Update on Council Engagements with ASEAN Sectoral Bodies
In 2019 the Council’s ASEAN Committee looks to deepen and expand partnerships with all 10 ASEAN Member States through various advocacy and programmatic workstreams. As a key resource and partner to ASEAN on emerging ICT issues, human capacity building and SME development, the Committee remains committed to helping a regionally integrated and globally connected ASEAN to develop an inclusive and resilient ASEAN Economic Community (AEC). Contingent upon this momentum, there are also wide-ranging opportunities to engage ASEAN via leveraging U.S. Government initiatives such as the US-ASEAN Smart Cities Partnership and other relevant work under the Free and Open Indo-Pacific (FOIP) strategy. While continuing to deepen our established engagements with certain ASEAN sectoral bodies that fall under the remit of the ASEAN Economic Ministers (AEM), this year the Committee will also aim to create new engagement opportunities with other regional entities including the ASEAN Consultative Committee on Standards and Quality (ACCSQ), ASEAN Education Ministers (ASED), and the ASEAN Regulatory Cooperation Project.
Standards and Conformance in ASEAN
Duplicative testing procedures that result from different conformity assessment systems in different countries pose serious barriers to trade. Even if a product or service meets a certain standard in the supplier’s home market, the supplier might not be able to sell this product or service in the target market because the buyers or regulatory authorities in the latter do not accept the home market’s standard. ASEAN, through the work of ACCSQ, has sought to address differences between Member States’ conformity assessment regimes to better facilitate trade and investment in the region. The ACCSQ’s ultimate goal is to achieve an integrated market of “One Standard, One Test, Accepted Everywhere,” and it aims to do this through the harmonization of national standards with international standards and the implementation of mutual recognition agreements on conformity assessment.
Thus far, all ASEAN Member States have achieved harmonization for the 20 priority products and 81 standards for safety and electromagnetism compatibility. ACCSQ continues to identify new areas for harmonization, with priority given to standards used in ASEAN Member States’ technical regulations. In past years, ACCSQ has stood up technical working committees in legal metrology, pharmaceutical products, cosmetics, electrical and electronic equipment, prepared foodstuffs, automotive products, traditional medicines and health supplements, medical devices, and rubber-based products. The committee is currently in the process of setting up a working group on the digital economy that will look at the various standards approved by the ISO/IEC Joint Technical Committee 1. Engaging the digital economy-focused working group is likely one way for the Council’s ASEAN Committee to begin engaging ACCSQ.
The U.S. Department of Commerce and the U.S. Trade and Development Agency have identified standards as an important component of the United States’ Indo-Pacific Strategy. Both are prioritizing standards in ASEAN and engaging ACCSQ as a way to ensure that U.S. companies and their products and services remain competitive in the region. Consequently, the Council will look for synergies between its engagement with ACCSQ and the U.S. Government’s engagement on standards issues, so as to potentially amplify the Council’s advocacy efforts in ASEAN.
Tapping into ASEAN Youth and Education Platforms
A key component of the Council’s strong commitment to economically empowering the countries in ASEAN is the role it plays in supporting the U.S.-ASEAN Internship Program. The U.S.-ASEAN Internship Program provides a means to match interested students and young professionals in ASEAN to internship opportunities at U.S. companies in the region. The program’s online portal currently includes internships from 11 partner companies. The ASEAN University Network (AUN) has also become a partner organization, helping to extend the program’s outreach through its 30 different member universities across all 10 ASEAN Member States. The program’s growing presence and influence highlights a potential opportunity for the ASEAN Committee to engage ASEAN sectoral bodies on youth and education, with a view to leveraging ASEAN’s vision of free movement of skilled labor in the region.
Regulatory Cooperation Project in Chemicals
ASEAN has made progress in several areas (cosmetics, skilled professionals, stock exchange linkages) in establishing regional building blocks for the AEC. Currently, a group of chemical regulatory authorities are working on a project to formulate an ASEAN regional regulatory cooperation framework for chemical management and standards. This year, members of the Council’s Manufacturing Committee would like to partner with the ASEAN Committee in an effort to elevate the Industry 4.0-related benefits of this regional harmonization-focused initiative to the ASEAN Secretariat and other ASEAN policymakers.
ASEAN Business Advisory Council (ASEAN-BAC) Meeting
On January 21, the Council attended the 13th Joint Consultation Meeting with ASEAN+1 Business Councils and Associations in Bangkok, Thailand. Arin Jira of ASEAN-BAC Thailand chaired the meeting, with Dr. Doan Duy Khuong of ASEAN-BAC Vietnam and Dr. Robert Yap of ASEAN-BAC Singapore serving as co-chairs. During the meeting, the Chair provided a briefing on Thailand’s four focus areas for its ASEAN Chairmanship year—digital infrastructure, digital connectivity, human resource development and MSMEs development. These areas are closely aligned with the major themes and priorities of the Council’s ASEAN Committee, as described in the 2019 Work Plan (available here), providing avenues for engagement on these topics over the course of the year.
ASEAN-BAC Thailand also used the meeting to promote its legacy project—ASEAN Human Empowerment and Development (AHEAD), which focuses on the challenges and opportunities presented by Industry 4.0, especially with regard to the need to re-skill and up-skill ASEAN's workforce to prepare the region for Industry 4.0. One of the planned activities under AHEAD is the submission of a report to the Senior Economic Officials Meeting (SEOM), the ASEAN Economic Ministers (AEM), and ASEAN Leaders on skilled labor and professional services guidelines in response to Industry 4.0.
On-going efforts by various ASEAN stakeholders to address non-tariff measures (NTMs)/non-tariff barriers (NTBs) were also discussed at the meeting. Three main efforts to address NTMs/NTBs at the meeting:
- A complaint and information-sharing portal that is part of the ASEAN Solutions for Investments, Services and Trade (ASSIST);
- A survey on NTMs/NTBs collection in ASEAN by the Asian Trade Center; and
- An Australia-ASEAN Chamber of Commerce report on dealing with agri-food NTMs in ASEAN.
In addition to these channels, New Zealand’s representatives at the meeting tabled a proposal that ASEAN-BAC adopt cross-cutting principles on NTMs in conjunction with the negotiation of the APEC-BAC, and more of the region’s economic think tanks, such as CARI and PIDS, are promoting public discourse on the importance of governments addressing the constraints that NTMs pose to the formation of the AEC.
Engagement with ASEAN Coordinating Committee on Electronic Commerce (ACCEC) Working Group on ASEAN Digital Integration Framework Implementation
The ACCEC will serve as the lead committee in the implementation of the ASEAN Digital Integration Framework, indicating that the committee’s responsibilities are extending beyond e-commerce issues. A high-level overview of the ASEAN Digital Integration Framework can be found here, while a more detailed version of the framework is available here. The last ACCEC Meeting January 12-13 in Bangkok, Thailand, further recognized the need to consult with ASEAN-BAC Joint Business Council in their forthcoming meeting in April.
