Indonesia

Surprise Rate Hike by Bank Indonesia due to Widening Current Account Deficit (15 Nov)

Indonesia’s central bank surprised observers with its sixth rate hike in 2018, bringing its benchmark rate to 6%. Bank Indonesia Governor Perry Warjiyo explained that the hike was aimed at reducing the current account deficit and strengthening the attractiveness of Indonesian assets in anticipation of US rate hikes. Indonesia’s current account deficit had widened from 3.02% in Q2 2018 to 3.37% in Q3.

Sources: Nikkei Asian Review, Channel NewsAsia, Bloomberg

Prabowo’s Promises to Lower Taxes, Seek Self-Sufficiency for Indonesia (15, 21 Nov)

Presidential candidate Prabowo Subianto has promised to reduce corporate and personal income tax rates if elected president in 2019, in a bid to compete with low-tax neighbours like Singapore. For comparison, the island nation has a corporate tax rate of 17% and a top personal income tax rate of 22%, while Indonesia’s rates are 25% and 30% respectively. He also outlined a “big push strategy” to make Indonesia self-sufficient in food, energy and water at the Indonesia Economic Forum on 21 November.

Sources: The Jakarta Post, The Straits Times

A New Stimulus Package to Weather External Shocks (16 Nov)

The Indonesian government announced the 16^th economic package to relax regulations pertaining to investment. Its contents include a new tax holiday with increases in categories, duration and applicable amounts; the opening of 54 and 33 business sectors to full and partial foreign investment respectively; and income tax cuts for exporters who deposit their earnings in domestic bank accounts.

Sources: The Jakarta Post, The Straits Times

Malaysia

Conclusion to a Messy PKR Election Season (16-18 Nov)

The eventful PKR elections came to a close last week, with incumbent Deputy President Azmin Ali hanging on to his position despite stiff competition from his opponent, Rafizi Ramli. Looking forward, Party President Anwar Ibrahim will have to address the messy conduct of the elections, which included accusations of misconduct and violence. Observers should also monitor the new dynamics within PKR closely, with Anwar expressing a hope for Rafizi to remain in a leadership position.

Sources: The Straits Times, Malay Mail

PM Dr Mahathir Denies Rumours of a Cabinet Reshuffle (15 Nov)

Prime Minister Dr Mahathir Mohamad denied that he was considering reshuffling his cabinet, saying that he was giving underperforming ministers a chance. Rumours of a reshuffle had emerged following reports that Dr Mahathir was unsatisfied with his cabinet’s performance, as well as a Straits Times interview on 13 November in which he expressed openness to the idea of a reshuffle.

Sources: The Star (10 Nov, early speculation), The Straits Times, New Straits Times

UMNO Flirts with a Merger with PAS (19 Nov)

After uniting in opposition to issues such as the ratification of the International Convention on the Elimination of All Forms of Racial Discrimination (ICERD), UMNO and PAS have ostensibly taken another step towards a formal political alliance with the creation of a special committee to find common grounds on Malay and Muslim issues. Furthermore, UMNO President Ahmad Zahid Hamidi called for a merger between the two parties at a gathering on 17 November. Whether PAS shares the same sentiments remains to be seen.

Sources: Free Malaysia Today, The Straits Times

Myanmar

Myanmar announces creation of new investment-focused government ministry (19-21 Nov)

President U Min Wyint announced on Wednesday that a new Ministry of Investment and Foreign Economic Relations would be created, with Myanmar Investment Commission (MIC) Chair U Thaung Tun at its head. Approved by Myanmar’s parliament in a vote passed on Monday, the new ministry will inherit jurisdiction over the Directorate of Investment and Company Administration (DICA), and the Foreign Economic Relations Department, which were previously managed by the Ministry of Planning and Finance (MoPF). An initiative the new ministry is to oversee is the creation of a ‘single window system’ which would allow companies to apply for and complete all necessary administrative procedures in a single centralised location or organisation.

