[PREMIUM] Country Updates (10-23 Feb)

Indonesia

• Indonesia relaxes quarantine rules as the country looks at reopening travel
• Indonesia reports a $2 billion budget surplus in January
• Indonesia signs a set of bilateral agreements with Singapore to resolve long-standing issues

Indonesia is planning to reduce quarantine rules for fully vaccinated international visitors to the archipelago from 5 days to 3 days. The relaxed rules apply to those who have taken their booster shot and will take effect from 1 March or potentially earlier depending on the local situation, according to Mr. Luhut Pandjaitan, Coordinating Minister of Maritime and Investment Affairs of Indonesia. There are plans to remove quarantine rules by April if the situation improves. As Indonesia looks at reopening its tourism sector and fully reopening its economy, the country recorded a $2 billion budget surplus in January. According to Finance Minister Sri Mulyani, tax revenue was bolstered by higher commodity prices and stronger economic recovery from the pandemic. She said the budget surplus indicates Indonesia’s strong fiscal position and reaffirms the country’s path to recovery. She projects a GDP growth of 4.8% to 5.5% in 2022.

Indonesia and Singapore signed a set of landmark agreements during the Singapore-Indonesia Leaders’ Retreat in January. The agreements tackle long-standing issues including airspace management, defence cooperation and an extradition treaty. Following the signing of the agreements, criticisms were raised in Indonesia, questioning Indonesia’s sovereignty and the linkages between the three treaties signed. Indonesian ministers have reaffirmed the merits of the agreements signed for both countries. In a parliamentary session, Singapore’s Senior Minister Teo Chee Hean said the agreements “must enter into force simultaneously to reduce misunderstandings and form a strong basis for future cooperation”.

Sources: Straits Times; CNA; Business Times; Straits Times (2); Business Times (2); CNA (2); Reuters; Jakarta Post

Malaysia

• Malaysia looks to reopen borders as early as Q2
• Negotiations on an electoral pact between PKR and Muda have collapsed
• Mahathir says former PM Najib “must be stopped” in a letter to Johor voters

Even as COVID-19 cases reach an all-time high in Malaysia, the country is looking at fully reopening borders in the second quarter. According to Health Minister, Khairy Jamaluddin, the Health Ministry has been given two weeks by the Prime Minister to prepare protocols for the reopening of borders. The guidelines will need to be approved by the COVID task force and the cabinet before implementation.

Negotiations on an electoral pact between opposition leader Anwar Ibrahim’s Parti Keadilan Rakyat (PKR) and former Cabinet minister Syed Saddiq Abdul Rahman’s Malaysian United Democratic Alliance (Muda) for the upcoming Johor election have collapsed. Muda had wanted three seats from PKR but they failed to agree on a resolution. However, Muda reached an accord with Pakatan Harapan (PH)’s two other components, Parti Amanah Negara and Democratic Action Party (DAP) last week. The negotiations took place under PH’s “big tent” policy – an attempt to unite all opposition parties and prevent multi-cornered fights that tend to work against the opposition parties. The strategy is meant to enable PH to present a united front for a general election widely expected later this year. However, lower voter turnout rate is likely to further affect PH’s chances.

As campaigning for the Johor state election is underway, former Prime Minister Dr. Mahathir Mohamed told Johor voters that former premier Najib Razak “must be stopped”. In his second letter to voters, he wrote, “If he comes back to power, this means that the country will be controlled by a kleptocrat from the ‘court cluster’ and risks being robbed”. Najib is currently out on bail after Malaysia’s Court of Appeal upheld his graft conviction. The March 12 Johor state election is a critical one, if Barisan Nasional records another strong win as it had in Melaka, a general election is expected to be held in the next few months which could see the return of BN to the federal government.

Sources: Bloomberg; Straits Times; Straits Times (2); Straits Times (3); Malay Mail; Malay Mail (2);

Myanmar

●      Myanmar junta rejects push for new ASEAN envoy to meet opponents
●      New Zealand will not engage Myanmar in RCEP
●      Myanmar junta to contest ICJ Rohingya case, without Aung San Suu Kyi

With the support of several ASEAN member states including Indonesia and Malaysia, Cambodia’s Prak Sokhonn who is the ASEAN Special Envoy had suggested meeting with all parties of the conflict including the members of the National Unity Government (NUG) and the ousted National League for Democracy (NLD). However, Myanmar’s Foreign Ministry said it would not agree to the envoy engaging with ‘unlawful associations and terrorist groups’ which were ‘perpetrating violence’. The Ministry said that such meetings were “not only contrary to the principles of the ASEAN charter but also undermine ASEAN’s counterterrorism efforts.”

