CARI Captures 386
Vietnam aims to be among top ASEAN countries for doing business by 2021
(25 December 2018) The Vietnamese government has decided that improving the country’s business environment would be its foremost policy priority next year, second only behind the implementation of its socio-economic development and state budget for 2019. This comes as the government races to implement further reforms in order to meet its target of being among the top four ASEAN countries with the best business environment by 2021. According to the World Bank, Vietnam’s business environment has improved greatly in recent years, especially in areas such as logistics services, innovation, e-government and access to e-public services. However, its overall ranking is still relatively low compared to other nations in the region, as it lags behind in areas such as dispute resolution, property registration, bankruptcy and business performance. During the Vietnamese government’s recent cabinet meeting, Prime Minister Nguyen Xuan Phuc stressed the need for leaders of ministries and localities to set clear goals, specific criteria and strict punishments for poor implementation based on these standards. To this end, the government has also identified four key areas for 2019 under its resolution to improve the country’s business environment, i.e. to simplify procedures for doing business, continue reforms in specialized inspections and initiatives related to the National Single Window Portal, promote electronic payment and provide e-public services at a higher level, as well as to develop innovation ecosystems and support startups.
Brunei’s central bank predicts low inflation in 2019
(23 December 2018) Brunei’s central bank Autoriti Monetari Brunei Darussalam (AMBD) expects the country’s inflation to remain below 1% next year with potential downside risks if global inflationary pressures remain weak, according to its recently published biannual policy statement. The statement also highlighted that local financial institutions continue to have strong fundamentals which are underpinned by high levels of capitalization, strong liquidity and improved profitability. The AMBD further noted that Brunei achieved a full score and ranked first out of 190 economies in the Getting Credit indicator in the World Bank’s Doing Business Report 2019, sharing the top spot with New Zealand.
World Bank downgrades Philippines growth forecasts
(22 December 2018) The World Bank has adjusted its economic growth forecasts for the Philippines from 6.5% to 6.4% in 2018 and 6.7% to 6.5% in 2019. The adjustments were made due to the delay in the approval of the 2019 national budget, which will likely result in the reenactment of the 2018 budget in the first quarter of 2019, thus denying funding for several planned projects. Moreover, the World Bank also expects weakness in global demand to continue to dampen the Philippines’ exports. It also noted that while high inflation may have tempered the growth in household consumption in the fourth quarter of 2018, a moderation in inflation in the following quarters is expected to boost consumer confidence and raise private consumption in 2019.
Indonesia reassures Singaporean investors on upcoming elections
(24 December 2018) Indonesian ambassador to Singapore Ngurah Swajaya assured foreign businesses and investors that Indonesia’s upcoming election year would not affect the government’s commitment to improve the country’s business climate. Speaking at a gala dinner in Singapore for investors and the business community, the ambassador urged attendees to continue investing, doing business in and visiting Indonesia. He also urged them to seize opportunities arising from the US-China trade war, stressing the need for ASEAN players to go beyond just touting their potential and work on selling concrete investment packages. Trade between Indonesia and Singapore amounted to over US$25 billion in the first three quarters of 2018, representing an increase of over 18% for the same period last year.
Malaysian firms keen on landing engineering contracts in the Philippines
(25 December 2018) Malaysia hopes to participate in the Philippines’ ‘Build, Build, Build’ programme by offering the expertise of its engineering companies to the Philippines, said a trade commissioner from the Embassy of Malaysia Trade Office (MATRADE). According to the trade commissioner, introductory sessions have been organized involving Malaysian companies and the Philippines’ Department of Public Works and Highways (DPWH) with the aim of promoting collaborations on infrastructure and manufacturing projects in the Philippines. According to MATRADE, Malaysian exports to the Philippines rose 9.7% year-on-year to reach US$3.1 in the first nine months of 2018. Manufactured goods accounted for 78.2% of these exports, followed by agricultural goods at 16.6% and mining goods at 4.5%.