Informal Dialogue Session between ASEAN Secretariat and Joint Business Councils
On February 21-22, representatives from the Council participated in an informal dialogue session between the ASEAN Secretariat and the Business Councils in Jakarta, Indonesia. The meeting included a review of a list of recommendations proposed by the Business Councils and discussions on issues such as the concept note on Low Value Shipment Program and the proposed terms of reference to establish an ad-hoc task force on trade facilitation. It was decided that the issues would be elevated to the ASEAN Trade Facilitation Joint Consultative Committee (ATF-JCC) for consideration on how best to move forward.
ASEAN Agreement on Electronic Commerce Released
On March 13, the text of the ASEAN Agreement on Electronic Commerce was released to the public, four months after all 10 ASEAN countries signed the Agreement—the region’s first such agreement on the digital economy—at the ASEAN Leaders’ Summit in Singapore on November 12 last year. In general, the Agreement primarily aims to (i) facilitate cross-border e-commerce transactions, (ii) create an environment of trust and confidence in the use of e-commerce, and (iii) deepen cooperation among ASEAN Member States to further develop and intensify the use of e-commerce to drive regional economic growth. The full text of the Agreement can be found here.
This Agreement is timely in view of the burgeoning growth of the internet market in Southeast Asia, which saw the number of internet users jump from 90 million in 2015 to more than 350 million in 2018. Top players in the region such as Lazada, Shopee, and Tokopedia have helped to drive the growth of e-commerce. Last year, Southeast Asia’s internet economy reached US$72 billion. By 2025, it is projected to grow to more than US$240 billion, spurred by mobile internet services—more than one-third of this growth, around US$88 billion, is expected to come from e-commerce. This would make e-commerce the most dynamic sector of the digital economy in Southeast Asia, when compared with online travel, online media, ride-hailing and food delivery services.
However, cross-border issues faced by businesses might impede the region’s growth potential in e-commerce. Concerns over the security and reliability of e-payment systems have prevented widespread adoption of such systems in countries like Indonesia, the Philippines, Thailand and Vietnam. Moreover, existing non-tariff barriers and the absence of growth-enabling e-commerce regulatory frameworks hamper the overseas expansion of smaller enterprises. Thus, even though the e-commerce sector in ASEAN has experienced growth, it remains weaker than in other markets. In particular, ASEAN’s e-commerce adoption represented only 2 percent of its total retail sales in 2017, compared to that of 20 percent in China and 12 percent in the US.
While the Agreement signifies ASEAN’s commitment to creating a conducive environment for the growth of e-commerce through the advancement of associated trade rules and increasing digital connectivity in the region, the fact that very little industry consultation was conducted during its drafting is concerning. Many of the Agreement’s provisions are positive enablers of growth and efficiency, but it still lacks others that would help safeguard transparency, fairness and innovation. The Agreement attempts to address this issue in Article 11, which institutionalizes more regular engagements between the private sector and ASEAN in the form of information exchange and feedback on policies. This consultative approach can help ensure that the Agreement truly addresses the barriers faced by industry players in expanding their e-commerce activities in ASEAN, and help the region achieve its full potential in this sector.
Japan to bolster ASEAN trade by loaning out experts Nikkei Asian Review 4th Apr 2019
Japan will dispatch specialists and advisers in areas such as trade to the Association of Southeast Asian Nations as part of a cooperation deal to be signed later this year. The government will send experts to the ASEAN Secretariat and other agencies of the region's 10-member association under the program, slated to begin as soon as early 2020. Tokyo will invite staff from ASEAN's head office to international conferences and workshops in Japan as well. The deal also broadens the reach of Japan's development aid in Southeast Asia. The agreement paves the way for Japan to provide advice on simplifying customs and promoting trade or other economic activities, as well as help shape ASEAN policies and rules. By expanding its influence in Southeast Asia, Japan sees an opportunity to establish a counterweight against U.S. protectionism and Chinese expansionism. Tokyo's development aid has been limited to individual members of the association, given that use of funds from the quasi-governmental Japan International Cooperation Agency requires an agreement with a recipient government or group. No low-interest yen loans or grant assistance have been carried out, while support for Singapore, Brunei and other places not eligible for Japan's official development assistance has also been hampered. But the Japan-ASEAN Technical Cooperation Agreement will authorize Tokyo to use foreign development aid for providing staff and equipment to the bloc's organizations through JICA. Japanese Foreign Minister Taro Kono and ASEAN Secretary-General Lim Jock Hoi are expected to sign the final agreement as soon as August.
The Mekong region is caught in a tug-of-war East Asia Forum 7th Feb 2019
For the Mekong countries, including Thailand, Laos, Myanmar, Cambodia and Vietnam, 2018 was a big year both domestically and regionally. Key developments from last year will inevitably continue to shape the politics of the region in 2019. In terms of domestic affairs, the most worrying trend is the consolidation of autocratic power in almost all countries. The autocratisation of the Mekong region has significant implications at a time when its giant neighbour China continues a long march to the south. China has committed billions of US dollars in concessional loans and credit to Mekong countries via the Lancang-Mekong Cooperation (LMC), an ambitious initiative which was launched in 2016. But the LMC’s actual impact remains to be seen. While the LMC is ostensibly aimed at creating a ‘shared future of peace and prosperity’, China can use it as part of a carrot and stick strategy due to its largely opaque and non-binding frameworks.
ASEAN and Japan to ink revamped economic pact in March Nikkei Asian Review 25th Feb 2019
Japan and the Association of Southeast Asian Nations are finalizing updates to their economic partnership agreement to resolve shelved issues on liberalizing the investment and service fields, completing a deal that took effect over a decade ago. Japan and each ASEAN member will sign amendment protocols as soon as early March that will take effect as each country completes domestic procedures for approval. Abe met with ASEAN leaders in November to confirm the early signing of a deal. Negotiations for the ASEAN Japan Comprehensive Economic Partnership (AJCEP) began in 2005. The elimination of tariff barriers to trade in goods began to gradually take effect in 2008, while issues related to opening up investment and service fields were tabled. Japan has separate trade agreements with seven ASEAN members but with varying degrees of liberalization among them, and it has no deals with Cambodia, Laos or Myanmar. The number of Japanese companies with facilities in the 10-nation bloc climbed 70% in the five years through 2017 to about 12,500. Southeast Asia is shoring up its business environment as the region's economy grows.
