1]
May 3, 2000
Asian Travel
Undaunted Business Travelers Show
Tolerance for Hassles in Cambodia
By SOFIA MCFARLAND
THE WALL STREET JOURNAL INTERACTIVE EDITION
A business trip to Phnom Penh was a rarity until seven or eight
years ago, and has only stopped raising eyebrows in the past
two.
The mobile-phone rentals at Phnom Penh's Pochentong airport
and "cyber-relations officers" at the major hotels may seem
miraculous for a country that during its darkest days -- the
1975-79 years of Khmer Rouge rule -- saw its currency
abolished, its cities emptied and hundreds of thousands of its
citizens murdered.
That may explain why many business visitors have tolerance
for the bad roads, expensive phone calls and lack of speedy
Internet access. Santipong Pimolsaengsuriya, Cambodia
manager for McCann-Erickson, says the advertising agency's
Cambodia clients display more flexibility than they would
elsewhere. "In Thailand or Malaysia, they would expect
first-class service because there is no excuse," he says.
In February, 32,752 visitors arrived in Cambodia, a 69%
increase over the year-earlier month. Of those, 3,692 came for
business. The relative ease of launching a business lures many
investors: "It took me 10 days to set up my company and get
all the papers," says Peter Lietz, director of tour operator Lolei
Travel. But that doesn't mean running a business is
problem-free. Mr. Lietz laughs when asked whether the
business environment could be improved. "You want me to
make a list? A book?"
Cracks in Corruption Crackdown
Chief among complaints are poor infrastructure, expensive and
inefficient telecommunications and a deficiency of flights. And
though the visa-on-arrival policy has received much praise as a
business facilitator, some visitors report being asked to pay
more than the requisite visa fee of $20 for tourists and $25 for
those on business.
Ronald Ko, a Hong Kong garment-industry executive who
arranged his visa before visiting Phnom Penh in April, said an
immigration officer still asked him for money. "Certainly I have
not given it to him," he said. "I just pretended I do not
understand English."
Cambodia's government over the past few months has cracked
down on corruption, arresting dozens of officers and civil
servants over illegal roadblocks and extortion. But some
visitors are worried about the bigger picture. "As a business
traveler, that's the last thing you want to see," said a
Singaporean who had a similar airport experience. "If that's
already happening at the customs counter, can you imagine
how much more you'll have to pump in if you want to invest?"
2] May 2, 2000
Dow Jones Newswires
Clinton Wants Americas Trade Zone,
Help For Colombia
Dow Jones Newswires
WASHINGTON -- U.S. President Bill Clinton on Tuesday
reiterated his commitment to build a free-trade zone
encompassing all of the Americas by 2005 and urged Latin
American countries to band together to help Colombia battle
narco-traffickers and left-wing guerrillas.
"Today we are called upon to stand for democracy (which is)
under attack in Colombia. Drug trafficking, civil conflict,
economic stagnation combine everywhere they exist, and
explosively in Colombia, to feed violence, undercut honest
enterprise in favor of corruption, and undermine public
confidence in democracy," Clinton said.
3] May 2, 2000
Dow Jones Newswires
Sacking of Armenia's PM Means
Entire Government Is Fired
Dow Jones Newswires
YEREVAN, Armenia (AP)--Armenia's President Robert
Kocharian fired the government on Tuesday after mounting
disputes with the prime minister, who had been named six
months ago after his predecessor was killed in a parliament
shootout.
According to the former Soviet republic's constitution, with
the firing of the prime minister, the government was also
automatically dismissed.
Sarkisian's predecessor and brother, Vazgen Sarkisian, was
killed when gunmen burst into parliament Oct. 27. The gunmen
took legislators hostage, saying they were trying to save the
country from corruption. Sarkisian, the parliament speaker
and six others were killed in a shootout before the gunmen
surrendered.
4] May 2, 2000
Dow Jones Newswires
Indonesia To Present New Oil,
Electricity Law In June
Dow Jones Newswires
JAKARTA -- The Indonesian government will present a new
oil and electricity law to parliament in June, Mines and Energy
Minister Susilo Bambang Yudhoyono said Tuesday.
