Sun. Jan 20th, 2019

Asean Investor

Philippines remains among top 10 recipients of foreign investments in East, Southeast Asia

MANILA – The Philippines is one of the top 10 foreign direct investment (FDI) recipients in East and Southeast Asia, the World Investment Report (WIR) 2015 of United Nations Conference on Development and Trade (UNCTAD) said on Wednesday. The WIR 2015 showed that the Philippines has attracted some US$6 billion worth of FDI in 2014, up from US$4 billion in 2013. This lifted the country’s ranking in East and Southeast Asia from 10th in 2013 to ninth last year. The UNCTAD report said China remained the highest recipient of FDIs in 2014, with inflows of US$129 billion, followed by Hong Kong with US$103 billion. Other ASEAN member-countries that topped the Philippines were Singapore with US$68 billion, Indonesia with US$23 billion, Thailand with US$13 billion, Malaysia with US$11 billion, and Vietnam with US$9 billion. South Korea’s share of US$10 billion placed it at seventh in the region. For East Asia alone, FDI inflows increased by 12 percent to US$248 billion. Southeast Asia has attracted FDI worth of US$133 billion in 2014, up by 5 percent year-on-year. “Combined FDI inflows to East and Southeast Asia grew by 10 percent in 2014, despite a slowdown in economic growth, to reach a historical high of US$381 billion,”€ according to the UNCTAD report. The report said global FDI inflows in 2014 declined by 16 percent to US$1.23 trillion brought by fragility of the global economy, policy uncertainty for investors and elevated geopolitical risks. By msn.comThe post Philippines remains among top 10 recipients of foreign investments in East, Southeast Asia appeared first on Asean Investment | Marc Djandji Blog.

If China joins the TPP, will Vietnam would lose its advantages?

VietNamNet Bridge – The possibility of China becoming a member of the Trans Pacific Partnership (TPP) Agreement remains open. Experts say China’s membership, to some extent, would affect Vietnam. According to Dr. Le Van Sang, former deputy head of the Institute for the World Economics and Politics Research, the US has not invited China to join TPP but does not oppose the country’s membership. Meanwhile, Chinese press report that Beijing may consider joining the free trade area. “Both the US and China remain inconclusive about Chinese membership. But I think China would join TPP, sooner or later,” Sang commented. Analysts have every reason to believe that TPP would be inked soon, which means China may not join TPP from the very beginning. However, the door to TPP remains open for China. According to Bui Ngoc Son, a renowned analyst, in the past, the US did not want to admit China into TPP for some reasons. First, the US did not welcome the Chinese foreign exchange policy. Second, rising China may overcomE the US plan to increase its influences in Asia Pacific. However, though wanting to establish a free trade area with no China, the US has no reason to oppose the presence of China in TPP. What will happen if China joins TPP? The strategy China has been following for the last years is that it tries to prevent other countries to benefit in its land. However, the analysts both affirmed that China, if joining TPP, will have to change its ways. What will happen if China joins TPP? An economist said that if China stays outside TPP, it will be put at a disadvantage as TPP members, or China’s rivals, can do business with the US and benefit from the world’s largest economy. Meanwhile, if China joins TPP, its products sold among TPP member countries will be exempted from tax. If China joins TPP, its great advantages will be fully exploited. If not, it will face big difficulties because of increasing labor costs. Meanwhile, the Chinese TPP membership, to other TPP member countries, would not be good news, because they will have to share benefits with China. As for Vietnam, the great benefits it expects from TPP membership would shrink with China’s presence, because the Vietnamese economy is smaller than Chinese and is quite similar to Chinese. The two countries have similar export products and therefore, they compete with each other. If China can also enjoy tax preferences like Vietnam, Vietnamese products will have no more advantages over Chinese. By Dat Viet – vietnambreakingnews.comThe post If China joins the TPP, will Vietnam would lose its advantages? appeared first on Asean Investment | Marc Djandji Blog.

