Suu Kyi freedom is test for Asean, says Macapagal

By Quentin Peel in London
Published: December 7 2007 02:00

The release from house arrest of Aung San Suu Kyi, Burma's opposition leader and democracy campaigner, will be the "number one benchmark" for the Philippines in deciding whether to ratify the new charter of the Association of South-East Asian Nations, President Gloria Macapagal Arroyo said yesterday.

While strongly backing the economic integration process of Asean, she warned that the Burmese military junta must comply with the human rights elements in the charter by accelerating the movement towards democratic processes in the country.
If Burma fails that test, she said in an interview with the Financial Times, "it will not be a serious charter".

Mrs Macapagal warned her Asean partners last month that the Philippine Senate would "find it very hard to ratify" the new charter if the human rights section was not taken seriously by all the member states. But she said yesterday that this should not hold up progress towards the target of a single market, and single production base, in Asean by 2015.

"Our combined gross domestic product is pretty close to China's GDP, and economic integration makes us an important player in the international economic arena," she said.

Speaking on a working visit to London, during which she met Queen Elizabeth and addressed foreign investors, Mrs Macapagal dismissed fears of political instability in the Philippines, after an abortive coup attempt last week, and stressed the country's strong economic growth.

"Those who tried to mount a coup misread the sentiments of the people," she said. "They want political stability, and they want a bright economic future. At the end of the day, the rule of law prevailed."

She said the difficult economic reforms implemented by the government, including a rise in sales tax to reduce the budget deficit, had laid the foundation for strong economic growth based on a big infrastructure spending programme.

"I have been focused like a laser beam on the economy," she said. "The macro-economic fundamentals are the strongest for a generation. The growth rate is 7 per cent, inflation is low, the peso is strong, and the stock market is the highest in history.

"The world is taking notice and investments are coming in."

She promised that tougher action would be taken to curb corruption in government procurement contracts, and announced that a special taskforce had been established to scrutinise projects with China. A $330m (€225m, £166m) telecoms contract with China's ZTE Corporation was scrapped recently, after allegations of corruption, and criticism of the high price. The World Bank has also deferred approval of a $232m loan, to help finance new road-building, to investigate reports of bid-rigging and over-pricing.

"We want to continue to eliminate corruption from the system," Mrs Macapagal said. "We have a taskforce on how to improve the procurement system. We have a system that provides so many loopholes, we have to remove all this."

She said the Chinese investors were very keen to get into the mining sector, since a ruling of the Supreme Court in 2004 to open the door to foreign investors. Negotiations are continuing for a $1bn Chinese investment in a nickel mine in northern Mindanao.

"For all its largeness, China does not have nickel, and they need it for industrialisation," she said. "Nickel is to the Philippines what oil is to Saudi Arabia. We have a complementarity right now."

Outside the mining sector, she said her government was looking for "sunrise industries" in the "skills-intensive, labour-intensive service sectors, such as IT and process outsourcing", and in tourism.

Background

*Born in 1947, Gloria Macapagal Arroyo is the daughter of Diosdado Macapagal, who led the Philippines in the 1960s

*Educated at Georgetown University, Washington, and the University of the Philippines

*Elected to the Senate in 1992

*Elected vice-president in 1998. Became president in 2001 after popular revolt against Joseph Estrada

*Won 2004 presidential election. Survived two coup attempts