Speaking after a meeting of economic ministers and
representatives of the International Monetary Fund,
Yudhoyono also said the government hasn't yet decided when
it will lift fuel subsidies and thus raise fuel prices.
He said the forthcoming Letter of Intent to the IMF will require
the management of state oil and gas company Pertamina to
submit financial and restructuring reports to the government
every quarter.
Since joining the Cabinet, Yudhoyono has pledged to stamp
out the corruption, collusion and nepotism that has dogged
Pertamina for years.
Pertamina has been under scrutiny since the downfall of
Suharto for allegedly awarding many lucrative business
contracts to the former president's family and friends.
The new IMF agreement - which the government says should
be finalized this week - will also include a commitment from
the government to continue its negotiations with private power
producers.
National electricity utility PT Perusahaan Listrik Negara has
power supply contracts with 27 independent power producers,
or IPPs, most of whom involve foreign multinationals along
with local minority partners.
The struggling power company is seeking to restructure the
contracts and cancel some where power plants aren't yet
completed. Yudhoyono didn't give details on the state of the
negotiations.
5] May 2, 2000
Dow Jones Newswires
Thai Senate Election Vote Count Will
Be Slow -Watchdog
Dow Jones Newswires
BANGKOK (AP)--The commission charged with overseeing
that elections for the Thai Senate are free of corruption was
reviewing ballot counts Tuesday and investigating allegations
of fraud.
Gothom Areeya, a member of the Election Commission, said
that monitoring provinces with a history of unfair election
practices would be a "slow process."
Thais in nearly half the country's provinces voted Saturday to
fill 78 Senate seats. The vote was required after the winners of
those seats weren't endorsed because of suspected cheating in
elections March 4 for the 200-member Senate.
6] May 2, 2000
International Commentary
Trichet's Problem
Jean-Claude Trichet has always seemed to bring together all
the qualities one would want in a central banker. He takes
seriously the need to supply the liquidity the economy
requires, but recognizes at the same time that monetary policy
has its limits. Thus the governor of the Banque de France has
courageously called for European fiscal reform.
Mr. Trichet, however, came under investigation late last week
for behavior in a former role that certainly wouldn't pass
muster under modern financial disclosure rules. If his
culpability is proven, it would call into question his ability to
carry out his present responsibility or to take over the
European Central Bank, as was envisioned in the compromise
that gave Wim Duisenberg initial tenure at the ECB.
Until a better system is found, markets will have to rely on the
ability of central bank chiefs to manage monetary policy, and
their judgment must be solid. The distribution of clear
information related to monetary management is, additionally, of
prime importance. Indeed, some would argue that
transparency is even more important than the actual policy
itself, on the principle that market players would at least be
able to anticipate the central bank's reaction to economic
news, however bad it is. This would end the guessing game
that is behind much of the volatility in the pricing of securities
and currencies.
Which explains the seriousness of the investigation of Mr.
Trichet for "disseminating false information to [financial]
markets and presenting and publishing inexact [company]
accounts," in relation to the rescue of the then
government-owned bank Credit Lyonnais, when he was
director of the Treasury in 1992-1993. If the Paris prosecutor's
office does indeed find out that Mr. Trichet hid the truth back
then, markets might not trust him again.
It is necessary to make clear from the outset that France is a
very different place in 2000 than it was 10 years ago. Many of
the affaires haunting French officials today -- whether they
involve former Foreign Minister Roland Dumas, former Prime
Minister Edith Cresson or Mr. Trichet -- date from the end of
the presidency of Francois Mitterrand.
The main issue here is not the corruption that was endemic in
the 14 years of Mitterrandisme, but the economic model of
state ownership and cronyism that was operative at the time. In
the cases of Mr. Dumas and Mrs. Cresson, it is the former
state oil giant Elf Aquitaine that has come under investigation
for questionable activities also linked to its role as a state
company.
In the case of Mr. Trichet, the investigators are looking into
whether French officials failed to disclose losses by Credit
Lyonnais in order to make it appear that the bank met solvency
ratios. Credit Lyonnais's assets at the time may not have
covered its liabilities under the ratios in question because the
then-state bank had launched throughout the 1980s into an
expansion phase that was expensive and, in retrospect,
foolhardy. The bail-out of the bank ended up costing French
taxpayers almost $18 billion, a package approved only last
year in France and in which the European Commission
acquiesced only after the bank was stripped of many of its
assets.
