ASEANREGIONAL

CARI CAPTURES • ISSUE 139

CARICAPTURES

In collaboration with the ASEAN

Business Club, CIMB ASEAN

Research Inst i tute he ld i t s

inaugural Network ASEAN Forum

in Singapore to bring together

regional business leaders to

help shape ASEAN economic

integration.

The Network ASEAN Forum

provides a platform for thought

leaders and decision makers to

incubate change in an open

exchange of ideas in order to

bridge the gaps that hamper

free trade in the context of the

ASEAN Economic Community

01

Deputy Prime Minister and

Finance Minister of Singapore,

Tharman Shanmugaratnam

opened the event with a speech

expressing his optimistic outlook

for ASEAN, citing the importance

of cooperation between the

private sector and the ASEAN

governments

Key highlights of the forum

included the sector based “Lifting

the Barriers” roundtables which

saw delegates discussing issues

hindering freer trade around

six sectors namely Aviation,

Connectivity, Infrastructure,

Power and Uti l it ies, Capital

3 SEPTEMBER 2013

www.cariasean.org

THE INAUGURAL NETWORK ASEAN FORUM 2013

Markets, Financial Services and

Healthcare

Some of the takeaways from

the roundtables included the

need for ASEAN-wide regulation,

better cooperation between

key industry players as well as

abolition of protectionist policies

The outcome of the roundtables

wi l l be ref lected in pol icy

recommendation white papers

which will be presented at the

23rd ASEAN Summit in October

2013

The forum also entailed plenary

sessions whereby guest speakers

such as Zhang Lei of China’s

Hillhouse Capital Management,

Azman Mokhtar of Malaysia’s

Khazanah Nasional Bhd as well

as Singaporean High Commission

to Malaysia HE Ong Keng Yong

shared valuable insights and

experience to address issues

that may be of interest to policy

makers

Guests enjoyed a del icious

dinner at the end of the day at

the ASEAN Business Club’s 3rd

Annual Gala Dinner

ASEAN

CARI CAPTURES • ISSUE 139 3 SEPTEMBER 2013

DISCLAIMER: The news articles contained in this report are extracted and republished from various credible news sources. CIMB ASEAN Research Institute (CARI) does not make any guarantee, representation or warranty, express or implied, as to the adequacy, accuracy, completeness, reliability or fairness of any such information and opinion contained in this report. Should any information be doubtful, readers are advised to make their own independent evaluation of such information.

Channel NewsAsia (20 August 2013)Malaysia-Chronicle (23 August 2013)

US FIRMS OPTIMISTIC ABOUT REGION WHILE DOUBTFUL OF THE AEC 2015 VISION04

Despite a recent survey showing

that US f i rms are scept ical

that ASEAN will meet the 2015

dead l ine o f es tab l i sh ing a

single market, US firms claim

to be optimistic about business

prospects in the region.

A survey released on 20 August

by the American Chamber of

Commerce in Singapore and the

US Chamber of Commerce shows

that US firms operating in ASEAN

are sceptical that the region

T h a i l a n d i s c o n s i d e r i n g

establishing a sovereign wealth

fund to increase returns and

help improve the central bank’s

balance sheet, as the country

deals with capital outflows and

a recession.

Thailand’s economy officially fell

into a recession for the first time

since 2009, when the second

quarter of this year showed a

0.3% contraction following a 1.7%

contraction in the first quarter

The Thai baht has fallen to a

three-year low mainly due to

capital outflows

The Bank o f Tha i l and i s

considering to use its surplus

foreign reserves to establish a

sovereign wealth fund named

the New Opportunity Fund with

the purpose of generating more

long run investment returns with

manageable risk

The fund would be only one of

measures to improve the central

bank’s balance sheet which has

accumulated US$16.5 billion (531

billion baht) in debt mainly from

foreign exchange stabilisation

Meanwhile, in an attempt to

will succeed in establishing the

ASEAN Economic Community

(AEC) by 2015

About 52% of the 475 senior US

executives in the survey said

they do no not think the AEC‘s

goal will be realised by 2015,

and 60% of the doubters believe

ASEAN will not reach the goal

of the AEC until 2020 or later

Only 23% of the respondents said

they believe ASEAN will meet its

2015 goal

Despite the scepticism regarding

02 THAILAND CONSIDERS A SOVEREIGN WEALTH FUND AMIDST RECESSION AND POLITICAL REFORMS

03

Bangkok Post (28 August 2013)Bangkok Post (27 August 2013)Bangkok Post (25 August 2013)