Asean backs Rohingya return Bangkok Post 19th Jan 2019
Foreign ministers from the 10 Southeast Asian Nations yesterday pledged to continue providing humanitarian assistance to Myanmar over the Rohingya crisis and called for the repatriation process to take place as soon as possible. "We received a briefing from Myanmar on the humanitarian situation in Rakhine State and had a fruitful discussion on the issue where we agreed on the importance of Asean's role," said the statement from the two-day Asean Foreign Ministers' Retreat in Chiang Mai that ended yesterday. The event was the first ministerial-level event held under Thailand's Asean chairmanship to discuss the region's priorities and direction this year. Thai Foreign Minister Don Pramudwinai said Asean was committed to helping Myanmar solve the humanitarian crisis and has commissioned the Asean Coordinating Centre for Humanitarian Assistance on Disaster Management (AHA Centre) to play a role in providing assistance to Myanmar and its displaced people.
India Opens Gate to Bring ASEAN Closer Through Myanmar Sputnik 4th Jan 2019
The newly-inaugurated integrated check-post (ICP) is an important part of the 1,360-kilometre-long India-Myanmar-Thailand Trilateral Highway, which has been touted as a rival to China's One-Belt-One-Road (OBOR) project. In a major development, India has opened a high-capacity traffic-handling integrated check-post (ICP) at Moreh in the northeastern state of Manipur; it is positioning the customs desk and border crossing internationally as a gateway to the ASEAN countries: neighbouring Myanmar as well as Indonesia, Thailand, Singapore, Malaysia, the Philippines, Vietnam, Cambodia, Brunei and Laos.
Asean economic ministers to sign two documents for boosting services sector and investment The Nation 22nd Apr 2019
ASEAN CHAIR Thailand has lined up 13 ambitious goals to achieve regional integration as the 25th Asean Economic Ministers’ Retreat (AEMR) kicks off today in Phuket, where two pacts are set to be signed to enhance services trade and investment within the group. Amid challenges such as the election uncertainty in Thailand and the US-China trade war, which have hindered progress in achieving these goals in the first quarter of 2019, Thailand faces a tough job completing all 13 “economic deliverables” by year-end. The deliverables fall under three pillars: to help Asean prepare for the Fourth Industrial Revolution (4IR); to enhance Asean connectivity through trade, investment, and tourism; and to enable sustainable economic development in Asean. Two of its key goals to be discussed at the AEMR are the conclusion of the Regional Comprehensive Economic Partnership (RCEP) negotiations and the completion of the Asean Single Window (ASW) trade system for all 10 Asean members, said Auramon Supthaweethum, the director-general of the Commerce Ministry’s Department of Trade Negotiations. If the negotiations are successful, RCEP will be the largest multilateral trade pact in history – encompassing China, India, Japan, South Korea, Australia, New Zealand and the 10 Asean nations. The combined gross domestic product of RCEP members accounts for up to 28 per cent of global GDP, she said, and as much as 30 per cent of the value of world trade. In 2017, up to 60 per cent of Thai exports went to RCEP countries, according to Commerce Ministry data. Meanwhile, the ASW aims to integrate the different national single-window systems of the Asean countries in order to expedite cargo clearance and boost cross-border trade by enabling the electronic exchange of trade-related documents among Asean members.
Southeast Asian ministers seek RCEP trade pact by year-end Nikkei Asian Review 4th Apr 2019
Finance ministers and central bankers from the Association of Southeast Asian Nations will push to finalize an Asian trade megadeal by the end of this year, according to a draft declaration for their Friday meeting here obtained by Nikkei. ASEAN leaders had hoped to reach agreement on the Regional Comprehensive Economic Partnership -- a 16-country trade pact that also includes Japan, China and India -- sometime last year. But India's resistance to scrapping tariffs and other roadblocks stood in the way, and they gave up on this goal at a November summit in Singapore. Efforts on RCEP are ramping up again, including a ministerial dialogue on the deal. ASEAN finance and banking chiefs are expected to take a strong stand toward a swift agreement at their upcoming meeting. Australia, New Zealand and South Korea round out the countries taking part in the RCEP negotiations. The Thai and Philippine central banks are also set to sign a memorandum of understanding toward promoting the use of local currencies to settle bilateral trade and investment. The Indonesian, Malaysian and Thai authorities signed a similar memorandum in 2016 to reduce currency risks in trade. The draft declaration welcomes the new agreement, and pushes for a framework for using local ASEAN currencies by the end of this year.
Asean must tackle non-tariff barriers: Panel The Straits Times 3rd Apr 2019
Stronger political will needed to remove them as they can inhibit trade and hurt SMEs more. Asean countries need stronger political will to tackle non-tariff barriers - which range from high taxation to policies that favour domestic manufacturers - and these tend to hurt small and medium-sized enterprises (SMEs) more, said a panel yesterday. Mr Chris Humphrey, executive director of the European Union-Asean Business Council, said Asean is at risk of failing to fulfil its potential unless more proactive action is taken on economic integration, including the removal of such barriers. There are about 6,000 non-tariff measures in Asean, with many being potential barriers to trade and this number continues to grow, he told an Asean roundtable discussion with six experts, organised by the CIMB Asean Research Institute. Yet, not a single barrier has been removed via Asean processes since 2015, the year the Asean Economic Community (AEC) was set up, said Mr Humphrey. Under the AEC, member states are obliged to allow the free flow of goods, services, capital and labour among their countries, in line with agreed terms. Non-tariff barriers can inhibit trade, and panellist Kaewkamol Pitakdumrongkit gave the example of how foreign firms in Thailand have to set up two entities if they want to provide both warehousing and distribution services. This is because a licence is needed for each of these services, said the assistant professor at the S. Rajaratnam School of International Studies. Such measures hurt micro-enterprises and SMEs more as they have fewer resources to absorb the added costs, she noted.
Asean trade window tops agenda The Nation 11th Mar 2019
“To counter the rise of protectionism around the world and mitigate the negative impacts of the US-China trade war, completing the RCEP negotiations by the end of this year as Asean chair is one of the Commerce Ministry’s top economic priorities,” said Auramon Supthaweethum, director-general of the DTN. There are a total of 20 chapters in the RCEP negotiations, seven of which were completed last year. Thailand aims to conclude the remaining 13 chapters this year, ranging from trade in goods and services, investment liberalisation, rules of origin, intellectual property regulations to e-commerce competition regulations, according to the department.
ASEAN – Hong Kong FTA likely to come into force in 2019 vietnamplus.vn 13th Feb 2019
The ASEAN – Hong Kong Free Trade Agreement (FTA) is now in its final stage and is hoped to take effect within 2019, according to Xinhua news agency. The agreement looks to offer more legal certainty and easier market access for goods flow between ASEAN and Hong Kong. Under the trade deal, Brunei, Malaysia, the Philippines and Thailand, agreed to cut customs duties of 85 percent of goods listed in their tariff schedules within 10 years.