While no one has raised the same allegations of corruption
against Credit Lyonnais that have been leveled against Elf, the
problem was essentially the same: The French government
used both companies as extensions of itself. In the case of the
bank, many of the dud loans were politically motivated; Credit
Lyonnais was mainly a tool of French industrial policy.
In a statement last week, Mr. Trichet said that his Treasury
team "did all within the limits of its responsibility to ensure that
the bank changed course." The courts have not passed
judgment yet on the French officials in question. Mr. Trichet --
who is due to take over as head of the European Central Bank
in 2002 -- is simply being investigated and has not been
indicted.
Whatever the facts of this particular case, there is no doubt
that officials operate under heavy pressure to "go along to get
along" in a system that presupposes the wisdom of
bureaucrats, disdains markets and which considers raisons
d'etat to be above all else. The one finance minister that dared
buck the system in the 1990s, Alain Madelin, was
unceremoniously dumped by his prime minister, Alain Juppe.
Officials who behaved according to a less honorable code
should not be excused. However, privatization, the end of the
Mitterrand era, global forces of competition -- all worked and
are working to scale back the role of public officials in the
private sector and, it appears, improve their accountability in
office. Mr. Trichet's innocence should be presumed unless
otherwise proven. Certainly his record since the treasury job
suggests he is one of those who has grasped the need to
minimize the French state's intervention in the economy. That
said, Mr. Trichet's prospect as ECB chief would certainly be
hobbled if prosecutors found that he behaved in a fashion
unbecoming a central banker.
7] May 2, 2000
Business and Finance - Europe
Dominican Police Arrest
Seven in Political Killings
Dow Jones Newswires
SANTO DOMINGO, Dominican Republic -- Dominican
police arrested seven people in the slayings of two men by
bodyguards for the country's leading presidential candidate, an
official said Monday.
Thirteen other people were questioned and released in
Saturday's killings, said Lt. Col. Nelson Rosario, who declined
further comment.
Bodyguards for Hipolito Mejia of the
opposition Dominican Revolutionary
Party shot and killed Luis Terrero Gil,
41, a local official of the governing
Dominican Liberation Party and director of the National Center
for Science and Art. Also slain was Rafael Penalo, 29, a
Liberation Party supporter. The shootings occurred during a
rally for Mr. Mejia in Moca, 85 miles (135 kilometers) from
Santo Domingo, the capital.
The Revolutionary Party said Sunday that someone shot at
Mr. Mejia's car and that his security guards returned fire. The
Liberation Party said the security guards shot first.
It wasn't immediately known if those detained included the
security guards. Officials from both parties said they had no
comment Monday.
Mr. Mejia is a left-leaning politician who has threatened, if he
wins, to prosecute leading members of the government for
alleged corruption.
Government supporters fear a Mr. Mejia victory could reverse
strides made by the administration of Leonel Fernandez, which
has overseen a 50% expansion in the economy by privatizing
state companies and encouraging trade.
Mr. Fernandez is barred by law for running for another term in
the May 16 election. Also running is former President Joaquin
Balaguer of the Social Christian Reformist Party.
8] May 2, 2000
Business and Finance - Asia
Taiwanese Cabinet Is Likely to Retain
Key Policies of Departing
Government
By RUSSELL FLANNERY
Staff Reporter of THE WALL STREET JOURNAL
TAIPEI, Taiwan -- Taiwan President-elect Chen Shui-bian may
have campaigned as a reformer, but the cabinet he announced
Monday is likely to adhere to many of the same policies as the
island's departing government -- especially in economic and
foreign affairs.
That's largely because many of the forty-odd members of the
new cabinet have worked for current President Lee Teng-hui,
or already hold senior posts in the Nationalist-led government
that leaves office on May 20. Chief among that group is the
cabinet's new leader, Defense Minister Tang Fei. Among the
other new members, about one-third are Nationalist members,
a slightly smaller number are from Mr. Chen's Democratic
Progressive Party, and the remainder are independents.
Underscoring the large number of outsiders, Vice
President-elect Annette Lu in a speech Monday called on the
group to familiarize themselves with Mr. Chen's campaign
positions.
