Indonesia

Protests Continue as Jokowi Considers His Next Move (26 Sep – Ongoing)

 Jakarta and other cities across Indonesia continued to experience violent protests as tens of thousands of students and other groups clashed with police. These rallies were the biggest of their kind since the 1998 student protests that led to the fall of the New Order under Suharto. Their demands include rejecting the proposed reforms to the criminal code, ending the burning of Indonesia’s rainforests, halting military action in Papua and repealing the new Corruption Eradication Commission (KPK) law. Two students have died so far in the confrontation, while 1,489 were arrested on charges such as spreading false information and vandalising police stations. Three men were also arrested in connection to a plot to “burn Chinese shops”.

Sources: Today Online, Channel NewsAsia, The Jakarta Post, SCMP

For his part, Indonesian President Joko Widodo “Jokowi” delayed parliament’s vote on the criminal code bill to October. However, while he is considering a regulation in lieu of law (or perpu) to delay the KPK law, most parties, including the Indonesian Democratic Party of Struggle (PDI-P) said that they would reject such an effort. Meanwhile, Jokowi maintained that he is still planning to push ahead with reforms to Indonesia’s labour and investment laws despite the unrest.

Sources: Channel NewsAsia, Temp.co, Tempo.co, SCMP

New Speakers for the MPR and DPR (2 – 4 Oct)

 Puan Maharani, the daughter of PDI-P Chairman Megawati Sukarnoputri and granddaughter of Former-President Sukarno, was sworn in as speaker of the House of Representatives (DPR) on 2 October. She is the first female speaker in the legislature’s history. Two days later on 4 October, Golkar politician Bambang Soesatyo was appointed as speaker for the People’s Consultative Assembly (MPR), the bi-chamber institution in which the DPR and the Regional Representative Council (or Senate) reside. While little is known about their legislative agendas, observers have pointed out that Bambang has been an outspoken proponent of ending the practice of direct presidential elections in Indonesia. His leadership of the MPR will thus be an important issue to monitor, especially after President Jokowi is sworn in on 20 October.

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

Jokowi Open to Holding Dialogue with Papuan Separatists as Violence Persists (30 Sep)

 President Jokowi told journalists on Monday, 30 September that he was prepared to meet Papuan activists demanding an independence referendum. This represents a marked departure from the policies of past Indonesian governments, who refused to engage the separatists. The province has been engulfed in violence since August, with 33 deaths taking place in the city of Wamena on 23 September. While pro-independence groups such as the West Papua National Committee (KNPB) and the United Liberation Movement for West Papua (ULMWP) have acknowledged Jokowi’s offer, their spokesmen have maintained that any dialogue must include the option for an independence referendum.

Sources: The Diplomat, Reuters, Channel NewsAsia, RNZ

Indonesia’s Digital Economy Growth Outperforms, but Tax Concerns Loom (7 Oct)

 A recent report by Google, Temasek and Bain found that Indonesia’s US$40 billion digital economy, the biggest in Southeast Asia, also has the fastest growth rate among its neighbours at 40% per annum. The report also suggested that in the next four years, E-Commerce and ride hailing transactions could grow by 12 and four times respectively. However, an emerging concern is the proposed tax bill that will force E-Commerce companies such as Netflix and Google to collect and pay value-added tax (VAT), which is expected to be passed into law in 2020.  At 10%, the figure is higher than that of many countries, and observers and split on how this will impact Indonesia’s digital prospects.

Sources: Techwire Asia, The Straits Times

Jokowi and PM Lee Meet for Leaders’ Retreat in Singapore (8 Oct)

 Singaporean Prime Minister Lee Hsien Loong and Indonesian President Jokowi met on Tuesday, 8 October for their fourth leaders’ retreat. The last retreat was in Bali in October 2018, when the two leaders discussed issues such as tourism-related cooperation and connectivity. These issues were revisited in this year’s retreat, with bilateral projects such as the Kendal Industrial Park and the Nongsa Digital Park in Batam highlighted as successful examples of cooperation. The deliverables and aspirations from the retreat included:

• (Renewed) A US$10 billion currency swap agreement between Bank Indonesia and the Monetary Authority of Singapore, originally signed in 2018, was renewed for another year.
• (Signed) An Agreement between Indonesia and Singapore on Electronic Data Exchange to Facilitate and Secure Trade.
• (Signed) A memorandum of understanding (MOU) between the National Archives of Singapore and its Indonesian counterpart.
• (Promised) Updates to the bilateral Avoidance of Double Taxation Agreement, which came into force in 1991.
• (Promised) Indonesia to ratify the Bilateral Investment Treaty that was signed at the 2018 retreat.

