around. If this tactic is done correctly, although the reported profits of some of the MNE’s subsidiary may decrease, the profits of the MNE as a whole increases, even though it was not done through creating value but rather by deliberately mispricing invoices, which may be done simply with a keystroke. Remembering that US$ 10-23 trillion of international trade is actually done within companies (estimates vary because cross-country corporate ownership is difficult to assess), the scale that transfer pricing can

assist with tax avoidance is proportionally large.

Today, most ASEAN countries already have transfer pricing regulations which are largely derived from the OECD’s general guidelines, which is based upon the “arm’s-length” principle of assessing cross-border transactions. The guidelines essentially say that transfer prices must be as if the two related were independent

of each other, which is done by using prices of comparable goods. But this is impossible, because MNE affiliates are not

independent. When one considers that a significant portion of intra-company trade is in intermediate products, often with no “arm’s-length” benchmark with which to compare it, ultimately it is the MNEs themselves that value the transactions.

Another way that MNEs may avoid taxes is through strategically allocating balance sheet items. This can be described as the assets analogue to transfer pricing, such as when MNEs lend money to affiliates located in higher-taxed jurisdictions, as interest payments are usually a tax-deductible expense (also known as thin capitalization).5 Other cost-intensive operations may also be located at high-taxed affiliates, such as R&D or central administration, to reduce taxable profits. Inversely, income-generating assets such as

financial assets, trademarks, copyrights, or patents are located in low-taxed affiliates.

What can be done? Should it be done?

Now that we have a preliminary understanding of how MNEs make use of loopholes in countries’ tax code so as to pay as little tax as possible and just how much tax revenue developing countries lose because of it, what remains to be discussed is what sort of policies–whether national, regional, or international—can be enacted to reduce

the amount of corporate tax avoidance. As specific policies should be tailored to the administrative and revenue-absorptive capabilities of each country, note that the policy recommendations here should be thought of as guidelines for a more equitable taxation regime.

The first step is to implement strict general anti avoidance rules (GAAR). Although some ASEAN countries already have some GAAR’s in place (Thailand, Vietnam, and the Philippines do not), particularly to counteract transfer-pricing and thin capitalization tactics, GAAR’s between ASEAN states still vary widely and are usually up to the discretion of the country’s tax authority. General guidelines for the tax authority to adjust transfer prices in cases where no arm’s-length

benchmarks exist could be made clearer and harmonized as much as possible among countries. There are countries that have already started implementing Advanced Pricing Agreements whereby an MNE and the tax authority agree on the transfer pricing methodologies of certain transactions for a certain time period. Governments must also force MNEs to file all transfer-pricing related documents above a certain amount. As transfer pricing and intra-company loans are still legitimate tools in corporate strategy, tax authorities should monitor their activities to see that they do not abuse these tools for avoiding

taxes. It would be useful to have a specific Large Taxpayer Unit (LTU) within the tax authority that specifically handles large MNEs and a further unit for high net-worth individuals (HNIU). Myanmar has yet to have a LTU while Cambodia, the Philippines, Singapore, and Thailand do not have a HNIU.

Companies that are suspected to do profit-shifting practices to secrecy jurisdictions (states with low or zero taxes and highly secretive banking practices; commonly known as tax-havens) could either be denied doing so or be subject to (higher) withholding taxes. Tax authorities should also be empowered to do more audits on companies that make royalty payments while domestic laws should ensure that royalty payments are

subject to withholding taxes. If need be, tax treaties that do not enforce withholding taxes on royalty fees, management and interest expenses should be renegotiated.

Usually MNEs publish an annual report (usually for shareholders, but may be accessed by the wider public) that outline their activities worldwide, but these activities are not broken down by each country. To further increase the transparency of MNEs operations, the Tax Justice Network recommends that governments enforce country by country reporting (CBCR)

Tax authorities should also be empowered to do more audits on companies that make

royalty payments while domestic laws should ensure that royalty payments are

subject to withholding taxes.