The presence of non-DPP members
reflects the underlying weakness of the
party. Mr. Chen won the March 18
election with just 39% of the vote, and
is seen by many as having a mandate
that is mainly limited to cracking down
on organized crime and corruption.
What's more, the DPP controls only about a third of the seats
in parliament, compared with more than half for the
Nationalists. To get legislation passed, Mr. Chen will need to
compromise; he hopes the presence of the Nationalist
members in his cabinet will help.
Military's Anxiety
Mr. Chen is also likely to stay the course in national security
and China policy because of anxiety within Taiwan's military
about a pro-independence plank in the DPP's charter. The
president-elect has said he wouldn't support independence
unless China attacks the island, but many in the military remain
discomfited by the party.
"There are pressures from within Taiwan and in the
cross-Strait realm that will limit policy change under the new
government," says Ger Yeong-kuang, a political science
professor at National Taiwan University. More broadly, he
says, the new cabinet that takes over in less than three weeks
may be a transitional one that buys the DPP time while it
prepares for a crucial parliamentary election next year.
Mr. Chen's election marks the first time in 5,000 years of
history that a Chinese government has democratically
transferred power. The Nationalists, who have governed
Taiwan for almost 55 years, moved their capital here from the
mainland after losing a civil war in 1949. Because the
Nationalists governed under martial law for most of that time,
Taiwan's opposition party had limited resources and members.
Now the new government also may face hostility in pressing
change among the bureaucracy. Founded in 1986, the DPP
traditionally has been a catch-all party of opponents to the
Nationalists.
The DPP's problems in building support among the military
are so pressing that Mr. Chen turned to Mr. Tang, a career
officer and longtime Nationalist Party member, to lead the
cabinet. He also agreed to back the selection of Hung-mao
Tien, an independent scholar and adviser to Mr. Lee as his
new foreign minister, and gave Tsai Ying-wen, a professor
who also is close to Mr. Lee, the job of the running the
cabinet's chief office for China affairs.
'A Lot of Continuity'
"There's going to be a lot of continuity in foreign policy" says
Mr. Tien. Underscoring a wish for stability in relations with the
U.S., Taiwan's key ally, Mr. Chen will allow the departing
Nationalist Party foreign minister, C.J. Chen, to serve as his de
facto ambassador to Washington.
In economic and financial policy, another traditionally weak
spot for the DPP, many faces in the new government will also
be familiar. The central bank governor, Perng Fai-nan, is
staying on; the new finance minister is Shea Jia-dong, a deputy
of Mr. Perng. Asked Monday to comment on how much of
Mr. Chen's financial-policy campaign platform will be
implemented, Mr. Shea said it is too early to say.
Mr. Chen's economics minister, Lin Hsin-I, is currently an auto
industry executive, and the government's new chief economic
planner, Chen Po-chih, is a scholar with ties to Mr. Lee. A top
government top priority will be winning membership in the
World Trade Organization, which itself limits much room for
the kind of change that would alarm business and the financial
sector, analysts said.
Mr. Chen's initiatives in economic policy will most likely not
be aimed at the island's high-tech industry or stock market,
both seen as vital to the country's health. More likely, analysts
say, it will be microeconomic tinkering, such as over the
number of hours in the work week, or over central government
budget resources.
Write to Russell Flannery at russell.flannery@awsj.com
10] May 1, 2000
Dow Jones Newswires
May Day Protest In Yugoslavia
Against Govt Policies
Dow Jones Newswires
BELGRADE (AP)--Protesting against repression and poverty
in this ostracized Balkan country, thousands of residents and
independent trade unionists marched Monday through Serbia's
capital marking May Day.
It was a scene repeated in other Central and Eastern Europe
capitals, as opposition party members voiced discontent with
government policies.
The Belgrade rally, organized by the non-government trade
union, Independence, drew a diverse crowd of blue-collar
workers, pensioners, students and opposition supporters.
In the decade of Yugoslav President Slobodan Milosevic's
rule, plagued by bloody conflicts and international sanctions,
living conditions have steadily declined and a monthly
paycheck now averages the equivalent of $30.
Some 3,000 protesters marched past Parliament and other
government buildings, booing and blowing whistles - a
trademark of anti-government rallies.