the AEC, US companies claim

to be optimistic about overall

business prospects in ASEAN,

and 79% of those surveyed

said their trade and investment

levels in ASEAN has risen over

the past two years and 91% of

them expect that to increase

over the next five years

About 63% of respondents said

that ASEAN‘s proportion of their

companies‘ global revenues has

grown over the past two years

"Th i s su rvey shows tha t

US companies are thinking

regional ly , and as ASEAN

continues to integrate, US

c o m p a n i e s w i l l n e e d t o

increasingly focus on strategies

to realise ASEAN's potential," Ms

Tami Overby, the US Chamber of

Commerce's vice-president for

Asia said

reconcile Thailand’s struggles

in the pol i t ica l arena, the

government is hosting a political

reform forum, which is intended

for the country’s experts to help

the government find solutions to

Thailand’s political impasse

P r i m e M i n i s t e r Y i n g l u c k

Sh inawatra expressed her

sadness for the absence of the

opposit ion Democrat Party

and the yellow-shirt People's

Alliance for Democracy (PAD),

and welcomed them to join at a

later time

Former Prime Minister General

Chavalit Yongchaiyudh said

during the forum that the Thai

people should play a larger role

in the country’s political reform

process and the development of

democracy

EXPATS LIKE BRUNEI BEST

Foreign expats living in Brunei

gave the country a full 100%

satisfaction score, putting the

small oil-rich sultanate in first

place of ASEAN countries as an

expat favourite.

Brunei scored a fu l l 100%

satisfaction marks in a survey The Malay Mail (20 August 2013)

done by the the American

Malaysian Chamber of Commerce

( A M C H A M ) , f o l l o w e d b y

Malaysia, Singapore and Laos

tied in second place with a score

of 94%

The survey covered 475 senior

executives working for US

companies operating in Brunei,

Malaysia, Singapore, Laos and

Indonesia

The sample size of respondents

living in Brunei was quite small,

possibly influencing the outcome

of the survey

Corruption and an unattractive

tax s t rucut re cou ld have

in f luenced Ma lays ia ‘ s and

Indonesia‘s popularity among

foreign expats, as AMCHAM‘s

2013/2014 ASEAN Business

Outlook Survey reported that

53% of respondents were

concerned at the level of

corruption in Malaysia and 80%

in Indonesia

SINGAPORE LAOSBRUNEI INDONESIAMALAYSIA

THAILAND

ASEAN

THE SOVEREIGN WEALTH FUNDS OF 5 ASEAN NATIONS

COUNTRY NAME INCEPTION ORIGIN SIZE (US$ BILLION)

Singapore

Singapore

Brunei

Malaysia

Vietnam

Indonesia

Government of Singapore Investment Corporation

Temasek Holdings

Brunei Investment Agency

Khazanah Nasional

State Capital Investment Corporation

Government Investment Unit

1981

1974

1983

1993

2006

2006

Non-Commodity

Non-Commodity

Oil

Non-Commodity

Non-Commodity

Non-Commodity

285

173.3

40

39.1

0.5

0.3

Source: Sovereign Wealth Fund Institute

CARI CAPTURES • ISSUE 139 3 SEPTEMBER 2013

DISCLAIMER: The news articles contained in this report are extracted and republished from various credible news sources. CIMB ASEAN Research Institute (CARI) does not make any guarantee, representation or warranty, express or implied, as to the adequacy, accuracy, completeness, reliability or fairness of any such information and opinion contained in this report. Should any information be doubtful, readers are advised to make their own independent evaluation of such information.