12Issue 23/ May 2017

requirements.6 This would force MNEs to provide their operations in every country, which would include the names and locations of each subsidiary or affiliate, along with data regarding assets (broken further between tangible and otherwise), employee numbers, turnover, and profits. This way, it forces MNEs to disclose whether their reported profits in each country are actually in line with their activities. We would expect MNEs that aggressively avoid taxes to report much of their profits in jurisdictions where little economic activities actually take place. With CBCR further agreements between countries can be made to implement profit-splitting methods, whereby the profits of an MNE is split and later taxed in proportion to where economic activities actually take place.

Although there has been quite significant international cooperation to combat tax avoidance, particularly the ‘Action

Plan on Base Erosion and Profit Shifting’ (BEPS) by the OECD and the G20, yet it does not do nearly enough to curb corporate tax avoidance, e.g. the sort of CBCR that they recommend does not require royalty, interest, and service fees to be reported, although these fees can significantly change the reported profits of an MNE subsidiary. The BEPS also does not address the problem that one of the main loopholes that MNEs use exploit the

legal assumption that an MNE’s affiliates are separate entities. Oxfam has further criticized the BEPS in that it only helps the tax avoidance problems of developed countries while ignoring the concerns of developing countries. Although the BEPS outlines common reporting standards for the automatic exchange of information (AEOI) concerning taxes, yet OECD countries are still unwilling to share their information to tax authorities that meet a certain standard.7

Organizations such as Oxfam and the Tax Justice Network, among others, have further recommended that what is ultimately needed is a multilateral organization to supervise international tax issues. Although there is clearly a lack of interest, let alone political will, both globally

and regionally for bringing about such an organization (because, who really spends much of their time immersing oneself in matters of international corporate tax

if they could help it?), such an authority could be the tax-world’s equivalent of the WTO. It could be given the authority to oversee the introduction of international tax and reporting standards, set minimum tax rates that would prevent harmful tax competition between countries (the many adverse effects of which cannot be explained here), develop further regulations regarding tax policies, and surveil the operations of MNEs.

Asking for the world to do so may be a bit much, maybe we can start with ASEAN?

ReferencesBuettner, T., Overesch, M., Schreiber, U. and Wamser, G. (2012). The Impact of Thin-Capitalization Rules on the Capital Structure of Multinational Firms. Journal of Public Economics, 96(11), pp.930-938.

Cristea, A D. and Nguyen, D (2015). Transfer Pricing by Multinational Firms: New Evidence from Foreign Firm Ownerships Available at SSRN: https://ssrn.com/abstract=2517509 or http://dx.doi.org/10.2139/ssrn.2517509

Crivelli, E., R. De Mooij, and M. Keen (2016). ‘Base Erosion, Profit Shifting and Developing Countries’. Finanz Archiv: Public Finance Analysis, 72(3).

Cobham, A. & Janský, P. (2017). Global distribution of revenue loss from tax avoidance: Re-estimation and country results. WIDER Working Paper 2017/55. Helsinki: UNU-WIDER.

Hebous, S and Johannesen, N (2015). At Your Service! The Role of Tax Havens in International Trade with Services. CESifo Working Paper Series No. 5414. Available at SSRN: https://ssrn.com/abstract=2627083

International Tax Compact (2010). Addressing Tax Evasion and Tax Avoidance in Developing Countries,

UNCTAD (2015). World Development Report 2015.

Oxfam (2014). Business Among Friends.

Endnotes1 Crivelli, De Mooij, Keen (2016) for the IMF and Cobham

and Jansky (2017) for the UNU-WIDER

2 UNCTAD World Investment Report, ch.5 (2015)

3 International Tax Compact (2010)

4 Cristea and Nguyen (2016) in services trade and Hebous and Johannsen (2015) in goods trade.

5 Buetnner and Wamser (2013)

6 Tax Justice Network (2016)

7 Oxfam (2014)

We would expect MNEs that aggressively avoid taxes to report

much of their profits in jurisdictions where little economic activities

actually take place.