ASEAN ‘among fastest growing in the mid to long term’

ASEAN is expected to remain one of the world’s fastest-growing regions in the medium to long term, Monetary Authority of Singapore managing director Ravi Menon said on Friday. “Barring shocks, overall growth in ASEAN should remain firm this year – at about 5 per cent, not spectacular, but very respectable, considering the state of the global economy,” he said in his keynote address at the ASEAN Banking Council Meeting. Last year, ASEAN’s combined gross domestic product was nearly US$2.5 trillion (S$3.3 trillion) – larger than that for India, he noted. The World Bank had on Thursday cut the global growth rate for this year to 2.8 per cent, from 3 per cent in January. But for East Asia and the Pacific region (excluding China), the World Bank has pegged growth to hit 4.9 per cent this year and 5.4 per cent in the next two years, driven by the large ASEAN economies. The ASEAN 4 – namely, Indonesia, Malaysia, Thailand and the Philippines – are projected to grow by at least 4 per cent per annum on average over the next five years. But Mr Menon said that growth could be as high as 6 per cent – on condition that the region becomes more integrated, and if these countries implement domestic structural reforms to raise their productivity and competitiveness. Aside from the ASEAN 4 and Singapore, the other ASEAN states are Brunei, Cambodia, Laos, Myanmar and Vietnam. The key to higher growth lies in integration – both economic and financial, he said. Substantial progress has been made towards economic integration in the implementing of the blueprint for the ASEAN Economic Community (AEC). This was adopted in 2007 as roadmap towards achieving a free flow of goods, services, investments and skilled people within the region by 2015. More than 90 per cent of the key deliverables targeted for completion by 2015 have since been implemented; virtually all goods traded within ASEAN are at zero tariff. “There are agreements in place to enhance protection for investors, liberalise sectors for investment and to provide greater transparency on investment rules,” he said. “The pace of financial integration has, however, lagged behind trade integration,” he said, noting that this is despite financial integration being a strong complement to trade integration and a critical component of the overall AEC project. The ASEAN Financial Integration Framework, adopted by ASEAN’s central bank governors and endorsed by ASEAN finance ministers in 2011, envisages the financial markets in the region being more linked up by 2020. “In part, this is deliberate. In part, this is disappointing,” said Mr Menon of the slow progress. “The slower pace is deliberate in the sense that financial integration is more complex than trade integration and requires more time.” He added that the financial systems across ASEAN are at very different stages of development and levels of sophistication. But policymakers are intent on making up for lost time, he said. ASEAN’s finance ministers and central bank governors are therefore determined press ahead with liberalisation in the post-AEC phase leading up to 2020. he added. By Siow Li Sen – The post ASEAN ‘among fastest growing in the mid to long term’ appeared first on Asean Investment | Marc Djandji Blog.

Vietnam pledges to implement master plan on ASEAN connectivity

Vietnam will actively join regional efforts to speed up the implementation of the Master Plan on Association of Southeast Asian Nations (ASEAN) Connectivity (MPAC) on the three pillars of infrastructure, institutions and people. Ambassador Nguyen Hoanh Nam, Head of the Vietnamese Permanent Representative delegation to the ASEAN made the statement at the second meeting of the ASEAN Connectivity Coordinating Committee (ACCC) that took place in Parapat, Indonesia, on June 7 and 8. The Ambassador confirmed that priority will continuously be given to projects on strengthening connections in terms of infrastructure, education and human resources training in the Sub-Mekong region. The MPAC, which was approved during the 17th ASEAN Summit held in Hanoi in 2010, sets three pillars for strengthening regional connectivity on infrastructure, institutions, and people via 125 action plans. They include 55 projects on regional traffic system networks, telecommunications and the power grid; 50 on developing a favourable legal framework for regional trade and the investment environment; and 20 on education cooperation, human resources training, and cultural and tourism exchanges. Reports made during the meeting showed that of the 125 total action plans, 24 have been completed, 50 are expected to be completed within this year and the rest are facing either financial or management difficulties. Participants suggested applying the public-private partnership (PPP) model in implementing the MPAC and including MPAC projects in national development programmes. They also called for the ACCC to strengthen their coordination role and cooperation with National Coordinating Commitees in monitoring and supervising the implementation process. Promotion activities should also be expanded to draw the attention and participation of partner countries, international financial organisations and businesses. During the event, participants also discussed the Post-2015 Agenda for ASEAN Connectivity and agreed upon the schedule for regular meetings between the ACCC and its partners including China, Japan, the Republic of Korea, India and the European Union late this year. The third 2015 ACCC meeting is scheduled to take place in September in Malaysia. By VNAThe post Vietnam pledges to implement master plan on ASEAN connectivity appeared first on Asean Investment | Marc Djandji Blog.

