Myanmar's Suu Kyi reaches out to ethnic minority rebels

Yahoo – AFP, Athens Zaw Zaw, April 18, 2016

Myanmar's Aung San Suu Kyi was blocked from the top job but has vowed to
rule "above" the president (AFP Photo)

Aung San Suu Kyi on Monday vowed to press for greater autonomy for Myanmar's ethnic minorities, in an early move to soothe the rebellions roiling the country after her party's ascent to power.

Myanmar has been swept up in optimism for a more peaceful and prosperous future since the National League for Democracy (NLD) took power on April 1, ending nearly a half century of military domination.

But Suu Kyi warned its prospects hinge on ending ethnic conflicts that have blistered the country since its independence in 1948.

To do so, the NLD government would seek "a real federal democratic union", the democracy figurehead said in a televised address marking Myanmar's New Year.

"Peace and a federal democratic union are closely intertwined and that's why we need to change the constitution. The most important thing is national reconciliation."

They were Suu Kyi's first major comments as "state counsellor" -- a role she took on following the handover to her civilian-led government.

The current charter, penned by the military in 2008, centralises state power.

The former junta in part justified its tight control of the country with fears that ethnic divisions would fracture the nation.

Daughter of a hero

But the concept of federalism has gradually become central to peace discussions steered by the quasi-civilian government that replaced outright military rule in 2011.

Negotiations, which do not include all rebel groups, have yet to agree on exactly how powers such as policing or revenue raising might be shifted to regional authorities under a federal system.

In this image made from video, Canadian Foreign Minister Stephane Dion, left, meets

 with Myanmar President Htin Kyaw and Myanmar Foreign Minister Aung San Suu Kyi,

 right, at the Presidential Palace, in Naypyitaw, Myanmar, Thursday, April 7, 2016. 

Dion congratulated Myanmar on installing its first civilian government in decades 

and on its transition from military rule to democracy. (APTN via AP)

But by reiterating the federal pledge, Suu Kyi has sought to reassure ethnic leaders that the NLD will not squeeze out minority groups.

Though Suu Kyi belongs to the ethnic Bamar majority, her party picked up seats in many of Myanmar's ethnic minority regions in last year's election.

She has however come under fire from rights groups for not throwing her moral weight behind the plight of the embattled Rohingya, a largely stateless Muslim minority pushed into grim displacement camps by waves of communal violence in 2012.

Nobel laureate Suu Kyi is beloved by many in Myanmar but blocked from becoming president by the constitution as her two sons carry foreign citizenship.

The 70-year-old is the daughter of the country's independence hero, who famously signed an agreement before his assassination that would have granted a level of autonomy to several ethnic minority regions.

A Shan ethnic woman from the Akha hill

 tribe waits for the arrival of Aung San 

Suu Kyi during a 2015 rally in Kyaing

Tong (AFP Photo/Romeo Gacad)

Attempts to amend the army's charter under the former quasi-civilian government were stymied by the military -- which is gifted 25 percent of all parliamentary seats by the constitution it scripted.

Any fresh moves to change the charter are likely to meet stiff resistance from the military, which can veto amendments through its parliamentary bloc.

Suu Kyi has taken a firm grip of the country's first civilian-led government in decades, taking on a string of senior roles in the new administration, including the powerful -- if vaguely defined -- advisory role.

She has vowed to rule "above" the president, picking school friend and close aide Htin Kyaw as her proxy.

Conflicts continue to rage in several areas between ethnic minority armed groups and the army, which operates beyond the reaches of civilian government, after a ceasefire pact signed late last year failed to include all of the country's fighters.

Myanmar president pardons 83 political prisoners: official

Yahoo – AFP, Athens Zaw Zaw, 17 April 2016

Myanmar President Htin Kyaw has stressed his government's determination to 

release political prisoners, who were routinely jailed under the military leaders

that strangled free expression (AFP Photo/Ye Aung Thu)

Yangon (AFP) - Myanmar President Htin Kyaw pardoned 83 political prisoners on the country's traditional New Year Sunday, a spokesman from his office said, as the fledgling civilian-led administration seeks to cast off the shackles of nearly half a century of military rule.