SINGAPOREANS WANT BETTER QUALITY OF LIFE05

SINGAPORE

ASEAN CURRENCIES AT WEAKEST LEVEL IN YEARS

Bloomberg (30 August 2013)Phil Star Business (29 August 2013)

The Star (22 August 2013)

A series of events has led to

many of the ASEAN currencies

reaching their lowest level in

years but international debt

watcher Standard & Poor’s (S&P)

says that a financial crisis in the

region is unlikely.

The possible US-led military

action in Syria is the latest in a

series of events that has caused

a slump in stocks and weakening

currencies in several Asian and

ASEAN countries

and have a surplus of foreign

exchange income would not be

affected

S&P however said that smaller,

more open and more trade-

dependent economies in Asia

such as Singapore have higher

risks to growth due to their

openness

Indonesia is one of the worst hit

by outflows as investors flee the

emerging market. The Indonesian

rupiah had its weakest month in

five years causing Bank Indonesia

to raise its benchmark interest

rate on 29 August to a four year

high of 7%

Other ASEAN currencies have

a lso been weakening; the

Philippine peso has reached a

two-year low, and Malaysian

ringgit and Thai baht have both

reached their lowest rate in three

years

Malaysia’s central bank brushed

of f concerns of an As ian

contagion risk, saying it has

the capacity to manage its

currency volatility as it did in

the 2008/2009 global financial

crisis

Standard & Poor’s released a

statement saying that a repeat

of the 1997 financial crisis in

unl ikely and that emerging

countries which rely on domestic

demand for economic growth

WATCHFUL EYES ON FREE CHAT APPS07

In this age and t ime where

smartphones have enabled us

to access information anytime

anywhere , surve i l lance and

content management gets quite

tricky for governments wishing

to monitor communication.

The Vietnamese government

is looking into a policy that

could ban free internet-based

telecom tools like Viber, Line and

Whatsapp for the damage it has

Yahoo! Finance (21 August 2013)Yahoo! News (13 August 2013)

The Star (27 August 2013)

In Malaysia, content creators

and users are urged to observe

the Electronic Content Code as

self regulation has become an

important element in stemming

inappropriate content on the

web

06

the Housing Board had recently

lowered the l im i t to the

proportion of gross monthly

income that can be used for

repayment of HDB loans to

the current level of mortgage

servicing ratio for private loans

of 30%

D e s p i t e o p t i m i s t i c f u t u r e

outlooks for the economy, most

Singaporeans are willing to trade

off high economic growth for

better quality of life as they want

everyday to be as rewarding as

saving for the future.

A survey of 4,000 Singaporeans

has shown a growing desire

for the government to ease

Singapore’s pace of growth

and development in return for

a slower pace of life

Most of the respondents wanted

a less competitive education

system and fewer fore ign

workers in their country as they

yearn for more in life given that

stable infrastructure are already

in place

59% of the respondents chose

a comfortable pace of life over

career advancement, citing the

importance of work-life balance

Additionally, more than half

of the respondents opted for

preservation of green spaces

and her i tage spaces over

infrastructure development

While the country is achieving

s teady economic growth ,

the government had plans to

adjust housing, healthcare and

education policies to address

issues of rising living costs and

the widening gap between the

rich and the poor

To discourage overspending,

The Malaysian Insider (26 August 2013)The Wall Street Journal (19 August 2013)

Straits Times (27 August 2013)

ASEAN

THAILAND MALAYSIAVIETNAM

done to the revenue of network

providers.

