[PREMIUM] Country Updates (16-29 Sep)

Indonesia

Indonesia’s parliament approves 2022 budget (28 Sep)

Indonesia’s parliamentary budget committee has approved the government’s $190 billion 2022 budget proposal. The budget aims to revive economic growth, manage the fallout from the pandemic and reinforce structural reforms. The government is projecting GDP growth of 5.2% in 2022. The budget is forecasted to represent a fiscal deficit of 4.85% of GDP, which is lower than the estimate of 5.82% of GDP this year. President Jokowi said the 2022 budget will pave the way to further reduce the deficit to under 3% in 2023, as required by law.

Meanwhile, the World Bank mirrored similar growth targets for 2022 and said it is expecting Indonesia to potentially grow close to 5%. World Bank’s Chief Economist of the East Asia and Pacific Region Aaditya Mattoo said he was optimistic about Indonesia’s growth prospects, given the mass vaccination push by the government. However, growth is contingent on how the government continues to manage the pandemic while balancing lives and livelihoods.

Sources: Reuters; The Star; CNA; Tempo

Logistics and staff shortage dampens Indonesia’s vaccination efforts, Singapore donates vaccines to Indonesia (26 Sep – 28 Sep)

Indonesia lags behind other ASEAN countries in its vaccination drive due to manpower shortage and logistical problems. Despite having secured adequate vaccine supply, Indonesia still grapples with insufficient medical staff and lack of vaccination booths. The government is harnessing manpower help from the police, military and intelligence personnel to set up more vaccination centres. Singapore recently donated 122,400 AstraZeneca vaccines to Batam and Riau Islands of Indonesia under the COVAX programme. As of 29 September 2021, only 18.4% of Indonesia’s target population has been fully inoculated whilst 32.9% are partially vaccinated. The government aims to cover at least 70% of its population with the first dose by the end of the year.

Jokowi’s popularity continued to drop in the latest poll conducted by Indikator Politik Indonesia this month, depicting a decline from 59% in July to 58% currently. Another survey done by Indikator revealed that public sentiment regarding the economy has improved. Only 44.2% of the respondents in September perceived the economy to be bad, as compared to 52.5% in July. The government must continue to assist the micro, small and medium enterprises which constitute the country’s economic backbone and are significantly affected by the restrictions imposed.

Sources: Straits Times; Bloomberg; Straits Times(2)

Malaysia

PM Ismail Sabri unveils 12th Malaysia Plan (27 Sep)

PM Ismail Sabri propounded the 12th Malaysia Plan (12MP) in parliament on 27 September 2021. The 12MP entitled, “Malaysian Family – Prosperous, Inclusive and Sustainable” has three overarching themes. They are revamping the economy, empowering people, and advancing sustainability. The 12MP also outlined nine main goals that are subsumed under the three themes. In resetting the economy, the government aims to achieve an average of 4.5 to 5.5% GDP growth per year and to increase Malaysia’s labour productivity growth from 1.1 to 3.6% per year.

The government also promised to assist all segments of society, especially the Bumiputera population who comprise the bulk of the lower income group or bottom 40% (B40). The government is strengthening support for Bumiputera residents through providing training and technical skills to mould them into future professionals, funding several initiatives to facilitate more Bumiputra businesses into the digital economy, and others. The 12MP is the first major policy tabled by the new government and perceived by many as a proxy for measuring the viability of bipartisan cooperation.

Sources: Straits Times; Straits Times (2); CNA; New Straits Times; The Star

Payment linkage between Singapore and Malaysia from 2022 (28 Sep)

Malaysia’s DuitPay and Singapore’s PayNow will be linked from the end of 2022 in incremental phases. The partnership will enable real-time financial transactions between participating banks in both countries. Remittances between Singapore and Malaysia valued at $957 million in 2020, and the partnership will allow for more seamless transactions. It will also benefit travellers between the two countries, once leisure travel resumes, as the PayNow-DuitPay partnership supports retail transactions. According to the Monetary Authority of Singapore (MAS), the payment linkage is a key infrastructure to support cross-border payments. The partnership between MAS and Bank Negara follows a similar deal between MAS and the Bank of Thailand, and is another step towards a regional network of linked real-time payment systems.

Sources: TodayOnline; Business Times; TechinAsia

Myanmar

US-China backdoor deal blocks Myanmar junta from United Nations (13 Sep-25 Sep)

The junta has been vying for Myanmar’s seat in the United Nations (UN) to bolster its international legitimacy. It attempted to unseat the current UN Ambassador for Myanmar Mr Kyaw Moe Thun, with retired military officer Aung Thurein as their representative. However, Ambassador Kyaw requested to renew his accreditation.

In light of the situation, the US and China managed to negotiate a backdoor agreement that blocked the junta from addressing the General Assembly on 27 September. As part of the deal, Ambassador Kyaw Moe Thun must also not speak out against the military government during the annual high-level meeting where he was initially expected to address attendees. Ambassador Kyaw Moe Thun will retain his seat until a decision has been made by the UN’s nine-member credentials panel in November.

Sources: Foreign Policy, Aljazeera, Reuters

Aung San Suu Kyi has “no comment” on call for war against junta; Quad calls for end to violence 20 Sep ongoing)

During her court hearing on 20 September, Aung San Suu Kyi’s lawyer said she has “no comment” on the declaration of war against the junta by the National Unity Government (NUG), Myanmar’s shadow government. Her lawyer said she would only comment after discussing with other leaders of the National League for Democracy. Notably, in early September, the NUG declared a “people’s defensive war” urging citizens to attack junta assets. Following the declaration, violence and aggressions have increased from both sides.

