[PREMIUM] Country Updates (28 Oct-10 Nov)

Malaysia

Malaysia unveils largest national budget to kickstart economic recovery in 2022 (29 Oct)

Malaysia plans to spend $80.06 billion, with a deficit of 6% projected, in 2022. Budget 2022, the largest budget to date, is a wide-ranging plan which includes cash aid for low-income citizens, subsidies for basic food and fuel, aid for SMEs and tax deduction for businesses. Finance Minister Zafrul Abdul Aziz said the Budget supports three main pillars, “strengthening recovery, building resiliency and driving reforms”. The government is expecting a GDP growth of 5.5% to 6.5% in 2022, driven by the reopening of the economy and higher commodity prices.

The 2022 budget is the first major policy initiative introduced by Prime Minister Ismail Sabri’s government, who took office in August. He signed an unprecedented Memorandum of Understanding (MOU) with the opposition to quell political fighting. The opposition was largely muted about the 2022 budget, but former Prime Minister Mahathir said the high allocation for the budget would cause the country to accumulate more debt and said, “the culture of corruption has returned to Malaysian politics”.

Sources: Straits Times; Bloomberg; SCMP; CNA

All 28 seats in the Melaka state assembly sees multi-cornered fights (8 Nov)

The state election in Melaka will see three-way fights in all 28 constituencies in the 20 November polls. There are six-way contests for three seats, according to the Election Commission officials as nominations closed on 8 November. The state election is largely seen as a prelude to the upcoming general election, scheduled to be held by 2023, as the UMNO-led coalition contests under the Barisan Nasional banner instead of the Perikatan Nasional (PN) alliance. The PN alliance includes Parti Pribumi Bersatu Malaysia (Bersatu), helmed by ex-Prime Minister Muhyiddin Yassin and Parti IslamseMalaysia (PAS). UMNO, Bersatu and PAS currently form the ruling coalition at the federal level but failed to unite for the Melaka elections after UMNO’s president Ahmad Zahid Hamidi said it would not work with Bersatu.

While Malaysia has largely reopened its economy and inter-state borders, the federal government has banned political gatherings. Political rallies and physical campaigning are not allowed to prevent a surge of COVID-19 infections, as was seen during the Sabah state elections in September 2020. Sarawak is expected to hold its state election at the end of the year if the Melaka election goes smoothly.

Sources: Straits Times; Malay Mail; Straits Times (2); CNA ; New Straits Times

Singapore-Malaysia launches vaccinated travel lane (9 Nov)

Malaysia and Singapore will launch a vaccinated travel lane from 29 November 2021. The travel lane will be the first step towards reopening borders, and will see the resumption of the busiest air route in the world prior to the pandemic. Six designated flights will fly between Changi Airport and Kuala Lumpur International Airport daily. Malaysia expects the scheme to offer a boost to its aviation industry, which has been decimated by the lockdown measures.

Singapore Prime Minister Lee Hsien Loong and Malaysian Prime Minister Ismail Sabri said that the decision to launch a vaccinated travel lane is timely and cross-border travel will resume in a safe manner. There are plans to further expand the VTL scheme to include land borders in the future.

Sources: Straits Times; SCMP; Straits Times (2) 

Indonesia

Indonesia further reduces quarantine period for foreigners and proposes vaccinated travel lane with Australia (2 Nov)

In a further step towards reopening borders, Indonesia has reduced the quarantine period for foreigne visitors and returning Indonesians to three days from five. All visitors need to be fully vaccinated and produce a negative PCR test result on arrival in Indonesia. Indonesia currently allows fully vaccinated travellers from 19 countries including China, New Zealand and the UAE, to visit Bali and Riau Islands.

Meanwhile, President Jokowi has proposed to introduce a vaccinated travel lane with Australia to boost tourism and economic relations between both countries. Such an arrangement would enable fully vaccinated visitors from Australia to visit Indonesia (and vice versa) without having to serve quarantine.

