Indonesia

Toyota, Softbank Among Big Investors as Jokowi Eyes 6% Annual Growth (19-29 Jul)

Indonesia’s economic growth rate could reach an average of 6% per annum if President Joko Widodo “Jokowi” can attract more investment, according to a proposal from the Planning Ministry. The projected rate is more modest than Jokowi’s first-term aims of 7% per annum, and are based on the assumption of Indonesia attracting between US$2.62 trillion and US$2.68 trillion in direct investments over the next 5 years. Much of this will go into infrastructure investment, the demand for which was pegged at 6% of Indonesia’s gross domestic product.

At present, the government has managed to secure some lucrative investment deals since Jokowi was officially declared the winner of the 2019 election.

• 15 June: Japan’s biggest oil and gas explorer Inpex Corp signed a basic agreement on the development of the US$15 billion Abadi liquefied natural gas project.
• 19 July: Toyota Motor Corp said it will spend US$2 billion to build hybrid vehicles in Indonesia.
• 24 July: Companies from the United Arab Emirates, such as Abu Dhabi National Oil Company (ADNOC) and investment company Mubadala, signed agreements worth US$9.7 billion during the Abu Dhabi Crown Prince’s visit to Indonesia.
• 29 July: Grab said that it will invest US$2 billion into Indonesia over a period of 5 years using capital from Japan’s Softbank Group Corp, which is looking to increase its presence in Indonesia. The investment is to go towards creating a next-generation transportation network and the digitisation of crucial services and infrastructure.

Jokowi is also targeting deals Saudi Arabia’s Crown Prince Mohammed bin Salman during his visit in August. At the same time, the government is looking to expand its funding pool and reduce dependence on foreign funds for closing budget deficits. One method being explored is the “diaspora bond”, which will target non-residents such as migrant workers and students.

Sources: Channel NewsAsia, Bloomberg, Reuters, Reuters, Channel NewsAsia, SCMP

Prabowo-Megawati Meeting Leads to Murmurs of Discontent in Jokowi Camp (24-29 Jul)

Gerindra Chairman Prabowo Subianto met with Indonesian Democratic Party of Struggle (PDI-P) leader Megawati Soekarnoputri on Wednesday, 24 July. The meeting between the two followed a meeting between Prabowo and President Jokowi on 13 July, and suggested a thawing of tensions between the two camps. Megawati also said that Prabowo had sought her blessing to have some senior Gerindra members among Jokowi’s new ministers, despite statements by Gerindra leaders that the party would remain in the opposition.

A subsequent meeting between PDI-P’s main allies – the National Democratic Party (NasDem), Golkar, the National Awakening Party (PKB) and the United Development Party (PPP) – without PDI-P fed rumours that they were unhappy with Gerindra’s outreach. NasDem and Golkar addressed these concerns on 29 July, with Airlangga Hartarto denying that the coalition was split over the ministerial appointments. He did, however, maintain that all members of the coalition must be accommodated in the new cabinet. Jockeying for ministerial positions is expected to continue until Jokowi is officially sworn in on 20 October.

Sources: Jakarta Globe, The Jakarta Post, Jakarta Globe, The Straits Times

Ahok Bows Out of Politics, Entertains Thought of Becoming Talk Show Host (22 Jul)

Former Jakarta Governor Basuki “Ahok” Tjahaja Purnama told media outlets that he saw no future in his political career. Ahok, who had been jailed for 18 months on a blasphemy charge, was speculated to harbour political ambitions following his release in January 2019. Former Justice Minister Mahfud M.D. also said that Ahok can still run for regional office as long as he openly declares his previous jail sentence, though he cannot hold a ministerial position. However, Ahok noted that contemporary political sentiments were against him. Instead of returning to public office, he suggested that he may experiment with becoming a talk show host in the style of The Tonight Show Starring Jimmy Fallon.

Sources: Jakarta Globe, The Jakarta Post

BI Cuts Rate to Pre-Empt Fed Easing (18 Jul)

Bank Indonesia (BI) cut its benchmark interest rate by 25 basis points on Thursday, 18 July, in anticipation of a similar action by the US Federal Reserve in July. The seven-day repo rate now stands at 5.75%. This is the first time in nearly two years that BY cut its rate, and follows a year in which its hiked rates by 175 basis points. BI Governor Perry Warjiyo also hinted that there may be scope for further easing in line with a low inflation projection.

