Southeast Asia dogged by problems of key members: DBS Bank
Southeast Asia dogged by problems of key members: DBS Bank
SINGAPORE (AFP): Corruption scandals dogging the leaders of the Philippines and Thailand, and the inexperience of new Indonesian President Megawati Sukarnoputri, have regional financial markets on edge, Southeast Asia's largest bank said Wednesday.
Bribery allegations against the husband of Philippine President Gloria Arroyo, Jose Miguel, "has taken on added significance" because the state ombudsman has formed a panel to investigate her alleged involvement, DBS Bank said in a report.
"It should continue to keep the Philippine financial markets on the edge if it threatens to result in another Estrada-type scandal," the bank said.
Former Philippine president Joseph Estrada was toppled in a popular uprising in January following a corruption scandal. Estrada's fall catapulted then vice president Arroyo to power.
Jose Miguel Arroyo is alleged to have accepted 50 million pesos (US$943,000) in bribes to convince the president to approve two vetoed telecoms franchise bills. He has denied the allegations.
DBS compared Arroyo's rise to power with that of Southeast Asia's other woman president, Megawati, who was swept to office following the ouster by parliament of Abdurrahman Wahid.
"Megawati honeymoon to end soon," DBS said. "Given the similar paths to power by both Megawati and Arroyo, it would be difficult to be optimistic for Indonesia for the medium term."
Both leaders, who are daughters of former presidents, are haunted by supporters of their deposed predecessors. Both also have businessmen husbands, DBS noted.
But the bank said Megawati faced bigger separatist problems with more provinces crying out for independence.
Arroyo's government is holding peace talks with the main Filipino Muslim separatist group, the Moro Islamic Liberation Front, and is waging war on a small but notorious band of kidnappers, the Abu Sayyaf.
While Arroyo boasts of an economics background and extensive experience as a cabinet member, Megawati was relatively inexperienced.
"This leaves much doubt if Megawati can fare any better, in an environment that is more politically and economically more challenging," the bank said.
Allegations that Thai Prime Minister Thaksin Shinawatra had deliberately concealed assets in 1997 continue to hobble his leadership, DBS Bank said.
Thailand's Constitutional Court is expected to hand down a verdict either this month or next. A guilty verdict could lead to Thaksin's removal from office.
"Even if Thaksin is able to remain a strong influence in the background, it will not be the same as having a captain at the steer," it said.
Indonesia, the Philippines and Thailand are key members of the Association of Southeast Asian Nations (ASEAN), which also groups Brunei, Cambodia, Laos, Myanmar, Malaysia, Singapore and Vietnam.
ASEAN is losing out to stronger competition from China in terms of foreign investments and exports.