The Novel Coronavirus Outbreak

More Governments Restrict Travellers from China

As the Novel Coronavirus outbreak develops, more governments are instituting temporary travel restrictions to and from mainland China. Australia and Italy joined the United States in denying entry to non-citizens who had travelled to China. Within ASEAN itself, the countries that implemented travel restrictions against China are:

• Singapore | Total ban on visitors who have been to mainland China within the past 14 days | Effective 2 Feb
• Indonesia | Total ban on visitors who have been to mainland China within the past 14 days | Effective 3 Feb
• The Philippines | Total ban on visitors who have been to China (including Hong Kong and Macau) within the past 14 days | Effective 3 Feb
• Vietnam | Total ban on visitors who have been to mainland China (initially included Hong Kong and Macau, but later reversed the decision) within 14 days | Effective 1 Feb
• Myanmar | Suspension of visa-on-arrival packages for Chinese visitors (Chinese tourists can still apply for e-visas) | Effective 1 Feb
• Malaysia | Partial ban on visitors who live in Hubei province | Effective 27 Jan

Sources: The Straits Times, SCMP, The Jakarta Post, CNN, SCMP, Malay Mail

Hua Chunying, spokesperson for China’s Ministry of Foreign Affairs, criticised “some countries, the US in particular”, for overreacting with regards to travel bans on Chinese visitors. She also pointed out that the World Health Organisation, despite declaring the outbreak a global emergency, expressed opposition to the use of travel bans. In response to such remarks, Singaporean Home Affairs Minister K Shanmugam argued that the government implemented the travel ban due to the island’s dense population. He dismissed notions that the ban was based on nationality, and spoke out against reports of xenophobic actions against Chinese nationals.

Sources: Today Online, Today Online

Outbreak Leads Observers to Rethink 2020 Outlook

Observers are expressing concerns that the coronavirus will weigh on global and regional economic growth in 2020. Goldman Sachs estimated a hit of 0.1-0.2 percentage points to global gross domestic product (GDP) under a baseline scenario where the outbreak peaks in February and March. In a more severe scenario, where the peak does not arrive until the second quarter of 2020, the hit could rise to 0.3%. Within ASEAN, economists from Maybank Kim Eng are warning that the economies of Singapore and Thailand are set to be the hardest hit by the outbreak. This is due to their dependence on China for trade and tourism, and the result could be even more economically damaging than the SARS outbreak in 2003.

Sources: FT, Today Online, The Straits Times

Indonesia

Omnibus Laws Hit Speedbump (23 Jan – Ongoing)

 The pragmatic reform programme of President Joko Widodo “Jokowi” has entered a new stage as one of his touted omnibus bills reached the House of Representatives. The four bills were a bid by Jokowi to raise Indonesia’s attractiveness as an investment destination. They include bills on taxation (which is currently with the House), job creation, small and medium enterprises (SMEs) and the development of the new capital city. However, progress has been slow. The first draft of the bills was only completed in January. Meanwhile, opposition to the bill on job creation, which would have amended portions of the labour law, has simmered since December 2019, with unions complaining that the government did not consult labour during the drafting process.

Jokowi still aims to have the bills passed within 100 working days of their submission. However, the four bills are part of a lengthy agenda of 50 bills that comprise the House’s 2020 National Legislation Programme. Observers have also expressed that the current system, which invites members of the public to provide feedback on the bills, could lead to a much longer deliberative process.

 Sources: The Straits Times, Nikkei Asian Review, The Jakarta Post, The Jakarta Post

Harun Masiku Scandal Deepens as Law Minister Put in the Hot Seat (23 Jan – Ongoing)

 The scandal surrounding Indonesian Democratic Party of Struggle (PDI-P) politician Harun Masiku took a new turn as Law and Human Rights Minister Yasonna Laoly came under scrutiny. Corruption Eradication Commission (KPK) investigators had tried to apprehend Harun, who was implicated in bribery allegations, during a raid on 8 January. The KPK and Yasonna claimed that Harun had left Indonesia for Singapore on 6 January, and the Immigration office said that it had not recorded Harun’s return to Indonesia. However, investigative reporting by Tempo magazine found that Harun had returned the Jakarta a day before the raid was conducted, and the Immigration Office later admitted that the newspaper’s findings were accurate. As a result, Director General of Immigration Ronny Sompie was dismissed from service on 25 January.