The new government, steered by veteran democracy activist Aung San Suu Kyi, has spent its first weeks in power freeing scores of political activists prosecuted under the country's former military leaders.

"All of the 83 prisoners that the president gave amnesty to today are political prisoners and prisoners concerned with political cases," Zaw Htay, the deputy director of the president's office, told AFP.

A presidential pardon published Sunday morning said the amnesty was granted to "make people feel happy and peaceful, and (promote) national reconciliation during the New Year".

The former junta's routine jailing of dissidents was one of many repressive policies that garnered support for the democracy struggle led by Suu Kyi and her National League for Democracy (NLD), which swept historic polls in November.

Myanmar Foreign Minister Aung San Suu Kyi pledged in a statement earlier this

 month to make releasing prisoners of conscience a priority of her administration

(AFP Photo/Nyein Chan Naing)

The party is stacked with ex-political prisoners who were jailed for their activism under the former military regime.

Suu Kyi, who spent some 15 years under house arrest during the dark junta days, oversaw her government's first amnesty push earlier this month, when authorities dropped charges against nearly 200 political activists ahead of the New Year holiday.

The former quasi-civilian government that replaced junta rule in 2011 also freed hundreds of political detainees, but oversaw the detention of scores more.

Families reunited

Local media aired joyful reunion scenes as released prisoners left jails across the country, carrying small bags of belongings and joining loved ones in song outside the prison gates.

Among those pardoned Sunday were five journalists handed 10-year sentences in 2014 over a report accusing the military of producing chemical weapons -- which the government denied.

The journalists' sentence, which was later reduced to seven years, was slammed by rights groups as "outrageously harsh".

"We have been looking forward to hearing good news from this new government," Yarzar Oo, one of the reporters from Unity Weekly News, told AFP by phone after his release from Pakokku Prison in Magway region.

Aung San Suu Kyi's ruling National League for Democracy (NLD) is stacked with 

\ex-political prisoners once jailed for their democracy activism under the former

military regime (AFP Photo/Romeo Gacad)

The group was greeted with flowers by their relatives, who gathered at the prison the night before after learning of their release, he said.

Others seen released in local media reports included Htin Lin Oo, a writer and former NLD information officer, and Htin Kyaw, a well-known democracy activist who shares the president's name and spent more than a decade in and out of the country's notorious prisons.

"The release is welcome, but the NLD needs to release more political prisoners as soon as possible" said Bo Kyi from the Assistance Association for Political Prisoners (AAPP), a watchdog group that tracks information about the country's prisoners of conscience.

There are still dozens of political prisoners and hundreds of others facing trial, he told AFP.

In a New Year speech Sunday, President Htin Kyaw -- an ally and close friend of Suu Kyi -- stressed his administration's determination to free all political activists facing prosecution.

Suu Kyi is banned from the presidency by a junta-era charter but is guiding her party's government through her seats in the cabinet and a newly-fashioned role as state counsellor.

The novice administration is carrying the hopes of millions of voters hungry for greater freedoms and economic rejuvenation after decades of military strangulation.

But many challenges lie ahead, including a deeply flawed legal system, the military's continuing clout, high poverty rates and civil wars in several ethnic minority states.

EU foreign policy boss lands in Iran for talks

EU foreign policy chief Federica Mogherini has arrived at the head of an EU delegation to Iran. The short trip, designed to boost trade and regional peace after last year’s nuclear deal, is not to everyone's liking.

Deutsche Welle, 16 April 2016

Mogherini talks Saturday with Iranian Foreign Minister Mohammad Javad Zarif and other ministers about EU-Iran economic ties, the security situation in Syria, the opening of an EU mission in Tehran and issues including Iran's use of capital punishment and refugee flows.

