[PREMIUM] Country Updates (10- 23 June 2021)

Sources: Our World in Data, Worldometer, Straits Times. As of 23 June 2021

Indonesia

Surge of COVID-19 cases hindering Indonesia’s reopening plans (21 Jun)

Indonesia faced its highest daily increase of over 14,000 cases on 21 June, with total cases surpassing the two million mark. In the past two weeks, more than 41,000 cases were recorded. Eight provinces, including Jakarta, Central Java, East Java and Yogyakarta, reported the greatest rises. Other high risk “red zones” include the towns of Kudus in Central Java and Bangkalan in East Java, where the Delta variant is identified to have caused the outbreaks. Blame is also placed on the 18 million travellers who returned to their hometowns for Eid celebrations despite the domestic travel ban. The healthcare sector is struggling as hospitalisation rates have exceeded 80% in the capital, West Java and Central Java.

The government has imposed new restrictions, which will be in place until 5 July. They require non-essential businesses in red zones to close at 8pm. Three quarters of the workforce must work from home, and religious and social gatherings will be banned. The new surge is expected to further delay the plan to reopen Bali to international visitors in July. Additionally, there is lowered confidence that the travel corridor between Singapore, Nongsa in Batam and Lagoi in Bintan will proceed in July.

As of 20 June, Indonesia had received more than 104 million COVID-19 vaccines, 94.5 million of which were supplied by China’s Sinovac, and the rest by AstraZeneca and Sinopharm. However, doubts on the efficacy of Sinovac’s vaccine emerged when more than 350 doctors became infected despite being fully inoculated with its CoronaVac vaccine. Nonetheless, the government is pushing forward with the aim of inoculating a million people a day by July.

Source: SCMP Post, Straits Times

COVID-19 surge likely to dampen Indonesia’s economic growth as Bank Indonesia holds interest rates (17-22 June)

The recent surge in Covid-19 cases is likely to dampen Indonesia’s GDP in the second quarter of 2021, according to Indonesia’s Finance Minister Sri Mulyani Indrawati. She highlighted, in particular, the surge in Java as worrying as the province accounts for nearly 60% of the country’s GDP. The government’s previous forecast for Q2 was between 7.1% to 8.3%. While Sri Mulyani did not update the forecast, she said “as COVID-19 cases increase, maybe the upper end of the projection will be lower.”

Meanwhile, Bank Indonesia has left its benchmark interest rates unchanged despite below-target inflation and the US Federal Reserve’s hawkish shift as the US looks to end its pandemic support. The Rupiah fell by as much as 0.9% following the Fed’s statement. The Fed’s move has limited BI’s ability to cut rates further.

Sources: Jakarta Post; CNA; Business Times; Reuters; Bloomberg 

Indonesia considers higher tax for the rich to boost revenue (15 June)

Indonesia is planning to raise its personal income tax for high net-worth individuals and raise consumption tax in order to boost the country’s revenue. President Jokowi asked Parliament to discuss proposals to amend the 1983 law on general tax provisions and procedures. Proposed changes include a 35% personal income tax for high net-worth people, with earnings over five billion rupiah (US$347,540) annually. Other changes could include the levying of a carbon tax and broadening the scope of the consumption tax to include education, healthcare, public transport and food staples.

Indonesia’s budget deficit in 2020 hit 6.09% of its GDP due to massive government stimulus measures as a result of the pandemic. The government said it would return the deficit within the legal limit of 3% by 2023. The proposed tax reform could be a way for the government to recoup losses. Indonesia hopes that if the tax reform is passed next year, it will not need to borrow more from foreign lenders. Foreign debt reached US$418 billion as of April 2021.

Sources: SCMP; Straits Times

Malaysia

Prime Minister Muhyiddin lays out Malaysia’s pandemic exit plan (June 15-23)

Malaysian Prime Minister, Muhyiddin Yassin, unveiled Malaysia’s exit strategy from the Covid-19 pandemic. The National Recovery Plan is a four-stage plan, which projects Malaysia might open up its economy, parliament and social sectors in September. Muhyiddin said the current nationwide lockdown and covid restrictions are costing the government RM1 billion (US$240 million) a day. The current lockdown is the first phase of the plan. The country will move to the second stage, where restrictions are eased slightly, when Malaysia’s daily Covid-19 cases are below 4,000, and 10% of the population has been fully vaccinated. The third phase, when 40% of the population is vaccinated and daily infections are below 2,000, will see most sectors of the economy reopen. A full reopening, projected to take place from November, is expected when 60% of the population is vaccinated and daily cases are below 500.