Attention has now turned to Yasonna himself. The minister, also a member of PDI-P, maintains that Ronny misled him about Harun’s whereabouts. Nonetheless, he was reported to the KPK by anti-graft activists for allegedly obstructing justice by concealing information about Harun’s whereabouts. Yasonna denied the accusation, and announced the creation of an independent fact-finding team to investigate the issue. He also said that he is ready to resign from his ministerial seat if Ronny was found not guilty of covering up Harun’s whereabouts.

 Sources: The Jakarta Post, The Jakarta Post, Jakarta Globe, The Jakarta Post

FDI in Indonesia – Lower than Expected in 2019, But Bright 2020 Ahead (29 Jan)

 Indonesia’s Investment Coordinating Board (BKPM) Chief Bahlil Lahadalia noted that foreign direct investment (FDI) in to Indonesia in 2019 fell short of the targeted amount, but he is confident that investors will become more interested in the country after reforms are completed. Indonesia received US$28.2 billion in incoming FDI excluding investment in banking and oil and gas, short of the target by roughly US$4 billion. The total was also slightly lower than that of 2018, which amounted to US$29.3 billion. Singapore remained the country’s biggest investor, followed by China and Japan. For 2020, Bahlil is aiming for FDI to make up 55% of an overall investment target of US$65 billion, or US$35.8 billion. He also remarked that Jokowi had entrusted him with lifting Indonesia’s ease of doing business ranking from 73^rd place to the top 50 by 2022, and said that he would resign if he could not reach this target in four years.

 Sources: Today Online, Jakarta Globe

Malaysia

Trouble in PKR as Zuraida Comes Under Investigation (23 Jan – Ongoing)

An ongoing issue involving Parti Keadilan Rakyat (PKR) Vice President Zuraida Kamaruddin is exacerbating internal divisions within her party. Zuraida was issued a show-cause letter by the PKR disciplinary committee on 18 January over a speech she gave in December that criticised party President Anwar Ibrahim. She was also issued a letter of demand by Secretary General Saifuddin Nasution over alleged defamation made against him during the same speech. As Zuraida is an ally of Deputy President Azmin Ali, the issuance of the show-cause letter caused a stir. On 22 January, 46 PKR leaders (15 MPS, 28 state assemblymen and Azmin himself) called for the action against Zuraida to cease. On 2 February, 87 PKR members who were former leaders in the Youth wing declared their support for Anwar and the investigation by the disciplinary committee. Zuraida responded to the letter on 29 January, though some expect her to leave the party if the investigation intensifies.

Sources: Free Malaysia Today, Malay Mail, Malay Mail, Malay Mail, Malaysiakini

AirAsia Comes Under Investigation for Taking Bribes from Airbus (1 Feb – Ongoing)

Asia’s largest budget airline group, the Malaysia-based AirAsia, has become the subject of an investigation over alleged bribes from Airbus. On Friday, 31 January, Airbus disclosed as part of an investigation by France, Britain and the US that its then-parent company EADS had paid US$50 million to sponsor a football club jointly owned by two AirAsia executives between October 2013 and January 2015. In return, the executives allegedly ordered 180 aircraft from Airbus. Malaysia’s Anti-Corruption Commission (MACC) announced that it is investigating these allegations, and the country’s securities regulator will also examine whether AirAsia broke securities law. AirAsia rejects all allegations of wrongdoing, but owner Tony Fernandes and his business partner Kamarudin Meranun announced that they would step down from their positions for the next two months, “or such other period that the company may deem fit”.

Sources: Channel NewsAsia, The Straits Times, FT

Drama as Syed Saddiq Claims UMNO Was Behind Johor Mob Attack (31 Jan – 2 Feb)

Youth and Sports Minister Syed Saddiq Abdul Rahman accused the United Malays National Organisation (UMNO) of being behind a mob that heckled him in Johor. The minister had been at a dinner with family and friends when a group of 100-150 uninvited guests wearing black surrounded his table, harassing him until he was forced to flee over a fence. Syed Saddiq subsequently claimed police had informed him that UMNO had been behind the mob after making three arrests, leading the UMNO Youth wing to lodge a police report against him. However, Free Malaysia Today quoted a source that one of the three arrests was a youth leader in UMNO’s Pasir Gudang division.