"This visit is an important step towards building cooperative relations between the EE and Iran on the areas where there is mutual interest and to have frank discussions on the issues where differences remain," Mogherini said.

The 24-hour trip comes days after Italy’s Prime Minister Matteo Renzi became the highest-ranking European leader to visit Tehran since July’s nuclear accord.

The US, UK, China, France, Russia and Germany agreed in 2015 to lift sanctions in return for Tehran accepting curbs to prevent it acquiring nuclear weapons.

U.S. Secretary of State Kerry meets with
EU High Representative Mogherini at the
Nuclear Summit in Washington

Energy, banking and the WTO

According to the European Commission, the EU's executive, the EU is also interested in discussing future energy imports from Iran.

Tehran is also thought to be interested in closer cooperation with the EU on energy and also trade issues, notably possible membership in the World Trade Organization (WTO).

An EU official told reporters Saturday that Brussels is “willing to play a supportive role” in Iran’s bid to join the WTO. But the EU wants Iran to do more to fight money laundering and terrorism financing, which are impediments to foreign investment, the official said.

The trip comes after Iran raised concerns about banking sanctions, with officials saying the West - particularly the US - is creating obstacles to its access to the global financial system.

The governor of Iran's Central Bank said Friday in the US that the international community was not sticking to its promises. "The impact that we were expecting to get is not what we see, at least on a tangible basis," Valiollah Seif told a forum at the Council of Foreign Relations in Washington.

Seif, in the US capital for the IMF-World Bank spring meetings, pointed to a reluctance by European banks to engage with Iran for fear of falling foul of US sanctions.

"They have been asked not to work with Iranian banks, and they're afraid," he said.

Industry commissioner Elzbieta Bienkowska, transport commissioner Violeta Bulc and energy commissioner Miguel Arias Canete will be among those travelling with Mogherini. They will meet Foreign Minister Mohammad Javad Zarif, parliament speaker Ali Larijani and the secretary of the Supreme National Security Council, Ali Shamkhani, an EU statement said.

An Iranian woman casts her ballot
to vote in February's elections

Migrants

Europe is struggling to cope with an influx of migrants and asylum seekers, including Afghan migrants from Iran.

Iran hosts around 3 million refugees from neighboring Afghanistan.

“Migration is a very important theme for discussion,” a senior EU official said.

Mogherini is expected to brief the bloc's 28 foreign ministers about the visit on Monday at talks in Brussels.

Not all on board

Critics attacked the visit for appearing to legitimze Tehran's poor track record on huma rights, among other things.

The British Parliamentary Committee for Iran Freedom (BPCIF), for example, said in a statement that: "[the trip] is highly inappropriate considering the regime's domestic repression and destructive policies abroad."

It said that "during the 'moderate' administration of Hassan Rouhani, nearly 1000 people were executed in Iran last year alone, including juveniles in violation of international law. At least 47 journalists and social media activists were reportedly detained in the country as of January 2016, according to reports by the UN Special rapporteur for Iran and Amnesty international."

The EU did not request a meeting with Iranian civil society representatives because of the shortness of the visit, a senior EU official said on condition of anonymity. Iranian President Hassan Rowhani went at short notice to Ankara and was also unable to meet the EU delegation, the Iranian press reported.

"Our objective remains to reassure everyone - particularly in the financial sector - that re-engaging with Iran is possible now," an EU official said.

Regional conflicts

An EU official said that Mogherini - who personally helped negotiate the nuclear deal - will also seek to advance diplomatic efforts on Syria and Yemen, two regional conflicts where Iran plays a role.

jbh/ (dpa, AFP)

Panama Papers reveal Hong Kong's murky financial underbelly

Yahoo – AFP, Caroline Henshaw, April 14, 2016

The Panama Papers have exposed the key role played by Hong Kong and
Singapore in funnelling wealth into tax havens (AFP Photo/Anthony Wallace)

Hong Kong (AFP) - Jasmine Li was still a student when she opened her first offshore bank account through Mossack Fonseca Hong Kong, but the shady world she entered that day had been part of the city's underbelly for decades.

