TOKYO -- Sri Lankan President Gotabaya Rajapaksa on Thursday vowed to balance diplomatic ties between China and India -- the two Asian giants competing for strategic influence in the Indian Ocean -- while defending controversial Chinese infrastructure projects.

"We are aware of the world power rivalry and regional power dynamics, but our foreign policy is to remain neutral," Rajapaksa said while addressing Nikkei's Future of Asia conference, which is being held in Tokyo and online through Friday.

"We will not jeopardize Indian security," he stressed. At the same time, ties with China will continue, Rajapaksa added.

Colombo's relationship with Beijing began to deepen toward the end of Sri Lanka's nearly 30-year civil war, and then expanded in the postwar infrastructure building spree. While India provided military training and non-offensive military assets, China, Pakistan and Russia supplied weapons on a commercial basis, he noted.

"China provided concessionary loans for many infrastructure projects [during the post-conflict development]," he said.

Rajapaksa used the occasion to defend one of China's flagship infrastructure projects in southern Sri Lanka -- the $1.5 billion Hambantota Port, which was built with Chinese loans and sits on the edge of one of the world's busiest shipping lanes.

"The Hambantota Port is not a debt trap," Rajapaksa insisted, dismissing a widely held view that Sri Lanka had coughed up the port to a Chinese company on a 99-year lease because of a failure to pay the project's debts. It is a "commercially viable project" and is "transforming Sri Lanka's overall port infrastructure."

This followed praise for another Chinese-funded "Port City" project off the coast of Colombo, the commercial capital. Sri Lanka aims to position this $1.4 billion Chinese investment on an artificial island as an international financial and business special economic zone.

This "Gateway to South Asia" on 269 hectares of reclaimed land "represents an exciting new opportunity for international business," he said. "Investors from all over the world will benefit greatly from ... the Port City's unique geostrategic position at the heart of one of the most rapidly advancing regions in the world."

Faith in these Chinese mega-projects to boost the country's fortunes comes as Sri Lanka, like other Asian neighbors, is feeling the economic pain of the coronavirus pandemic. "Our economy contracted by 3.6% during 2020," Rajapaksa said of the downturn -- the worst economic performance since records started being kept.

He made a pointed reference to the drain in foreign exchange from the once-lucrative tourism sector. "Although most sectors rebounded to their pre-2019 levels by the end of 2020, the tourism sector could not," he said of an industry that saw its earnings shrink to $692 million for 2020 from $4.3 billion in 2018, an all-time high.

Thailand's Prayuth says COVID vaccines should be 'public goods'

Thai Prime Minister Prayuth Chan-ocha on Thursday called on global leaders to allow COVID-19 vaccines to flow freely -- rather than using them as political or diplomatic tools -- and to cooperate on measures to restore travel.

"Thailand hereby calls for COVID-19 vaccines to be considered global public goods," Prayuth said in a recorded speech to Nikkei's Future of Asia forum. "We need collective action toward a global vaccination campaign," he stressed, warning against "vaccine nationalism and politicization."

Thai Prime Minister Prayuth Chan-ocha addresses Nikkei's Future of Asia conference on May 20. (Photo by Kai Fujii)

This was the first appearance at the annual forum for Prayuth, who took power in a 2014 military coup and retained it in a 2019 general election. He was speaking as the kingdom struggles to contain a new wave of infections: As of Wednesday, Thailand had confirmed a total of 116,948 cases, 76% of which were reported after late March.

Monday brought the largest single-day jump since last year -- 9,635 infections.

Despite the worrisome numbers, the premier claimed that the local epidemic is under control. "The situation has shown a good sign since the infection rate is not increasing but stabilizing," Prayuth said in a Q&A session following his speech.

"A factor that will soon enhance the disease control efficiency is the acceleration of the vaccine rollout, which aims to inoculate 70% of the population by the end of this year," he added.

Current forecasts by the Economist Intelligence Unit do not expect Thailand to exceed the 60% threshold until the second half of next year. The country's locally mass-produced AstraZeneca vaccines -- made by a company owned by King Maha Vajiralongkorn -- are due to be introduced in June.