For ASEAN Future FTA Deals, Look Towards Vietnam

With Vietnam just becoming the first Asian country to sign off a Free Trade Agreement with the Moscow backed Eurasian Economic Union, the relevance of how Vietnam plays its bilateral trade agreements has suddenly taken on a more interesting slant. Vietnam has been a member of ASEAN since 1995, and has been embarking on a specific set period of reform and opening up since 2012, when its “Three Pillars” scheme was announced, intending to restructure public investment, state-owned enterprises and the banking sector. This has reached some urgency with Vietnam set to attain ASEAN Economic Community compliance by the end of this year. When completed, Vietnam, like the other major ASEAN nations of Indonesia, Malaysia, Philippines, Singapore and Thailand, will reduce tariffs on 97% of all imported products to zero. This mutual agreement also extends to the Free Trade Agreements ASEAN as a bloc has with both China and India – and is the primary reason that China-Vietnamese trade is expected to significantly increase from January 2016. This will bring Vietnam up to speed with its larger ASEAN counterparts. However, as the FTA with the EEU has shown, Vietnam is confident enough to embark on its own negotiations, and to take a leading regional role. An upcoming negotiation of note is the Vietnam-European Union FTA, which has been under discussion for some time. ​Such discussions always take time, however it is understood that the negotiations between the two parties are at a highly advanced stage. A deal could be signed off later this year, which would be the first time the European Union has committed to an FTA in Asia. EU agreements with Singapore and South Korea are both pending, but Vietnam, which as is common amongst all ASEAN nations, is engaged in separate FTA discussions rather than collectively under the ASEAN bloc. Should Vietnam succeed in both agreeing a deal with the EU and then implementing that, it would be a game changer for the region. It would push more China and Asian based manufacturers to invest in Vietnam in order to access the wealthy EU markets, and practically deliver Vietnam as a very serious competitor to China for a share of the global manufacturing market. While the other ASEAN nations, China and India are all engaged in various stages of discussions with the EU, the Vietnam negotiations promise to lead the way. EU negotiators will have learned a great deal about emerging Asia as a whole during this process, which may make future EU agreements with Indonesia, Malaysia, Philippines and Thailand easier to navigate. But as regards Asian relations with the EU, eyes are all on Vietnam to see what can be delivered as the first agreement to be put on the table. By aseanbriefing.comThe post For ASEAN Future FTA Deals, Look Towards Vietnam appeared first on Asean Investment | Marc Djandji Blog.