The granddaughter of China's then fourth-ranked politician was among dozens named in a vast cache of documents leaked from the Panama law firm that have given a glimpse into how the rich and powerful hide their money.

But the so-called Panama Papers, released by the International Consortium of Investigative Journalists this month, have also exposed the key role played by Hong Kong and Singapore in funnelling that wealth into tax havens.

More than 16,300 of Panamanian law 

firm Mossack Fonseca's active shell 

companies were incorporated through its

 Hong Kong and China offices (AFP

Photo/Johannes Eisele)

Mossack Fonseca's Hong Kong offices were their busiest in the world, the ICIJ analysis showed, setting up thousands of shell companies including some linked to China's top political brass, the city's richest man, Li Ka-shing, and movie star Jackie Chan.

Experts say the Asian financial hubs have already channelled billions into tax havens, and the Boston Consulting Group predicts they will be the world's fastest-growing offshore centres over the next five years.

"Hong Kong is set up to make it easy for people to do business, and it is very easy to do business here," said Douglas Clark, a barrister with one of Hong Kong's largest chambers.

"But when it's easy to do business then it's easy to do any type of business, legal or illegal."

Offshore companies are not necessarily illegal, but they operate on the fringes of what is allowed and their opaque structures make it easy to conceal ill-gotten or politically inconvenient wealth.

They have proved a boon for Hong Kong and Singapore, which are known not only for their financial expertise but also light-touch regulation, discretion and non-cooperation with foreign tax authorities.

Both are already on regulators' radars -- the EU briefly added Hong Kong to its tax blacklist last year -- but experts say they are unlikely to do anything to jeopardise the lucrative offshore business.

'Turning a blind eye'

Domiciling offshore has a long history in the region. In 1984, then trading house Jardine, Matheson & Co, one of the most powerful companies in Hong Kong's colonial history, relocated to Bermuda citing concerns about the city's handover to China.

"Hong Kong's history as a financial centre that specialises in turning a blind eye to things that would be investigated elsewhere goes right back to the 1960s," said financial commentator Tom Holland.

A company name plate is displayed next to the entrance of Mossack 

Fonseca & Co. (Asia) Limited in Hong Kong, China April 5, 2016. Reuters/Bobby Yip

Today, Chinese investors use offshore companies legally in Hong Kong to bypass red tape, take advantage of tax breaks for foreign investors and circumvent strict capital controls.

Hong Kong University law professor Douglas Arner said it has become "perfectly normal" for companies to park money from overseas operations offshore, as the city does not tax profits made elsewhere.

But their widespread use has earned Hong Kong and Singapore reputations for murky dealings, and the Tax Justice Network ranked them among the least transparent places in the world in last year's financial secrecy index.

In Singapore, seen as more rigorous in policing its financial sector, the TJN said a culture has evolved of enforcing the law domestically but tolerating the illicit money that flows in from crimes committed overseas.

"Singapore is not only a secrecy jurisdiction... but also a tax haven, providing numerous tax avoidance and evasion opportunities," the group said in its profile of the city state.

'They'll find snakes'

Clark said criminals, drug dealers, email scammers and corrupt Chinese officials have turned to Hong Kong to try to hide their money offshore.

But even when used legally, offshore companies can make it harder to sniff out crime.

Local shareholder activist David Webb said three-quarters of companies listed in Hong Kong are incorporated in the Cayman Islands or Bermuda.

More than 500 banks, their subsidiaries and branches have worked with Mossack

 Fonseca since the 1970s to help clients manage offshore companies (AFP Photo/

Niklas Halle'n)

Webb also noted that stock exchange rules do not require listed companies to say who owns any British Virgin Islands companies they make acquisitions from, thereby fostering fraud and corruption.

