CARI Captures Issue 80 (11 June 2012)
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Transcript of CARI Captures Issue 80 (11 June 2012)
although its exports and currency have
declined
Investors have sold off Indonesian assets,
but the central bank believes that it has
enough foreign reserves to protect the
Rupiah
Why it matters: ASEAN must prepare
contingency measures should there be a
Eurozone contagion. It should strengthen
cooperation in financial security and agree
on a release mechanism for the funds in the
Chiang Mai Initiative.
Carnegie Endowment for Peace
Straits Times, Yahoo! News (1 June 2012)
exploration, Petronas LNG’s Nazlee
Aziz said. ASEAN gas prices paid by end users have
been kept artificially low, but they should
now face real world gas market prices, said
1 1 JUNE 20 12 I SSUE 80
CARICAPTURES
BETA
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Although ASEAN withstood the
2008 US subprime mortgage crisis,
its commodities trade and financial
markets are closely tied to European
markets making it vulnerable to the
disaggregation of the Eurozone. Most Southeast Asian economies are
already showing signs of slowing export and
GDP growth in the first quarter of 2012
Malaysia reported unchanged growth in
exports in April due to weak demand from
European markets
Indonesian officials downplayed the
impact of the deepening global crisis,
ASEAN
02 ASEAN NAtioNS NEEd to fAcE
rEAl world gAS mArkEt
ASEAN must address inefficiencies
created by policies such as natural
gas subsidies initially meant
to diversify sources, but which
now hamper gas investment and
ASEAN, EU
01 ASEAN rEActS to thE EurozoNE
criSiS
Aziz on 5 June at the World Gas Conference
2012 in Kuala Lumpur
With the exception of Singapore, all other
ASEAN countries have a gas price that is
regulated and normally lower than market
conditions
The low, regulated gas prices have
discouraged exploration of new reserves,
Aziz added, saying that the situation was
unsustainable and puts security of supply
at risk
Most gas in ASEAN countries will be
for power generation, with the exception
of Indonesia, which will continue to rely
heavily on coal because of its status as the
largest coal producer in the world
Platts (5 June 2012)
top 5 ASEANtrade Partners 2010
Source: ASEAN Secretariat
11 15 0606 ‘12 ‘12
DISCLAIMER: The news articles contained in this report are extracted and republished from various credible news sources. As such, 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.
chairman of Fortis Healthcare, said the free
flow of talent should happen earlier rather
than later as a more open market would
encourage competition and investment
Why it matters: The ASEAN Economic
Community project to be realised in 2015
will pave the way for the free flow of skilled
labour in eight professions comprising
doctors, dentists, nurses, engineers,
architects, accountants, surveyors and the
tourism industry.
Bangkok Post (5 June 2012)
The Indonesian government is riding
off strong economic performance
and passing a wave of new policies
which pose obstacles for foreign
investors in several sectors including
banking, mining, and construction. The government annulled international
tenders for the construction of a new
port at Tanjung Priok in North Jakarta
and contracted the government-linked
Indonesian Ports Corporation for the US$1.9
billion project
Indonesia’s Chamber of Commerce and
Industry (Kadin), capped the export of
14 metals, in order to increase upstream
production in the country
The central bank will limit foreign
ownership of domestic banks to 40%,
which would block the acquisition of Bank
Danamon by the Singaporean-based DBS
Holdings, although there are hints that this
deal may be exempted from new laws
Meanwhile, lawyers for Churchill Mining
are suing the Indonesian government for
US$2 billion for an uncompensated asset
seizure in East Kalimantan, attracting the
attention of other mining companies and
highlighting the uncertainties of investing
in Indonesia
Why it Matters: While analysts say
Indonesia’s new rules are part of a trend
in resource nationalism, a closer look at its
banking sector shows that it is has been
more liberal than other ASEAN members
and these new laws level the playing field.
