[PREMIUM] Country Updates (14-27 Oct)

Myanmar

ASEAN Summit takes place without Myanmar (26 Oct)

ASEAN leaders convened their annual summit on Tuesday, 26 Oct, with Myanmar absent for the first time. Last week, in an unprecedented move, ASEAN had decided to exclude Myanmar’s military leadership from attending the summit for their failure to implement the Five Points Consensus agreed in April. Although ASEAN had said that it would accept a non-political representative from Myanmar, the junta said that it would only agree to its leader or a minister attending.

Indonesia, Malaysia, and Singapore had taken a firm stance against military leader’s Min Aung Hlaing’s participation at the summit. Notably, during the summit, Singapore’s Prime Minister Lee Hsien Loong commented that the move was “difficult but necessary” to uphold ASEAN’s credibility. Cambodia’s Prime Minister Hun Sen, who will chair ASEAN next year, also stressed that ASEAN had not expelled Myanmar but that “Myanmar had abandoned its right” and that the situation of “ASEAN minus one” is not because of ASEAN but because of Myanmar.

Sources: Straits Times (1), Straits Times (2), Reuters, CNA

US top official meet representatives of Myanmar’s shadow government (26 Oct)

On Monday, 25 Oct, US National Security Adviser Jake Sullivan, held a virtual meeting with Duwa Lashi La and Zin Mar Aung, two representatives of Myanmar’s shadow government, the National Unity Government (NUG).

During the meeting, Sullivan stressed that the US continues to support the pro-democracy movement and “will continue to promote accountability for the coup”. Parties also discussed ongoing efforts to restore democracy and US initiatives to provide humanitarian assistance directly to the people of Myanmar as the country battles the Covid-19 pandemic.

The military junta has branded the NUG as a terrorist group. Notably, while top National League for Democracy (NLD) leaders including Aung San Suu Kyi has not explicitly legitimised the NUG, the NUG has strong support from Myanmar people. It is also vying for the right to represent Myanmar on international forums.

Sources: Al Jazeera, Reuters

UN Chief appoints Singaporean sociologist as new Myanmar special envoy (26 Oct)

United Nations (UN) Secretary-General Antonio Guterres has announced that Singaporean sociologist Noeleen Heyzer will replace Christine Schraner Burgener of Switzerland as the new special envoy to Myanmar. Heyzer, 73, has held multiple senior positions at the UN and is known for having good relations with Myanmar’s National League for Democracy (NLD).

A focus of Heyzer’s task would involve engaging Myanmar’s junta leadership, which so far has rejected the proposals of both the UN and ASEAN to meet and hold dialogues with all stakeholders. Neither Burgener, who is leaving her UN duties after three-and-a-half years nor ASEAN’s Special Envoy, Brunei’s Deputy Foreign Minister Erywan Yusof has been granted permission by the junta to go to Myanmar, where they hoped to meet and engage with former civilian leader Aung San Suu Kyi.

Sources: CNA, The Irrawaddy, Straits Times

Thailand

Thailand reopening: quarantine-free travel allowed for 46 countries (23 Oct)

Starting from 1 Nov, Thailand will reopen the country to visitors from 46 countries without the need for quarantine, instead of only 10 Covid-19 low-risk countries announced earlier. The requirements are as follows: First, these visitors must have stayed in a country within the list for 21 days prior to departure. Second, they must be fully vaccinated two weeks prior to their flight into Thailand. Third, they must also have evidence of pre-flight negative test results 72 hours before their flight. Fourth, they must take another test upon arrival. Fifth, visitors must also have health insurance of at least US$50,000. And finally, they will also be required to download a phone app that will track their whereabouts.

With the move, Prime Minister Prayuth Chan-ocha has also ordered an end to the curfew imposed in 17 provinces which have been deemed to have tourism significance and designated for reopening, including Bangkok. This will take effect from 31 Oct to support the reopening of the country. Nonetheless, entertainment venues in these 17 provinces will remain closed, including pubs, bars, and karaoke shops, but operators have been told that they can begin preparing for their reopening. Still, the number of people at public gatherings in the tourist reopening zones will be capped at 500.