On the hee ls of a h igh ly

controversial policy that would

prevent social media sharing

of news, many are questioning

Vietnam’s censorship laws, citing

the protectionist nature of this

policy

In Thailand, the police force has

attempted to gain access to the

records of online chats from

the operators of Line instant

messaging, citing the need to

monitor targeted individuals who

are suspected of committing

crimes such as insulting the

Thai monarch, arms trading,

prostitution and drug dealing

Saudi Arabia has banned Viber in

June 2013 as it was too difficult

for the state to monitor and it

was shaving the revenues of

licensed telecom companies.

Whatsapp also sits on their

watch list

A S E A N C U R R E N C Y D E V A L U A T I O N

Currency

Indonesian Rupiah

Thai Baht

Malaysian Ringgit

Philippine Peso

11,210

32.16

3.286

44.61

9,619 (24 Jan)

28.70 (23 April)

2.972 (10 May)

40.67 (10 March)

16.54%

12.06%

10.56%

9.68%

12,788.5 (1 Dec 2008)

36.16 (11 March 2009)

3.729 (8 March 2009)

50.25 (22 Nov 2008)

Value on 30 August 2013 (per 1 US$) Highest Value In 2013 (per 1 US$) Depreciation (%) Lowest Value, Past 5 Years (per 1 US$)

Source: www.xe.com

CARI CAPTURES • ISSUE 139 3 SEPTEMBER 2013

DISCLAIMER: The news articles contained in this report are extracted and republished from various credible news sources. CIMB ASEAN Research Institute (CARI) does not make any guarantee, representation or warranty, express or implied, as to the adequacy, accuracy, completeness, reliability or fairness of any such information and opinion contained in this report. Should any information be doubtful, readers are advised to make their own independent evaluation of such information.

MYANMARMONITOR08

While many are disgusted by the idea of eating bird spit, the bird’s

nest industry is growing in Asia for its perceived health benefits.

Once served only to emperors, the demand for bird’s nest has now

created a global market with annual revenue as high as US$5 billion

that caters to the growing number of wealthy consumers in Asia

In Vietnam, the bird’s nest industry is just taking off. It is estimated

to generate US$200 million in revenue per year and is growing at

approximately 25% annually

VinaCapital Group Ltd invested as much as US$7.5 million in 2011 in

a bird house located in central Vietnam that housed about 100,000

birds, one of the largest in the country

To catch up with the region’s top producers, Vietnamese officials

are also working on a plan to expand the bird’s nest industry in the

Phan Rang Tham province to 2.8 million birds by 2020

Indonesia produces about 70% of the world’s bird nest, followed by

Malaysia with 20%

Bird’s nest, made of congealed saliva of Asian swiftlets, is believed

to ward off diseases and have anti-aging properties

Editorial Team: Sóley Ómarsdóttir, Nicole Khoo Designer: Hizzad Dinno Consultant Editor: Tunku ‘Abidin Muhriz

Bloomberg (19 August 2013) International Business Times (20 August 2013)

POLITICS

Abillthatwouldallowfortheremovaloflawmakersfromparliamentiftheelectioncommissionreceivescomplaintsfrom1%oftheirconstituentsiscausingadivisionin parliament, highlighting the powerstruggle between President Thein SeinandLowerHouseSpeakerShweMann.ThebillwasproposedbytheUnionElectionCommission (UEC), is supported byThein Sein and the military members ofparliament.ShweMannandotherUSDPmembersopposethebill.Inaddition,theUECrecentlywarnedallpoliticalpartiesthattheCommissionwillde-registeranypartythatacceptsforeignassistance, incashorkind.

The Irrawaddy (28 August 2013)

Mizzima (29 August 2013)

The Myanmar parliament is discussinga constitutional amendment that wouldprohibit all non-citizens from voting,running foroffice, and forming politicalparties. The amendment, proposed bya member of the Rakhine NationalitiesDevelopment Party (RNDP), wouldeffectivelyexcludeallRohingyaMuslimsfrompolitics,aswellasreturningpoliticaldissidents.