Asia Sentinel, New York Times
(6 June 2012)
ASEAN
ASEAN
Indonesia
04
03 05
ViEwS mixEd oN ASEAN lAbour
flow
dEbAtE hEAtS uP oVEr ASEAN
bANkiNg iNtEgrAtioN
mouNtiNg
EcoNomic
Integration in some areas in
ASEAN such as labour should come
gradually to ease the risk of a “brain-
drain”, said Joseph E Stiglitz, Nobel
Laureate in economics and professor
at Columbia University, at the World
Economic Forum on East Asia. With countries investing in people who
later on move somewhere else, there
needed to be a form of compensation for
The ASEAN Banking Integration
Framework (ABIF) which was
endorsed in April 2011 by ASEAN
central bank governors has invoked
vigorous debates on ASEAN’s efforts
to integrate its banking sector, wrote
Joko Siswanto and Maria Monica
Wihardja, Bank Indonesia. One debate is on the definition of
integration and its benchmark indicators
The ASEAN Framework Agreement on
Services (AFAS) says banking integration
is measured by cross border bank flows,
consumption abroad, commercial banks
presence and the movement of people,
Services integration:banking debate
that country, said Stiglitz
“We have to invest in the creativity of
our people, and countries moving fast will
attract more. That’s why competition in
ASEAN is important. A lot of multinational
corporations are creating an advantage in
this landscape, and we have to encourage
ASEAN labour to move around and help
develop all these economies”, said ASEAN
secretary-general Surin Pitsuwan
However, Malvinder M Singh, executive
while ABIF’s concept of integration is based
on the commercial presence of Qualified
ASEAN Banks
Another debate is on the benefits,
opportunities, costs and risks of ABIF
ASEAN is also being urged to reconsider
the varying impact of ABIF on Malaysia,
Indonesia, Singapore, Thailand, the
Philippines versus Brunei, Cambodia, Laos,
Myanmar and Vietnam
Less financially developed countries may
not be able to bail out large international
banks, deterring banks and capital from
entering those markets
Jakarta Post, East Asia Forum (7 June 2012)
NAtioNAliSm iN
iNdoNESiA
ASEAN Framework Agreement on Services - Promotes liberalisation of trade
in services by 2015. The agreement was signed on 15 December 1995.
ASEAN Banking Integration Framework – Promotes banking liberalisation.
The multilateral framework was endorsed by ASEAN central bank governors on
7 April 2011.
11 15 0606 ‘12 ‘12
DISCLAIMER: The news articles contained in this report are extracted and republished from various credible news sources. As such, 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.
mYANmAr
moNitor06Economy
Myanmar will hold an investment summit
in Yangon from 20-21 June. The New
Myanmar Investment Summit 2012 will
review the outlook and and opportunities
for investments in Myanmar and serve as
a platform for foreign investors to gather
information.
Daily Star (6 June 2012)
PTT, Thailand’s biggest oil and gas
conglomerate, plans to open petrol service
stations in Myanmar next year, saying the
time is right to enter the newly opening
neighbour before competition from other
major brands intensifies. PTT will set up
a company in Myanmar within a year for
the retail network to be developed next
year, said Nuttachat Charuchinda, chief
operating officer of downstream petroleum
business.
Bangkok Post (5 June 2012)
Politics
Myanmar‘s state run press, the New
Light of Myanmar, praised Aung San Suu
Kyi on 5 June for her work with President
Thein Sein, calling the pair “the hope of
Myanmar”. The publication came amid
reports of tension between the president
and the opposition leader after her trip to
Thailand.
Associated Press (7 June 2012)
Myanmar’s government is open to
changing the constitution to reduce the
role of the military, which now has 25% of
all parliamentary seats according to the
2008 constitution, said Defence Minister
Hla Min. “This 25% participation could
be reduced in the future if and when it
is appropriate”, he said. Changing the
constitution requires support from more
than 75% of lawmakers.
Bloomberg (3 June 2012)
Foreign Affairs
Switzerland is planning to open an
embassy in Myanmar this summer as its
government expects the presence of Swiss
citizens to increase in Myanmar. It will be
the 24th country to open an embassy in
Myanmar.