European firms see ASEAN falling behind schedule on integration Business World 3rd Feb 2019
EUROPEAN businesses consider the economic integration of the Association of Southeast Asian Nations (ASEAN) to be well behind schedule due to the reluctance of individual members to liberalize their markets. “Regional economic integration in ASEAN is happening at a crazily slow pace, to be quite honest. And so we’re not seeing big improvement in the trade representation in the region…,” Chris Humphrey, Executive Director of the EU-ASEAN Business Council said in a briefing on Tuesday in Makati City. “Improving customs procedures across Southeast Asia, removing non-tariff barriers in trade are simply not happening,” he added. Asked if ASEAN members are protective of their economies, he said yes, citing some countries’ continued use of a negative list for foreign investment. According to its August 2018 EU-ASEAN Business Sentiment Survey which polled 330 executives from European companies around Southeast Asia, only 12% believe that ASEAN has achieved its goal of serving as an integrated market and production hub. Meanwhile, 54% said the pace of ASEAN economic integration is too slow. Also, the survey noted that nearly 67% believe that there are “too many barriers to the efficient use of regional supply chains,” a significant rise over 2017.
More provinces join western China-Asean trade corridor The Straits Times 8th Jan 2019
Four more Chinese provinces have officially joined the new land and sea trade corridor that connects western China to South-east Asia, bringing the total number to eight. Singapore Trade and Industry Minister Chan Chun Sing and Chongqing party boss Chen Min'er yesterday witnessed the signing of a pact involving the first four signatories - Chongqing, Guangxi, Guizhou and Gansu - and the latest additions of Qinghai, Yunnan, Ningxia and Xinjiang at a hotel in downtown Chongqing. The new trade route is a network of railway links from western China to the port of Qinzhou in southern Guangxi, which connects to South-east Asia by sea. It extends from the Chongqing Connectivity Initiative (CCI), the third joint project between China and Singapore that aims to spur the growth of China's less-developed western region through better transport, financing and data connectivity.
Brexit news: Jeremy Hunt reveals plans to join MAJOR free trade agreement Express.co.uk 2nd Jan 2019
The Foreign Secretary said the UK was "absolutely are open" to joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and expanding discussions with the Association of Southeast Asian Nations (ASEAN). He revealed how Britain had opened a "new mission" in Indonesia's capital Jakarta to open trade discussions. He said: "We’ve said that we are very interested in being part of the CPTPP, which I think would be a very big opportunity.
India cuts duty on crude, refined palm oil imported from ASEAN - Times of India The Times of India 1st Jan 2019
The Indian government has cut import duties on crude and refined palm oil effective Tuesday to comply with preferential trade pacts with Southeast Asian nations. The import duty on crude palm oil, originating from Malaysia, Indonesia and other members of ASEAN has been cut to 40 per cent from 44 per cent, the Central Board of Indirect Taxes and Customs (CBIC) said in a notification. The duty on import of refined palm oil has been lowered to 45 per cent from 54 per cent, if it is imported from Malaysia, and to 50 per cent, if it is imported from members of ASEAN, which includes Indonesia. The duties have been cut, CBIC said "to provide deeper tariff concessions in respect of specified goods" when imported from ASEAN under the India-ASEAN Free Trade Agreement and Malaysia under the India-Malaysia Comprehensive Economic Cooperation Agreement (IMCECA). The duty cuts are effective from January 1, 2019.
Asean can prosper with removal of non-tariff barriers, better connectivity New Sarawak Tribune Online 8th Mar 2019
Asean as a regional grouping would certainly continue to grow, while at the same time there is a need to focus on connectivity and efforts to remove the non-tariff barriers to trade (NTBs), says Thai Ambassador to Malaysia Narong Sasitorn. The ambassador said the 10-member grouping need to strive for the removal of NTBs in order to achieve a seamless economy. Thailand is the chair of Asean this year under a rotating system. Despite attaining free trade arrangement through the Asean Free Trade Area (AFTA) agreement, the average tariff in Asean countries is still at 4.5 per cent. However, it is a huge achievement made by the grouping when compared to the figure of 8.9 per cent in 2000. “We have to continue what we had been trying to do. Certainly, Asean will continue to grow and perhaps do a little bit more on connectivity and efforts to remove NTBs,” Narong told Bernama International News Service, here, recently.
Heng calls for deeper Asean integration to meet challenges The Straits Times 6th Apr 2019
Defense & Security
Structural reforms, multi-year collaboration in many areas needed, he says at Thailand meet. The Asean region has a promising future but it still must undertake structural reforms to deepen integration and connectivity to meet new challenges, said Singapore's Finance Minister Heng Swee Keat. He said in the Thai city of Chiang Rai yesterday: "Many areas of Asean's integration require multi-year collaboration, whether it is in infrastructure financing, payment linkages, green sustainable financing or in Customs and taxation matters." The region's economy grew 5.1 per cent last year, driven by strong domestic demand and investments. Mr Heng was speaking after the Asean Finance Ministers' and Central Bank Governors' Meeting drew to a close. A joint statement by finance ministers and central bank governors also underlined the region's commitment to economic growth and financial stability amid uncertainty caused by trade tensions and policy adjustments by advanced economies. "We are confident that the significant infrastructure developments implemented across the region in several Asean member states will boost investment, consumption and spur economic growth," it noted. Asean's efforts to lift financial integration and liberalisation included the signing of a protocol yesterday. This aims to further open market access in the financial service sector and also allow qualified Asean banks to benefit from greater market access and operational flexibility.
U.S. Pacific Command Boss: the Chinese Military Is the 'Principal Threat' The National Interest 14th Feb 2019
China is fielding a wide range of highly-capable weapon systems that could threaten U.S. interests in the Pacific region. That was the stark warning from U.S. Navy admiral Philip Davidson, the commander of U.S. Indo-Pacific Command, in his testimony before the U.S. Senate Armed Services Committee on Feb. 12, 2019. "Over the last 20 years, Beijing has undertaken a massive effort to grow and modernize the People’s Liberation Army," Davidson explained in his written statement.
US commander pushes for more funding to counter China’s influence in the Indo Pacific South China Morning Post 14th Feb 2019
The US Indo-Pacific commander has urged America’s strategic decision-making body to increase financial investment in the region to counter China’s expanding economic and military influence. Davidson warned that China had become the “principal threat” to American interests, people and allies with the modernisation of the People’s Liberation Army in the past two decades. Chinese foreign ministry spokeswoman Hua Chunying said Davidson’s remarks were aimed at finding excuses for the US military’s bigger presence in the region.
US eyes new bases to counter China in Pacific Asia Times 14th Feb 2019
The United States is currently in talks with allies about the possibility of expanding American military presence around the South China Sea, a top navy commander suggested this week, prompting a rebuke from Beijing. Speaking at a congressional hearing on Tuesday, US Indo-Pacific commander Admiral Philip Davidson told lawmakers that “the environment is changing so drastically in the South China Sea that it’s going to require new approaches in many cases.” Referencing the new National Defense Strategy, released last year, Davidson said a reassessment of the US military’s presence in the region was needed.