Sources: MFA Press Release, Channel NewsAsia, The Straits Times

Malaysia

Tg Piai By-Election Set for 16 Nov as Coalitions Begin Preparations (1 Oct – Ongoing)

 The Election Commission announced on Tueday, 1 October, that the by-election for the Tanjung Piai seat in Johor will be held on 16 November, with nomination day on 2 November. This will be the fifth by-election of 2019, of which only one (Sandakan) was won by the ruling Pakatan Harapan (PH) government. The United Malays National Organisation (UMNO) and the Malaysian Chinese Association (MCA) have yet to announce their candidate choice for the race. Nonetheless, the by-election in the swing state, and particularly in a seat with 57% Malay voters and 42% Chinese voters, is seen as a key test for both the government and the opposition parties amid dimming support for PH. A survey by Merdeka Centre found that support for PH among Malaysians had dropped from 66% in August 2018 to 38% currently.

Sources: The Straits Times, The Star, Malaysiakini, The Star, The Straits Times

Dr Mahathir Launches Shared Prosperity Vision 2030 (5 Oct)

 The Malaysian government launched the Shared Prosperity Vision (SPV) 2030 on Friday, 5 October. The plan, which outlines a series of 10-year goals to restructure Malaysia’s low-skill labour-intensive industries, aims to reduce the country’s income gaps between different ethnicities to within 10%. While the plan included a “needs-based economic approach” as one of its guiding principles, support for the bumiputera community was highlighted as a priority.

Following the announcement, a core concern raised by Parti Islam Se-Malaysia (PAS) was that the bumiputera share of corporate equity, which had been targeted to reach 30% under the New Economic Policy, had in fact fallen from 23.4% in 2011 to 16.2% in 2015. Non-bumiputera Malaysians and foreigners held 30.7% and 45.3% of corporate equity respectively. Dr Mahathir attributed this failure to wrongdoings by the previous two governments, including rampant corruption and nepotism. Nonetheless, PAS Deputy President called on the government to publish a report on the latest share of equity holdings.

Sources: Full Document, Malaysiakini, The Straits Times, Free Malaysia Today, Malay Mail

Budget 2020, GST and Other Economic News (1 Oct – Ongoing)

 Finance Minister Lim Guan Eng told Malaysian media that the upcoming Budget 2020 will emphasise creating more job opportunities with reasonable pay. Better paying jobs, he said, would help incentivise Malaysian workers to be more productive despite the larger context of the trade war and a weak economic outlook. Such measures would follow up on efforts to catalyse the growth of Malaysia’s digital economy that were introduced in Budget 2019. Dr Mahathir and Minister Lim also suggested on separate occasions that the goods and services tax (GST), which was abolished in 2018, might be brought back if the public is shown to support such a policy.

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

In news related to Malaysia’s fiscal health, Minister Lim revealed that former Council of Eminent Persons Chairman Daim Zainuddin is leading negotiations with China over the Multi-Product Pipeline and Trans-Sabah Gas Pipeline. The projects had been cancelled around the same time as the East Coast Rail Link (ECRL) in 2018, when it was revealed that 88% (US$2 billion) of the total contract value had been paid despite only 13% of the work having been completed. In the months since, Daim was successful in reviving the ECRL project after lowering its cost to US$10.7 billion, and is now tasked with reclaiming the US$2 billion paid for the pipelines. Previously, the Malaysian government had already taken action against the Chinese contractor, Chinese Petroleum Pipeline Engineering, seizing US$240 million from their local accounts in July,

Sources: SCMP

War of Words as Timeline of Mahathir Succession Returns to the Fore (28 Sep – Ongoing)

 The timeline of Prime Minister Dr Mahathir Mohamad’s succession returned to the fore after a public spat between Syed Husin Ali, a deputy chairman of the Parti Keadilan Rakyat (PKR) advisory council, and Youth and Sports Minister Syed Saddiq Syed Abdul Rahman. Syed Husin had expressed doubt about Dr Mahathir’s promise to hand over power to PKR President Anwar Ibrahim, noting that the Prime Minister had recently suggested that he might remain in power for three years instead of two. Syed Saddiq retorted that the PH presidential council had never discussed the two-year timeline transition, a statement that was echoed by Dr Mahathir on 3 October. While Anwar said that he is satisfied with Dr Mahathir’s continued assurance that he would eventually hand over power, and that they had indeed not agreed on a fixed date for the transition, a great deal of uncertainty still surrounds the entire issue.

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

Anwar’s Absence, and Other Takeaways from the Malay Dignity Congress (6 Oct)

 The Kongres Maruah Melayu (Malay Dignity Congress) held on 6 October was notable for several reasons. The congress, which the event organiser said was in response to certain “non-Malay” parties challenging the rights and positions of Malays, saw roughly 10,000 attendees. These not only included leaders from UMNO and PAS, but Dr Mahathir and Economic Affairs Minister Azmin Ali as well. However, a conspicuous absence was that of Anwar Ibrahim. The PKR President said that he received a belated invitation, but already had commitments in his constituency.

