[PREMIUM]: Country updates (29 April-12 May 2021)

Myanmar

Myanmar Shadow Government Forms Militia to Oppose Military Junta (6 May)

Myanmar’s shadow National Unity Government (NUG) has announced the formation of a “people’s defense force (PDF)” to protect its supporters from attacks and consolidate opposition to the Tatmadaw. According to the NUG, the PDF will function as its military wing and is meant to be a precursor to a “Federal Union Army” which will see the majority ethnic Bamar militia coming together with Myanmar’s many armed ethnic rebel groups.

Still, it remains to be seen whether the Federal Union Army can indeed be successfully formed and be a force to be reckoned with. Notably, the Tatmadaw is one of Asia’s best-equipped militaries and is many times the combined size of the country’s various ethnic armed groups. The military can field approximately 350,000 troops in comparison to only 75-000-78,000 troops which the rebel groups can field. Furthermore, a relatively high degree of coordination is also necessary to threaten the Tatmadaw on the battlefield. Yet, it is unclear how aligned the ethnic armed organisations are in their goals despite them jointly standing against the military junta.

Sources: The Diplomat, Radio Free Asia, The Irrawaddy

Myanmar’s Economy Fails to Normalise (11 May)

Since the coup, foreign investors have suspended more than US$6 billion worth of projects due to concerns over the stability of their investments, international sanctions and reputational costs associated with indirectly supporting the junta. 600,000 workers are also estimated to have lost their jobs. Given Myanmar’s political crisis, the World Bank has predicted that the economy will shrink by about 10% this year. Fitch Solutions, an affiliate of the global rating agency Fitch Ratings, has given an even dimmer outlook of the economy shrinking by 20%. The United Nations Development Programme (UNDP) has said that the double impact of both the political situation and the COVID-19 pandemic could force nearly half of Myanmar’s population into poverty by 2022 — the highest level of impoverishment in the country since 2005.

Myanmar’s foreign exchange hit a record low of 1,660 kyat on the dollar on 10 May, with the currency having lost 20% of its value. Despite daily withdrawal limits placed by the junta, a prevalent lack of trust in the system has seen many waiting in long queues at ATMs daily to withdraw the maximum allowed and exchanging their kyats for dollars and gold in hopes of protecting their assets. Should the outflow of deposits continue, analysts say Myanmar’s banking system may indeed collapse in the next two months as the Central Bank of Myanmar is unable to provide the required liquidity for banks.

Sources: The Irrawaddy, Nikkei Asian Review, The Diplomat

Thailand

Thailand betting on return of tourists to boost economy (10 Apr)

The outbreak of COVID-19 has decimated Thailand’s once bustling tourism industry and the Thai government is strategizing to bring back tourists, hoping they can help rescue the country’s ailing economy. With the requirement for mandatory quarantine being the biggest deterrent against potential tourists, a list of eight Covid-19 vaccine makers has been approved for visitors hoping to shorten the mandatory quarantine on arrival. Thailand is also working towards completely doing without quarantine for vaccinated travellers visiting popular tourist destinations such as Bangkok, Pattaya, Phang Nga, Koh Samui and Krabi by October.

Despite facing its biggest wave of infection, Thailand is pushing forward with their plans to reopen Phuket by July in a pilot scheme. However, before any reopening could happen, Minister for Tourism and Sports Phiphat Ratchakitprakarn stated that the island would need to have zero new infections, in addition to the previous condition that 70% of Phuket’s population is vaccinated.

Sources: Straits Times; CNA; Bloomberg; Thaiger

‘Get out of Thailand’ campaign gains momentum as Covid-19 worsens (6 May)

Hundreds of thousands of Thai students and young professionals have joined a Facebook group called “Migrate” to discuss ways to leave the country. The country is now experiencing its third and worst wave of the pandemic. Frustrated and disillusioned by their government’s pandemic response, the slow pace of vaccinations, and lack of opportunities in their country, participants seek advice from Thais already living abroad on emigration pathways, in hopes of seeking better job and wealth prospects. Preferred destinations are the US, Australia, Japan, Canada and Germany. 

Although Prime Minister Prayuth Chan-ocha has yet to make any comments about the online campaign, the Digital Economy and Society Ministry is keeping a close watch and has said it may take legal action against any content that it deemed illegal. The number of members the group has is currently equivalent to about 1.3% of the Thai population. Notably, it garnered more than 800,000 members in less than a week of being set up.

Sources: Straits Times, Bloomberg

Malaysia

Malaysia reimposes nation-wide Movement Control Order (MCO) amid spike in COVID-19 cases (10 May)

Malaysian Prime Minister Muhyiddin Yassin announced the reimposition of a nation-wide Movement Control Order (MCO), from 12 May till 7 June, in a bid to control the rising COVID-19 infections. While all economic activities will continue, social activities, dining out and travelling between districts and states are not allowed. This is the third major shutdown imposed since the start of the pandemic. According to Senior Minister of State Ismail Sabri Yaakob, the new MCO will be less strict in comparison to Malaysia’s initial MCO in March 2020 as the government tries to “balance health and livelihoods”.