Growing Chinese Navy Adds to Risk of Clashes in Asia’s Major Maritime Dispute VOA 28th Jan 2019
A Chinese missile frigate returned last week from a five-day, friendly visit to the Philippines -- days after a Chinese fleet had visited Cambodia and half a year after a Chinese state firm started taking bids to build a nuclear-powered aircraft carrier, a sign of Beijing’s growing power at sea. Multiple media outlets last week cited a Chinese Xinhua News Agency report saying the People’s Liberation Army ground forces had dwindled to less than half China’s total 2.26 million troops as the number at sea grew. This mounting evidence of Chinese naval expansion will show first in the South China Sea, experts say, upsetting five other governments that dispute Beijing’s maritime sovereignty claims, and challenging U.S. defense for the weaker states.
The Asia Reassurance Initiative Act and ASEAN ASEAN Business News 24th Jan 2019
On December 31, 2018, US President Donald Trump signed the “Asia Reassurance Initiative Act” or ARIA into law following its approval by the US Senate on December 19, 2018. The ARIA’s main aim is “to develop a long-term strategic vision and a comprehensive, multifaceted, and principled United States policy for the Indo-Pacific region”. More specifically, the enacted law is focused on the promotion of American interests in the Indo-Pacific region in terms of defense and security partnerships. As per ARIA, US security interests primarily involve building new counterterrorism partnership programs in Southeast Asia and increasing maritime domain awareness both in South Asia and Southeast Asia.
From Asean Economic Development to Militarization The Manila Times Online 21st Jan 2019
IN a recent editorial, The Manila Times expressed concern that relatively benign economic conditions may lead to a false sense of security as “the United States-China trade war may be starting to inflict collateral damage on the economy.” In the short term, it is a valid concern for the Philippines and other Asean economies that currently benefit from relatively benign economic conditions. But even if the worst excesses of the trade war could be deterred, there are darker clouds in the longer-term horizon. The Trump administration’s new trade protectionism is accompanied by an increasingly military stance. The new US Africa strategy heralds changes in other regions as well, particularly Asia.
US demand not enough to save Q1 Asean exports The Business Times 23rd Apr 2019
SOUTH-EAST Asian electronics factories have been hard hit by the US-China trade war, especially amid a Chinese slump, an OCBC economist has said. That’s despite exports to the United States rising in some Asean markets over the same period. Exports from Singapore, Malaysia, the Philippines and Indonesia contracted year on year in the first quarter while Thailand was flattish, according to data compiled by economist Howie Lee. The electronics sector suffered more than others - led by the downturn in semiconductors, which, along with integrated circuits, make up most of the region’s electronics exports. Mr Lee wrote in a recent report that the US may have turned to Asean amid its trade feud with China, either from “a textbook demonstration of substitution effect”, or because the US tends to import finished products - rather than intermediate goods like semiconductors. “China’s ability to engineer a soft landing and establish a bottom will be key in driving an uptick in exports from the Asean bloc and beyond,” he added.
Emerging Asia bears brunt of global trade slowdown Nikkei Asian Review 3rd Mar 2019
Asian emerging markets are suffering a notable slowdown in trade, part of a global trend suggesting a loss of economic vigor that could outlast U.S.-China frictions. Emerging Asian countries, including China, logged a 4.6% drop in trade volume on the year in December, according to the Netherlands Bureau for Economic Policy Analysis, or CPB. This stands in sharp contrast to the 10.8% growth in October. The trade war has made companies hesitant to spend on capital investments, which has weighed on Southeast Asian and Japanese exports to China, said Sony Financial Holdings chief analyst Masaaki Kanno. A closely watched CPB index measuring world trade volume fell 1.4% on the year in December, marking its first decrease since January 2016. "There was a rush to get exports through before the U.S. raised tariffs on China, which likely ate into trade in the latter half of the year," Kanno said. Worldwide trade grew 3.3% in 2018, slowing from the 4.7% rise the year before, according to the CPB.
Southeast Asia's expansionary fiscal budgets put markets on edge Nikkei Asian Review 16th Feb 2019
Southeast Asian governments are expected to spend more this year as they try to prop up growth and address domestic challenges, unnerving market players who fret that heavier spending and falling government revenues will combine to upend the region's economy. Total government spending in six Southeast Asian countries -- Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam -- will likely exceed $500 billion in fiscal 2019, an increase of nearly $40 billion, or 8%, from the previous year at current exchange rates. The region's expansionary fiscal plans, however, pose an economic risk. According to a recent report by Citigroup, budget deficits are forecast to rise this year in Indonesia, the Philippines, Singapore and Thailand by 0.1 to 0.4 percentage points of gross domestic product, likely adding to swelling government debts. That, in turn, could affect their sovereign ratings, triggering a sell-off in local currencies and stocks. Any such swoon would be bad news this year, particularly as an economic slowdown may eat into tax revenues.
Navigating ASEAN’s economic priorities East Asia Forum 11th Feb 2019
Southeast Asian economies may face major economic headwinds this year amid US–China trade tensions and US Federal Reserve interest rate increases. To help weather the impact, ASEAN member states should prioritise progress on regional economic initiatives. Regional economies must brace themselves for future economic and financial turbulence. While they are unlikely to be able to avoid such headwinds, ASEAN member states can nevertheless cushion the impact through regional initiatives: the ASEAN Economic Community (AEC) 2025, ASEAN–Hong Kong Free Trade and Investment Agreements (AHKFTA and AHKIA), Regional Comprehensive Economic Partnership (RCEP) and Chiang Mai Initiative Multilateralization (CMIM). Policymakers should prioritise the complete implementation of the AEC 2025. This is a regional economic integration project by the 10 ASEAN member states designed to achieve five objectives: a highly integrated and cohesive economy; a competitive, innovative and dynamic ASEAN; enhanced connectivity and sectoral cooperation; a resilient, inclusive, people-oriented and people-centred ASEAN; and a global ASEAN. Advancing the AEC 2025 will enable businesses to better tap into the integrated market of over 600 million people, rendering regional economies more resilient to the incoming headwinds.
Southeast Asia bucks trend of sinking global foreign investment Nikkei Asian Review 4th Feb 2019
Southeast Asia is bucking the global trend of falling direct foreign investment, as the low-cost fast-growing region solidifies its position as an attractive location for multinationals. Asia received a third of global investment in 2018 and accounted for nearly all the year's investment growth, according to the United Nations Conference on Trade and Development. This is despite global foreign direct investment (FDI) declining 19% in 2018. Of the $694 billion in FDI that went to developing economies last year, $502 billion found its way to "developing Asia." And although the U.S. was the most favored destination, five of the top 10 FDI recipients were in the Asia-Pacific region: China, Hong Kong, Singapore, Australia and India. But Southeast Asia was the world's "main FDI growth engine" last year, according to UNCTAD, with inflows up 11% to a record $145 billion. Not only did FDI in the region top that of Europe, it was slightly more than what China received and almost three times as much as South Asia.