Sources: Nikkei Asian Review, The Straits Times

AP Interview Highlights Jokowi’s Reform Hopes, Concerns about FPI (27-30 Jul)

Indonesian President Jokowi told The Associated Press during an interview on Friday, 27 July that he would push for the implementation of economic reforms in his final term as President, given that he is no longer constrained by politics. He also said that it is “entirely possible” that he could outlaw the Islamic Defenders Front (FPI), a hard-line group that has been at the centre of numerous protests, if their “ideological standpoint shows that they are not in line with the nation”. The group has been in a state of legal uncertainty for several weeks after its permit expired on 20 June. Defence Minister Ryamizard Ryacudu told reporters that the decision to extend FPI’s permit is now in Jokowi’s hands. Prabowo has also expressed interest in being a mediator if FPI’s license is revoked.

Sources: SCMP, AP, Coconuts Jakarta, Tempo.co

Malaysia

Developments in the Sex Video Scandal and the Anwar Succession Issue (18 – 31 Jul)

More developments in the sex video scandal afflicting Parti Keadilan Rakrat (PKR) have come to light. Tensions were especially high on the week of 18 July, brought on by the arrest of PKR President Anwar Ibrahim’s political secretary on Tuesday, 16 July. Anwar had also called for Economic Affairs Minister Azmin Ali to resign if he was proven to be featured in the video. Azmin is ostensibly off the hook for now, given the police announcement confirming the video’s authenticity also included a statement that they were unable to identify the people featured in it. Anwar has also publicly accepted the police findings. However, Azmin and his supporters were absent from a PKR leadership retreat from 20-21 July.

Sources: The Straits Times, Channel NewsAsia, Nikkei Asian Review

Both Azmin and Anwar have made efforts to rally their supporters. A joint statement supporting Azmin and reprimanding Anwar for not standing by his deputy president was signed by 28 PKR members, including 14 members of parliament. Anwar’s supporters responded with a nationwide pledge of support, reportedly involving more than two-thirds of division chiefs nationwide. 12 of 13 Penang division chiefs were said to have inked the pledge, and 22 of 23 in Perak.

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

Speculation about the succession issue also came to the fore. Azmin’s political secretary Hilman Idham denied rumours that his boss was considering switching from PKR to the Gerakan party. However, reports emerged that talks between a PKR leader and Gerakan leaders had taken place for a month, and the possibility of Azmin arranging an escape route was suggested by analysts. Azmin himself joined voices from opposition parties Parti Islam Se-Malaysia (PAS) and the United Malays National Organisation (UMNO) in calling for Prime Minister Dr Mahathir Mohamad to serve out his full five-year term as Prime Minister on Monday, 29 July.

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

UMNO and PAS to Cement Cooperation with New Pact Name (24 Jul)

Opposition parties UMNO and PAS told Malaysia media that they are upgrading their political cooperation, and will announce a new name for their pact in August 2019. UMNO Secretary-General Annuar Musa told The Star that there was no need for the pact to be approved at UMNO’s annual general assembly in November, since the supreme council had already endorsed the move. He also expressed an interest in expanding the agreement to including other parties. PAS President Abdul Hadi Awang also said that his party and UMNO will support the idea of Dr Mahathir staying as Prime Minister for a full term.

Sources: Malay Mail, The Star, Malaysiakini

BRI News: After a Year-Long Suspension, the ECRL is Back on Track (25 Jul)

China and Malaysia have resumed the construction work on the 640 km long East Coast Rail Link (ECRL) project following a year of negotiations. The project, which was suspended in July 2018, saw its original price tag of roughly US$15.9 billion bargained down to US$10.7 billion, and the agreed proportion of civil works to be done by domestic contractors increased from 30% to 40%. Transport Minister Anthony Loke expressed his hope that the rail project would catalyse the development of east coast states. Finance Minister Lim Guan Eng also noted that Beijing had offered Malaysia more BRI investments, and that the government would consider them “if the pricing is right”.

Sources: The Star, Malay Mail

PPBM Constitution Changes Lead to Comparisons with UMNO (20 Jul)

Members of Parti Pribumi Bersatu Malaysia (PPBM) voted to pass 79 of 80 proposed amendments to their party’s constitution on 20 July, Saturday. The changes included the creation of a two-tier voting system for PPBM, with branch and divisional leaders being elected by a one-man-one-vote system, while the supreme conucil would be chosen by delegates at the party congress. Party elections were also allowed to be postponed for up to 18 months under these changes, though party chairman Dr Mahathir expressed his hope that the elections would be held by the end of this year. The delay in the polls has attracted criticism for allegedly preventing grassroots members from voting against party leaders they disagreed with, an approach that was compared to that of UMNO.