"Enough promises - we want bread," "Serbia is in jail" and "I
live in Europe but my living standard is African," read some of
the banners carried by the marchers.
In the Czech Republic, 20,000 Communists protested in
Prague against capitalism, President Vaclav Havel, and the
country's planned entry into the European Union.
Gathering at the Letna Plain, where hundreds of thousands of
people helped bring down Communism in 1989, the crowd
chanted Socialist slogans and blamed Havel for what they
called a "political and social crisis."
"Havel should pay his bill for trying to drag this country into
the EU," said Miroslav Grebenicek, chairman of the
Communist Party. "Our aim is to return to Socialism, where
free individuals create a democratic society."
In Croatia, Prime Minister Ivica Racan told about 100,000
people gathered in a Zagreb park that the country's economic
situation had not significantly improved, but "there is no more
arrogance and thefts."
Racan was referring to the previous government of the late
President Franjo Tudjman, which is widely accused of
corruption and financial scams that enriched Tudjman's
associates at the expense of average Croatians.
"All those who were involved in these illegal actions will be
prosecuted," Racan pledged.
Many Croats are eager to see positive changes. In the
northwestern city of Pula, union leader Bruno Bulic called on
Racan's government to fulfill pre-election promises.
"You promised to put an end to the rise of the unemployment
and to bring economic progress," Bulic said. "Unfortunately,
we are witnessing the rise of the unemployment, we see
collapsed firms and no real progress.
11] May 1, 2000
Dow Jones Newswires
Thousands Protest In Bulgaria
Demanding Govt Resignation
Dow Jones Newswires
SOFIA, Bulgaria (AP)--Thousands of leftist supporters rallied
in Bulgaria's capital to mark May Day Monday, decrying the
center-right government for poverty, unemployment and
corruption in this Balkan country and demanding it quit.
It was the first major street protest led by the Socialist Party,
made up of former communists and their smaller allies, since
they were voted out of office in 1997 following an economic
and political crisis.
But as the ruling Union of Democratic Forces of Prime
Minister Ivan Kostov has been unable to remedy the country's
social and economic ills, the Socialists have been gaining again
in popularity.
"Ivan Kostov must get away and give way to better, cleverer
and more responsible rulers," said Socialist leader Gerogi
Parvanov.
Kostov has succeeded in taming Bulgaria's 1997
hyperinflation, but failed to raise dismal living standards--the
main hope most people had pinned on him. Bulgaria's
unemployment rate is about 18% and the average monthly
salary is about $110.
In addition, Kostov's government has been tainted by
mounting allegations of corruption.
12]May 1, 2000
Dow Jones Newswires
New Thai Senate Vote Seems
Inevitable Amid Fraud Charges
Dow Jones Newswires
BANGKOK (AP)--A third round of voting to elect Thailand's
first democratically chosen Senate appeared likely Monday
following allegations of fraud.
The Election Commission overseeing the vote vowed to
disqualify any winner who cheated, which would force new
elections to be held in the provinces where they occurred. It
remained unclear whether cheaters will be allowed to run again.
The commission, acting for the first time under a 1997
constitution aimed at cleaning up Thailand's notoriously
corrupt politics, has said that it has received more than 500
reports of fraud nationwide.
The initial vote for the 200-seat Senate - the first time in 68
years of Thai democracy where voters chose their senators
directly - was held March 4. The panel invalidated the victories
of 78 candidates for fraud.
All but three of them were allowed to stand again in Saturday's
rerun. As of late Sunday, 44 had won their races again, helped
by a much lower turnout than the March ballot, commissioners
said. Still, official vote tallies weren't expected from many
provinces for several days.
The Nation newspaper reported Monday that convincing
evidence of fraud had been reported to the commission from
11 northeastern provinces, while results were suspect in 15
others. Nine provinces appeared to have no serious problems.
Investigations into allegations of fraud are expected to take no
more than 10 days, the Bangkok Post newspaper reported.
The commission is wary of false charges being made in an
attempt by losers to discredit their rivals.
Sawasdi Chotepanich, the commissioner in charge of the
investigations, was quoted by the Post as saying that the
commission would not simply endorse all the current winners
and weed out the fraud later, as some politicians have urged.