Mizzima (4 June 2012)
Myanmar will host the World Economic
Forum (WEF) on East Asia in 2013,
according to Klaus Schwab the founder
and executive chairman of WEF. Myanmar
is also scheduled to host the 2014 ASEAN
summit.
Mizzima (4 June 2012)
07 PhiliPPiNES-uk trAdE
booSt
Philippine President Benigno Aquino
witnessed the signing of more than
US$1 billion in business agreements
between British and Filipino
companies. Aquino visited Britain from 4 to 6 June
and the US from 7 to 9 June
The Philippines would like to get direct
government and private investments to
generate jobs and not just developmen-
tal aid, said Presidential Communications
Development and Strategic Planning Office
Secretary Ricky Carandang
Once one of Asia’s laggards, the Philip-
pines is performing much more strongly
after Aquino launched a drive to tackle cor-
ruption and reduce waste from government
spending
His initiative helped lead the country to
a series of credit-rating upgrades in recent
months, restoring investor confidence in
the country
ABS-CBN (6 June 2012)
ASEAN
08 ASEAN fArES bEttEr iN trAdE
AccESS rANkiNg
ASEAN members improved in their
ability to ease trade flows, according
to the Global Enabling Trade Report
2012. Singapore retained its top position as the
most prominent enabler of world trade,
while other ASEAN countries recorded
marked improvements
The biennial report released by the World
Economic Forum, covering 132 economies
worldwide, measures the extent to which
individual economies have developed
institutions, policies and services
facilitating free flow of goods over borders
to destinations
The report also found that traditional
notions of trade are increasingly outdated
as global value chains require new
measurements, policies and cooperation
Why it matters: The 2012 results
demonstrate that the ASEAN Trade in
Goods Agreement has facilitated trade
since its entry into force in 2010, according
to Margareta Drzeniek Hanouz, Senior
Economist of the Global Competitiveness
Network
Philippine Daily Inquirer (5 June 2012)
global trade openness ranking for ASEAN
countries
(Brunei, Laos, Myanmar were not included in the survey)Source: World Economic Forum
Philippines, UK
11 15 0606 ‘12 ‘12
DISCLAIMER: The news articles contained in this report are extracted and republished from various credible news sources. As such, 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.
Editorial Team: Angela Goh, Manissa van Geyzel, Han Fang Rong, Chayut Setboonsarng, Manoj Nair
Consultant Editor: Tunku ‘Abidin Muhriz Designer: Iqbal Hakim
ASEAN
10 culturAl iNtEgrAtioN
imPortANt for ASEAN
The push for regional integration
tends to focus on economic
initiatives, yet cultural integration
can also create economic value,
said Mari Elka Pangestu, Indonesia’s
Minister for Tourism and Creative
Economy. ASEAN countries share similar cultural
roots in food, music, arts and film, and
those industries could become valuable if
linked to tourism and trade, she explained
Government could assist those by
implementing supporting policies, noted
Karim Raslan, group chief executive officer
of KRA Group
In the education sector, an ASEAN
curriculum sourcebook will be launched in
July 2012 for classroom training in primary
and secondary schools across the region
The sourcebook includes topics to help
students understand their neighbours
cultures; how depleting biodiversity affects
the ecosystem; or how the United Nations
Declaration of Human Rights applies to
ASEAN
Bangkok Post, ASEAN Secretariat
(5 June 2012)
Singapore
09 SiNgAPorE to ExPANd rolE AS
ASiAN iP hub
Singapore’s Ministry of Law (MinLaw)
is aiming to expand Singapore’s role
as an Asian Intellectual Property
(IP) hub, and service the potential
growth in demand for such services
in the region. MinLaw had announced earlier the
setting up of an IP Steering Committee to
formulate the IP Hub Master Plan to guide
Singapore’s development as an IP hub
Industry players have also earmarked
China and India as potential contenders
vying to be the next IP hub in Asia
Why it matters: Intellectual Property is
increasingly important as a key component
of the global economy.
AsiaOne, Channel News Asia (4 June 2012)