CARI Captures 409
ASEAN leaders convene in Bangkok for the 34th ASEAN Summit
(17 June 2019) All 10 ASEAN heads of state are in Bangkok for the 34th ASEAN Summit, held under the theme “Advancing Partnership for Sustainability” and chaired by Thai leader Prayut Chan-o-cha. According to Thai officials, key discussion points on the agenda include the Regional Cooperation Economic Partnership (RCEP) negotiations, an Indo-Pacific strategy, the Rohingya crisis in Myanmar, as well as policy directions on marine debris. Ahead of the meeting, the ASEAN Secretariat published its fifth and latest issue of the ASEAN Economic Integration Brief (AEIB), which concludes that the 2019 outlook for the region “remains uncertain” due to tensions in the global economic environment, particularly those brought upon by the ongoing trade negotiations between the US and China. The AEIB also provides preliminary trade data for 2018, which sees growth for ASEAN’s trade in goods moderating to 8.1% in 2018, down from 15.0% in 2017. The report notes that while global foreign direct investment (FDI) declined by 13.4% in 2018, the Southeast Asian bloc saw a 5.3% growth in FDI inflows in the same year, reaching US$151.2 billion.
ASEAN identifies 19 potential ASEAN Connectivity 2025 infrastructure projects
(14 June 2019) The ASEAN Secretariat announced on June 10 that it has identified 19 projects to be included in the Initial Rolling Priority Pipeline of Potential ASEAN Infrastructure Projects, an initiative under the Master Plan on ASEAN Connectivity 2025. Of the 19 projects, five are in Myanmar, four in Laos, three in Thailand, three in Indonesia, two in Vietnam, one in Cambodia and one in Brunei. Broken down by sector, 11 of the 19 projects involve the development of roads, three involve power projects, two are ports, and one project each involving the development of airports, ICT infrastructure and railways. According to the secretariat, the projects were selected based on their “strategic relevance, impact on regional connectivity, environmental and social (E&S) impact, project feasibility, and contracting agencies’ implementation capacity”, and the next step will be to determine the financing options for each project. According to ASEAN secretary-general Lim Jock Hoi, these projects will contribute to the overall infrastructure network at a regional level as part of the bloc’s goal of achieving ASEAN Connectivity.
Singapore non-oil exports record biggest fall in over three years
(17 June 2019) Singapore’s non-oil domestic exports recorded a 15.9% year-on-year decline in May — its biggest drop in over three years. According to data published by Enterprise Singapore, the overall drop was largely due to the continued downtrend of electronic exports, which saw a 31.4% drop in May following a 16.3% dip in April. The electronic exports which contributed the most to the slump were integrated circuits (-39.8%), disk media products (-42.4%), and integrated circuit parts (-54.2%). Meanwhile, Singapore’s non-electronic exports also continued to fall in May as it fell 10.8% following April’s 8% drop. This was largely attributed to a decline in exports of civil engineering equipment parts (-92.4%), non-monetary gold (-72.4%), and petrochemicals (-14.7%). However, analysts say that Singapore might enjoy some respite in June as China’s front-loading of exports to the US ahead of further tariff increases may create a temporary increase in export demand from Singapore.
Malaysia aspires to be E&E hub despite escalating US-China tech war
(16 June 2019) Malaysia will continue taking a neutral stance in the US-China technology and trade war as it works to become a hub for investments, said Malaysian international trade and industry minister Darell Leiking. He added that Malaysia continues to attract investments despite ongoing global economic tensions, evidenced by the positive performance in terms of the increase in investments in the manufacturing, services and primary sectors. According to the Malaysian Investment Development Authority (MIDA), the country saw a 3.1% increase in investment inflows in the first quarter of 2019 reaching US$12.9 billion, up from the US$12.5 billion recorded during the same period last year. Foreign investments accounted for 54.5% or US$7 billion of the sum, while domestic investments accounted for the remaining 45.6% or US$5.9 billion. Leiking also urged local electrical and electronic (E&E) industry players to step up their game in leveraging opportunities presented by the technological trade war.
24/7 border gate expected to boost bilateral trade during three-month trial period
(19 June 2019) Malaysia’s Bukit Kayu Hitam and Thailand’s Sadao border gates will be open to lorries and trailers 24/7 beginning June 18 for a three-month trial period to boost the flow of goods between the countries. Previously, the gates were only open from 6am till midnight. According to Malaysian foreign affairs deputy minister Marzuki Yahya, greater connectivity between Malaysia and Thailand is vital since border trade accounts for over 60% of bilateral trade between the countries. Furthermore, the countries’ total trade saw a 13.7% increase last year, reaching US$26.12 billion. Thai foreign minister advisor Chaisiri Anamarn, for his part, said that the longer operating hours will help reduce traffic congestion in the day and subsequently improve cross-border trade, business and tourism. He added that Thailand is also constructing a new customs complex for the Sadao checkpoint, one which will be able to connect directly with the Bukit Kayu Hitam customs complex once it begins operations in early 2020.