Sooner or later, vaccines promise to help revive Southeast Asia's second-largest economy. "Given the government's economic measures and inoculation plans, we believe that economic activities can resume, and Thailand can fully open the country," Prayuth said.

The government has implemented support measures for workers and industries heavily impacted by the pandemic and business lockdowns. A reopening would restore the tourist spending Thailand normally relies on. "All these factors will contribute to Thailand's continued economic growth of 4.7% next year," Prayuth said.

The Thai economy shrank 6.1% in 2020, and the country's economic planning agency has twice lowered its growth projection for 2021 to 1.5% to 2.5%. For the first quarter, gross domestic product contracted 2.6% on the year.

The prime minister emphasized the need to foster a favorable environment for building up post-COVID tourism. "We need to mutually recognize vaccine certificates and develop global interoperable digital health passes to facilitate travel and revive the tourism industry," Prayuth said. "Thailand places great importance and urgency in reconnecting ... our region especially in travel and tourism."

On international relations, Prayuth advocated multilateral economic cooperation as the host of the Asia-Pacific Economic Cooperation meetings in 2021. "Cooperation at the regional and global levels, such as in ASEAN, APEC, RCEP and CPTPP, are key to supporting the recovery process," he said, referring to economic blocs and major trade deals.

"Thailand is eager to kick-start a fresh conversation on the road to our Free Trade Area of the Asia-Pacific, or FTAAP," he added.

Thailand is contemplating joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) free trade pact, and has established a committee to assess the pros and cons. "This committee is expected to report its findings and recommendations to the cabinet for further consideration by July," Prayuth said.

Thailand, he stressed, "is strategically positioned as a regional connecting point, making it an ideal location for doing business and investment." To take advantage, he said his government is committed to reviewing redundant regulations, pursuing digitalization, and attracting skilled workers and investment for key industries.

Prayuth did not comment on perhaps the region's most pressing issue: the military coup in Myanmar and violent crackdowns on pro-democracy protesters. Thailand sent Deputy Prime Minister and Foreign Minister Don Pramudwinai to the special Association of Southeast Asian Nations summit on the matter in April, as Prayuth insisted he was focused on the coronavirus.

Reporting by Masayuki Yuda.

Cambodia's Hun Sen: 'If I don't rely on China, who will I rely on?'

Cambodia's Prime Minister Hun Sen has defended his close relationship with China, pointing to Beijing's large injections of financial support to his small nation.

China is Cambodia's key political patron and largest source of development assistance, having helped funnel billions of dollars for infrastructure projects. This has fueled criticism that Phnom Penh has become over-reliant on, and a proxy for, Beijing. But Hun Sen, speaking remotely to Nikkei's Future of Asia conference, called that criticism "unjust."

"If I don't rely on China, who will I rely on? If I don't ask China, who am I to ask?" Hun Sen said.

Cambodian Prime Minister Hun Sen speaks during the 26th International Conference on The Future of Asia on May 20. (Photo by Kai Fujii)

There have also been suggestions that Cambodia intends to host Chinese military assets at bases on its soil. Hun Sen reiterated previous denials that there were plans to do so at a naval base where the Chinese government is helping to expand facilities.

He pointed to Cambodia's constitution, which prohibits foreign military bases within the country. He added that any country was welcome to send ships to Cambodia, a sentiment he echoed regarding development aid.

"We do not close the door to anyone in accepting assistance for building the country," he said.

Hun Sen remained defiant about European Union trade sanctions imposed on the country last August.

Brussels partially suspended preferential access to the EU bloc for 20% of Cambodia's exports, over what it called systemic human rights violations. The move was a blow for the country's $10 billion garment manufacturing sector, which relies on the European market.

Among the EU concerns was the forced dissolution of Cambodia's main opposition party, the Cambodian National Rescue Party, which came close to winning a national election in 2013. Since the party's dissolution in 2017, its leader has been charged with treason and senior members have fled abroad to avoid jail. More than 100 supporters have been hauled before courts in mass trials.