Sources: The Star, Straits Times; Bloomberg

UAE to invest $32.7 billion in Indonesia (7 Nov)

The United Arab Emirates (UAE) will invest US$32.7 billion in various sectors such as vaccine development, energy, financial services and smart city initiatives in Indonesia. The investments were announced during President Jokowi’s visit to the UAE to deepen bilateral relations. Foreign Minister Retno Marsudi said 10 agreements, including investment promotion and tourism, will be signed between the Indonesian government and the UAE government. National oil company, Pertamina, will also sign a deal on floating solar panels with Masdar, a renewable energy company based in Abu Dhabi. Bilateral trade between the UAE and Indonesia was valued at $2.5 billion in 2020, and both countries hope to triple that in the next four years.

Both countries have agreed to expedite the signing of the comprehensive economic partnership agreement (CEPA), and the deal is expected to be signed in March 2022. The agreement is part of the UAE’s strategy to invest in fast-growing countries such as South Korea and Turkey.

Sources: Straits Times; The Star; Tempo; The National

Myanmar

Initiatives by the Myanmar’s National Unity Government to fund revolution (5 Nov)

This month, Myanmar’s civilian National Unity Government (NUG) will start selling bonds to fund the revolutionary movement against the junta. It aims to raise US$1 billion from the two-year bonds valued at $100, $500, $1,000 and $5,000, and which do not offer interest.

The pro-democracy movements have relied on donations to fund their activities since the coup in February. Excluding military spending, the NUG hopes to raise at least US$800 million for social and humanitarian support. This includes health care, social care, education and funding for military personnel and police officers who have defected. The NUG has initiated three ways for supporters to contribute financially: lottery ticket sales, voluntary tax and bonds.

Notably, in August, the NUG introduced a pilot project of selling “Spring Lottery” tickets online to support the civil disobedience movement (CDM) and this helped support 5,800 staff who participated in the CDM. On 5 November, the NUG will officially commence its commercial launch of its lottery and aims to secure US$11 million (20 billion kyats) to support 200,000 CDM staff. Last month, the NUG invited individual and corporate taxpayers to voluntarily pay tax online through a self-assessment process, after the Committee Representing Pyidaungsu Hluttaw (Union Parliament) approved the Union Taxation Law in September.

Source: The Irrawaddy, Nikkei Asia

Veteran U.S. diplomat Bill Richardson criticised after trip to Myanmar (7 Nov)

Veteran U.S. Diplomat Bill Richardson visited Myanmar in his private capacity in early November. During a meeting with Military Chief Senior General Min Aung Hlaing, parties discussed increasing supplies and the delivery of food, vaccines and humanitarian aid. Richardson expressed that if the humanitarian situation and vaccine access improves, this could pave the way for political reconciliation. Richardson said that while discussions were productive and positive, military chief Min Aung Hlaing did not make any promises during their talks.

Since the 1990s, Richardson had made numerous trips to Myanmar, engaging with both the military generals and Aung San Suu Kyi. He had been an ally to the Lady but later became her critic when the country made little progress on the Rohingya issue under her leadership.

His latest visit made him the most prominent Western figure to meet with Myanmar’s general since the coup in February but his decision to engage with the junta drew criticism from rights activists who felt that Richardson gave them legitimacy as the country’s rulers. Further, while Richardson was able to secure the release of Ma Aye Moe, a former employee of his nonprofit group, the Richardson Center for Global Engagement, he was also criticised for failing to secure the release of other prisoners including Danny Fenster, an American journalist hit by three criminal charges since the coup.

Sources: Straits Times, New York Times

Thailand

Thailand reopens borders but a full tourism recovery looks unlikely (8 Nov)

Over the past week, Thailand has welcomed more than 12,000 travellers mostly from 63 countries which have been exempted from quarantine or area restrictions. There have been some technical problems on the Thailand pass meant to ensure immediate approval for those who satisfy entry requirements, but the Foreign Ministry has committed to making improvements to its interface. If the current momentum continues, the total number of incoming travellers this month is likely to overtake total arrivals for the past 19 months. This may help create a positive outlook for Thailand’s battered travel industry, although numbers still remain a far cry from the pre-pandemic era, which saw a monthly average of over 3 million tourists visiting Thailand.