However, a week after The National Recovery Plan was unveiled, the government said Malaysia will only be able to fully vaccinate 10% of its population from mid-July. This could potentially delay the easing of lockdown measures. Muhyiddin said that the vaccination rate and daily case tallies will serve as indicators for the country’s reopening.

Sources: Straits Times (1); Straits Times (2); The Star

Special Rulers’ Conference: Malaysian King says Parliament should reconvene as soon as possible (16 June)

Malaysia’s royal leaders met in a special meeting of rules to discuss the country’s surging Covid-19 infections, vaccination, the state of emergency and the suspension of parliament. Prior to the special meeting, the King had met with 18 political leaders from various parties and the chairman of the Special Independent Committee on the Emergency. In a statement released after the meeting, the rulers declared that the state of emergency should not be extended beyond 1 August and Parliament should reconvene as soon as possible. However, the rulers’ statement stood in contrast to Prime Minister Muhyiddin’s statement that the earliest Parliament would reconvene was in September. While the developments appear to back Muhyiddin into a corner, the King has limited constitutional power and is obliged to take the government’s advice on most matters.

Sources: SCMP; Straits Times (1); CNA (1); Straits Times (2)

Myanmar

COVID cases at highest since coup in Myanmar (21 June)

On 21 June, Myanmar reported a record 595 new cases of COVID-19, the highest daily number since the coup in February. The increase in the number of infections this month has raised concerns that this could be a start of a new deadly wave. While the number of cases is rising, it likely does not reflect the actual number of cases in the country. Myanmar’s low testing rates suggest a hidden reservoir of infections. Since the coup, testing rates stand at approximately 4,000 per day. This stands in stark contrast to 17,000 tests per day prior to the coup.

The situation in Myanmar seems bleak — both in terms of prevention and cure. Its vaccination plan has been progressing poorly as public distrust of the military government has caused people to politicise the junta’s vaccine rollout. Many vehemently reject the vaccine, seeing their rejection as a means to protest against the junta. Myanmar’s healthcare system has also been crippled by the Civil Disobedience Movement, with doctors and nurses going on strikes in protest of the coup and consequently arrested.

Sources: CNA; The Guardian

United Nations condemns coup in Myanmar and calls for arms embargo (18 June)

In a resolution passed on 18 June, the United Nations General Assembly (UNGA) condemned the Tatmadaw’s use of “excessive and lethal violence” since the coup on 1 Feb and called on all countries “to prevent the flow of arms into Myanmar”. The resolution also called for Myanmar’s military junta to restore the country’s democratic transition and the unconditional release of detainees.

While not legally binding, the resolution reflects international condemnation of the coup. The measure was approved with 119 countries voting in support and 36 countries abstaining. Despite ASEAN’s earlier proposal for the United Nations to drop its call for an arms embargo, 6 out of 10 ASEAN member states were in support of the resolution after lengthy negotiations with the EU and several other Western nations. Myanmar’s UN ambassador Kyaw Moe Tun, who in February denounced the military takeover also voted in support. Brunei, Cambodia, Laos and Thailand however, had abstained, alongside China and Russia.

Sources: Financial Times, The Guardian, CNA

Thailand

Thailand’s pro-democracy protesters plan to return to streets (21 June — ongoing)

After a six-month break, where Thailand faced two waves of COVID-19 infections, the pro-democracy movement plans to return to the streets of Bangkok on 24 June to call for the resignation of Prime Minister Prayuth Chan-ocha. Notably, on 24 June 1932, the Siamese Revolution had taken place, which ended absolute monarchy in Thailand. The Metropolitan Police Bureau, has warned against the large-scale demonstration, adding that organisers may face up to two years in prison. The start of large-scale protests could threaten the government’s plan for economic recovery and its plans to reopen the country for tourism. Large crowds and low vaccination rates could result in further spread of the virus in Bangkok, the current hotspot.

On 24 June, parliamentarians will also be voting on proposed amendments to the constitution. Discussions on changing the constitution started last year to appease the growing pro-democracy movement and it remains to be seen how the vote will turn out and the protestors’ response.