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

DPM Heng Expresses Hope for Malaysia-Singapore Ties (27 Jul)

Singapore Deputy Prime Minister Heng Swee Keat told Malaysian journalists on Saturday, 27 July, that the two countries can work “more closely” together on many fronts. While he noted that differences will arise from time to time, he expressed confidence that the two countries can “achieve more” together, and that differences should be resolved through “proper process” such as the International Court of Justice. He specifically highlighted three areas for bilateral cooperation: ensuring regional peace and stability, developing the economy and fostering stronger people-to-people ties.

Sources: Channel NewsAsia

Myanmar

Corruption allegations force Industry Minister to resign (26 Jul)

Myanmar’s President’s Office released a statement announcing the “voluntary resignation” of Union Minister for Industry U Khin Maung Cho. The minister had been involved in a corruption scandal, reportedly resulting from a failure to invite tenders for the procurement of raw materials for a state-owned drug-maker under the Industry Ministry. U Khin Maung Cho’s resignation comes shortly after Myanmar’s Anti-Corruption Commission (ACC) ramped up its investigation into the Ministry of Energy and Electricity by seizing intra-ministry meeting minutes dating back three years. The ACC had prior to that requested information regarding the bank accounts of Energy Minister U Win Khaing and his wife from the Central Bank of Myanmar, and also requested information about accounts held by them at Private banks.

Sources: Myanmar Times, Irrawaddy, Myanmar Times, Irrawaddy

Visit by Myanmar delegation to Cox’s Bazar inconclusive (27 Jul)

Talks between a Myanmar delegation headed by Ministry of Foreign Affairs Permanent Secretary U Myint Thu and 35 Rohingya leaders at the refugee camp of Cox’s Bazar have proven inconclusive. Rohingya leaders reasserted their demand to be recognised as an official ethnic group by the Myanmar government. Further demands were made for justice for offences committed during the ongoing crisis in Rakhine state, international protection, and the ability to return to their original villages of residence. Myanmar authorities have assured the Rohingya that they are able to access a “gateway to citizenship” if they apply for National Verification Cards – a measure which voices in the Rohingya community have asserted will lead to further discrimination against them.

Sources: Reuters, Frontier Myanmar, Al Jazeera

Grenade found in front of NLD office in Yangon, bomb scare in Naypyidaw (24 Jul)

A live hand grenade was found outside the National League for Democracy headquarters in Thingangyun township in Yangon.The explosive was found near an NLD signboard outside the office on the morning of the 24th of July. This incident closely follows a bomb threat made in Naypyidaw the previous day, in which it was stated that a bomb had been placed in a building which served as living quarters for most of the NLD lawmakers residing in the city. The bomb threat was later determined to be a hoax after a police inspection. It has been suggested that these cases are connected to the fact that Union parliamentarians are preparing to debate 4,000 constitutional amendments proposed by the NLD and other political parties.

Sources: Irrawaddy, Frontier Myanmar, Myanmar Times

Arakan Army welcomes foreign investment into Rakhine State (23 Jul)

The Arakan Army (AA)’s political wing, the United League for Arakan, announced that it was happy to accept investment into Rakhine state – placing particular emphasis on its essential position in China’s Belt and Road Initiative. While fighting in the northern part of the country is fierce, international investors from Singapore, Malaysia and China have indicated interest in projects located in the state’s southern areas. Most recently, Singapore’s Huacheng International Resources Ltd and China’s Shanghai Bright Industry jointly proposed a US$1.6bn investment project to the Rakhine state government. No further details have been provided regarding this proposal.

Sources: Irrawaddy, Radio Free Asia, Irrawaddy

Military-backed Mytel fined for anti-competitive behaviour (18 Jul)

Myanmar’s fourth telecoms operator, Mytel, which is partly military-owned by way of the Tatmadaw-aligned Union of Myanmar Economic Holdings Limited, has been fined around MMK300m (US$200,000) for breaching the Pricing and Tariff Regulatory Framework by issuing free sim cards. Mytel is 49% owned by Vietnamese SOE Viettel. Warnings were also issued to Norway’s Telenor and local company Amara Communications, two other major telcoms operators. Mytel had previously been warned twice for similar offences, after it began issuing free sim cards in order to rapidly increase its market share upon its entrance last June.