Experts estimate that tourism may gradually recover but brighter prospects will only be seen around Q2 2022. This cautious estimate is due to the need to neaten and stabilise policies and regulations. Time is also needed for workers to regain confidence and return to work in the travel industry. There is also the concern that tourists remain deterred from travelling to Thailand despite its quarantine exemptions as they still need to serve a mandatory quarantine upon return to their home country. Moving forward, the country has plans to create a new national tourism structure that prioritises quality spending over head count. However, some caution that the policy of creating high-value tourism might cause concerns over inequalities to arise among local communities.

Source: Bangkok Post (1), Bangkok Post (2), Financial Times

Suan Dusit Poll: Most say time is ripe for new election  (31 Oct – ongoing)

According to a Suan Dusit Poll conducted between 25 to 28 October, approximately 70% of more than a thousand people surveyed throughout the country say that time is now ripe for a general election, preferably in early 2022. Asked which political party they thought would win the most MPs in the election, most (32.94%) chose the Pheu Thai Party. 25.21% chose the Move Forward Party; 24.61% chose the incumbent Palang Pracharath Party; 6.18% chose the Democrat Party; and 4.28% chose the Bhumjaithai Party.

In addition, when asked to name the person they wanted to be Prime Minister if there was a new election, most (28.67%) chose Pita Limjaroenrat, leader of the Move Forward party, and only 21.27% chose Gen Prayut Chan-o-cha.

Source: Bangkok Post, The Thaiger

Calls to review application of Lese Majeste law (5 Nov)

This week, the opposition Pheu Thai party re-ignited discussions on the notorious Lese Majeste law, proposing a parliamentary review of its application. Stirring the debate was influential tycoon and self-exiled former premier Thaksin Shinawatra, Pheu Thai’s de facto founder, whose youngest daughter, Ms Paetongtarn Shinawatra, recently made her first public foray into politics, taking the role of head of Pheu Thai’s Inclusion and Innovation Advisory Committee. The discussions were shot down by Thai royalists but were supported by other opposition parties including Move Forward and the Seri Ruam Thai, who also accuse the government of abusing the royal law to go after opponents. While some prominent figures such as Thaksin only called for a review in its application, there are other leaders who are pressing for a complete abolishment of the law.

Source: Reuters, Straits Times

Vietnam

Vietnam sets plan to resume international travel in 2022 (5 Nov – ongoing)

Vietnam’s Ministry of Transport has put forward a plan to resume international flights in 2022. The plan will be executed in three phases with the first phase opening to 13 countries including Singapore, Malaysia, Laos and Cambodia. Fully vaccinated travellers will still need to undergo a 7-day quarantine while those not fully vaccinated will face 14 days of quarantine. The second phase targeted for the second quarter will begin recognition of a “vaccine passport” where visitors can isolate themselves at their places of residence. The third phase likely in the third quarter may see regular international flights to and from Vietnam.

Tourism authorities have already begun a pilot program this month to open up five tourist destinations of Phu Quoc island, Khanh Hoa, Quang Nam, Da Nang, and Quang Ninh. Before the Covid-19 pandemic, tourism revenue in 2019 was USD 31 billion or 12% of GDP. Foreign visitors to Vietnam fell from 18 million in 2019 to 3.8 million last year.

Sources: VGP, Reuters, VNExpress

Vietnam races to reopen factories and resume production but faces labour and logistics crunch (3 Nov – ongoing)

The easing of lockdowns in Vietnam brought the country’s manufacturing sector back to growth in October. IHS Markit’s Vietnam manufacturing PMI jumped back to 52.1 from 40.2 in September, signalling growth of manufacturing activity after a five-month slump. Nike that has felt the squeeze in production saw 200 contracted factories resuming operations.

However, shortages of labour are causing pressure on production capacity after many workers moved back to their hometowns amid tight restrictions. One Nike supplier is offering $100 bonuses to workers, about a quarter of an average month’s pay. Companies are also facing high packaging and transportation costs and have had to pay workers overtime wages to fulfil its export contracts.

Vietnam has increasingly become an attractive destination to produce electronics and textiles. Annual exports have climbed almost twentyfold in the past two decades, reaching $283 billion in 2020

Sources: Vietnam News, Reuters, Bloomberg, Vietnam News 2