HSBC: Global headwinds create impetus for ASEAN integration vietnamplus.vn 11th Feb 2019
The threat of macro-economic headwinds dragging global growth should be the impetus ASEAN needs to push its reform agenda harder in 2019, according to a report recently released by the HSBC Group. Amid improving intra-regional flows to offset global trade slowdown, ASEAN economies could partly offset any trade downturns if supply chain diversion to Southeast Asia materialises, but increasing the ease in which goods and services flow across ASEAN will make the transition more widespread, it said.
ASEAN fast becoming a renewable energy hub The ASEAN Post 31st Mar 2019
Technological innovations and favourable government policies are among the four trends expected to drive Southeast Asia’s transition to renewable energy in the coming years. A report published by global auditing firm KPMG on Tuesday titled ‘The Renewable Energy Transition’ noted that while there are still 70 million ASEAN citizens without access to reliable electricity, the potential for renewable energy is huge in those markets and governments are increasingly turning to solar and wind energy to address the issue. Consumers driving the green agenda forward and the entry of new funds into the ASEAN renewable energy market are two other trends identified in the report. Each of ASEAN’s 10 members have set targets for renewable energy, and technological innovations such as better solar power efficiency and floating solar panels means that renewable energy is now more accessible than ever before. The World Bank, Asian Development Bank (ADB) and Japan Bank for International Cooperation are leading the way in renewable energy investment in the region, which has helped to bring prices down. While prices have often been a key concern, falling costs and rising demand are now helping to push the industry forward.
Japan carmakers angle for EV primacy in Southeast Asia Nikkei Asian Review 8th Mar 2019
Japanese automakers are moving to extend their iron grip on the Southeast Asian market into electric vehicles, starting with plans to build plug-in and hybrid offerings in Thailand. The Thai government has offered generous tax incentives to automakers producing plug-in hybrids and electrics in the country for applications submitted by the end of 2018. This has led a flurry of companies to flesh out plans. As the region grows wealthier, electrics are turning into a status symbol. Big Japanese names including Toyota Motor and Honda Motor are eager to tap this growing demand in one of their most important markets, while Thailand aims to become a production hub for environmentally friendly vehicles as it did with pickup trucks. Toyota Motor Thailand will begin local production of plug-in hybrids in the coming years, to be followed by EVs, local media report. It already makes conventional hybrids in the country, selling about 13,000 units here in 2018. As its first step into other eco-friendly cars, it will start assembling batteries in Chachoengsao Province this May. Plans are to initially import most of the components and gradually shift to more locally sourced parts.
The future of Southeast Asian cars is electric The ASEAN Post 2nd Feb 2019
The first image that usually springs to mind when someone mentions any Southeast Asian capital is that of congested roads filled with honking cars and motorcycles. Congested roads have become synonymous with Southeast Asia, and that is not going to change anytime soon. According to the latest data, vehicle sales in Southeast Asia is set to outpace all other regions in the world. As vehicle sales are expected to rise across the region, concerns over the environment have been raised. Since most vehicles in the region run on gasoline or diesel, they contribute significantly to the worsening air pollution in Southeast Asian cities. Electric vehicles (EVs) could however change all that. EVs, including hybrid electric cars can drastically reduce carbon emissions released into the environment. Compared to conventional cars that release unhealthy amounts of carbon dioxide, carbon monoxides and nitrogen oxides into the environment, battery-electric cars effectively produce zero-emissions from their tailpipes.
Asean's Power Landscape Expected to Transform in 2019 Jakarta Globe 24th Jan 2019
Member states of the Association of Southeast Asian Nations are on a path to transform their power landscapes as energy demand continues to rise to match the region's economic growth potential, a power management company said this week. "In the pursuit of a robust digital economy, Asean is heralding in an era of unprecedented innovation … 2019 will see power play an indispensable role in shaping the evolution of the region's economy," Ireland-based power management company Eaton said in a statement. In Southeast Asia, technology will have to meet increasing demand for clean, renewable energy and remote power management, support the arrival of 5G connectivity, and provide resilience against growing cyberthreats. Asean's evolving energy demand, which according to the International Energy Agency will grow by almost two-thirds by 2040, will go together with the projected boom in the region as part of the fourth industrial revolution.
Southeast Asia 'smart cities' redesign roads and grids with Japan Nikkei Asian Review 1st Jan 2019
Japan will help build "smart cities" across Southeast Asia, using artificial intelligence and networked devices to tackle problems like road congestion and energy conservation. The 10 member states of the Association of Southeast Asian Nations have drawn up a framework to develop environmentally friendly smart cities and have selected 26 locations for the program. Japanese Prime Minister Shinzo Abe pledged support for the program at an ASEAN summit in November. Tokyo intends to host a meeting with Southeast Asian nation officials as early as October to hammer out details of the cooperation. Support for Asian smart cities forms part of Japan's effort to provide an alternative to China's Belt and Road infrastructure initiative. Beijing has mobilized billions of dollars in loans for port and rail projects in developing Asian nations, but Tokyo takes a different approach, touting "quality" infrastructure assistance as a way to help countries build sustainable economic growth.
Top ASEAN nations seek to boost investment in local currency Reuters 2nd Apr 2019
The central banks of Thailand, Indonesia, Malaysia and the Philippines will chart out a framework this week to promote trade and investment in local currencies, in a latest move by emerging economies to trim exposure to volatile global markets. The four central banks will sign a letter of intent on a local currency settlement framework on Friday in the northern province of Chiang Rai, Thailand. The finance ministers and central bank governors of the Association of Southeast Asian Nations (ASEAN) plan to meet on April 4-5, according to the Bank of Thailand (BOT). “ASEAN currencies tend to move (in line) together, and so we are not subject to foreign exchange rate volatility of major currencies,” BOT Governor Veerathai Santiprabhob told Reuters late Monday. The central banks of Thailand, Indonesia and Malaysia had launched a similar framework in 2017, and will involve the Philippines this year. The use of local currencies among ASEAN nations will help save foreign exchange transaction costs for businesses amid volatility faced by currencies in advanced economies.