"I don't think there is any appetite in the stock exchange to look under that particular rock, because they'll find snakes if they do," he said. "They see tighter regulation as a problem."

An exchange spokesman said all companies have to comply with the law and exchange rules, and those incorporated in China and Hong Kong count for more than half of the exchange's market capitalisation.

Despite the controversy, few expect authorities in Hong Kong or Singapore to change their regulations surrounding offshore dealings any time soon given how lucrative the industry is.

And, because the cities' own laws haven't been broken, experts say even international efforts to stop tax cheats are unlikely to make any difference.

"If anything, this is going to make people even more careful when they set up offshore holdings," said Clark.

"People will make sure investments are structured in such a way that if they are ever revealed, you won't be in trouble."

Hong Kong authorities said they were aware of the Panama Papers allegations. Singapore's monetary authority said it was investigating and "will not hesitate to take firm action" against wrongdoers.

#NEWSGRAPHIC #PanamaPapers highlight Hong Kong's extensive offshore banking connections pic.twitter.com/aftCv6twN1

— AFP news agency (@AFP) April 14, 2016

The Tax Justice Network's Financial Secrecy Index (AFP Photo/Alain

Bommenel, Jean Michel Cornu)

Related Articles:

Why few Americans appear in the Panama Papers

Switzerland, Singapore join clampdown on bank secrecy (Update)

Myanmar court frees student activists after Suu Kyi pledge

Yahoo – AFP, Hla-Hla Htay,April 8, 2016

Newly-released political student protesters and family members reunite in Myanmar
on April 8, 2016 after a court freed dozens of activists (AFP Photo/Ye Aung Thu)

A Myanmar court on Friday freed dozens of jailed students, in the first wave of detainee releases after Aung San Suu Kyi pledged to make freeing activists and political prisoners a priority of her new government.

There were jubilant scenes at the sweltering central Myanmar courthouse in Tharrawaddy, as a judge told the young activists they could go home more than a year after they were arrested over an education protest that was violently crushed by police in March 2015.

Tearful parents gripped their children in emotional scenes before hurrying to the nearby prison to collect the detainees' belongings.

National League for Democracy (NLD) 

party leader Aung San Suu Kyi arrives

 at the Union Parliament in Naypyitaw, 

Myanmar March 15, 2016. REUTERS/

Soe Zeya Tun

"Our release showed that we didn't commit any crime," Ei Thinzar Maung, 20, told AFP after her release.

"We suffered in prison for more than one year. We are happy but we want the new government to release all political prisoners immediately."

Cases were cancelled against some 70 student protesters, although three remain in jail pending other charges.

A further dozen students will have to wait until their next scheduled hearing to find out whether they will be freed.

Myanmar has scores of political prisoners languishing in its jails and hundreds of detained activists awaiting trial, despite reforms in recent years as the military loosened its grip on power following half a century of repressive rule.

Suu Kyi had on Thursday said she would prioritise releasing activists -- an issue laden with significance for herself and scores of MPs in her party once jailed for democracy activism during the junta era.

Late Friday, she released a second statement seeking to reassure that the remaining student cases would be resolved after Myanmar’s nearly two-week New Year holiday which starts on Monday.

It added that political prisoners and jailed activists would also be freed, but that “necessary scrutinisation” would need to be completed before they could be released.

Routine jailing

Court officials said they began preparing to release the students shortly after Suu Kyi's statement, which said her government would try to free detainees still on trial by asking the state prosecutor to drop the charges.

Myanmar student protest leader Min Thawe Thit (centre) is greeted by relatives

as he arrives for his trial in Tharrawaddy, on April 8, 2016 (AFP Photo/Ye Aung Thu)

Those gathered in Tharrawaddy's dusty courtroom erupted into cheers and song after the judge delivered his statement, while dozens of police looked on.

Some students stopped at a cemetery to pay their respects to the graves of other activists who died in the country's decades-long democracy struggle.