The announcement comes right before Hari Raya Aidilfitri, which will be celebrated after the start of lockdown, on 13 May. After Malaysia’s initial success in controlling the second wave, cases had started to rise again in the middle of April, when Ramadan began. This was mainly due to the government laxing previous restrictions. However, some analysts believe that the new MCO may not be sufficient in curbing the virus. The lack of clarity on the new regulations and mixed messaging on the dangers of the virus by the authorities has left Malaysians confused and doubtful of effectiveness of the new measures. This could prove dangerous as the fight against misinformation is also crucial in Malaysia’s fight against COVID-19.

Sources: Straits Times; CNA; CNA(2)

Malaysia’s economy: Q1 economy records contraction while Malaysia’s central bank keeps interest rates unchanged (8-11 May)

Malaysia’s economy recorded a contraction of 0.5% for the first quarter of 2021, down for the fourth consecutive quarter. Domestic spending and external demand picked up in the January to March quarter, in spite of the spike in Covid-19 cases. The first-quarter data exceeded the 2% contraction forecasted by analysts in a Reuters poll and a 3.4% contraction in the fourth quarter of 2020. Bank Negara Malaysia Governor Nor Shamsiah Mohd Yunus said he expects GDP growth to remain within the projected 6% to 7.5% this year. While the economy is largely expected to rebound, the reimposition of the MCO could dampen prospects. Malaysia’s central bank has kept its policy rate at a record low of 1.75%.

Sources: Business Times; CNA; TodayOnline

Indonesia

Indonesia’s GDP contracts for fourth consecutive quarter (5 May)

Indonesia’s economy shrank by 0.74% year-on-year for the January to March 2021 quarter, as the country grapples with the impact of the coronavirus pandemic on its economy. The 0.74% contraction recorded is an improvement from the 2.19% contraction noted in the previous quarter, but missed analysts’ expectations. The tourism sector was amongst the worst-affected industries but government spending and higher commodity prices helped exports.

The government is expecting a sharp turnaround from the second quarter as its stimulus measures are set to target domestic consumption. Indonesia’s Coordinating Minister for Economic Affairs, Airlangga Hartarto, said growth should return this quarter as the government readies tax and sales measures to support the retail sector. The government is expecting a growth of 6.9%-7.8% in the second quarter. However, economic growth is dependent on how the government manages the pandemic, as the rate of vaccinations slow down and more infectious variants of the virus have been detected in the country. Indonesia has recorded the highest number of coronavirus infections and deaths in South-east Asia.

Sources: CNA; Straits Times; Bloomberg

President Jokowi launches an online “national shopping week” in a bid to revive retail sales (7 May)

In a bid to boost consumption, Indonesian President Joko Widodo launched a national shopping week, encouraging Indonesians to shop online. Jokowi expects the initiative to encourage Indonesians to shop online for food, clothes and presents, ahead of the Eid al-Fitr holiday, despite the covid-19 restrictions. More than 70 e-commerce players, including Tokopedia, Lazada and Shopee, are taking part in the initiative, which runs till 13 May. The trade ministry expects transactions during the shopping festival to exceed US$805 million. Indonesia’s retail sales for March fell at a slower pace of 14.6% on an annual basis in March, compared with an 18.1% contraction in February.

Sources: Bloomberg; CNA

Vietnam

Vietnam sees new COVID-19 outbreak from new virus strains (12 May – Ongoing)

Vietnam is experiencing a fourth wave of the COVID-19 outbreak since April 27. It has logged 562 local cases of COVID-19 in 26 cities and provinces. A bulk of the cases are in the north of Vietnam. One of the hotspots is a cluster formed at Hanoi’s National Hospital for Tropical Diseases, a frontline Covid medical facility that is under lockdown. Another lockdown was imposed on an industrial park in Da Nang after some workers tested positive for the virus.

Minister of Health Nguyen Thanh Long has warned of the difficulty to control the virus due to the emerging varied strains allowing for rapid infection. Most of the patients are infected with either the UK or Indian strains. The COVID-19 quarantine period in Vietnam has also been officially extended to 21 days.

Meantime Vietnam is seeking the transfer of mRNA technology as it struggles to access vaccine supply. The Vietnamese health ministry has spoken with the World Health Organization to negotiate the tech transfer to allow for the domestic manufacture of COVID-19 MRNA vaccines.

Sources: Vietnam Insider, VNExpress, Reuters, Vietnam News

Vietnam forecast to lead in growth in Southeast Asia: ADB (5 May)

Vietnam is expected to see the fastest growth rates in Southeast Asia this year with the Asian Development Bank (ADB) forecasting GDP gains of 6.7% in 2021 and 7.0% in 2022. Regional average growth is expected to be at 4.4%.

The ADB reports that growth in Vietnam will be driven by a manufacturing recovery, a boom in trade and an increase in investments. Trade is expected to remain robust this year, supported by strong economic recoveries in China and the US. Construction will also pick up quickly as Vietnam looks to accelerate transport infrastructure projects to keep up with the increasing volume of trade.

Vietnam’s Investment Law, passed in January 2021 to cut business regulations, is expected to help further attract foreign investment. Registered FDI increased by 17.8 per cent in Q1 2021, compared to the previous year.

However, the ADB reports that the country is still at risk from the emergence of new coronavirus variants or delays in vaccination plans. Fiscal policy is expected to remain expansionary and could push the fiscal deficit beyond the planned 2021 deficit target equivalent to 4.0% of GDP.

Sources: Business Times, VNExpress, The Diplomat