Rebuilding ASEAN’s financial safety net East Asia Forum 8th Feb 2019
Health & Life Sciences
Singapore and Indonesia signed a US$10 billion bilateral swap agreement (BSA) in October 2018, allowing the two countries to assist each other through US dollar loans during financial stress. The move signals a willingness by ASEAN countries to play a bigger and more direct role in strengthening the region’s financial stability — but there is still much more to do. The new BSA reflects increased unease among some ASEAN countries about the region’s existing financial cooperation arrangements. The most important is the Chiang Mai Initiative Multilateralisation (CMIM), a US$240 billion swap agreement among the ASEAN+3 countries (ASEAN plus China, Japan and South Korea). The CMIM was implemented in 2010 when multilateralism was on the rise and a new international financial architecture was taking shape. The new order involved sharing greater responsibility for crisis management between regional organisations and global institutions. In theory, the CMIM offers a strong and credible vehicle for crisis prevention and resolution. It provides a bigger pool of resources than pre-existing swap agreements between ASEAN and China, Japan and South Korea as well as the US$2 billion ASEAN Swap Agreement between ASEAN monetary authorities. By consolidating the network of BSAs under the CMIM, decision-making during crises is streamlined. By subjecting 70 per cent of emergency fund drawdown to IMF approval, the CMIM addresses the moral hazard problem associated with a multilateral fund. Still, there are increasing concerns among ASEAN members about the CMIM’s effectiveness and whether it represents the right financing arrangement for ASEAN. Specifically, there are concerns that the CMIM’s interests may not align with ASEAN’s.
Staying ahead of the healthcare game in Asia Asia-Pacific Biotech News 3rd Jan 2019
Collaboration between healthcare leaders in the public and private sectors through funding and various training avenues is what will help the medical industry overcome their challenges and drive the acceleration of the adoption of new, less-invasive technology. The wheels have been set in place around the region to ensure that access to quality health care improves. It is vital that both the public and private healthcare sectors continue this commitment in working together to stay ahead of the healthcare game. This ensures that the best care is made readily available across generations for a better future
Business News: Digital agility key to regional growth, Asean ministerial retreat in Phuket told The Phuket News 1st Apr 2019
A host of ministers and senior information and communications (ICT) officials attending the Asean Digital Ministers’ Retreat at the Banyan Tree Phuket resort at Laguna Phuket on Friday (Mar 29) were told that the Asean Digital Agility concept was vital for the development of the digital economy in the immediate future. Leading the retreat was the Thai and Minister of Digital Economy and Society, Dr Pichet Durongkaveroj. Joining the event was Asean Secretary-General Dato Lim Jock Hoi. “This meeting will be an important stage that Ministry of Digital Economy will show the potential of Thailand in the digital field in the Asean region, ready to drive the Asean region into a fully digital economy which if this adjustment occurs soon, it would have a positive effect on the economy of the entire region, especially Thailand, to benefit directly and ready to create prosperity for the people in a sustainable way,” Dr Pichet said. The meeting was held to unveil five key concepts that are to push the Asean region into the digital economy era, he noted. • Cybersecurity, to enhance the readiness and capacity to handle cyber threats such as Cyber War Game activities, cyber personnel training. • Connectivity and Mobility, focusing on data network linkage and the movement of people in the Asean region, such as submarine cable linking, the preparation of Asean biometric visas, international call rates (IMR Single Tariff). • Smart City, to continue the implementation of intelligent city development in the Asean region, including Asean intelligent city meetings, the creation of intelligent city information platforms • Digital Economy, to enhance the availability of digital ecosystems to attract investment in Asean, including digital information governance, privacy protection, online trade, Asean Single Window, among other aspects. • Manpower and Society Development, to develop the knowledge and abilities of people in the Asean region through digital activities such as Asean Startup, Hackathon, Social Media Guidelines Review, eSport, and so on.
Southeast Asia hastens 5G shift to close development gap Nikkei Asian Review 18th Mar 2019
Southeast Asian nations are scrambling to introduce 5G networks, determined not to fall behind developed nations as the technology is critical to innovations such as autonomous driving and digital medical services. Thailand and Vietnam plan to start 5G services as early as 2020, trailing rich nations by only a year or two. In contrast, they launched 4G services five years after their Western counterparts. The steep costs of 5G infrastructure weigh on telecommunications companies, which are still struggling with heavy spending on 4G technology. This factor may figure in their decisions on whether to exclude cheaper offerings from Chinese company Huawei Technologies, as urged by the U.S. Singapore, which is a regional leader in 5G, said in July that its Singapore Telecommunications had teamed up with Ericsson to test 5G networks. Singtel is also working with Garuda Robotics on drones for security and package delivery. The government plans to use 5G, which offers seamless data transmission, to install about 100,000 smart streetlights equipped with sensors and surveillance cameras. It is also expected to harness the technology for communications involved in automated driving. In Myanmar, where 4G service was fully launched only in 2017, the government aims to shift toward 5G by assigning mobile providers portions of the new spectrum early in the next decade. Health care consultancy Golden Zaneka is exploring telemedicine for rural areas to close the gulf in service with large cities. While most Southeast Asian countries are expected to maintain that course, Vietnam is in a somewhat different position. The Viettel Military Industry and Telecoms Group plans to begin its 5G pilot network this year and aims to develop its own base stations.
Southeast Asia eclipses China as world's mobile economy hot spot Nikkei Asian Review 12th Feb 2019
Southeast Asians are outpacing the Chinese in embracing the mobile economy, with higher percentages of the population in several countries using smartphones to do their banking, to shop and hail rides. China may be home to giant e-tailers like Alibaba Group Holding, but Indonesia has the world's highest mobile e-commerce penetration rate, a new report reveals. Thailand leads the way in mobile banking penetration, while Singapore is ride-hailing central -- two fields in which China doesn't even crack the top five. The findings explain why investment money is steadily pouring into Southeast Asian startups. That money is fueling a digital revolution that has already made the region one of the world's most powerful growth drivers, while China grapples with a worsening slowdown.
Japan makes infrastructure push into Southeast Asia Nikkei Asian Review 19th Feb 2019
Japan Inc. is launching a plan intended to make it a bigger development player in Southeast Asia, a region increasingly awash in Chinese money. Cambodia is to be the first landing spot for the initiative, with about 60 Japanese trading companies, banks, general contractors and other parties already aboard. Through bilateral talks, Tokyo intends to advance urban development with focuses on the environment and so-called smart city infrastructure. Japan's broader strategy is to deliver its solutions to the Association of Southeast Asian Nations. The Asian Development Bank expects the region's infrastructure demand over the 30 years from 2016 to reach $3.1 trillion. The Ministry of Land, Infrastructure, Transport and Tourism this month will set up a framework to bring the project to Cambodia. Talks with the Philippine government have also begun. In the bilateral talks, Japan will ask partner nations to adopt more transparent administrative procedures and take other steps to make it easier for Japanese companies to operate. Corporate executives are to join the talks to nail down the details of technical cooperation. The recipient countries will decide on relatively underdeveloped areas that they want to benefit from Japan's technical assistance. The Japanese ministry plans to hold technical seminars and business matching opportunities for local and Japanese companies.