PM Prayuth has cautioned that the decision to reopen borders acknowledges the risk of increased infections but said “it is a risk we have to accept”. He added that he has asked the Ministry of Public Health to accelerate vaccinations.

Sources: CNA, Bangkok Post (1), Bangkok Post (2)

Thailand to regulate digital platform service businesses (25 Oct)

With digital platform services such as online marketplaces, social commerce ifood delivery, space sharing, ride and car sharing businesses and online search engines becoming increasingly important to the public, Thailand’s cabinet has approved a draft decree to regulate such businesses. Digital platform service businesses will now have to notify the government before operating. This is intended to help maintain financial and commercial stability and oversee any negative impacts that such services may cause to the public.

Last month, the Thai government also announced that it would start collecting value-added tax (VAT) from foreign technology companies including Facebook and Google, intermediaries such as ride-hailing app Grab and streaming services such as Netflix.

Sources: Yahoo, Bangkok Post

Thailand’s monetary policy to stay accommodative amid economy uncertainty (18 Oct)

The Thai central bank has said that monetary policy would remain accommodative to support recovery in light of economic uncertainty. In 2022, Thailand’s economy is expected to be driven by domestic consumption, but the labour market remains fragile with an expected 3.4 million unemployed or partially employed by year-end. The Bank of Thailand (BoT) is also working to ensure that the baht’s volatility is in line with regional currencies and will not be an obstacle to economic recovery.

The Thai economy contracted 6.1% last year, with a battered tourism sector. Notably, the BoT forecasts an economic growth of 0.7% this year, bottoming out in the third quarter, and growing 3.9% in 2022. The BoT has implemented key monetary tools including keeping interest rates low and Assistant Governor Pip Disyatat said that the more targeted fiscal and financial measures would also be key going forward. At a separate seminar, Finance minister Arkhom Termpittayapaisith said monetary policy must support fiscal policy as government stimulus measures will generally increase inflation.

Source: Reuters, Bangkok Post

Indonesia

Jokowi calls for the implementation of ASEAN travel corridor (25 Oct)

President Jokowi first mooted the idea of an ASEAN travel corridor in November last year to expedite economic recovery. Now that the region has done relatively well in managing Covid-19, Jokowi has urged for an immediate implementation of the plan. Jokowi is set to attend the 3-day ASEAN summit held virtually from this Tuesday to Thursday (27-29 Nov) where leaders are expected to discuss the execution of the ASEAN Travel Corridor Arrangement Framework, amongst other things. The travel corridor intends to facilitate essential business travel with strict health protocols in place. At the ASEAN Summit last year, Jokowi aimed to enact the travel corridor arrangement in the first quarter of this year but the Delta variant has upended said plan.

Jokowi highlighted that resumption of travel is one of the key ways to revitalise the region’s economy. As the vaccination rate continues to accelerate and cases decline, movement restriction measures can be relaxed to accommodate the resumption of travel. Indonesia has reopened Bali earlier this month to 19 countries as vaccination rate in Bali exceeds 84%. Indonesia targets to open more areas if vaccination rates in those areas reach above 70%. There must be regional recognition of vaccine certificates and interoperability of vaccine systems amongst ASEAN countries to facilitate the travel corridor plan. Economic experts have noted that two-thirds of ASEAN tourism is derived from within the region itself. Hence, the revival of intra-ASEAN tourism would provide a significant boost to the region’s economy.

Sources: Jakarta Post, The Straits Times

Indonesia expects 4.5% GDP growth in third quarter of 2021 (26 Oct)

Indonesia envisages a 4.5% economic growth in the third quarter of 2021 as exports continue to rise and domestic consumption is showing signs of recovery. The country’s economy grew 7.07% in the second quarter but the onset of the Delta variant in July had ravaged Indonesia’s economic recovery. However, since mid-August, domestic demand has begun picking up amidst relaxed movement restriction measures. Record high prices for palm oil and coal have also helped bolster Indonesia’s exports. According to Indonesia’s Finance Minister, Sri Mulyani, this proves that the Indonesian economy remains relatively resilient despite the devastating socioeconomic effects brought about by the pandemic. The Finance Minister also updated Indonesia’s 2021 full-year growth forecast to 4%, revised from the earlier prediction of between 3.7% to 4.5%. However, analysts presented a rather bleak forecast as they estimated that Indonesia’s economy grew 3.2% in the July-to-September quarter and 4.6% in the current quarter, with the overall GDP growth for 2021 forecasted at 3.4%.