"I won't allow that," Sawasdi was quoted as saying. "It is
tantamount to shunning the EC. You might as well dissolve the
commission."
Thailand's constitutional court has ruled that the Senate cannot
convene until all 200 members have been elected. Politicians
have expressed concern that repeated elections to weed out
cheaters could take months.
The commission and government have noted, however, that
parliament is in recess until June 24 and a third round can
easily be held.
The commission's refusal to endorse victories resulting from
traditional vote-buying and other fraud has been praised as a
significant victory against the entrenched interests of Thai
politics.
The Senate race is seen as a test-run to elections that Prime
Minister Chuan Leekpai must call by November for the more
powerful House of Representatives.
In the interim, the commission is expected to seek authority to
bar cheaters from subsequent rounds of voting, a power it
does not yet clearly have.
13] May 1, 2000
Business and Finance - Asia
China's Battle to Reclaim
Its Cultural Relics Intensifies
By KARBY LEGGETT
Staff Reporter of THE WALL STREET JOURNAL
SHANGHAI -- After more than 100 years of looting that has
stripped China of some of its most precious cultural relics, the
government is fighting back with a two-pronged attack. It is
attempting to block international auctions for relics it says were
taken out of the country illegally. At the same time, it has
begun purchasing Chinese antiques overseas.
Over the weekend, the Shanghai Library acquired one of the
most important collections of classical Chinese books held
overseas -- a trove of 542 volumes, some up to 10 centuries
old, owned originally by the tutor of Qing dynasty Emperor
Tongzhi. The books were purchased by the Shanghai
government for $4.5 million from a private collector in New
York, a direct descendant of Weng Xincun (1791-1862), the
man who started the collection, state media reported.
While Shanghai government officials were celebrating, officials
in Beijing were decrying the planned sale of four Chinese
antiques -- three bronze pieces and a ceramic vase -- by
auction houses Christie's and Sotheby's in Hong Kong. An
official at the State Administration of Cultural Heritage, Liu
Shuguang, sent a letter to Christie's and Sotheby's asking them
to take the four pieces off the block. Mr. Lui warned that if the
items are sold, Christie's and Sotheby's will "have to pay for
their ill-advised choice," Xinhua news agency said.
Despite the warnings, Christie's on Sunday sold two of the
relics contested by China at its auction -- the bronze heads of
an ox and a monkey, formerly part of a zodiac garden fountain
in China's Old Summer Palace in Beijing, know as Yuan
mingyuan. Vocal protesters forced Christie's to hold the
auction behind a metal curtain at an upscale hotel, though the
two pieces were eventually sold to a Chinese man from Beijing
for $2.1 million. "This belongs to the Chinese," said the buyer
before leaving, the Associated Press reported.
Sotheby's faces a similar environment later this week when it
puts on the block an ancient ceramic vase and a bronze tiger's
head that was originally part of a water clock commissioned
by an emperor and designed by a French astronomer. A
spokesman couldn't be reached for comment.
Hong Kong, a former British colony that reverted to Chinese
rule in 1997, has long been an outpost for Chinese antique
smugglers, who often operate with help from corrupt Chinese
customs officials. China has been trying to clamp down on the
lucrative trade. Indeed, just last month it persuaded U.S.
Customs officials to seize a 10th-century marble sculpture that
was going to be auctioned at Christie's in New York, after it
said it had proof the sculpture was stolen and smuggled out of
the country.
For China, the issue is a sensitive one. Many relics were taken
out of the country during periods of intense social upheaval,
and Chinese officials often use language laced with nationalist
overtones when discussing smuggled antiques. The latest
auction in Hong Kong reopens an especially sensitive chapter
in Chinese history: the four pieces were taken from the old
Summer Palace, which was razed to the ground in 1860 by
French and British troops during the second Opium War, and
then shipped overseas.
It is unclear what China can do to get the four antiques back.
Though Hong Kong is technically part of China, it has a
separate legal code. Still, a spokesman for the State
Administration of Cultural Heritage said the matter isn't
finished. "China will definitely take further action ... selling
cultural relics that were looted from our country during a civil
war is in violation of international law.
Write to Karby Leggett at karby.leggett@awsj.com