No other political prisoners were confirmed as released on Friday, though scores of other detainees were freed from prisons around the country because their sentences were due to end during the upcoming Buddhist new year holiday.

Human Rights Watch welcomed the students' release, but urged Suu Kyi and her National League for Democracy (NLD) party to amend the laws used to imprison peaceful protesters.

"They have to release political prisoners but they also have to do away with these rights-abusing laws. The NLD has an absolute majority in both houses of the national assembly. They can do this," said Phil Robertson, HRW's deputy Asia director.

The routine jailing of dissidents was one of the former junta's most egregious acts, sparking international outcry and support for Suu Kyi's pro-democracy movement.

Relatives check lists of prisoners due for release at Insein prison in Yangon

on April 8, 2016 (AFP Photo/Romeo Gacad)

Suu Kyi herself spent about 15 years under house arrest and more than 100 current National League for Democracy lawmakers served time in the country's notorious prisons.

The quasi-civilian government that replaced the junta in 2011 freed hundreds of political detainees, but it also oversaw the detention of scores more, particularly those involved in land and education protests.

Prior to Friday there were about 121 political prisoners held in Myanmar's jails and a further 414 awaiting trial, according to the Assistance Association for Political Prisoners.

The majority were arrested before last November's landmark elections, which Suu Kyi's NLD won in a landslide.

Suu Kyi made the prisoner release announcement in her broadly defined new position of state counsellor, which she was given despite vehement opposition from the still-powerful military whose charter bars her from the presidency.

Why few Americans appear in the Panama Papers

Yahoo –AFP, Jeremy Tordjman, April 8, 2016

Issues of the German daily "Sueddeutsche Zeitung" featuring the "Panama Papers"
 with illustrations by German artist Peter M Hoffmann depicting heads of state
(AFP Photo/Christof Stache)

Washington (AFP) - From Russia to China, and Britain to Iceland, the revelations of the "Panama Papers" have tarnished officials and the wealthy over the implication that they hide riches offshore.

But one group is not there: prominent Americans. US tycoons and politicians are notably absent in the leaked files of the Panama law offices of Mossack Fonseca, which created thousands of shell companies worldwide to hide the identities of their ultimate owners, some of whom may have been evading taxes.

There is Hollywood mogul David Geffen, the Asylum Records and Dreamworks SKG co-founder. But there are no Americans comparable to Iceland's prime minister, or henchmen of the Russian president -- all in the Panama records -- at least in what has been disclosed so far.

"There are a lot of Americans, but they are more like private citizens," said Marina Walker Guevara, deputy director of the International Consortium of Investigative Journalists which coordinated the investigation and release of the Panama Papers.

However, that hardly means Americans have fully embraced financial transparency, she told AFP.

"It doesn't show that the US is outside of the offshore system; the US is actually a big player."

The Tax Justice Network's Financial Secrecy Index (AFP Photo/Alain

Bommenel, Jean Michel Cornu)

Other options

One possible reason for their small presence in the Panama documents is that US citizens hoping to hide funds and activities offshore were not drawn to Spanish-speaking Panama as a haven, when there are options like the British Virgin islands and the Cayman Islands.

"Americans have so many tax havens to choose from," said Nicholas Shaxson, author of "Treasure Islands: Tax Havens and the Men who Stole the World," a 2011 book on secretive centers for hiding money.

Indeed, Americans do not have to go abroad to hide funds and activities behind anonymous corporations: they can create them at home.

States like Delaware and Wyoming allow the creation of such companies, for just a few hundred dollars, that conceal their ultimate financial beneficiary.

And while US banks are normally required to "know their customers," they can bypass that rule and open accounts for shell companies, ensuring total discretion for someone who wants to move money around quietly.

The US Treasury is moving to stop the practice, which can be used by arms and drug traffickers to launder funds and lands the United States in third in the Tax Justice Network's ranking of the world's least transparent countries, well above Panama.

"We're in the last stages of drafting the final rule," a Treasury official told AFP.

