Photo credit: Reuters
TRADE, ECONOMY, AND INVESTMENT
Mekong-Lancang cooperation needs focus
(18 December 2018) Vietnamese deputy prime minister and foreign affairs minister Pham Binh Minh emphasized the need for the Mekong-Lancang Cooperation (MLC) to maintain an efficient working model and enhance coordination with regional cooperation mechanisms in order to ensure that projects bring benefits for all member countries. Speaking at the 4th Mekong-Lancang Cooperation Foreign Ministers’ Meeting, the minister also stressed the need to mobilize resources to advance the Sanya Declaration and the MLC’s five-year Plan for Action for 2018-22. During the meeting, the ministers also reached a consensus to strengthen the MLC’s connectivity with national development strategies and relevant regional and subregional co-operative mechanisms such as ASEAN, the Mekong River Commission, the Greater Mekong Subregion (GMS) and the Ayeyawady-Chao Phraya-Mekong Economic Cooperation Strategy (ACMECS).
Cambodia-Vietnam trade reaches record high in 2018
(14 December 2018) Bilateral trade between Cambodia and Vietnam reached a record high this year with trade volumes amounting to US$3.06 billion in the first ten months of 2018, representing a 36% increase compared to the same period last year. Of the US$3.06 billion, Vietnam’s exports to Cambodia accounted for US$2.25 billion or 73% of the total two-way trade. According to the Cambodia Chamber of Commerce, Cambodia has consistently run a trade deficit with Vietnam in recent years due to a lack of locally-produced products such as steel. As such, the trade deficit with Vietnam grows larger as Cambodian construction needs increase. Further, data form the General Department of Vietnam Customs indicated that Vietnam’s key exports to Cambodia include steel, petrol, garments, textiles, leather and footwear. Cambodia’s exports to Vietnam are mostly raw agricultural products such as cashew nuts, rubber, wood and woodwork products.
Thailand and Laos to deepen bilateral cooperationion
(16 December 2018) Thai Prime Minister Gen Prayut Chan-o-cha and Lao Prime Minister Thongloun Sisoulith inked several agreements to enhance cooperation between the two countries during the Thailand-Laos Joint Cabinet Retreat held recently. Documents signed included agreements to intensify cooperation in legal and judicial affairs, transportation, education, immigration control and electricity demand. Both parties also agreed to enhance subregional transport connectivity in line with the Ayeyawady-Chao Phraya-Mekong Economic Cooperation Strategy (ACMECS) Master Plan and bring bilateral trade volumes to US$11 billion by 2021.
Myanmar to open its doors to foreign insurance firms in 2019
(14 December 2018) Qualified foreign insurance providers will be able to operate in Myanmar by April next year, according to the country’s Financial Regulatory Department director U Thant Sin. Speaking at the UK Capital Market and Insurance Conference in Yangon, the director assured companies that they will soon be accepting Expressions Of Interest (EOI) so that foreign insurers can commence operation in April or May 2019. So far, 31 foreign insurers from 14 countries have set up offices in Myanmar in anticipation of government permits to allow full foreign investment in life insurance and joint ventures in general insurance. According to U Thant Sin, a licence for foreign insurers to provide general insurance will cost US$14 million. Once the license is given, 30% of foreign insurers’ required capital should be allocated to buying government bonds.
Flood of new passengers to stoke demand for jet fuel in Vietnam
(17 December 2018) Vietnam’s record 8.7% annual growth in foreign visitors has led the country’s fuel consumption to increase by 20-25% to reach a record high in 2018. The country has imported 1.87 million tonnes or 14.8 million barrels of fuel from January to November this year, up 18% from the same period in 2017. This trend is expected to continue for years to come as Vietnam is on track to welcome 38 million international passengers and 16 million visitors this year, up from 18 million passengers and 8 million visitors in 2015 based on data from CAPA Centre for Aviation. Further, the International Air Transport Association (IATA) predicts that the country will have 150 million airline passengers per year by 2035, four times the passengers in 2015. There are presently five Vietnamese airlines, i.e. Vietnam Airlines HVN.HNO, Jetstar Pacific Airlines, Vietjet Aviation VJC.HM, Vietnam Air Services Co. and the recently-approved Bamboo Airways.
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.