There may be a possibility for an economic rebound in the fourth quarter but challenges still remain. Potential challenges include the tapering in the US and European Union (EU) where we see governments retracting pandemic stimulus, a possible economic slowdown in China, and rising inflation rates globally. These factors contribute to the volatility of the financial market and will reduce the demand for goods from emerging markets like Indonesia, hence affecting the country’s performance in the last quarter of the year.

Sources: Reuters (1), Borneo Bulletin, Reuters (2)

Malaysia

Malaysia to unveil 2022 Federal Budget (26 Oct)

Malaysia will be releasing its federal budget on Friday, 29 October as the country looks towards its post-pandemic recovery. The budget is expected to be expansionary, aided by surging commodity prices. The 12 Malaysia Plan released by PM Ismail Sabri’s government is indicative that the government plans to increase development spending in 2022, despite the limited revenue expected. In a pre-budget statement released in August, the Finance Ministry said the budget will focus on the country’s recovery, introducing reforms, and aiding businesses and citizens impacted by the extended lockdowns. The passing of the federal budget in parliament will be the first real test of the stability of Ismail Sabri’s government, after a Memorandum of Understanding was signed with the opposition bloc.

Sources: CNA, The Edge, New Straits Times, Straits Times

Malaysia to hold Malacca state election in November (20 Oct)

State legislative election will be held in the southwestern state of Malacca on 20 November, despite concerns about holding an election during the pandemic. Malaysia’s Elections Commission said there will be 12 days of campaigning prior to the polls. The Malacca state assembly was dissolved in early October after the UMNO-led government collapsed. Opposition bloc, Pakatan Harapan, said it would file a lawsuit to block the election, and claims it has a majority to form the state government. The Malacca polls will be the first election in which parties in the current ruling coalition, UMNO, Bersatu and PAS, will compete against each other at the ballot boxes, resulting in a more fragmented political landscape.

There is increasing concern about holding an election just as COVID-19 infections stabilise. Malaysia’s Health Ministry has banned all political gatherings in Malacca until the campaign period officially begins on 8 November. The last state elections held in Sabah in September contributed to a surge of COVID-19 infections, undoing Malaysia’s early success in tackling the pandemic.

Sources: Straits Times (1), Straits Times (2), The Star, Malay Mail

Vietnam

Vietnam’s Prime Minister expects economic rebound (20 Oct)

Prime Minister Pham Minh Chinh spoke to Vietnam’s National Assembly on 20 Oct and promised an economic revival is on the cards. He said Vietnam’s exports are still likely to rise 10.7% this year, while GDP next year would expand at 6.0-6.5%. The country will still be missing targets on its garment exports this year, as Covid-19 restrictions had disrupted supply chains. There are also some upward risks to inflation but the government aims to keep annual inflation below 4%. Some analysts remain optimistic on Vietnam’s economic trajectory. A DBS report highlighted Vietnam’s bilateral trade with China has grown faster than all the other economies in the past two decades and will benefit from stronger ASEAN-China ties. In 2020, Vietnam contributed 8.8% of China’s overall electronics imports.

Sources: Reuters, Business Times, VNExpress

Industrial provinces seek ways to attract factory workers to come back (25 Oct – ongoing)

Factory zones in Vietnam’s south are hoping to bring back workers who had fled to their hometowns from the COVID-19 outbreak. Areas such as Ho Chi Minh City and Binh Duong Province are organising job fairs in person and online to try recruit more workers. According to the Ministry of Labour, Invalids and Social Affairs’ Department of Employment, the industrial provinces in the south face a large gap in labour, with only 60-70% returnees to work.

Textile exports this year are forecast to be at USD 34 billion dollars versus the USD 39 billion targetted. Footwear companies in particular have been severely affected with brands such as Vans, Nike and Crocs missing sales targets, or shifting production elsewhere.

Sources: Vietnam News, Reuters