Sources: Irrawaddy, Myanmar Times

Thailand

Drought ravages parts of North and Northeastern Thailand (20 Jul – Ongoing)

Areas in North and Northeastern Thailand are facing a catastrophic drought, which is said by the country’s meteorological department to be among the worst faced by the country as a whole in around a decade. Water levels in large reservoirs stand 38% capacity in the North, 33% in the North-east and 22% in the Central Plains, and average precipitation levels have fallen far short of their monthly averages across Thailand. PM Prayut Chan-o-cha has instructed the armed forces to be ready to provide assistance to drought-stricken areas via water trucks and cloud seeding. Drought conditions in these areas risk being exacerbated, should a planned test run of the newly built Xayaburi dam in Laos proceed as planned. The ongoing crisis has drawn attention to several dams in Laos and China upstream of the Mekong, which are said to contribute to diminishing water levels. Eight dams in China alone are said to block 40bn cubic metres of water from the Mekong..

Sources: Bangkok Post, The Nation, Thai PBS, Thaiger, Thaiger

Government and opposition engage in back-and-forth during first Policy Debate (26 Jul)

Both Thailand’s government and opposition parties came away from their first policy debate with bruises, as the government’s recently released 66-page policy statement, covering 12 major and 12 emergency policies, came under discussion. Many of the government’s economic initiatives revolve around the development of the Eastern Economic Corridor initiative. However, at the debate, tempers flared as a fight almost broke out between a Pheu Thai MP and a Senator, over comments the MP made regarding corruption allegations. Many observers were anticipating outbursts on the part of PM Prayut, who was indeed drawn into a confrontation with Seri Ruam Thai Party head Seripisuth Temiyavej. Pheu Thai Secretary-General Anudit Nakhonthap later asserted that the opposition had made efficient use of its time during the debate to merits and flaws of the government’s policy proposals.

Sources: Bangkok Post, Thai PBS, Thaiger, Thaiger

PM Prayut declares that he will directly supervise Police force and DSI (29 Jul)

Prime Minister Prayut Chan-o-cha announced that he would personally be taking charge of Thailand’s Royal Police Force and Department of Special Investigation (DSI). The Royal Police Force comprises approximately 230,000 law enforcement officers spread across the nation, under several bureaus. PM Prayut said that taking charge of the Police Force was a precursor to implementing reform, which civic groups and pro-democracy campaigners have long agitated for. The DSI is an agency charged with investigating incidents relating to Thailand’s national security – making them roughly analogous to the US Federal Bureau of Investigation. PM Prayut’s oversight of the DSI will reportedly allow it to perform its duties “more efficiently, faster and with better coordination from other agencies.”

Sources: Thai PBS, Thai PBS

Prawit Wongsuwon to join PPRP (25 Jul)

Influential Deputy Prime Minister Prawit Wongsuwon has reportedly applied for membership in the Palang Pracharat Party (PPRP), according to Deputy Agriculture and Cooperatives Minister Thammanat Prompao. Mr Thammanat’s announcement came after political activist Srisuwan Janya lodged a complaint accusing Mr Prawit of exerting undue, “outsider influence” on the workings of the PPRP. In this way, Mr Srisuwan asserts that PPRP is in violation of Section 28 of the organic law on political parties, which is potentially grounds for dissolution. Thailand’s Electoral Commission subsequently announced that it would be investigating Mr Srisuwan’s allegation, and suggested that Mr Prawit may be summoned to answer questions on his official party affiliation.

Sources: Bangkok Post, Bangkok Post, Bangkok Post

Thailand’s Constitutional Court agrees to hear cases against Prayut and FFP (19 Jul)

Thailand’s Constitutional Court agreed to hear cases brought against both PM Prayut Chan-o-cha and Thanathorns Juangroonruangkit’s Future Forward Party (FFP). The case against PM Prayut, submitted in the form of a petition by Thailand’s opposition parties, alleges that the Prime Minister was unqualified to serve in that role by virtue of serving as a state official, he was ineligible for nomination in the House of Representatives. If the Constitutional Court rules against PM Prayut, he may be forced to step down. The case presented by pro-junta parties against the FFP contrastingly asserts that they have engaged in activities deemed a threat to Thailand’s constitutional monarchy. Should the Constitutional Court rule against the FFP, the party may be resolved and its leaders and executive committee forbidden from political activity. These two petitions come as the latest in a series of attempts by both pro and anti-junta parties to test the processes of the Constitutional Court.

Sources: Thai PBS, Thaiger, Thai PBS