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

Comments made during the congress touched on issues of Malay primacy. For example, event organiser Professor Zainal Kling said that Malaysia is for the Malays, and those who opposed this social contract must be fought (When asked about the speech, Dr Mahathir said that he did not hear Kling make that remark). The Prime Minister also delivered a speech at the event, in which he made references to the orang asing (foreigners) who had come over during British rule, and who the Malays were forced to accept as part of the country after independence.

After the congress, resolutions across five areas were presented to Dr Mahathir, including demands that top government positions such as the Chief Justice and the Attorney General be reserved for Malay-Muslims. Dr Mahathir said that the PH government would look into the demands, though he cautioned that not all of them would be met.

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

Myanmar

Myanmar undertakes major shift to Unicode fonts for international standardisation (1 Oct)

Myanmar’s government and tech industry bodies have instructed that as of October 1, the country will adopt Unicode as the industry standard for encoding and text expression throughout the country. This is an important step towards allowing Myanmar’s digital infrastructure to advance in pace with the rest of the world, where Unicode is in widespread use. Myanmar was the last nation with a significant online population to fully embrace Unicode, resulting in most local users being unable to access international websites, which would appear as incomprehensible symbols. Its uniqueness in this regard resulted from its period of isolation under military rule, when sanctions prevented it from benefiting from standardisation efforts led by Microsoft and Apple. It is estimated that Myanmar’s full transition to Unicode will take years. The country had previously used a local encoding system called Zawgyi, which is incompatible with many important functions like search engines.

Sources: Frontier Myanmar, Myanmar Times, Channel NewsAsia

Myanmar and Thailand to move for progress on Dawei SEZ (4 Oct)

Myanmar and Thailand have published a nine-point agreement outlining their commitment to proceed on development of the US$8bn Dawei SEZ in Myanmar’s southern Tanintharyi region. This announcement came following a bilateral ministerial meeting in Naypyidaw, indicating that construction on both Dawei’s initial and phases would begin and proceed concurrently, with ground construction work expected to begin in 2020. The agreement also indicated that further meetings were to be held between Myanmar’s Vice-Presidents and Thai Deputy Prime Minister. The Dawei SEZ has been delayed since 2008, when Thailand’s Italian-Thai Development was granted a 75-year concession to develop the area. As a first step, Myanmar will accept a low-interest loan from Thailand to build a two-lane, 138km Dawei-Htee Khee highway which will link the SEZ to Thailand.

Sources: Irrawaddy, Myanmar Times

US Businesses to increase investment in Myanmar (1 Oct)

A delegation of the US-ASEAN Business Council met with the Union of Myanmar Federation Chambers of Commerce and Industry (UMFCCI) in Yangon on Monday to discuss efforts to deepen involvement in the country. The delegation was led by US Ambassador Scot Marciel and included representatives from Amazon, Google, Coca-Cola, Chevron, Chubb, Diageo, Ford, Jhpiego, MasterCard, Visa, Abbott and BowerGroupAsia. Representatives of the UMFCCI noted that US companies were demonstrating interest in expanding investment after seeing positive results in Myanmar. Specific focus industries were noted to be digital technology, vehicle production and SME development. This comes shortly after representatives from the US and Japan jointly commented on theire desire to promote responsible, ethical investment in Myanmar.

Sources: Irrawaddy, Myanmar Times

Rohingya returnee detained for possible ARSA ties (27 Sep)

Authorities in Myanmar have detained one of 26 voluntary returnees to Rakhine State, on suspicion of being affiliated to the Arakan Rohingya Salvation Army (ARSA). The 26 returnees returned to Maungdaw district in Rakhine state through the border checkpoint at Taungpyo Letwei. It was previously reported that around 200 returnees were due to return through official channels in September, pending investigations. 270 further individuals are stated to have returned through unofficial channels either by boat or simply by walking across the unsecured border. Local authorities have stated that returnees are being given humanitarian and rehabilitative support, and rehabilitated in villages where their relatives are present. Ongoing efforts to encourage displaced persons in Bangladesh to return to Myanmar have largely failed, with the most recent attempts to encourage around 3,450 Rohingya to return falling through in August.

Sources: Irrawaddy, Myanmar Times

F&N re-enters Myanmar beer market (25 Sep)

Fraser and Neave (F&N) has launched a Myanmar-based subsidiary called Emerald Brewery, marking its return to Myanmar four years after its departure. This new venture, made in partnership with local importer Shwe Than Lwin calls for a US$70m investment in a brewery facility in Yangon that will provide an annual production capacity of 500,000 hectolitres of Chang lager beer. Chang brand is one of Thailand’s most famous brands of beer. F&N initially entered Myanmar in 1997, purchasing a stake in Asia Pacific Breweries as it set up Myanmar Brewery with the Tatmadaw-linked Myanmar Economic Holdings Limited (MEHL). F&N left Myanmar in 2015 after a dispute with MEHL over the amount needed for the army-linked company to buy F&N out.

