cari captures issue 88 (06 aug 2012)
DESCRIPTION
Captures is CARI’s weekly news monitoring report, each time presenting the top 10 stories affecting ASEANTRANSCRIPT
06 AUGUST 20 12 I SSUE 88
CARICAPTURES
1 4
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Indonesia’s trade deficit hit an all-
time high in June as exports from
the country fell sharply, a sign that
weaker demand from China and
As the western world slowly recovers
from credit woes, consumers in
ASEAN are enjoying a wave of easy
credit from economic growth and
positive credit ratings. ASEAN’s middle class is bombarded with
credit card marketing campaigns as the
region’s trend shifts towards spending on
credit
The young population is especially
targeted by banks; Malaysians, still
burdened with college loans, are purchasing
Indonesia
ASEAN
02
01
IndonesIa’s Trade Gap sIGnals
TouGher TImes
asean credIT flowInG despITe
Global crunch
the West is affecting some of the
few countries still growing at a
considerable clip. A third straight month of trade deficits
in one of the world’s biggest commodity
producers bodes ill for Indonesia
“We’ve never recorded a deficit this huge,
even during crises”, Satwiko Darmesto,
director of Indonesia’s Central Statistics
Agency, told reporters following the release
of June data showing a US$1.3 billion
trade deficit, nearly three times as large as
expected
Overall, Indonesia is still running a trade
surplus of US$459 million through the first
half of the year
Longer term, the concern among some
economists is that Indonesia could face
more protracted periods of deficits, as
rising incomes and robust domestic demand
keeps imports high
Wall Street Journal (1 August 2012)
luxury items such as smart phones, while
Indonesians turn to debt financing for new
motorcycles
Aekapol Chongvilaivan, an economics
fellow at the Institute of Southeast Asian
Studies expressed concerns of over
exuberance
However, regional banking analyst at
Nomura, Anand Pathmakanthan, weighs in
saying ASEAN banks were still sensitive to
credit bubbles
Reuters (2 August 2012)
BETAHAPPY 45th
ASEAN
8 AUGUST 2012
06 10 0808 ‘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.
Philippines, China
Indonesia, Thailand
Thailand
04 05
03
phIlIppIne mall expansIon In
chIna
aIr asIa
draws
VerdIcT sTIll ouT on ThaI
readIness for aec
Philippine billionaire Henry Sy’s
shopping mall developer is planning
to spend US$1.5 billion in the next
three years to add as many as 18
shopping malls at home and in China
as consumer spending rises. SM Prime Holdings, the biggest Philippine
retail developer, plans to build four to five
malls a year in the country
It’s also targeting a shopping centre
Indonesia’s authorities want to make
sure Air Asia’s US$80 million bid
to buy Batavia Air will not create a
company with too much control over
the Indonesian market. Indonesia’s Business Competition
Supervisory Commission has asked to see
the ownership structure before deciding
whether it is in line with the anti-monopoly
law
Foreign companies are allowed to own up
to 49% of an Indonesian airline – Air Asia’s
bid is to purchase 49% of Batavia, while its
local partner PT Fersindo Nusaperkasa will
purchase the remainder 51%
Meanwhile, Thai Airways International
has scrapped plans to launch its low cost
carrier airline, ensuring the dominance of
Air Asia in Thailand as the country’s only
low-cost carrier option, according to CIMB
Securities Thailand
The Nation, Wall Street Journal (31 July 2012)
Healthy skepticism pervades the
readiness of Thai companies for the
ASEAN Economic Community 2015. Speaking at a seminar, Finance Minister
Kittiratt Na-Ranong, stated that Thailand
stands to lose up to 70% of its firms due to
unpreparedness at an AEC forum
in China every year, said Hans Sy, the
Manila-based company’s president and the
billionaire’s son
SM Prime may face the risk of
declining funds sent home by Filipinos
working abroad, while a sharp economic
slowdown in China may make it longer
for the company’s expansion to bear fruit,
according to Astro del Castillo, managing
director at First Grade Finance
Bloomberg (2 August 2012)
Firms may prefer other countries such
as Indonesia for its large domestic market,
Vietnam for its growth potential, and
Singapore for its high purchasing power
Kasikorn Bank chief executive officer,
Banthoon Lamsam, said that the prevalence
of AEC seminars is a sign of anxiety
asean retail developers on The move
However, Banthoon added that only
generalities of the AEC are discussed at
these forums and that Thai companies are
reluctant to go abroad
Government measures to reduce
corporate tax rates may help from 23% to
20% may induce more competitiveness for
Thai firms
Why it matters: Fear of looming market
competition is increasing awareness of
the AEC and inducing action from the
Thai corporate sector. This is a positive
development, but should be occurring
across ASEAN. The region’s private sector
needs to become more involved in learning
and giving input into the process of
integration.