Making the Asean economic integration a reality

SINCE its founding in 1967 with five nations (Indonesia, Malaysia, Philippines, Singapore and Thailand),Asean has grown to today’s 10-member association and is one of the fastest-growing regions, promising strong growth momentum and potential.With a population of 625 million people, aggregate gross domestic product of US$2.4 trillion (Bt81 trillion) and average GDP growth of 4.5 per cent in 2014, this economy is the 7th largest in the world and the 3rd largest in Asia. We are excited about its future – Asean’s population is set to grow to 690 million by 2020. Rapid urbanisation will drive the growth of the middle class and consuming class. Foreign investors are taking notice of this and foreign direct investment has grown by leaps and bounds. In 2013, Asean overtook China as the single largest recipient of FDI. The Asean Community was first established for the purpose of peace and harmony for the region. Today, we are moving into forging economic integration with the Asean Economic Community (AEC) and ultimately a common Asean identity and the realisation of the potential of this region as a collective to the rest of the world.So while political and business leaders gathered in Jakarta at the 24th World Economic Forum (WEF) on East Asia to share insights on closer collaboration and greater integration in the region, one wonders if the idea ofAsean and the AEC actually matters to the local businesses and people across the region. And why hasn’t it taken off in a big way yet?A.G.R.E.E. to make it workLet’s focus on the task at hand – economic integration and the AEC, which aims at a single market with a freer flow of capital, services, products and skilled workers across borders, to facilitate trade and integrate the region into the world economy with the hope of rivalling the European Union in 10 to 15 years time as suggested at the WEF. We believe that by growing the economic pie, all member states of Asean will benefit. Closer economic integration could improve the cost competitiveness for business, adding to the attractiveness of Asean and greater integration could lift the region to the next level of growth.To realise the potential of the AEC promise, everyone has to agree to make it work. Amongst the people in Asean, however, there are those who believe in the benefits of the AEC, some are sceptical and others who know little about the AEC.AwarenessSo the first area we need to focus on is to raise awareness amongst those who do not know what the AECmeans and its benefits. Larger companies are well set to engage; the more important challenge is to get small and medium-sized enterprises (SMEs) – which generate around 90 per cent of domestic employment and contribute between 30 per cent and 50 per cent of the local markets’ GDP – to buy into the idea of the AECand be active participants in the economic integration process.To do so, we need to create awareness among SMEs of what the AEC means, as there is too little understanding of the opportunities it brings. A survey by the Asian Development Bank and the Institute of Southeast Asia Studies revealed that less than one-fifth of Asean businesses are prepared for the new trading environment. While there are currently various programmes for the SMEs in each market, we need a pan-Asean framework for governments to support SMEs, directing some of the benefits towards smaller businesses.We believe that private-sector companies also have a role in helping local businesses and individuals understand the AEC. As the only international bank with a presence in all 10 Asean member states, Standard Chartered is in a strong position to do so. We have been working with the Asean Secretariat and participating in forums such as the WEF. And through interacting with our clients and partners, we share information about the AEC and promote the benefits of economic integration.Greater goodFor Asean, the whole is greater than the sum of the parts, so integration will generate employment, attract investment, grow wealth and improve the lives of citizens.Wealth is growing across Asean: Nielsen predicted that the middle class of 190 million as of 2012 in theAsean region, defined as people with disposable income of US$16-US$100 a day, will more than double to 400 million by 2020. We forecast increased female employment, a younger working population, and a better-educated workforce. All will drive demand for high-quality consumer products and services.As Asean’s population becomes urbanised, it will drive demand for housing, cars, information and communications technology, education, healthcare, consumer durables and financial services. The AEC will also open doors for cross-border trade in these areas. The governments are pushing for it, but some Asean members are trying harder than the rest. Perhaps a different way of looking at it is to change the mindset a little. Instead of pitching national agendas againstAsean agendas, which lead down the road of protectionism, why don’t we focus on the greater good of theAsean community? Let’s be realistic. There will never be absolute trust even between the closest political allies. But as long as every member state focuses its energy on achieving greater efficiencies, enhancing the ease of doing business across borders, improving the lives of the people in Asean, I am sure we can reach consensus and common grounds much more effectively.Rules and regulationAsean presents a diverse historical, cultural, political and economic landscape. There is much help needed for businesses venturing cross borders to make sense of the vastly differing administrative policies and diverse legal and regulatory standards across Asean countries. With over 625 million people across 10 countries, Asean can be a daunting prospect for businesses looking to expand. It is so complex and varied that it can be easier to pursue opportunities elsewhere. For example, it takes four days on average to clear goods being imported into Singapore, 14 days for Malaysia, and 23 days for Indonesia.This demands multi-pronged marketing strategies and an ability to offer differentiated products and services, which can be hard for businesses used to operating in one market. Asean is not a one-size-fits-all market, and we need to eliminate the speed bumps by next focusing on a more consistent set of regulations and rules for operating across the markets here. Banking partners such as ourselves, who can provide good local support and have deep access to the different Asean markets, can help businesses ease into unfamiliar markets.Entry barriersThe AEC is all about improving the flow and movement of goods, services, capital and people across borders in Asean. However, there are many barriers that are hindering the entry of businesses across borders, with tariffs being the most obvious. While the low-hanging fruits of tariff elimination have been reaped, the reduction of non-tariff barriers to trade and investment in the form of standards, regulations, and compliance measures is proving to be a more elusive goal. While part of the problem may be traced to domestic pressures, another reason could be the lack of familiarity with the process of standards harmonisation, in particular with standards and practices that are being used internationally. To address this problem, Asean nations have adopted a trade facilitation framework. I believe there is a proactive role that the private sector can play to catalyse and shape this process by working closely with key government stakeholders such as the regulators, central banks and trade authorities, and by facilitating the sharing of best practices from other parts of the world. In fact, the business community is already doing that via private sector channels such as the Asean Business Club and the Asean Business Advisory Council. I believe more can be done to eliminate barriers to entry.End pointThis was mentioned quite a few times at the WEF discussions – that the AEC integration is a journey rather than an end goal. I agree totally that it will take time for differences to be sorted, to reach common grounds and to achieve a oneAsean identity. However, if we keep telling ourselves that it is a journey, it may take much longer than it should.I am very clear about the end point that I have in mind for the AEC – an Asean that allows businesses and people to move with ease (it may not be absolute freedom) across borders, a region that speaks in a collective voice to the rest of the world, and a power house that generates growth and prosperity, bettering the lives of the people across Asean. Success begets success, and the more the AEC’s achievements are celebrated, the more we will expect to follow. The day will come when even the man in the street will be aware of the Asean story and the promise of a collective Asean power.So let’s work on agreeing to make Asean’s economic integration a reality, sooner rather than later. By LIM CHENG TECKSPECIAL TO THE NATIONThe post Making the Asean economic integration a reality appeared first on Asean Investment | Marc Djandji Blog.