Sources: Frontier Myanmar, Myanmar Times

Rohingya repatriation plans fail due to lack of interested returnees (15-18 Nov)

Plans to begin repatriating Rohingya refugees from Bangladesh have broken down due to an apparent lack of willing returnees. Physical arrangements had been made by both the Myanmar and Bangladesh governments to facilitate the beginning of the return process. However, Bangladesh has pledged that it would not force Rohingya unwilling to return to Myanmar to do so. Many Rohingya refugees consider a guarantee of formal citizenship that Myanmar is unwilling to provide a prerequisite for their return. UN agencies and aid groups also remain unconvinced that the safety of returning Rohingya can be guaranteed. Abul Kalam, Bangladesh’s refugee relief and repatriation commissioner, has since noted that the situation is likely to only be revisited in 2019, after the Bangladeshi General Elections on 30 December 2018.

Sources: Associated Press, Reuters, Reuters

Myanmar faces recriminations at ASEAN summit, but neighbours remain supportive (11-15 Nov)

The Chairman’s Statement issued at the 33^rd ASEAN Summit in Singapore took the unusual step of describing the humanitarian situation in Rakhine State as a “matter of concern”. This uncharacteristic departure from ASEAN’s usual policies of non-interference came alongside vocal criticism of Myanmar’s handling of the situation from Malaysian Prime Minister Dr Mahathir Mohamad. The Statement nevertheless concluded by reaffirming ASEAN’s fundamental support for Myanmar’s efforts to address the situation in Rakhine State. Myanmar’s State Counsellor Daw Aung San Suu Kyi also faced further criticism from US Vice-President Mike Pence, who was in attendance at the event. Chinese Premier Li Keqiang was more supportive in his meeting with the State Counsellor, however, with China making a general offer of support for Myanmar and Bangladesh’s efforts.

Sources: Nikkei Asian Review, Reuters

Thailand

As ASEAN Chair, PM Prayuth Promises to Push for Connectivity and Sustainability (13 Nov)

Thai Prime Minister Prayuth Chan-ocha revealed his vision for Thailand’s ASEAN chairmanship at the close of the 33^rd ASEAN Summit last week. With the theme of “Advancing Partnership for Sustainability”, he said that Thailand’s key priorities will be boosting connectivity in infrastructure, regulations and people-to-people links, as well as sustainability in security and economic growth.

Sources: Bangkok Post, The Straits Times

New Cybersecurity Law Draws Concern from Businesses (12 Nov)

A proposed cybersecurity law that would extend the powers of the Thai National Cybersecurity Committee (NCSC) has unsettled activists and businesses. While the draft law does not contain specific provisions about “fake news”, it would give the NCSC sweeping powers over online content without judicial oversight. The Asia Internet Coalition, which represents companies such as Google, Apple, Facebook and Amazon, sent the Ministry of Digital Economy and Society a detailed series of their concerns regarding the law.

Sources: Bangkok Post, Reuters, Comments from AIC

PM Prayuth Insists Cash Handouts Are Not Politically Motivated (21 Nov)

The Thai government will be issuing 63 billion baht (US$1.9 billion) worth of cash handouts to low-income earners, the elderly and retired government officers. Responding to comments that the announcement was made close to the February 2019 election, PM Prayuth insisted that the timing is “just a coincidence”.

Sources: Bangkok Post,

Q3 GDP Growth Disappoints as Exports and Tourism Slow (19 Nov)

Thailand’s economy grew at a slower-than-forecasted pace of 3.3% (year on year) in Q3, below Reuters’ projections of 4-4.2%. Exports, which account for more than 60% of Thailand’s GDP, fell 5.2% in September due to trade tensions. The number of Chinese tourists fell 8.8% as well, due to the fallout of the boating accident off Phuket in July. This slower growth may in turn complicate efforts to address the large proportion of non-performing loans among Thai small and medium enterprises (SMEs).

Sources: Financial Times, Nikkei Asian Review, Bangkok Post