Hun Sen said the EU assessment "did not conform with reality" and claimed the existence of more than 20 small political parties was proof that Cambodia remained democratic. In almost the same breath, however, he noted some opponents must be "rehabilitated" in order to participate in politics.

He was dismissive of the impact of the EU's preference withdrawal, saying it had been eclipsed by the "huge" economic fallout of the pandemic. Cambodia would not seek to overturn the decision, he added.

"We continue to export 20% of our goods to Europe by paying tariffs to them," he said.

"But we cannot accept that our country cannot implement its own laws. An independent sovereign state has to implement its laws."

With Cambodia battling an aggressive coronavirus outbreak, he also touched on the need to make COVID-19 vaccines easily available and eliminate restrictions on the movement of medical goods and services across borders.

"Asia needs to attach high priority and utmost importance to ensuring that the COVID-19 vaccines and medications are global public goods, which will be supplied and distributed upon humanitarian cause to every country, particularly the vulnerable ones," he said.

Cambodia, which recorded fewer than 500 cases and no virus-linked deaths in 2020, is grappling with its worst coronavirus outbreak since the pandemic began, recording more than 20,000 infections since February. Its health authorities are rushing to roll out a vaccine campaign and have delivered at least one shot to more than 2 million citizens.

While the country received some AstraZeneca stocks via the United Nations-backed COVAX program, the bulk of its vaccine supplies are from China, something Hun Sen emphasized.

"Without assistance from China," he said, "maybe we will not have vaccines for our people."

Reporting by Shaun Turton.

New Vietnam PM urges Asia to 'work closely' on South China Sea code

Vietnamese Prime Minister Pham Minh Chinh on Thursday called for boosting trade and maintaining peace in the South China Sea, while urging countries to "set aside differences and disagreements" to fight COVID-19.

Chinh, who took office in April, was speaking at Nikkei's Future of Asia conference. On the South China Sea, he stressed the importance of stability in the crucial waterway for global commerce, where tensions between Vietnam and China have been heating up over territorial claims.

"We must address all the issues and differences by peaceful solutions [and] fully observe the laws," especially the United Nations charter and the 1982 U.N. Convention on the Law of the Sea, he said.

Vietnamese Prime Minister Pham Minh Chinh addresses Nikkei's Future of Asia conference on May 20. (Photo by Kai Fujii)

"We need to bring into full play the multilateral cooperation mechanisms, implement fully and effectively the [Declaration of Conduct] and work closely in the effective negotiations for the [Code of Conduct] to be soon concluded. We also need to maintain peace, cooperation and development in the region, freedom of navigation, and overflight in the South China Sea."

The code would set rules for countries' activities in the South China Sea, but talks have deadlocked for years. China is reluctant to limit its activities, including building islands and performing military drills, while Southeast Asia wants to include external parties like the U.S.

As with his regional peers, however, Chinh's attention is currently focused on the COVID-19 pandemic and accelerating his country's economic recovery.

"The top priority now is to secure the supply of vaccines, ensure fair and timely access, while also reducing intellectual property rights barriers and accelerating the transfer of technologies for vaccine production," Chinh said.

Chinh came to power after the Communist Party of Vietnam's National Congress, inheriting the dual goals of growing the economy and containing the virus. Vietnam's effective countermeasures allowed the economy to grow 2.9% in 2020, but authorities are now on high alert as cases linked to new variants are rising.

Vietnam "is ready to share its experience" in fighting COVID-19, but it also seeks to "continue receiving the support and assistance from all countries in this endeavor, especially in terms of research and production and equal access to vaccines," the prime minister stressed.

"The post-COVID recovery of Asia will be largely dependent on its ability to maintain intra- and inter-regional trade investment," Chinh said, adding that international trade deals like the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and the Regional Comprehensive Economic Partnership "will help to accelerate the regional economic recovery and development process."

Reporting by Wataru Suzuki and Lien Hoang.

ASEAN can be bridge for US-China cooperation: Singapore's Heng

Post-pandemic Southeast Asia will be rife with opportunities for the U.S. to cooperate not only with countries in the region, but also with China, suggested leaders from Malaysia and Singapore who opened Nikkei's Future of Asia conference on Thursday.