Straits Times, The Nation (2 August 2012)
scruTIny In
IndonesIa, wIns
In ThaIland
CapitaLand (Singapore) -developed 58 malls in China
Central Retail Corporation (Thailand) -to develop first department store in Indonesia
Genting (Malaysia)-to develop leisure and
entertainment complex in the UK
Source: The Star, Bloomberg, Bangkok Post
06 10 0808 ‘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
The World Bank will help Myanmar by
clearing interest rates and restructuring
the rest of a US$397 million loan in arrears.
The World Bank has opened an office in the
country and will also resume aid after 25
years of absence.
Reuters (1 August 2012)
The Asian Development Bank (ADB) has
opened an office and dispatched staff in
Myanmar. ADB has not had operations in
the country since 1988 but Myanmar has
participated in ADB’s regional activities.
ADB (1 August 2012)
Politics
According a recent Human Rights
Watch (HRW) report, Myanmar security
forces raped and opened fire on Rohingya
Muslims in a recent wave of violence
in Rakhine state. HRW also claims the
official death toll of 80 people is “grossly
underestimated”, and criticises the
international community for lack of reaction
AFP (1 August 2012)
The Myanmar government has suspended
the publication of two news journals
for alleged violations of government
regulations, only a few weeks after
announcing it was relaxing censorship as
part of reforms.
The Irrawaddy (31 July 2012)
Foreign Affairs
The US Congress has extended a ban on
imports from Myanmar, seeking to maintain
pressure on Myanmar to continue the
reform process.
The Star (3 August 2012)
The new Myanmar Ambassador to the
United States Than Swe presented his
credentials to the US government on 30
July. He is the first person to assume the
post since 2004.
The Irrawaddy (30 July 2012)
Iran’s Foreign Minister Ali Akbar Salehi
said on 29 July that Iran plans to establish
an embassy in Myanmar to help resolve the
problems facing Muslims in this country.
Tehran Times (30 July 2012)
Thailand
ASEAN
07
08
ThaIland losInG compeTITIVeness
In rIce markeTs
asean paTh To economIc unIon
muddIed by souTh chIna sea
Thai rice exports halved to 4.7 million
tonnes and export value dropped from
US$5 billion to US$3.1 billion this year,
according to the Thailand Development
Research Institute (TDRI).
TDRI and other leading Thai economists
have pointed out that the government’s
The South China Sea row may not directly
affect plans by ASEAN for the economic
integration, political leaders and officials
say but analysts are less optimistic.