Vietnamese rubber exports plummet due to trade war
(18 June 2019) Vietnam’s rubber exports saw a 6% increase in volume reaching 80,000 tonnes and 7% increase in value reaching US$116 million in May as compared to April, but recorded a 26.5% decline in volume and 26.2% decline in value when compared with figures from the same period last year, according to data from the Vietnamese Ministry of Industry and Trade. Nevertheless, when taken together, Vietnam’s rubber exports in the first five months of 2019 recorded a 12% increase in volume and 4% increase in value reaching US$673 million on a year-on-year basis. According to the Vietnam Rubber Group (VRG), the fall in May exports can be attributed to uncertainties caused by the US-China trade war and a shift in Chinese policies. China’s increase of import tariffs on mixture rubber to 10% has had a significant impact on Vietnamese exports since mixture rubber make up half of its total rubber exports to China in the first four months of this year.
World Bank predicts 6.5% growth for Myanmar in the current fiscal year
(18 June 2019) The World Bank’s Myanmar Economic Monitor published on June 18 projects a positive outlook for the country’s economy due to accelerated implementation of reforms, higher infrastructure spending and greater liberalisation and investments in key sectors such as wholesale and retail, insurance and banking. On the whole, it expects Myanmar’s economic growth to expand to 6.5% in the 2018/2019 fiscal year which began in October 2018, up from 6.4% during the April to September 2018 transition period. It also expects this uptrend to continue in the next fiscal year with growth expected to reach 6.7%. Furthermore, the report expects Myanmar’s services sector to remain its key driver of growth, supported by industrial activity driven by the garment and construction sectors. According to the report, there is an increase in the rate of mega-project implementation in the country such as the China-Myanmar Economic Corridor, as well as other energy and transport projects.
Indonesia-Chile economic pact to come into effect in August 2019
(14 June 2019) The Indonesia-Chile Comprehensive Economic Partnership Agreement (IC-CEPA) will come into effect on 10 August 2019, Indonesian trade minister Enggartiasto Lukita said. The Indonesian minister’s remarks were made following his meeting with Chilean trade vice minister Rodrigo Yanez Benitez on June 11 during which they exchanged an instrument of ratification for the pact. Trade between Indonesia and Chile fell from US$419.4 million in 2014 to US$274.1 million in 2018, but Enggartiasto expressed his confidence that the countries will be able to double their total trade in the coming few years with the pact in place. The IC-CEPA, which is also Indonesia’s first trade agreement with a Latin American country, is part of the Indonesian government’s efforts to increase trade with non-traditional trade partners.
Cambodia, Turkey look to reach US$1 billion in annual bilateral trade
(17 June 2019) Cambodia and Turkey will work towards reaching US$1 billion in bilateral trade, starting with US$500 million by 2020, according to a statement on Prime Minister Hun Sen’s Facebook page following his meeting with Turkish President Recep Tayyip Erdogan on June 15 on the sidelines of a conference in Tajikistan. Erdogan, for his part, said that the two countries should “do business together as much as possible.” Hun Sen also announced that plans to establish a Cambodian embassy in Ankara are in the works. According to the Cambodian Chamber of Commerce, the country’s exports to Turkey include garments, shoes, rice and other agricultural products, while Turkish investments in Cambodia include schools, decorative materials and carpets. Meanwhile according to its tourism and commerce ministries, Cambodia received 2,339 Turkish visitors in the first quarter of 2019 and bilateral trade totalled US$19.6 million in 2017.
PH, Japan focus on speedy implementation of infrastructure projects
(18 June 2019) The Philippines and Japan will focus on the speedy implementation of large infrastructure projects moving forward since most of these projects have already secured financing from Japan and will be in the implementation phase till 2022, said the Philippines’ finance undersecretary Mark Dennis Y.C. Joven. These projects include larger ones such as the North-South Commuter Railway (NSCR) and the Metro Manila Subway Project, as well as smaller ones such as the development of roads and rehabilitation of existing rail lines. Meanwhile, the country’s socio-economic planning secretary Ernesto Pernia said that the government is prioritising more expensive projects for Japanese financing since the Philippines will no longer qualify for favourable terms for development assistance from Japan once it is upgraded to upper-middle income status. According to Pernia, the Philippines is set to be upgraded by the end of 2019 or 2020.