Clinton to Philippines in US Asia drive

Secretary of State Hillary Clinton headed Monday to the Philippines on a trip that will also include Thailand as the United States steps up efforts to reassure Asian allies of its staying power.

The visit comes a day before President Barack Obama leaves for another longtime ally, Australia, on the heels of playing host to Asian leaders in Hawaii for a summit that moved forward on an ambitious Pacific trade pact.

Obama and Clinton will head at the end of the week to an East Asia Summit in Bali, hoping to show an active role in a forum where some countries earlier sought to exclude the United States.

Clinton was expected to hold talks Wednesday with Philippine President Benigno Aquino and sign a formal declaration that looks to lay out a path for future relations between Manila and its former colonial power.

Amid concern in several Asian countries about China's growing clout, Clinton said the United States was "updating" relationships with its five treaty-bound regional allies -- Australia, Japan, the Philippines, South Korea and Thailand.

"These five alliances are the fulcrum for our efforts in the Asia-Pacific," Clinton said in a speech last week at the East-West Center in Honolulu.

"They leverage our regional presence and enhance our regional leadership at a time of evolving security challenges," she said.

Clinton and Obama have vowed to put a new focus on the Asia-Pacific region, saying that the United States wants to help build the emerging institutions of the fast-growing region which is vital both for the US economy and security.

Despite looming budget cuts, Defense Secretary Leon Panetta recently pledged that Asia would be the military's priority as he visited Japan, South Korea and emerging US ally Indonesia.

Clinton said that the United States wanted to ensure that its alliances enjoy political support and that its defense cooperation with each country was enough for "deterring provocation."

"We want our alliances to be nimble and adaptive so they can continue to deliver results," she said.

Admiral Robert Willard, head of the US Pacific Command, also stressed that the five treaty alliances "form in many ways the basis for security in the region."

"One of our endeavors is to improve those alliances and strengthen those alliances along the way," Willard told reporters in Honolulu.

The Philippines has accused the Chinese military of aggressive acts in Philippine-claimed areas, including firing on Filipino fishermen, laying buoys and harassing an oil exploration vessel.

Zenia Rodriguez, head of the political science office at the University of Santo Tomas in Manila, said that Clinton's trip was timely in light of the tensions in the South China Sea, including over the Spratly islands.

"When you face China in the Spratlys, the most the Philippines can do is lean towards a stronger nation, which in our case is the US," Rodriguez said.

While US policymakers have been upbeat about the Philippines under Aquino, they have been more concerned over Thailand after an extended period of political chaos in the kingdom.

Prime Minister Yingluck Shinawatra, the sister of coup-ousted former premier Thaksin Shinawatra, came to power only in August and has come under intense pressure as she tackles deadly floods that have threatened the capital Bangkok.

Clinton said she would offer new flood aid to Thailand, whose powerful military initially did not request the assistance of a US aircraft carrier that was near Thai waters.

Cost of rehab to be tallied this month

Financial authorities expect soon to finalise the sum needed for the Kingdom's reconstruction after the flood disaster with assistance from the World Bank, amid expectation that it will require hundreds of billions of baht to restore investor confidence.

Finance Minister Thirachai Phuvanatnaranubala reiterated the country's readiness to finance the rehabilitation efforts. Re-ferring to a meeting with World Bank executives yesterday, he said a team of 30 experts was now in Thailand and should complete their damage assessment and report on rehabilitation requirements by the end of the month.

"I was told about the availability of a damage-calculation formula and rehabilitation approaches. This will be reported to the Recovery Strategy Committee chaired by Vira-bongsa [Ramangkura]," he said.

Thirachai yesterday endorsed a proposal by the Federation of Thai Industries, the Thai Bankers Association and the Thai Chamber of Commerce to distribute some revenue from corporate income taxes to a rehabilitation fund. 

The donation is based on the differential of tax rates between 2011 and 2012. Next year, the corporate tax rate is to be cut from the current 30 per cent to 23 per cent.

He said his ministry was ready to relax the rules to accommodate the initiative. It estimated that if all companies join the effort, the fund could be valued at Bt52 billion and should be a particular help to small and medium-sized enterprises.

A government committee chaired by Transport Minister Sukampol Suwannathat, tasked with resuscitating flood-affected infrastructure, will today ask the Cabinet for a budget of Bt18.44 billion to rehabilitate Don Mueang Airport, 799 schools, and roads. 