The most popular tax havens (AFP Photo/Laurence Saubadu, Jonathan Jacobsen)

'Very frightened'

But there is another possible reason that Americans are not so visible in the Panama Papers.

Spurred by the need to halt huge, blatant tax evasion by Americans using foreign banks, Washington in recent years has cracked down with lawsuits, arrests and tighter laws that have targeted both the banks offering safe haven and those hiding money in them.

Swiss banks were hit in particular. UBS and Credit Suisse, respectively, had to pay fines of $780 million and $2.6 billion for having helped US citizens hide money.

The result, Shaxson said, is that now "there are a few tax havens around the world that are very frightened of American clients, because they know that the US can hit them."

Nevertheless, the seeming absence of Americans from the Panama Papers has fed conspiracy theories, such as claims the leak of the files was orchestrated by the CIA to destabilize Russia and other countries.

But Walker Guevara said there is still a lot to be examined in the trove of 11.5 million documents that make up the Panama Papers, and there could be more about Americans in there.

"It's a huge trove of documents and maybe there's something hiding there that we haven't found yet. It's a work in progress."

"@USTreasury has taken new action to prevent more corporations from taking advantage of one of the most insidious tax loopholes" —@POTUS

— The White House (@WhiteHouse) April 5, 2016

Related Articles:

President Obama Just Took a Major Step in Response to the Panama Papers
Switzerland, Singapore join clampdown on bank secrecy (Update)

New prime minister rounds out Vietnam's leadership trio

Vietnam's National Assembly has confirmed a new prime minister. Nguyen Xuan Phuc vowed to improve the investment environment, fight corruption and protect the communist nation's sovereignty.

Deutsche Welle, 7 April 2016

Nguyen Xuan Phuc took over as Vietnam's prime minister after being confirmed to the post by lawmakers on Thursday. The only candidate nominated for the job, he won 90 percent of votes in the National Assembly.

"I will do my best to serve the country and people," the 61-year-old said after the vote, according to state-run VTV.

Vietnam is run by the Communist Party and officially led by the trio of party secretary general, president and prime minister. Key policy decisions are made by the country's 19-member politburo.

Nguyen Phu Trong was re-elected as secretary general in January, and Tran Dai Quang, a former police general, won lawmakers' approval to take over the president's office on Saturday.

Former Prime Minister Nguyen Tan Dung, a charismatic reformist seen to have pushed a pro-business agenda, stepped down on Wednesday after losing an internal party election. Critics blamed him for corruption and inefficiency in the state-run sector.

Experts expect more of the same

Phuc, who served as the deputy prime minister since 2011, said Vietnam would maintain its "socialist-orientated" economy. Few expect the new prime minister to institute any major policy changes during his five-year term.

"Phuc certainly will be lower key than the hard-charging Dung," said Murray Hiebert, a Southeast Asia specialist at Washington's Center for Strategic and International Studies, told Reuters news agency. "We should expect him to operate within the consensus of the ruling politburo."

In a televised speech, Phuc vowed to continue with reforms and fight corruption and promised to "firmly defend the country's independence, sovereignty and territorial integrity."

Complicated international ties

Vietnam is currently struggling with public debt, a serious budget deficit, China's territorial claims in the South China Sea and drought and salt intrusion in the country's main rice-growing region of the southern Mekong Delta.

"[Phuc] will have to overcome major challenges to reform the state-owned sector and banking system, improve the country's fiscal position, and strengthen the private sector to make the economy less dependent on foreign investments," Le Hong Hiep, a visiting fellow at Singapore's Institute of Southeast Asian Studies, told The Associated Press.

Human rights groups and the United States have often criticized Vietnam's vague national security laws for jailing people who peacefully express their views. Hanoi has said only criminals are punished.

The sentencing of seven bloggers and activists in March for "abusing democratic freedoms" and "spreading anti-state propaganda" drew strong opposition from Washington and international rights groups.

sms/msh (AP, dpa, Reuters, AFP)