Two of what I consider the most politically significant films made last year participated in a regional film concourse, called Asean International Film Festival and Awards (AIFFA). These films are Bor Ocampo’s Dayang Asu and Lawrence Fajardo’s Imbisibol. And the two films came home with two wins: Best Supporting Actor for Ricky Davao and Best Editing for Lawrence Fajardo. The film contingent, in fact, came home with a total of six awards to include: Louie Ignacio, Best Director for Area; Ai-Ai de las Alas, Best Actress for Area; and Anna Capri Best Supporting Actress for Laut.

What do Asean filmmakers tell as stories? What do they tell each other? Or do we ever, in this region call Asean, converse with each other through films and the arts?

If we gauge the dialogue we enter into by way of Dayang Asu and Imbisibol , we do have important stories to tell our Asean neighbors.

Why it Matters?

How do we converse with each other in ASEAN? Indeed, the issue of ‘conversation’ often surfaces during discussion on

ASEAN. The region is, after all, a mixed bowl of cultures,

ethnicities, languages, and beliefs. While

ASEAN has decided upon English as the regional lingua

franca, the broader question of how we promote meaningful people-centred conversation remains a partially addressed challenge, leaving ASEAN image as an elite gathering of politicians and businesses intact.

In this context, films might help. It might not be the revolutionary bridge that will suddenly connects the peoples of all of the member states together, but it does provide some opportunities that can complement other people-to-people efforts such as students exchanges.

The article suggests that ASEAN films can tell the gritty stories of everyday lives in Southeast Asia. There are plenty of that abound. Development gap is still a major issue for the region with inequality persisting among and within countries. Governance challenges in the form of corruption or bureaucratic sluggishness alongside crimes and conflicts that are also apparent in some parts of the region can certainly fuel an engaging film that bring a dose of reality into our understanding of Southeast Asia, much like Brazil’s Cidade de Deus.

ASEAN films can allow for people in Southeast Asia to see what lives are on the other sides of their border . Perhaps similar to how the Korean Wave has helped many in Southeast Asia to get a glimpse about live in South Korea—as carricaturized as it can sometimes be. Filmmakers can stitch portrayals of pieces that can be more than a sum of its parts as they tell any sides of the stories: the good, the bad, and the ugly.

Moreover, as films can tell stories of the present, it can also tell the story of the past. Southeast Asia is rich not only with histories of its member states but also shared history among themselves. Long before the region is united against communism and even before they face common struggle against colonialism, the region was connected. It witnessed Hinduism and Buddhism spread along its many rivers and long shores. It welcomed Middle East traders who brought silks, incenses, and Islam; and saw Spanish and Portuguese explorers who spred Christianity in their quests for gold and glory. It also saw kingdoms rose and fell along the Malacca Strait. People of Sriwijaya, Champa, Ayutthaya, and Majapahit had travelled across the region to learn and trade.

These stories have been told and documented by historians. To a lesser extent, filmmakers have also told the story, such as through The Legend of King Naresuan series in Thailand. This historical films, expensive and unfeasible though they may be as an ASEAN socio-cultural program, is a welcome addition to region wide efforts to promote people to people contact.

It is therefore important to promote filmmakers to tell Southeast Asian stories for Southeast Asians. It is also important for policymakers to engage with them to try and further incorporate creative art and litearary forms in realizing a people-centered ASEAN. Otherwise, such stories might forever be contained in thick academic tomes.

Which might be bad for the future of ASEAN. I was told that us millenials—a.k.a. future leaders, today’s influencers—well, we do not read, we only do retweet.

A S E A N R O U N D - U P

What is anAsean film?

BUSINESS MIRROR, 11 May 2017https://www.businessmirror.com.ph/what-is-an-asean-film/

14Issue 23/ May 2017

PHNOM PENH — Economic i n t e g r a t i o n has long been the focus of the Association of Southeast Asian Nations (ASEAN), but attention is increasingly turning to the region’s shaky civil liberties plight.

At a World Economic Forum (WEF) discussion in Cambodia’s capital city on Wednesday, the organization’s first regional meeting in the country, a group of experts shared their dreams for the bloc and human rights emerged as a common denominator.

