Photo credit: Khmer Times
TRADE, ECONOMY, AND INVESTMENT
Cambodia and Nepal to ink aviation agreement
(28 November 2018) Cambodia and Nepal will sign an Air Service Agreement (ASA) in early December, allowing airlines to operate flights between the two countries. According to the Cambodian State Secretariat for Civil Aviation (SSCA), the ASA with Nepal is one of several agreements that Prime Minister Hun Sen will sign during his official visit to Nepal, where he will also be attending the Asia Pacific Summit in Kathmandu. Cambodia has thus far signed ASA agreements with over 40 countries globally, and this signing with Nepal marks the first agreement in the aviation sector between the two countries. According to the Cambodian tourism ministry, the country received 54,800 tourists from South Asia—a 12% increase—from January to September 2018. The largest number of tourists came from India, followed by Sri Lanka, Pakistan, Bangladesh and Nepal.
Laos seeks greater economic cooperation with India
(26 November 2018) In a bilateral meeting held in Vientiane recently between Lao foreign affairs minister Saleumxay Kommasith and the Indian external affairs minister Sushma Swaraj, the former urged for the deepening of cooperation between the two countries and for India to play a larger role in the development of ASEAN’s physical and digital connectivity. The Lao minister also urged for consideration to be given to the relaxation of interest rates, guidelines and procedures with regard to the US$1 billion line of credit announced by India at the ASEAN-India Summit in 2016. Both sides agreed to promote bilateral economic ties including encouraging Indian companies to invest in priority areas under Laos’ National Socio-Economic Development Plan and facilitating such investment. The ministers also agreed to revise the memorandum of understanding on the promotion and protection of investments and accelerate negotiations on the Double Taxation and Avoidance Agreement (DTAA).
Better corporate governance needed to obtain foreign bank loans
(24 November 2018) The Central Bank of Myanmar urged companies to improve their corporate governance standards in order to benefit from financing by foreign banks. This comes after its November 8 announcement that allows the 13 foreign banks currently licensed to operate in the country to “provide any financing and other banking services to local business entities, in the same manner as local banks”. While the announcement was generally well-received in the business community, foreign banks have stated that at least six months of preparation will be needed before such loans can be made available and that businesses must be ready to adhere to international standards of corporate governance in order to meet eligibility requirements. The Central Bank is also planning to permit foreign banks to enter the retail banking sector but such a development could be at least another two years away.
Vietnam faces ‘beanless’ coffee crisis
(23 November 2018) Vietnamese farmers may not meet their targeted production output this year as several areas have reaped fruits with no beans or have beans that are smaller than usual. The country, which is also the world’s largest grower of robusta coffee, had initially expected output of 1.83 million tonnes or 30.5 million bags. According to Vietnam’s second largest coffee exporter, the shortfall is due to non-stop rainfall which keeps tree roots from absorbing nutrients and prevents growers from adding enough fertilizer. While robusta bean prices are on course for a second annual decline, the Vietnam Coffee-Cocoa Association remains unfazed and insists that it is a small issue.
Digital ads to propel spending growth
(29 November 2018) According to an international ad agency, Thailand’s advertising and media spending could record growth up to 5% in 2019, fueled by a likely rise in digital ad spending of at least 20%. Thailand’s offline media spending in the first 10 months of 2018 stood at approximately US$2.57 billion and spending is expected to reach nearly US$3.03 billion by year-end. Due to increased internet connectivity in the country, digital advertising is also expected to grow by 20% to approximately US$454.16 million. A market research firm indicated that compared to others in emerging Asian countries, Thais spend twice as much time on social media and 91% of them use mobile phones to access the internet.
About Greater Mekong Subregion (GMS)
The Greater Mekong Subregion (GMS) Economic Programme was launched by the Asian Development Bank in 1992 connecting five developing ASEAN countries, namely Cambodia, Laos, Myanmar, Vietnam and Thailand, and Chinese provinces of Yunnan and Guangxi Zhuang Autonomous region. The region has some of the most robust economies sharing the Mekong River Basin thanks to its reform and liberalisation. The subregion is growing at a faster pace than the whole of East Asia and the Asia Pacific as the GDP growth rate for 2017 was at 6.4 percent, according to the World Bank. The population at the subregion as of 2016 is at 340 million while the GDP at PPP is at US$3.1 trillion in 2016. In 2015, trading within the region was at US$444 billion.