"I speak on behalf of many, if not most countries in the region that we welcome and want to strengthen relations with both the U.S. and China," Heng Swee Keat, Singapore's deputy prime minister, said in a video address. "We hope to engage both constructively."

He conceded, however, that the region "will need to navigate greater uncertainty and possibly turbulence."

Singaporean Deputy Prime Minister Heng Swee Keat speaks during the 26th International Conference on The Future of Asia on May 20. (Photo by Kai Fujii)

The Association of Southeast Asian Nations, to which Singapore belongs, has found itself caught between the U.S. and China, with both powers pressuring the region to choose a side. Many supply chains on which Southeast Asian economies depend traverse the Taiwan Strait and South China Sea, two areas where economic and geopolitical tensions could escalate into armed conflict.

Heng said the U.S. and China "will continue to jostle for strategic influence particularly in Asia," but that it need not be a zero-sum game. "What is important is that competition be conducted within a stable framework so as to defuse tension and to avoid a situation where differing interests prevent them from cooperating even on common interests."

In prepared remarks to the annual Nikkei forum, which was canceled last year because of COVID-19, Heng highlighted areas on which the U.S. and China could cooperate with each other and ASEAN members. Heng said he was "heartened" to see early signs of engagement between Washington and Beijing on climate change, as Southeast Asia is disproportionately prone to extreme weather changes caused by rising temperatures.

Earlier, Malaysian Prime Minister Muhyiddin Yassin also urged international cooperation while criticizing "dysfunctional competition and short-term thinking."

"Long-term victory doesn't mean pushing your country ahead of the line every time," Muhyiddin said, a veiled barb at U.S. vaccine hoarding. "It will be the countries who are most generous who will build bridges instead of walls."

Heng issued a challenge to the U.S. to match China's investments in Southeast Asian infrastructure. Through the Belt and Road Initiative, China invested around $25 billion in Asia last year. Heng also suggested the U.S. should keep the door open to rejoining the revised Trans-Pacific Partnership, which the Barack Obama administration initiated and the Donald Trump administration abandoned.

"I know that the current political conditions make it difficult for the U.S. to rejoin, but things are never static, and the U.S. should not rule it out," Heng said.

Wider economic cooperation could help countries emerge stronger from the COVID-19 crisis, he argued.

As a trade-reliant economy, Singapore has been a vocal proponent of free trade in recent years, especially since U.S.-China friction intensified. It is one of the 11 members of what is now known as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, alongside Asian neighbors Japan, Vietnam and Malaysia. It also belongs to the 15-country Regional Comprehensive Economic Partnership that includes China and South Korea.

So far, the Joe Biden administration has prioritized the domestic economy and has shown little enthusiasm for returning to the CPTPP. But Heng pointed out that the deal and RCEP could "serve as pathfinders for a possible FTA of the Asia Pacific, one which should include the U.S., China and India."

Such a huge free trade agreement, he said, "will shape economic relationships and the region's geostrategic landscape for years to come."

With respect to the crisis in Myanmar following the military coup in February, Heng said "the path back to normalcy in Myanmar will be long and difficult" despite last month's special Association of Southeast Asian Nations summit. There, the bloc's leaders agreed on a five-point consensus to de-escalate tensions.

"ASEAN member states have consistently stressed that engagement, rather than isolation, will go further in resolving the current crisis," he said, apparently brushing off the idea of tough sanctions. "I urge the international community to continue supporting ASEAN's and the United Nations' engagement of Myanmar."

Heng, who also holds the No. 2 position in Singapore's ruling People's Action Party, was seen as the successor to Prime Minister Lee Hsien Loong until he withdrew from the succession race last month, saying younger ministers should contend for the top job.

Heng did not touch on this during his speech.

Drawing on his experience as Singapore's finance minister, Heng warned of "economic scarring" if the coronavirus pandemic is allowed to drag on. "If companies were to close and workers are retrenched, it will be very hard to rebuild when the situation gets better," he said, pointing to Singapore's COVID stimulus that was worth nearly 20% of the city-state's gross domestic product.

