Mekong Monitor: Lao government has approved around US$37 billion worth of investments between 1989-2019
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TRADE, ECONOMY, AND INVESTMENT
Lao government has approved around US$37 billion worth of investments between 1989-2019
(14 May 2020) The Lao government has approved some US$37 billion worth of investments from the opening up of Laos’ economy in 1989 to 2019. The total number of investment projects during the period was 6,144 with an overall investment value of US$36.8 billion, according to figures recently released by the Ministry of Planning and Investment. China remains the largest foreign investor with a total of 862 projects with a combined investment value of US$10 billion. Thailand and Vietnam were listed as the second- and third-largest foreign investors with investment values of US$4.7 billion and US$3.9 billion, respectively. Other significant foreign investors within the same period included South Korea, France, the US, Japan, Malaysia and Australia. The most popular investment sector in Laos was electricity generation with investments worth US$14 billion, followed by mining, with investments worth US$7.5 billion.
Tourist arrivals to Thailand may plunge by almost two thirds in 2020
(12 May 2020) The Tourism Authority of Thailand noted in its latest forecast that the number of foreign tourists visiting Thailand in 2020 may plunge by almost two thirds to 14 million, its lowest in 14 years. This is a dramatic drop from the projection of 33.8 million tourists made in March 2020. In 2019, some 39.8 million tourists visited the country, with spending from foreign tourists accounting for 11% of its GDP. It has been suggested that foreign tourists may return to Thailand in October when the high season begins.
Thai companies struggle to raise funds in debt market as bond yields soar
(12 May 2020) Several Thai companies have struggled to raise funds in the Thai corporate bond market as yields on riskier local-currency debt have jumped near the highest in a decade. According to data from the Thai Bond Market Association and Securities & Exchange Commission, at least seven lower-rated Thai borrowers failed to raise as much in baht notes as they’d wanted recently. It is believed that government steps to reopen the economy will be crucial to investor sentiment, while the central bank has set up a bond-buying programme to support companies’ refinancing efforts and have cut its policy rate to a record low of 0.75%. However, one analyst warned that until the COVID-19 pandemic finally dies down, most investors will remain cautious about dealing with corporate bonds.
More than 6,300 factory workers in Yangon region have lost their jobs as of end-April
(13 May 2020) More than 6,300 factory workers in Yangon region have lost their jobs as of end-April 2020, due to the economic ramifications of COVID-19. The Confederation of Trade Unions in Myanmar stated that some 47 factories have either closed or downsized their workforce, with most of these factories producing clothing, shoes, and bags. While some factories have closed temporarily, others have closed permanently. According to the Ministry of Labor, Immigration and Population, around 100 factories have closed or reduced their workforce. The labor ministry has ensured that sacked employees will receive redundancy payments and social security compensations.
Cambodia to resume white rice exports
(21 April 2020) Vietnam’s deputy prime minister Trinh Dinh Dung on 20 April ordered the advancing of the export (13 May 2020) The Cambodian government announced that white rice exports would be allowed to resume from 20 May 2020 onwards. White rice exports had been previously banned for over a month to ensure local food security amidst the COVID-19 pandemic. The resumption was made at the request of the Cambodia Rice Federation and after the kingdom has detected no new COVID-19 cases for a month. The country exported a total of 300,252 tonnes of milled rice in the first four months of 2020, a 40.5% increase over the same period last year. On another note, the government has also encouraged factories in the garment industry to start making face masks, medical supplies, and personal protective equipment for local demand and export.
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.