EDITORIAL Shock move by White House

Bangkok Post
http://www.bangkokpost.com

Published: 16/06/2009

The latest decision on Southeast Asia by US President Barack Obama is the second disturbing action by Washington affecting this region. Late last Friday, after the main news cycles for the week had elapsed, Mr Obama announced a major new policy initiative. The low-level statement that he was declaring Laos and Cambodia eligible for major US loans and trade concessions took the rest of the region by surprise.

The first visit to Southeast Asia by Secretary of State Hillary Clinton largely ignored the longest and strongest US allies. Now, the decision to give special treatment to Laos and Cambodia came as a bit of shock, including in Thailand.

Mr Obama's "determination" about each country was a brief official statement, posted at the White House media room and website. Such presidential determinations are legal obligations in many cases in the United States; these were the 20th and 21st of an early presidency. But as these statements showed, they are often "game changers" by the president. In these almost identical statements, Mr Obama declared that Laos and Cambodia are eligible to be beneficiaries of US Export-Import Bank loans for American businesses in those countries.

The reason, Mr Obama said, is that each "has ceased to be a Marxist-Leninist country".

Mr Obama was apparently not concerned with the nuances of Marxist evolution. It was mandatory to declare Laos and Cambodia were not communist countries in order to achieve his true goal - to provide millions, and perhaps billions, of investment capital for American businesses to set up, operate in and trade with the two neighbouring countries.

Mr Obama did not explain why he set this goal. Indeed, the manner of the announcement was to keep all questions and justification to a minimum.

This apparently was to stifle the negative reaction of political groups in the US who are appalled at the treatment of Hmong tribespeople by Laos.

A more important result, however, is that Mr Obama has created negative fallout in Thailand and the region.

The US Exim Bank rarely is involved with Thailand, and generally supports one-time sales rather than investment.

In 2003, it provided support for sales of Boeing 747 aircraft to Thai Airways International, and there are occasional cases where the bank has backed smaller deals. As the Thai economy has developed, the US Exim Bank has been an ever-smaller presence.

That is why Mr Obama's unexpected support for Laos and Cambodia disappointed many in Thailand. For years, Thai businesses have expanded into these countries. The overseas business expansion - ironically with the frequent support of the Exim Bank of Thailand - has been a major engine of Thai growth. This in turn has led to decreasing dependence upon foreign help and special programmes by Washington.

The sudden entry of the US Exim Bank into these Thai markets will affect Thai trade and the economy. By failing to warn and prepare Thai authorities and businesses, the Obama administration has created a shock that will have negative implications, at least at the start.

This problem could easily have been avoided had the White House warned of the coming decision and allowed time for diplomatic talks and business preparations. Failing to do so again begs the question of whether the United States is seriously engaged with its long-time allies in this region.