“It’s not going to hold progress (on
integration) hostage”, ASEAN Secretary-
General Surin Pitsuwan told diplomats
in Jakarta, referring to a recent meeting
in Cambodia, where rifts over the South
China Sea prevented the group’s foreign
ministers from issuing a communique for
the first time in its history
At the Phnom Penh meeting of foreign
ministers, some diplomats said Cambodia,
ASEAN’s chair and China’s ally, blocked the
South China Sea dispute being put on the
agenda at China’s behest
“The difference is that China is giving
something that Cambodia needs, while
ASEAN is promising something that is
abstract”, said Aleksius Jemadu, dean of
rice-pledging policy is destroying the
nation’s competitiveness in rice production
TDRI president Nipon Poapongsakorn
said if the government releases the 10.2
million tonnes of rice it has in stock,
producers would immediately suffer US$
2.7 billion to US$3.1 billion
Thai rice costs more than its Vietnamese
counterpart, but the supply shock would
induce a loss of US$75 per ton, not
inclusive of the US$8.2 billion cost of
pledging
Srirat Rastapana, director general of
the Thai Trade Negotiations Department,
expects to begin negotiations with the
Philippines
Under WTO rules, Thailand can export
98,000 tonnes of rice to the Philippines
before incurring a 40% duty
Why it Matters: The rice pledging scheme
needs to be revisited so it does not only
serve rich farmers and landlords. A direct
income transfer to farmers has been
proposed. Trade negotiation with the
Philippines is not a long term solution
The Bangkok Post,
Philippine Daily Inquirer
(2 August 2012)
the school of political and social sciences at
Pelita Harapan University in Jakarta, adding
that “ASEAN countries will act based more
on their domestic needs”
“They are behind schedule (on the
economic community) and clearly not
going to make it ... they are not going to
see much action on services”, said Hal Hill,
professor of Southeast Asian economies at
the Australian National University
Why it matters: ASEAN will face further
challenges as it tries to standardise
customs procedures and open up
protected industries such as financial
services to competition from within. It has
implemented free transfer of profits and
dividends but needs to remove further
barriers to intra-regional investment flows.
Reuters (31 July 2012)
06 10 0808 ‘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.
cITIes wITh mosT TweeTs
RANK NUMBER OF TWEETS*Jakarta 1 265 million
Bandung 6 133 million
Singapore 11 120 million
counTrIes wITh mosT TwITTer accounTs
RANK NUMBER OF ACCOUNTS*Indonesia 5 30 million
Philippines 10 10 million
(*based on June 2012 only)
Source: Semiocast
ASEAN
Indonesia
09
10
faIled sTaTe IndIcaTors
challenGes To asean
JakarTa: world’s mosT acTIVe
TwITTer cITy
The Failed States Index 2012
published by The Fund for Peace,
could be important for ASEAN
members to address internal matters
and accelerate the realisation of
‘ASEAN Community 2015’. It ranks 177 countries in the world
based on its socioeconomic performance
with Somalia ranked first as the worst
performing country, while Finland is the
best
Four countries are in danger of plunging
to the ‘failed state’ category: Cambodia,
Laos, the Philippines and Indonesia
The Philippines is facing a critical issue
with security while Indonesia is considered
very weak in social indicators especially the
mounting demographic pressures related
to natural disasters, disease, environmental
degradation, pollution, food scarcity,
Indonesia has earned the title of fifth
most active nation on Twitter, while
Jakarta has emerged as the most
active city. Semiocast, a Paris-based research
company, found that Jakarta managed to
outdo major cities like Tokyo, London and
New York
Bandung, Jakarta’s neighbouring city,
ranked 6th most active city which helped
catapult Indonesia to its 5th place status
By June this year, there was a 50%
increase in Indonesian users which
accounts to 29.4 million account profiles
Although the United States still
dominates the top user base position,
the highest growth is coming from other
countries
Jakarta (1 August 2012)
malnutrition, water scarcity, population
growth, youth bulge and mortality rate
According to the report, Thailand has
to address the long-standing issue of
factionalised elites, while Vietnam has to
address critical issues concerning state
legitimacy and human rights, which include
press freedom and civil liberties
Malaysia is very weak on human rights,
lack of press and political freedom, while
Brunei has a dominant issue on uneven
economic development related to ethnic,
religious, or regional disparities, a yawning
gap between the rich and the poor, slum
populations
The only ASEAN country to have reached
the level of “a very stable state”: Singapore
and the only issue it faces is human rights,
particularly press and political freedom
Jakarta Post (1 August 2012)
failed states Index 2012: how asean ranks
mosT acTIVe on TwITTer In asean
RankMyanmar 21
Cambodia 37
Laos 48
Philippines 56
Indonesia 63
Thailand 84
Vietnam 96
Malaysia 110
Brunei 123
Singapore 157
Source: Fund for Peace
Editorial Team: Angela Goh, Manissa van Geyzel, Chayut Setboonsarng
Consultant Editor: Tunku ‘Abidin Muhriz Designer: Iqbal Hakim