ASEAN and China struggle to buckle the belt and road East Asia Forum 26th Jan 2019
China’s ambitious Belt and Road Initiative (BRI) continues to draw criticism and disapproval. Its sceptics brand it as China’s Marshall Plan or as a ‘neo-imperial project’. To ensure the initiative’s success, China should heed some of these concerns and take steps to improve the implementation of BRI-related projects. Doing so is particularly important in ASEAN — a region that stands to greatly benefit from BRI investment, if done right. ASEAN is the world’s sixth-largest economy with a total GDP of more than US$2.5 trillion. Economies across the region are growing steadily at an average annual rate of around 5 per cent. Sustaining this growth requires the region to meet its growing infrastructure needs, which are estimated to amount to US$2.8 trillion from 2016 to 2030. China’s BRI is important for ASEAN because it can help to fund and meet the region’s infrastructure needs. It also supports the success of the ASEAN Community Vision 2025 and Master Plan on ASEAN Connectivity 2025 initiatives.
Access to capital hampers smart city creation in the region Bangkok Post 15th Apr 2019
Access to capital is the most critical barrier for developing smart cities in Asean nations, including Thailand, as countries struggle to find alternative sources of investment for infrastructure projects with high upfront costs. The government, through the Digital Economy Promotion Agency (Depa), is urging cities to collaborate with the private sector to form a city development company through a public-private partnership (PPP) to secure funding for development projects. More importantly, the PPP model would enhance the use and management of assets in cities as well as embrace innovative businesses, accelerating the path to becoming a smart city or a city filled with sensors that collects data to optimise utilities like power grids and traffic lights. The city development company model has already been established in Phuket, Chiang Mai and Khon Kaen. Passakon Prathombutr, senior executive vice-president and chief technology officer of Depa, said partnerships with the private sector in any province is the key to success. Local firms should collaborate on developing smart infrastructure by sharing data and brainstorming innovative ways to tackle cities' major challenges.
ASEAN manufacturing PMI improves in March Nikkei Asian Review 1st Apr 2019
Manufacturing activity in ASEAN economies improved slightly in March thanks to a rebound in new orders and higher output, according to a survey. The Nikkei ASEAN Manufacturing Purchasing Managers’ Index, or PMI, rose from 49.6 in February to 50.3 in March, moving above the 50 point line that separates growth from contraction. The growth was supported by a slight rebound in new orders, the first time recorded in 2019. Myanmar continued to log the strongest rate of expansion, at 52.4, followed by Vietnam and the Philippines. The weakest reading was Malaysia at 47.2. “The survey found that a slight rise in sales and production growth lifted business sentiment,” said David Owen, Economist at IHS Markit, which compiles the survey. “Nevertheless, this still left the average PMI reading for the quarter at its lowest since Q4 2016.”
Southeast Asia PMIs point to widespread weakening factory growth Financial Times 28th Feb 2019
Manufacturing growth gauges from around Southeast Asia pointed to either sharper contraction or softer growth on Friday as export orders weakened throughout the region. Indonesia was the sole country for which the corresponding Nikkei-Markit manufacturing PMI notched an improvement, rising to 50.1 in February, just above the 50-point line separating expansion from contraction, from just below it in January. Most other countries were less fortunate: Thailand’s manufacturing sector fell into slight contraction (49.9) and Malaysia’s shrank at a faster pace (47.6), while Vietnam’s manufacturing growth slowed (51.2), as did that of the Philippines (51.9). Those dips helped take Nikkei’s Asean manufacturing purchasing managers’ index to 49.6, marking the first back-to-back contraction for the region in more than two years. “Asean manufacturing firms hoping to see a rebound in sales were disappointed in February, with survey results pointing to lacklustre demand once again,” said David Owen, an economist at IHS Markit. “Export orders continued to deteriorate, although US-China trade talks may offer some relief to producers. Input price inflation remained notably weak as well, allowing firms to maintain strong balance sheets during this difficult period.”
Singapore manufacturing slump portends regional slowdown Nikkei Asian Review 26th Feb 2019
The worldwide slump in smartphone sales and the slowing semiconductor cycle have been increasingly weighing on Southeast Asia, with official manufacturing output figures weakening across the region. On Tuesday, Singapore’s Economic Development Board announced that the country’s manufacturing output for January dropped 3.1% from a year earlier, making it the first year-on-year decline since December 2017 and the sharpest fall since July 2016. December’s figure was plus 2.7%. The main sector that dragged down the figure was electronics, which marked a 13.7% decline from a year prior, worsening from December’s drop of 11.5%. Semiconductors specifically, the biggest weight in the electronics segment, dropped 14.2%. The precision engineering sector also dropped 15.7%, worsened from the 7% drop in December. The government agency cited “lower production of semiconductor equipment” for the slump. Singapore, as a city-state with limited land, focuses on these high-end manufacturing products. But at the same time, as a small and open economy, Singapore is more exposed to global trends than neighboring countries. Most nations in Southeast Asia have not released official manufacturing figures for January yet. But the data through December already shows the weakening trend.
Travel & Tourism
Southeast Asia eases visa rules to counter fall in Chinese tourists Nikkei Asian Review 1st Mar 2019
Southeast Asia is responding to a drop in tourism from China, its largest source of arrivals, by offering easier visa procedures to visitors from countries in Europe, Latin America and elsewhere in Asia. Thailand, the region's most popular destination, received 38 million international tourists in 2018. In January, the kingdom extended a waiver of the 2,000 baht ($64) fee for visa-on-arrival for tourists from 21 countries and regions, including China, India and Saudi Arabia, through April 30. It began the waiver last December. Vietnam in February added 35 countries, including Brazil, Qatar and Belgium, to the list of those whose nationals can enter with e-visas. Cambodia has announced that it will soon issue three-year multiple entry visas for Chinese and South Koreans, according to a report by Chinese state-owned news channel CGTN. Tourism is important to Southeast Asia's economy, contributing 12% to gross domestic product in Thailand, 6% in Malaysia in 2018 and 16% in Cambodia in 2017.
Tourism gets a boost with e-wallets The ASEAN Post 22nd Jan 2019
The internet has changed the way most of us live. Through internet related technological innovations such as the Internet of Things (IoT), big data and e-commerce, a lot of our day to day tasks have been made easier. Such innovations could also boost many industries, making it easier for those who engage in certain types of business to carry out their tasks. The mushrooming of e-wallets in Asia – particularly Southeast Asia – could be useful for the tourism industry. E-wallets or digital wallets allow an individual to make cashless electronic transactions. E-wallets are usually linked to your bank account, credit cards and some can even store cryptocurrencies.