Sources: Straits Times; Bloomberg

Thailand greenlights Phuket’s quarantine-free travel model (22 June)

On 22 June, Thai authorities approved quarantine-free travel to Phuket, in hopes that the move may help boost Thailand’s economic recovery. The scheme, known as the “Phuket Sandbox” is set to begin on 1 July, where tourists who are fully vaccinated against COVID-19 may freely move on the island immediately upon arrival and after 14 days, may travel elsewhere in Thailand. For the plan to proceed as planned, infection rates must be kept low, and weekly COVID-19 cases cannot exceed 90 in Phuket. If the pilot scheme proceeds smoothly, there are plans to replicate it in other tourist hotspots such as Krabi and Koh Samui.

Some industry professionals have however complained the pilot scheme will make little difference as a considerable proportion of its target audience, middle class and wealthy Asians, must nonetheless quarantine upon their return home. However, the Thai government is optimistic, citing strong interest from the Middle East, UK, Europe and Scandinavia. So far, the scheme has met a lukewarm response, with hotel bookings indicating expected occupancy of less than 20 per cent.

On 17 June, Prime Minister Prayut Chan-o-cha also announced plans to reopen the whole country to tourists within 120 days, by October, calling it a calculated but necessary risk. With its tourism industry making up 20 percent of its national income in pre-COVID days, there are strong grounds for the Thai government’s many initiatives to boost tourism. Notably, the country had lost approximately US$50 billion in tourism revenue last year when foreign arrivals plunged 83 per cent to 6.7 million, from a record 39.9 million in 2019.

Sources: Bangkok Post, CNA (1), CNA (2), CNA (3), New York Times

Vietnam

Vietnam advances homegrown vaccine; receives foreign donations of doses (10 Jun – ongoing)

Vietnam continues to manage its most serious outbreak, seeing improvement in major clusters while other provinces are observing a new surge in cases. The Bac Giang and the Bac Ninh industrial park clusters are being brought under control, whereas Ho Chi Minh City is still struggling with unlinked cases that keep appearing.

Progress has been made in developing its own vaccines and foreign donations are expected to boost the vaccination rate in Vietnam. On 10th June, the third phase of clinical trials began for Vietnam’s home-grown vaccine candidate, Nanocovax. This final stage will determine whether the vaccine is fit for commercial production and widespread use. If the results from the third phase are just as promising as the first two, there is a possibility that Vietnam will give it emergency approval to tackle the northern clusters by the end of the year.

At the same time, the country is seeking to strengthen German-Vietnamese ties in order to access more vaccines and a transfer of vaccine-production technology. The country is also a beneficiary of vaccine donations from the US, China and Japan. 500,000 of Sinopharm vaccines were gifted by China and Japan sent over 1 million doses of AstraZeneca vaccines. Meanwhile, Vietnam is still discussing with Russia on permission to produce Sputnik V locally.

The ongoing outbreak has impeded production industries in Vietnam, with the country recording a trade deficit for the first half of June. Its aviation industry continues to be affected and there is talk of a credit package to rescue Vietnam Airlines from bankruptcy by the end of the month. The country is still looking to open up if it can ramp up its inoculation programme. For example, discussions have been held with Singapore to resume business and leisure travel.

Sources: WHO, Nikkei Asia, Vietnam Plus, CNA, Vietnam News,

Vietnam introduces a nationwide social media code of conduct (June 17)

Vietnam’s Ministry of Information and Communication (MCI) has introduced a code of conduct that seeks to regulate the content produced and seen by citizens online. The code prohibits posts that “affect the interests of the state”, offend the honor and dignity of people, infringe legitimate rights and interests of any organisations and individuals. Online behaviour needs to align with the country’s ethical values, culture and traditions. Social media providers are to comply with authorities to remove such content from their platforms, and state employees are required to report any “conflicting and unlawful information”. Positive posts that “promote the beauty of Vietnam’s scenery, people and culture, and spread good stories about good people” are encouraged.

MCI did not clarify to what extent the decision was legally binding, or how it would be enforced. There are concerns and criticisms against the code, given the government’s crackdown on dissidents and activists, some of whom are serving lengthy jail terms for posts on Facebook and YouTube. In response, the Ministry of Foreign Affairs stated that it serves to protect national security and order while not impeding any international pact.

Sources: Tuoi Tre News, VnExpress, The Diplomat, Reuters