Sources: Straits Times, Myanmar Times

Thailand

3.2tn baht Budget bill approved by cabinet, now due to be approved by special committee (8 Oct)

 Thailand’s cabinet announced that it had approved the 3.2tn baht (US$105bn) budget bill for FY 2020, and was moving forward to form a 63-member special committee to vet it. The budget bill examination panel will be made up of 15 representatives from the cabinet, 24 from opposition parties and 24 from coalition parties. The Thai cabinet has thus far appointed Minister of Finance Uttama Savanayana, his deputy minister, and the finance ministry’s permanent secretary to the panel. Other appointments are pending. Once the bill is approved by the panel, it will be tabled before the House of Representatives on October 17 for its first reading. Subsequent readings will take place in January. Mr Sompong Amornvivat of Pheu Thai stated that his party’s MPs would not vote in support of the bill.

Sources: Bangkok Post, Bangkok Post, Thai PBS

Chevron dispute gets March deadline (8 Oct)

A March 2020 deadline has been set for the resolution of a long-running dispute between the government of Thailand and American energy supermajor Chevron. The dispute concerns Thailand’s retroactive enforcement of a new energy ministry regulation calling for gas field operators to pay the costs to decommission installed assets even if they no longer operate those assets. This rule affects Chevron because it is due to hand over operation of the Erawan gas field to Thai oil firm PTTEP in 2022. The full cost of decommissioning its existing energy infrastructure would amount to approximately US$2.5bn, according to some estimates. Chevron stated previously that moving to an arbitration process was a possibility. This dispute has implications for other international energy companies operating in Thailand, such as France’s Total SA and Japan’s Mitsui & Co.

Sources: Reuters, Bangkok Post, Channel NewsAsia

CP Group and SRT railway contract delayed again (8 Oct)

The resignation of the entire board of the State Railway of Thailand (SRT) has delayed the signing of an already long-delayed 224bn baht (US$7.4bn) contract with CP Group. The contract concerns the construction of a railway linking Suvarnabhumi airport, Don Mueang airport and U-Tapao airport. CP Group headed a consortium of firms including Bangkok Metro Expressway and Metro Plc, Italian Thai Development Plc, CH Karnchang Plc and China Railway Construction, which won the bid for the project in May. Since then, negotiations have been ongoing, with land ownership issues being a major sticking point. Most recently, CP group’s request that the government share the risk in building the railway was denied on the grounds that the legal framework set out in the official request for proposal stipulated that the bid winner had to bear all the risk. DPM Anutin Charnirakul earlier stated that a failure to sign the contract would lead to CP group being blacklisted for further projects.

Sources: Bangkok Post, Bangkok Post, Bangkok Post

Judge shoots self in court in response to directive to change verdict (4 Oct)

Kanakorn Pianchana, a judge at a district court in Yala, in southern Thailand, shot himself in the chest after making a speech criticising the kingdom’s judicial system, which was broadcast on Facebook live. The incident occurred while he was delivering a verdict for five Muslim suspects in a gun murder case. A statement purportedly written by Mr Kanakorn asserted that he had been approached and ordered to change not guilty verdicts on the five defendants, condemning three to death and sending another two to prison despite lack of evidence sufficient to convict any of them. Thailand’s judicial system has been criticised for working in favour of the wealthy while enacting harsh sentences on ordinary people for minor offences. It is highly unusual for a judge to criticise the system. Thailand’s judicial commission has established a special panel to look into the facts of the case. Mr Kanakorn is in stable condition, and is being investigated for disciplinary offences.

Sources: Bangkok Post, Bangkok Post, Channel NewsAsia, Thai PBS

Thailand’s economic growth forecast cut (2 Oct)

Thailand’s Joint Standing Committee on Commerce, Industry and Banking (JSCCIB) lowered the economic growth projections for Thailand to 2.7-3 percent from 2.9-3.3 percent due to weakening economic growth and falling exports. The committee noted that the government’s present stimulus efforts were only likely to increase economic growth by 0.1 to 0.2 percent at most. The JSCCIB’s projections for exports also fell from a range of -1 to 1 percent growth, to -2 percent to 0 percent growth, indicating that exports had little chance of growing at all in 2019. Thailand’s Central Bank had previously cut its growth projections to 2.8 percent from 3.3 percent, though it stated that it would be holding its policy interest rate at 1.5 percent as opposed to implementing further cuts, as had previously been rumoured. The IMF also projected a growth rate of 2.9 percent in 2019, though it also expected growth to rise to 3 percent in 2020.

Sources: Thai PBS, Bangkok Post, Bangkok Post, Thai PBS, Bangkok Post