The Irrawaddy (27 August 2013)

HundredsofMuslimswerelefthomelessafter their houses had been burned tothegroundinafreshwaveofanti-MuslimviolenceincentralMyanmaron24August.ASEANlegislatorswarnedon29AugustthatcommunalviolenceinMyanmarcouldspinoutofcontroliftheauthoritiesdon’tacttostemtheriseofhatespeech.

The Nation (27 August 2013) The Irrawaddy (28 August 2013)

President Aquino was faced with his first ever major protest as people

rage over how the president turned a blind eye on themisappropriation

of the Priority Development Assistance Fund (colloquially known as

pork barrel) even with the discovery of misappropriation of funds

by politicians. The people are calling for transparency and better

accountability for the use of the pork barrel.

From the periodbetween2010 and 2012, a total of P500million

(US$11.2million)was channeled from theporkbarrel to fictitious

NGOsviaseveralstate-ownedcompanies

Theoutrage startedwhenbusinesswomanJanetLim-Napoleswas

identifiedasthemastermindbehindaP10billion(US$224.5million)

graftscandal.Shewasalsoaccusedofillegallydetainingherformer

assistantwhoblewthewhistleonher

PresidentAquino’s attempt toappease thepublicbackfiredwhen

hebluntedtheimplicationsofremovingtheporkbarrelandinstead

proposedaline-itembudgetingforprojectsinreplacementofalump-

sumdisbursement

Monetary rewardofP10million (US$225,000)wasofferedby the

presidentforinformationleadingtothearrestofNapoles

Napolessurrenderedtothepresident3daysaftertheprotestbegun,

fearingforherownsafetyasshehasreceiveddeaththreats.Napoles

iscurrentlybeingdetainedintheMakatiCityJail

BIRD SPITIS GOLD10

Inquirer News (26 August 2013)Inquirer News (26 August 2013)Inquirer News (28 August 2013)

PRESIDENT AQUINO’S PORK BARREL FIGHT09

ECONOMY

The global money transfer company;MoneyGramInternationalInc.hasexpandeditsmoneytransferservicetoMyanmarthroughan alliance with Asia Green DevelopmentBank, Myanmar Citizens Bank and TunFoundationBank,allowingitscustomerstoreceivepaymentsfromnearly80countries.

The Wall Street Journal (28 August 2013)

Apreliminaryagreementhasbeenreachedbetween Chin State government and Indiatoopen tax-freemarkets innineplacesontheborderarea,officialmediareportedon29 August. According to the Border TradeDepartment'sstatistics,MyanmarandIndiabordertradevolumescoresUS$1billionyearly.

Mizzima (29 August 2013)

Japanese-basedItochuCorporationwillbuildaYangon-ThilawabridgeaspartoftheJapan-backedThilawaSEZ,accordingtotheMinistryofConstruction.AJapanesedelegation,ledbyKojiUmemoto from ItochuCorporation,metwithMyanmarConstructionMinisterKyawLwinon15AugustinNaypyidawtodiscusstheproject.

Eleven Myanmar (22 August 2013)

FOREIGN AFFAIRS

MembersfromtheUSDefenceInstituteofInternational Legal Studies (DIILS) heldmeetingswiththeMyanmarmilitaryandtheMinistryofDefenceinNaypyidawon28-29August.TheDILLSvisittoMyanmarcoincided with a meeting between USDefence Secretary Chuck Hagel andMinister forDefenceLieutenantGeneralWaiLwin–thefirstbilateralmeetingUSandMyanmardefencechiefsinmorethan20years.

Myanmar Times (29 August 2013)

Myanmaron28AugustturnedfourbordercheckpointswithThailandintogatewaysfor international visitors, allowing anyforeignnationalholdingwithavalidentryvisatoenter.

Global Post (27 August 2013)

After months of uncertainty over itsreadiness,theOlympicCouncilofMalaysia(OCM)gaveMyanmarthegreenlightforhosting the SEA Games in December.Most of the venues are ready and thecouncildoesnotforeseeanymajorlogisticproblemsaswereinitiallyfeared.

The Star (26 August 2013)

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