While non-violence was a defining characteristic of the democracy movement led by Aung San Suu Kyi against the previous junta decades ago, many in Myanmar have turned to violent protests to resist the junta. So far, more than 1,100 people have been killed and over 8,000 arrested according to a local monitoring group. In a joint statement, leaders of the Quadrilateral Security Dialogue (Quad) met on 24 September and called for an end to the violence in Myanmar, and the urgent implementation of ASEAN’s Five Point Consensus on Myanmar.

Sources: CNA, Straits Times, The Irrawaddy

Thailand

Thailand vaccination programme on track (25 Sep-ongoing)

According to the Thai government, the country is on track to vaccinate 70% of the population against Covid-19 by the end of 2021. On 24 September, a record 1.44 million doses were administered and Thailand has now surpassed 50 million doses administered. Currently, more than 44.45% of the population have received at least one shot of the vaccine and more than a total of 16.6 million people, or 23.9% of the population, have been fully vaccinated. For the rest of the year, the ministry has procured 125 million doses, a mix of AstraZeneca, Pfizer and other vaccine brands. Notably, the department of disease control has set monthly coverage as percentages of the population from October to December at 58%, 71% and 85% for the first shot and 45%, 60% and 74% for the second shot.

Other countries have offered medical aid and supplies to Thailand to support its battle against Covid-19. Singapore has contributed 122,400 doses of AstraZeneca vaccines, 200,000 diagnostic tests and 500,000 nasopharyngeal swabs. The US has also donated 2.5 million doses of Pfizer vaccines. 1.5 million doses were delivered in July, but there have been delays in the arrival of the last million with both parties blaming each other for the hold up.

Sources: Bangkok Post, Bangkok Post (2), Thaiger, Straits Times

Thailand cuts quarantine to seven days and Bangkok to reopen without quarantine in November (27 Sep)

On 1 October, a variety of businesses and services including theatres, sports venues and nail salons will reopen in Thailand and nightly curfews imposed in several provinces will be shortened. Following the “Phuket Sandbox” pilot, from 1 October, Thailand will also not require vaccinated tourists to undergo quarantine in more provinces categorised as “blue zones”. These places include parts of Krabi, Phang Nga Surat Thani, Phi Phi, Samui and Pha Ngan. Social gatherings of more than 500 people will also be allowed in these provinces. These relaxation of measures will however only apply to ten other key provinces including Bangkok by November. In the meantime however, to boost tourism, Thailand will halve its mandatory quarantine to seven days for fully vaccinated visitors starting from 1 October.

The easing of measures comes as the country ramps up its pace of vaccination after initial supply shortages, with as many as a million doses administered daily in the past week. They also form part of the country’s “living with Covid” strategy to restart the economy while maintaining infections at a level that will not overwhelm the country’s healthcare system. Thailand’s tourism sector attracts nearly 40 million visitors annually pre-pandemic and it is hoped that easing international travel will help revive Thailand’s battered tourism industry.

Sources: Bloomberg, Reuters, CNA

Vietnam

Vietnam lockdowns hurt global supply chains; manufacturers begin to shift (23 Sept – Ongoing)

As Vietnam continues to deal with a high number of Covid-19 cases, companies are reportedly looking to move production to other markets. Strict pandemic related measures have caused a number of factories in the country to be shut down. The timing is unfortunate as manufacturers are hoping to catch the sales rush during the end-year holiday season. Brands such as Nike, Adidas and Toyota had had their operations disrupted. The American, EU and South Korean chambers of commerce in Vietnam and the US-Asean Business Council have appealed to Vietnam’s Prime Minister for a clear road map on reopening. Surveys of their associations showed that 20% of their manufacturing members have begun shifting production to other countries. Vietnam is a major player in global supply chains, especially in the manufacturing of electronics and garments. Companies say they are looking towards Indonesia and Bangladesh as alternative locations of production.

Sources: Financial Times, CNBC, Channel NewsAsia, VNExpress

Vietnam struggles with vaccine supply; president presses for equitable supply at UNGA (22 Sept – Ongoing)

President Nguyen Xuan Phuc spoke at the UNGA calling for international cooperation to ensure an equitable supply of vaccines. Vietnam has stepped up efforts to secure vaccines through a multipronged approach but still has one of the lowest vaccination rates in Southeast Asia at 7.6%. Access to vaccinations has been through a mix of contracts, the global vaccine access mechanism COVAX and foreign aid. The Prime Minister has issued a special appeal to COVAX for vaccine priority, especially in the months from September to November.

Meanwhile, Vietnam signed a deal with Cuba to ship in five million doses of its Abdala vaccine. The Abdala vaccine has yet to receive official recognition from the World Health Organisation. Vietnam is also one of the countries to purchase doses of Russia’s Sputnik V vaccine. The country continues to push for vaccine donations. South Korea on 22 Sept announced it would donate more than 1 million doses in October. Italy also doubled its AstraZeneca vaccine donations to 1.6 million total. Vaccine donations have also come in from the US, China, Japan, Germany, and France.

Vietnam has tried to develop its own vaccine, Nanocovax, but is still undergoing trials and may not be ready until Q1, 2022. Vietnam has so far received about 50 million doses – short of the 150 million target needed to vaccinate 70% of its population by April next year.

Sources: VNExpress, Reuters, Reuters(2), VNExpress(2), Nikkei Asian Review