Economists predict a slowdown in exports and GDP growth in 2019
(25 December 2018) Thailand has passed its peak growth of 4.9% that it enjoyed in the first quarter of 2018 and will likely grow at a slower pace in 2019 and 2020, according to local experts. The Bank of Thailand expects GDP to grow by 4.2% next year — a more optimistic projection than the International Monetary Fund’s projected 3.9% and Moody’s forecast of 3.7% GDP growth. Further, the Thai Ministry of Commerce maintained its ambitious 8% growth target for exports in both 2018 and 2019 despite comments by finance minister Apisak Tantivorawong that the trade war has already begun to take its toll on the country. For instance, the commerce ministry recently reported that exports of computer parts and integrated circuits to China fell by 18.4% in October, while the Federation of Thai Capital Market Organisations’ (FETCO) Investor Confidence Index (ICI) reported in November that investor confidence is expected to fall from November this year through to the beginning of 2019 by as much as 7.23%.
Laos not fully benefiting from ASEAN integration
(25 December 2018) Laos has not fully benefited from economic integration in ASEAN, evidenced by its declining share of trade with other ASEAN member states, reports the Lao National Institute for Economic Research (NIER). According to the NIER, Laos’ share of trade with other member states declined from 74% in 2004-2010 to 63% in 2011-2017, while its share of exports to member states out of total exports declined from 73% in 2004-2010 to 51% in 2011-2017. Further, Laos’ share of foreign direct investment from ASEAN member states declined from 41% in 2010 to 10% in 2017.
Year of ‘slow steaming’ in maritime transport
(24 December 2018) Malaysia’s maritime industry is expected to pick up steam in 2019 as plans to revive the industry are underway, according to national news agency Bernama. This development is in tandem with the increase in manufactured goods and shipments to China – factors which are deemed to have strengthened the export sector this year. Meanwhile, implementation of the Malaysia Shipping Master Plan (MSMP) 2017-2022 is also afoot, and a national maritime council to oversee matters related to shipping and ports was activated in August. The council, known as the National Shipping and Port Council (NSPC), convened for the first time in December and has thus far established six advisory councils to look into various focus areas. Other highlights reported by Bernama includes the long-delayed implementation of the single-window gateway system uCustoms aimed at speeding up cargo clearance, as well as the development of a new free zone (FZ) in Pulau Indah.
Vietnam gears up for ASEAN Chairmanship in 2020
(24 December 2018) Vietnam has launched its National ASEAN 2020 Committee to begin preparations to helm the ASEAN Chairmanship in 2020. The 29-member committee is headed by Deputy Prime Minister and Foreign Minister Pham Binh Minh. They are tasked with helping Prime Minister Nguyen Xuan Phuc to direct, supervise, coordinate and guide ministries, offices and localities in preparation for the chairmanship. Speaking at the launch ceremony, the prime minister said that ASEAN has always been a top priority in Vietnam’s multilateral diplomacy policy and the country will do its utmost to make the ASEAN Chairmanship 2020 a success.
Thailand’s economic goals as ASEAN chair in 2019
(25 December 2018) Thailand’s chairmanship of ASEAN in 2019 was officially launched by Thai Prime Minister Prayut Chan-o-Cha and ASEAN Secretary-General Lim Jock Hoi in Bangkok on December 21. Prominent corporations and government agencies were invited to showcase their contributions to the region in the areas of green technology, sustainability and innovation — in line with Thailand’s theme for next year’s chairmanship “Advancing Partnership for Sustainability”. Ten economic trends to watch during Thailand’s term as chair includes the adoption of the ASEAN Declaration on Innovation, enactment of the Declaration on ASEAN Industrial Transformation to Industry 4.0, further harmonization of ASEAN Member States’ national single windows, development of guidelines for an ASEAN Region of Gastronomy and ASEAN gastronomy tourism network, as well as the finalization of the Regional Comprehensive Economic Partnership (RCEP).