[PREMIUM] Country Updates (26 Jan-9 Feb)

Indonesia

• Indonesia records full-year GDP growth of 3.69% in 2021
• Government reintroduced COVID restrictions as cases surge

Indonesia’s economy expanded in 2021, with full-year growth of 3.69%, largely in line with analysts’ expectations and the official government forecast. The country recorded a 2.07% contraction in 2020. Growth accelerated in the last quarter of 2021 at 5.02% on a yearly basis, compared to 3.51% growth in the third quarter. Higher consumption spending due to the easing of COVID-19 restrictions and stronger commodity prices bolstered Indonesia’s GDP in Q4. While GDP is expected to grow further in 2022, the spike in COVID-19 infections and tightening fiscal policy might impact the country’s growth prospects. The government plans to return its budget deficit to 3% of GDP by 2023.

As COVID-19 infections surge in Indonesia, movement curbs have been re-introduced in Greater Jakarta, Bali, Bandung and Yogyakarta. The spike is driven by the infectious Omicron variant and the government expects cases to peak by the end of February. Public places such as shopping centres and eateries must now function at 60% capacity, while places of worship at 50%. The government will consider the ratio of hospital bed occupation and the number of cases when evaluating if restrictions should be tightened, according to Mr. Luhut Pandjaitan, Coordinating Minister of Maritime and Investment Affairs of Indonesia. The government initially announced a temporary ban on international travel through Jakarta airport, but later retracted the ban. Tourists with the necessary documentation are still able to enter Indonesia through Jakarta, Bali, Batam and Tanjung Pinang. The tightening of restrictions came as Bali reopened its borders to vaccinated international travellers last week. Travellers are still required to serve five to seven days of quarantine.

Sources: Straits Times; Jakarta Post; Bloomberg; Reuters; Nikkei Asia

Malaysia

• Malaysia’s National Recovery Council recommends borders to fully reopen by March
• COVID-19 infections surge as Malaysians urged to get booster shots
• Johor state polls to be held on 12 March

Malaysia’s National Recovery Council (NRC) has proposed for the country to reopen its borders fully to all vaccinated travellers, without the need for mandatory quarantines, by March. Visitors to the country will still be required to undergo a PCR test before departure and on arrival. Former Prime Minister Muhyiddin Yassin, Chairman of the NRC said the reopening of borders will help aid the country’s economic recovery.  Currently, international travel to Malaysia is only allowed through the Vaccinated Travel Lane (VTL) with Singapore, the Langkawi international travel bubble and on a case-to-case basis. The NRC’s recommendation has to be approved by Prime Minister Ismail Sabri’s cabinet. However, concerns abound among Malaysians about the NRC’s recommendation given the surge in infections over the last few weeks.

High-risk individuals such as those above 60 years old and residents who have taken the Sinovac vaccines are required to take the booster shot by 1 March or risk losing their fully vaccinated status, according to Health Minister Khairy Jamaluddin. Malaysia is relying heavily on its high vaccination rates in its fight against the Omicron variant. The Health Ministry expects the current wave to peak around the end of March. Despite the large number of cases, fatalities remain low. The government had previously assured the public that it will not resort to lockdown measures to control the infections, and would adopt a more targeted approach to curbing the spread of COVID-19.

Even with the rise in COVID-19 cases, the Johor state election is expected to go ahead with safe management measures in place, according to Khairy Jamaluddin. The state election will be held on 12 March, with nomination day set for 26 February. The Johor state assembly was dissolved in late January, following the slim majority the ruling coalition had after the death of the former Chief Minister, Mr Osman Sapian. The Johor state election will be the first after the enactment of the automatic voter registration and lowering of the voting age to 18.

Sources: The Star; SCMP; CNA; Straits Times; Straits Times (2); Free Malaysia Today; CNA (2)

Myanmar

• ASEAN Special Envoy will be allowed to meet with members of the ousted NLD
• Military government not invited to ASEAN foreign ministers meeting in late February
• Fearing military retaliation, families cut ties with children

In a video call with Cambodian Prime Minister Hun Sen, Myanmar military leader Min Aung Hlaing has agreed to arrange for the ASEAN Special Envoy from Cambodia, Prak Sokhonn, to meet members of the ousted National League for Democracy (NLD) on a future visit. However, Min Aung Hlaing did not identify which members of the NLD will be allowed to attend the meeting. While this represents a small concession on the part of the junta, it was not enough for Myanmar to be invited to next week’s ASEAN foreign minister’s retreat due to the little progress it has made in implementing the five-point consensus agreed upon last year. ASEAN member states remain divided over whether to invite Myanmar’s foreign minister and the country has been asked to send a non-political representative instead.

Violence in the country continues and out of fear of persecution, families are posting notices instate-owned newspapers cutting ties with children and relatives who have publicly opposed the ruling military junta. During the political unrests of 1980s and 2007, Myanmar’s military often targeted families of opposition activists. This tactic has been employed even more frequently since the coup of 1 February last year.

Sources: CNA, CNA (2), Bloomberg, The Irrawaddy

Thailand

• The Bank of Thailand to hold interest rates to support recovery
• “Test & Go” travel scheme reinstated with plans to set up travel bubble with China
• PM suffer boycott of his cabinet meeting by seven ministers

Thailand’s central bank will wait for at least a year before raising interest rates from record lows as the country’s recovery continues to be fragile due to the Omicron variant. Tourism numbers have yet to bounce back. While the country has resumed its “Test & Go” travel scheme, allowing quarantine-free entry into the country for vaccinated people with health insurance who test negative upon arrival, tourism revenue remains low due to the lack of tourists from mainland China. This is in light of China’s lengthy quarantine for most arrivals including its own nationals. To attract Chinese tourists, Thailand is planning to discuss a bilateral travel bubble arrangement with China later this month.

There are signs of growing political discord in the country with Thai Prime Minister Prayut Chan-ocha suffering a boycott of his cabinet meeting by seven ministers on Tuesday. These ministers hail from the Bhumjaithai Party, the second-largest coalition member, and it is said that the boycott was over their opposition to a government transport operation plan. The government has also faced increasing struggles in its attempts to mobilise lawmakers to pass legislation, with house sessions already being called off four times so far in 2022 over a lack of quorum, compared to eight times during 2021 and once in 2020. Intensifying political instability may give way to unexpected results in the country’s next elections, due by March 2023.

Sources: CNA, CNA (2), Thaiger, CNA

Vietnam

• COVID-19 cases surge after Lunar New Year break
• Government makes further moves to reopen economy
• Business chambers seek faster resumption of international travel

Vietnam is seeking for more ways to reopen its economy although the Deputy Minister of Health Nguyen Truong Son has warned of a surge in cases from the Lunar New Year (Tet) holidays. Many had travelled back to their hometowns during the break and cases have been on the rise, with 21,900 new COVID-19 cases reported on 8 February.

But the country is seeking to resume aviation, tourism and education activities. Most schools in the country are due to reopen by mid-February. The Vietnam National Administration of Tourism, has proposed to fully welcome back international tourists starting May 1. Vietnam currently has restarted flights to and from nine cities: Tokyo, Seoul, Taipei, Bangkok, Singapore, Vientiane, Phnom Penh, San Francisco and Los Angeles. Business Chambers have called for a faster reopening of travel activities now that Vietnam has managed to achieve over 75% vaccination rates. About 157,000 international tourists visited Vietnam in 2021, a steep decline from over 3.8 million arrivals in the previous year.

Sources: VNExpress, VNExpress (2), Vietnam Investment Review, CNA, VNExpress (3)