“Development can only be sustained when people are secure,” said Wai Wai Nu, a former political prisoner under Myanmar’s military government who is now founder and director of Women Peace Network. “My dream is for ASEAN is to become an inclusive society where all people in the region can enjoy freedom with respect to their human rights.”

Why it Matters?

Civil liberties have always been an issue in ASEAN. As previous Thinking ASEAN has highlighted—particularly December 2016 and April 2017 editions—has highlighted

the region is facing challenges t o w a r d democracy

and human rights. At the

same time, the currently existing

mechanisms are not well equipped to

deal with these challenges, partially due to ASEAN core norms

of non-interference and closed door diplomatic culture.

ASEAN 50th anniversary is a good time as any for all stakeholders to take stock of the future of democracy and the protection of human rights in the region. The rights to freedom of speech, expression, religion, or even the rights to nationality are still denied in many parts of the region.

However, although analysts and activists have pointed out these challenges, they way forward is not always clear. This is not because there are no attempts to answer these challenges, or that there are no goodwill among stakeholders.

The article quoted an activist mentioning, “At the time, Indonesian ministers told me that if they supported the idea of a UN rapporteur to investigate Myanmar, there would be similar proposals in their

country… Leadership in ASEAN must be honest about these matters.” This quote underlines how driving positive changes at the regional level must also take into account domestic constraints of member states.

We can be glad that civil society organizations in the region are active in promoting democracy and the protection of human rights. However, they do not have the best working relations with other stakeholders in the region. Civil society participation in the region has been criticized as ‘structured’, implying that they can only openly promote agenda that are accepted by ASEAN Member States.

While stakeholders need to maintain optimism in the face of adversity, it is often useful to remember how difficult changes can happen in the region. It is easy to say that changing things in ASEAN require political will. However, such will is located in intricate webs of norms and cultures; both domestic and regional. Indeed, locating political will might be the easiest task in hand, putting them to work is far harder.

As ASEAN turns 50, focus turns to region’s shaky civil liberties plight

CNBC, 10 May 2017http://www.cnbc.com/2017/05/10/asean-humanrights-wef-cambodia-airasia.html

Wirya Adiwena is the Head of International Relations and a Researcher at the Habibie Center

F I N DO U R

U P C O M I N GA G E N D A

O Nhabibiecenter.or.id

BEST CUISINEASEAN’S

In 2011, CNN Travel issued a list of 50 best foods in the world based on reader’s choice, and guess what, 18 out of 50 come from ASEAN! This infographic will show you top 6 foods from the list. Do you agree with this list or do you have your own favorite food that is not on the list?

Image:Freepik, Wikimedia Commons

RENDANG NASI GORENG tom yam goong

PAD thai som tam masaman curry

1

1065

42

ONION garlic CHIL I

most used ingredients

16Issue 23/ May 2017

ASEAN STUDIES PROGRAMThe Habibie Center

Jl. Kemang Selatan No.98, Jakarta Selatan 12560(P.) 62 21 781 7211(F.) 62 21 781 7212

www.habibiecenter.or.idwww.thcasean.org

facebook.com/habibiecenter @habibiecenter

The ASEAN Studies Program was established on February 24, 2010, to become a center of excellence on ASEAN related issues, which can assist in the

development of the ASEAN Community by 2015. The Habibie Center through its ASEAN Studies Program, alongside other institutions working towards the same

goal, hopes to contribute to the realization of a more people-oriented ASEAN that puts a high value on democracy and human rights.

The objective of the ASEAN Studies Program is not merely only to conduct research and discussion within academic and government circles, but also

to strengthen public awareness by forming a strong network of civil society in the region that will be able to help spread the ASEAN message. With the

establishment of ASEAN Studies Program, The Habibie Center aims to play its part within our capabilities to the ASEAN regional development.

Cover:An overgrown sandstone Buddha statue, near the minor chapels of

Wat Maha That in AyutthayaSource: Wikimedia Commons