Sources: Free Malaysia Today, The Star, Malay Mail, Free Malaysia Today

Myanmar

Internet Shutdown Reimposed in Rakhine and Chin State (3 Feb – ongoing)

Myanmar has reimposed an internet shutdown in Rakhine and Chin State, according to Norwegian telco Telenor Group. The shutdown went into effect at 10pm local time on Monday, February 3. Five townships in the conflict-torn western states will be without internet traffic for three months. The official reason given for the blackout is for “security requirements and public interest”, given ongoing clashes between the Tatmadaw and the Arakan Army. Lawmakers and NGOs have expressed concern that the outage will prevent aid from reaching villages caught up in the fighting. The shutdown will also make it difficult for communities to access digital payment systems and send and receive money transfers. Rakhine’s Maungdaw, Buthidaung, Rathedaung and Myebon and Chin’s Paletwa townships will be affected by the new shutdown. Other townships in Rakhine – Ponnagyun, Mrauk-U, Kyauktaw and Minbya – continue to function without internet since the first shutdown in June 2019.

Sources: Reuters, Myanmar Times, Irrawaddy

Political Movements Amid Preparations for General Elections (Ongoing)

Former National League for Democracy (NLD) member and outspoken lawmaker U Kyaw Zay Ya has been appointed second vice president for the People’s Pioneer Party (PPP). U Kyaw Zay Ya had been critical views of the Yangon’s government policies and performance and was dismissed by the NLD on January 21. He raised questions on a 64 billion kyat budget (US$43.6 million) that had been spent on a housing project which had yet to be implemented. According to the NLD he had been dismissed because he had disclosed confidential party information. The PPP was established by Union Parliament member Daw Thet Khaing, who was also previously with the NLD. She resigned in November 2019 saying she faced restrictions from the party. In August 2018, both U Kyaw Zay Ya and Daw Thet Khaing were suspended from serving party duties in the NLD, for allegedly violating party rules.

Former President U Thein Sein has announced he will campaign for the Union Solidarity and Development Party (USDP). His party had lost the 2015 elections by a landslide despite jump-starting political and economic reforms in Myanmar. Analysts see the USDP as the main opposition in parliament, gaining more seats in the 2020 elections although it is unlikely they would win a majority.

The Union Election Commission (UEC) has said preparations for this year’s elections are going smoothly although a date has not been fixed yet. There will be over 40,000 polling booths across the country that has more than 37 million eligible voters. Voting is expected to be held in all constituencies including the restive Rakhine state.

Sources: Irrawaddy, Irrawaddy, Myanmar Times, Myanmar Times

Singapore’s GIC Buys into Yoma Bank (Jan 29)

Singapore sovereign wealth firm, GIC, has acquired a 30% stake in Myanmar’s Yoma Bank. GIC injected US$88.7 million in the latest funding round, together with Norwegian private equity firm Norfund. The World Bank’s investment arm, International Finance (IFC) is also a shareholder in Yoma Bank. The IFC was the first foreign stakeholder in a Myanmar bank following a decision to convert a $5 million loan into a 5% equity shareholding. Once the transaction is complete, IFC will have an interest of around 4%, while GIC and Norfund will own 20% and 10% respectively. Myanmar’s banking sector had opened up to foreign investors in January 2019.

Sources: Bloomberg, Myanmar Times

Thailand

Opposition Submits Censure Debate Motion Targeting Six Ministers (31 Jan – Ongoing)

The Opposition coalition in the Thai Parliament submitted a censure debate motion on Friday, 31 January to Parliament President Chuan Leekpai. The motion, which accuses the government of “not having faith and adhering to democratic system with the King as the head of state” and rampant corruption, targets Prime Minister Prayuth Chan-Ocha, Deputy Prime Ministers Prawit Wonguwon and Wissanu Krea-ngam, Interior Minister Anupong Paojinda, Foreign Minister Don Pramudwinai and Deputy Agriculture and Cooperative Minister Thamanat Prompow. The last time a no-confidence debate occurred was in 2013, under the then-Yingluck Shinawatra government. The dates for the debate have not been confirmed yet, but observers have noted that it is unlikely to lead to a successful no-confidence vote, given that the opposition does not have a simple majority in the 500-seat House.