Billions of baht is expected to be required to build flood barriers around industrial estates, after the inundation of nearly 1,000 factories.

Finance permanent secretary Areepong Bhoocha-oom said the ministry expected to achieve its tax-revenue target of Bt1.98 trillion for fiscal 2012, a 4.7-per-cent increase from a year earlier.

The ministry expects the economy to grow about 5 per cent next year, boosted by rising local consumption and reconstruction investment following the flood crisis. 

The disaster may shave 1.8 percentage points from growth in gross domestic product this year, he said, without giving a forecast for 2011 economic growth.

It is now widely expected that the Bank of Thailand's Monetary Policy Committee at its November 30 meeting will cut the policy rate to boost the ailing economy.

Praipol Koomsup, a former member of the MPC, said the rate might be cut by half a percentage point. Amid calls from some companies for a cut of as much as 1.5 percentage points, he said such a reduction would be too steep and could make it hard for a U-turn.

"A 50-basis-points cut is large, but not too big. It could be cut that much while the Bank of Thailand monitors the situation. If the economy does not pick up, another cut is possible in the next round," he said.

In 2008 the central bank slashed the policy rate by as much as 1 percentage point. Praipol reasoned that the decision at that time was supported by the severe economic plunge sparked by the financial crisis that began in the US. 

Though the impacts of the current flood crisis are huge, they vary in severity across the provinces.

The government is scrambling for plans to rehabilitate infrastructure as well as build new facilities to prevent a recurrence of the disaster in coming years.

Thirachai said a US trade representative who paid him a visit yesterday also urged both short- and long-term plans.

Attending the Asia-Pacific Economic Cooperation Leaders' Summit in Hawaii this weekend, Deputy Prime Minister Kittiratt Na-Ranong relayed the government's commitment to prevent another disaster.

New highways, towns planned to combat floods

HONOLULU, HAWAII : A new river, new highways, new railways and new towns are among the government's long-term flood prevention measures, Deputy Prime Minister and Commerce Minister Kittiratt Na-Ranong said.

Deputy Prime Minister Kittirat Na-Ranong went to Hawaii as head of the Thai delegation for Sunday's Apec summit.

He explained the plan to multinational business leaders who expressed concerns that any repeat of the heavy flooding in Thailand will cause huge damage again.

He said leaders and executives from multinational firms, including Google, Microsoft, AT&T, Cagill, Boeing and GE, expressed concerns over Thailand's worst flooding for half a century at the Asia-Pacific Economic Cooperation (Apec) CEO forum in Hawaii.

They asked Thai delegates whether heavy floods will happen again in the near future.

This year's floods submerged seven industrial estates in Ayutthaya and Pathum Thani and still pose a threat to two industrial estates in Bangkok Bangchan and Lat Krabang.

Mr Kittiratt, who attended the Apec meeting on behalf of Prime Minister Yingluck Shinawatra, said he told the business leaders the government would improve the water management system and would not allow such a disaster to occur on such a scale again.

The government has planned investment in water resource management, to prevent heavy floods, particularly in densely populated communities and business districts.

Initially, the development would include digging a new river to act as a flood way leading from the Central Plains to the sea.

A dual track railway or a highway would also be developed along the river.

New town development and new city planning are also in the pipeline.

Kittiratt: Assures big business

Mr Kittiratt chairs the national strategic committee for water resources management.

Details of how the investment was funded would depend on a joint decision between the committee for reconstruction and development, chaired by Virabongsa Ramangkura, and the Finance Ministry.

"The government has decided to seek help from Japan International Cooperation Agency [JICA] for technical consultancy in water resource management, particularly in the Chao Phraya basin," he said.

The JICA conducted a water management study on the Chao Phraya basin in 2000 as well as the Crown Property Bureau.

The study results of the two organizations would be applied for the development. Mr Kittiratt said the government is considering sources of funding for the mega-project development for flood prevention.

There are several suitable sources available, including the World Bank, Asian Development Bank and the JICA.

Meanwhile, the United States, which hosted the Apec Ministers' Meeting, tried to push the "promoting green growth" issue.

This is aimed at encouraging Apec member nations to promote environmentally friendly goods and service markets.

Among proposed measures is a tax reduction scheme for environmentally friendly goods and services, such as solar cell development and energy-saving services.

Mr Kittiratt also said Thailand has been invited to join the Trans Pacific Partnership FTA which has nine members, led by the US.