Reporting by Kentaro Iwamoto and Francesca Regalado.

Malaysia's Muhyiddin says COVID should spur total pharma overhaul

Wealthy countries should not hoard COVID-19 vaccines and their patents, Malaysian Prime Minister Muhyiddin Yassin urged on Thursday, calling for equitable access to end the pandemic and total reform of the pharmaceutical system for the future.

In a video address to Nikkei's Future of Asia conference, Muhyiddin said artificial hurdles are hindering efforts to suppress COVID-19 infections quickly and win the race against mutating variants that could render current shots "obsolete."

"The wealthiest 27 countries have 35.5% of the vaccines, although they only cover 10.5% of the world's population," Muhyiddin said. "These countries have more than enough vaccine doses to immunize people beyond their own populations."

Meanwhile, he continued, "there have been 1.23 billion doses administered across 174 countries so far, with 252 million doses or 20% of the global supply taken up by the U.S. alone."

Malaysian Prime Minister Muhyiddin Yassin addresses Nikkei's Future of Asia conference on May 20.

Muhyiddin's participation in the annual Nikkei conference marks his first engagement with a foreign media organization since he took office in March 2020. He joins a who's who list of top leaders due to deliver their perspectives on the region's challenges and post-COVID era, including Singapore's Deputy Prime Minister Heng Swee Keat, Vietnamese Prime Minister Pham Minh Chinh, Thai Prime Minister Prayuth Chan-ocha and Cambodian Prime Minister Hun Sen.

Japanese Prime Minister Yoshihide Suga will speak at the conclusion of Thursday's session.

Muhyiddin noted that Asian countries have been more generous in sharing their vaccines. China and India, he said, have exported around 200 million and 66 million vaccine doses, respectively -- approximately 48% and 34% of their total production. He said the ratios for the U.S. and U.K. are far lower, at 1.1% and 4%.

Muhyiddin said Asia should take lead in lifting patent protections to produce cheaper generic versions of life-saving medicines for critical diseases, from COVID-19 to HIV/AIDS.

The prime minister did welcome U.S. President Joe Biden's support for a temporary waiver of intellectual property protections on COVID-19 vaccines. Muhyiddin said this should be a precursor for a total transformation of the global pharmaceutical patent system.

"Pausing the gears is not enough. Our obligation is to dismantle it entirely," he said. For Asia to effectively prevent and fight pandemics, he added, it needs to shift from a "purely nationalistic approach" to health services to investing in health as a global public good.

Muhyiddin also warned of a "global leadership vacuum" and a "trust deficit between the world's so-called superpowers" over trade, technology and other geopolitical concerns. Despite globalization changing the way infectious diseases spread, he stressed the world lacks an effective system of global governance to respond to these threats swiftly and on a large scale, transcending the forces of nationalism and isolationism.

"Hence the United Nations, not for lack of effort, has struggled" to reach a consensus on international cooperation against the pandemic and to "call for a truce in conflicts around the world."

"We have yet to see the kind of urgency of meetings at the U.N. Security Council nor the global heads of state coming together to organize, for example, global supply chains in managing the pandemic."

Asia, according to Muhyiddin, should seize this ongoing crisis as an opportunity to help forge a more equal world with better global governance. "There can be no return to the status quo, there can be no recovery without an Asia recovery," he said.

Malaysia is confronting a wave of COVID-19 infections, with more than 485,000 cases reported as of Wednesday, including 47,340 active cases that are straining the country's health system. The death toll has reached 2,040.

While the economy contracted 5.6% in 2020 and declined 0.5% in the first quarter of this year, Muhyiddin's government is juggling a fiscal deficit estimated to hit 6% of gross domestic product this year. Since March 2020, his government has committed over 340 billion ringgit ($82 billion) worth of stimulus packages to mitigate the pandemic's impact.

In his address, Muhyiddin also highlighted growing concerns about inequality, noting that in many cases "poverty and exclusion comes from working in an unfair system." New Asian institutions, he said, should be created to help level the playing field.

Striking an optimistic note, he said, "Our greatest centuries can be ahead of us, not behind."

Reporting by P Prem Kumar.