Sources: Khaosod English, Khaosod English, Bangkok Post, Bangkok Post

Thai Budget Delayed Due to Voting Irregularity (29 Jan – Ongoing)

The US$104 billion Thai Budget bill was delayed after the country’s Constitutional Court accepted a complaint on 29 January about voting irregularities in the lower House of Parliament. The complaint alleged that certain Members of Parliament were absent when the vote was called on 11 January, but their votes were somehow recorded. News of the delay comes at an inconvenient time, as the Budget bill had already been delayed for four months, and developments such as the coronavirus outbreak, smog and severe drought emerged to challenge the country’s growth prospects. The Bank of Thailand identified the fiscal budget delay as another economic threat for the year, but said that the delay would not take a “big bite out of the economy” if it could be passed and implemented before April 2020.

Sources: Reuters, Nikkei Asian Review, Bangkok Post

China Overtakes Japan to Top Thailand’s FDI Rankings in Historic First (24 Jan)

China ranked first in the list of economies that invested in Thailand in 2019, overtaking Japan as the country’s main source of foreign direct investment (FDI). Applications from China amounted to US$8.5 billion (or US$9.7 billion if you include Hong Kong) and were spread out among sectors ranging from automobiles to biotechnology, eclipsing Japan’s total of US$2.4 billion. However, the vast majority of this investment was linked to the US$7.2 billion high speed rail project between the airports of Suvarnabhumi, Don Muang and U-Tapao. Going into 2020, Thailand’s finance ministry aims to expand upon the country’s current offering of tax rebates and preferential visa policies to continue attracting investments – for example, Finance Minister Uttama Savanayana said that his ministry planned to increase the tax deduction from 1.5 times on investment to 2.5 times. Such measures, by his ministry’s calculations, could draw investment of more than US$3.3 billion.

Sources: SCMP, Reuters

Vietnam

Vietnam Plans for Government Restructuring for the Next Term (26 Jan – Ongoing)

Vietnam’s Ministry of Home Affairs (MoHA) says a master plan is being formed in order to streamline the central Government. The MoHA will work with other ministries to assess the efficiency of the current government structure and propose for a leaner administrative system for 2021-2026. Ministries which see overlapping functions will need to work out a way to cut down or merge offices. 15 centrally-controlled cities and provinces have already registered pilot mergers such as combining the Department of Transport and Department of Construction in Dak Nong.

Source: Viet Nam News

Vietnam Adds On Requirements for Top Leaders (3 Feb)

President and General Secretary Nguyen Phu Trong has issued a new set of criteria for Party members to hold top positions. The general secretary of the Communist Party now must have the capability to prepare and develop “key officials.” Key officials include the general secretary, president, prime minister, National Assembly chairperson, and executive secretary of the Secretariat. The new provisions also require these top leaders to have a “high reputation among the Central Committee, Politburo, the entire Party and the people”. Yet, the Central Committee will have the right to make exceptions. These changes can be seen as a build up to the 13th CPV National Congress in 2021 where Trong will likely step down due to his age and health. Questions remain over whether his anti-corruption drive will continue beyond Trong’s time. Anti-corruption efforts have intensified in recent months and have been generally perceived positively by the public.

Sources: VNExpress, East Asia Forum

Inflation in Vietnam Surges to 6-Year High as Dong Depreciates (29 Jan – 4 Feb)

Consumer prices in Vietnam climbed 6.4% in January from a year ago. It is the fastest increase since August 2013. The price of pork was a main factor in pushing up inflation due to the recent bout of swine fever. Food and catering services saw the largest price increases followed by housing and construction materials. The strong rise in January’s CPI was also linked to the strong demand for foodstuffs for the Tết (Lunar New Year) festival.

Sources: Bloomberg, Viet Nam News, Viet Nam News