In light of the junta’s continued atrocities, New Zealand has said it will not deal with Myanmar under the Regional Comprehensive Economic Partnership (RCEP). It remains unclear if other leading countries included in the RCEP, such as Japan, Australia and ASEAN, which have all expressed alarm over Myanmar, would follow suit. A diplomat who spoke anonymously shared that ASEAN member states were individually assessing New Zealand’s action and may announce their position soon.

Myanmar’s military junta will represent the country at the International Court of Justice (ICJ) next week to contest a genocide claim. This has resulted in some controversy as members of the NUG said that Kyaw Moe Tun, whom the shadow government named to represent it in The Hague, is the only person authorised to engage with the court on behalf of Myanmar. However, local Myanmar media said the junta has a new delegation led by Ko Ko Hlaing, international cooperation minister, and Thida Oo, attorney general, who will attend virtually. Both have been hit with US sanctions over the coup. Myanmar is prepared to argue that the ICJ has no jurisdiction over the case, and must throw it out before it moves on to substantive hearings.

Sources: SCMP, CNA (1), CNA (2), CNA (3), AP News

Thailand

• Omicron surge prompts level 4 alert in Thailand
• Tourist organisations calling for more COVID-19 restrictions to be eased to boost tourism
• World Bank says digital, circular economy can earn Thailand $3.4 billion a year extra

Thailand’s Public Health Ministry has raised its COVID-19 alert to Level 4 following a sharp increase in Omicron variant infections nationwide. Containment measures have been stepped up in high-risk areas but lockdowns remain unlikely. Individuals from at-risk groups, including the elderly, those with underlying health conditions and the unvaccinated, continue to account for most COVID-related deaths. Under the new alert, people are encouraged to work from home, avoid non-essential inter-provincial travel, suspend overseas trips, close at-risk venues and avoid large gatherings. The authorities have shifted their focus from the spike in new cases to watch the number of deaths and severe cases.

Tourism organisations in Thailand have called on the government to ease COVID-19 restrictions so as to boost arrivals. Presidents of 20 tourism associations and councils submitted a letter to the Prime Minister asking for authorities to consider waiving the requirement for international travellers to undergo a second PCR test on the fifth day of their stay, reduce the amount of travel insurance coverage from US$50,000 to US$25,000 and shorten the quarantine period for travellers who test positive for COVID-19 from 10 days to five days. This is to reduce tourist expenses and ensure that Thailand remains competitive and attractive to tourists as neighbouring tourist destinations such as Vietnam and Japan are likely to open borders soon.

Thailand’s tourism-reliant economy has been massively affected by the interruptions to global travel caused by COVID-19. To recover, Thailand can look to digital and disruptive technologies and development of a circular economy, which the World Bank says can earn Thailand up to $3.4 billion each year in additional investments, savings and revenue. It says Thailand needs an innovation-led growth model to address existing foreign investment constraints, create better jobs and become a high-income country.

Sources: CNA, CNA (2), Bangkok Post, Nation Thailand

Vietnam

• Vietnam sees single-day records of COVID-19 cases
• Vietnam to remove travel restrictions 15 March
• Vietnam named most attractive apparel sourcing location

Vietnam continued to see new highs in its daily cases, with 55,871 new infections recorded on 22 February 2022. However, the government is pressing ahead with reopening its economy and has resumed its 20th international flight. The country is gradually lifting restrictions this year for international flights after almost two years of suspension. In tandem, authorities have announced that Vietnam will fully open international tourism and lift all travel restrictions on 15 March. International travelers showing symptoms will need to undergo testing upon landing at the airport. Otherwise, visitors only need to self quarantine for one day.

Vietnam is emerging as a top sourcing location for apparels, according to consulting and data analytics firm GlobalData. The country is seen as being able to match China in terms of production quality and is able to capture shifts in supply chains if businesses need to diversify from China. In line with this, Vietnam’s textile and garment association is expecting a boom in apparel exports. This year, textile sales are forecast to jump 7.4% to $43.5 billion. The government has decided to keep factories running, deeming the Omicron variant as less severe and touting the high vaccination rate in the country.

Sources: VNExpress, VNExpress (2), Vietnam Insider, Reuters