ANZ Bank says Southeast Asia will replace China for manufacturing

Southeast Asia could replace China as the world’s leading manufacturing centre in the next decade if the region’s plan to establish a unified market by year’s end gets new political leadership, a study by ANZ Bank economists says. In what would amount to a sea change in the way Australia relates to Asia, the study says Southeast Asia is on track to be Asia’s third engine of growth and the fifth-largest economic entity in the world by the end of this decade. But a combination of favourable demographics, increasing foreign investment and fast growing internal consumer demand mean it will also “take up China’s mantle of the world’s factory over the next 10-15 years.” The 10-country Association of Southeast Asian Nations (Asean) group will also assume a greater role in trade with Australia and New Zealand offsetting the high dependence on China which now exists. “Already there are signs that Asean is assuming much greater importance for the Antipodes in certain industries such as agriculture, and overall exports to Asean are growing strongly,” says the report released in Singapore on Friday. ANZ International chief executive Andrew Geczy says: ” ANZ believes that Southeast Asia will eventually be as important to Australia and New Zealand as China is today. The Asean bloc has enormous potential, as both a manufacturing hub and as a source of consumption for the world. “A large, youthful workforce and strategic location are just some of Asean’s many advantages, which should draw more companies to establish production bases in the region.” The report forecasts that two way trade between Australia and New Zealand and Asean and incoming Asean investment will be worth about US$230 billion ($300 billion) by 2025 compared with about US$100 billion today. Australia’s two-way trade with China was $150 billion in 2014 and approved foreign investment from China in 2013 was $15 billion. The ANZ report says southeast Asia is set to evolve into a more sophisticated economic zone with youthful cheap labour manufacturing on the Mekong frontier around Myanmar, cost effective mid-manufacturing business around Thailand, Vietnam and Indonesia and high value manufacturing and services in Singapore and Malaysia. It says large production synergies will emerge from this regional structure with big scope for productivity improvements if the regional leaders can create greater economies of scale from the Asean Economic Community (AEC) which is meant to be in place by the end of this year. The ANZ economists reflect the emerging consensus that not all the integration targets will be met by the end of the year and say that big challenges remain integrating regional infrastructure and boosting financial integration. But they say: “Good progress has already been made in some areas such as trade integration and the reduction of tariffs, and ultimately we expect the AEC to unlock synergies within the region which will usher in a new era of higher potential growth.” The key export opportunities for Australia will be in food, tourism, education, energy and hard commodities but there will also be big opportunities for on the ground investment in the Asean countries to take advantage of lower costs and high growth. The report predicts a much higher flow of imports from the region as manufacturing there picks up and suggests this will provide another two decades of cheap imported goods for Australian consumers similar to what has happened from China over the past two decades. The post ANZ Bank says Southeast Asia will replace China for manufacturing appeared first on Asean Investment | Marc Djandji Blog.

26th Asean Summit: what are Malaysia’s priorities? – Prashanth Parameswaran

Earlier this week, local media outlets reported that Malaysia, as the 2015 chair of the Association of Southeast Asian Nations (Asean), had formulated strategies and priorities to realise the establishment of an Asean Community by the end of 2015 ahead of the 26th Asean Summit and related meetings to be held in Malaysia this weekend. The reports were based on an interview that Foreign Minister Datuk Seri Anifah Aman had given Malaysia’s national news agency Bernama. In that interview, Anifah outlined some of the specific priorities Malaysia had as Asean chair for the year. These were not new and were drawn from the eight priorities Malaysia outlined for its chairmanship back in January. The eight priorities were: the official formation of a strong Asean community; building a post-2015 vision with related guidelines and documents; steering Asean closer to the people; developing small- and medium-sized enterprises; expanding intra-Asean trade and investment, strengthening Asean institutions; promoting regional peace and security; and enhancing the association’s role as a global player. I covered some of these priorities in an earlier piece here. Some of these priorities will find their way in some form into the chairman’s statement usually issued at the Asean summit. This is traditional practice, since many of these “priorities” are not Malaysia’s alone as ideas and initiatives are often carried through between Asean chairs. Furthermore, Malaysia is also chairing Asean during a year when regional considerations are going to feature even more prominently, since the Asean Community will come into existence and plans have already begun to shape the post-2015 agenda as well, as I have written previously. In addition to the chairman’s statement, Anifah also reportedly said that Malaysia had proposed that Asean leaders adopt two declarations. The first is on the Global Movement of Moderates, a Malaysian initiative to use moderation to counter extremism that has been promoted by the government of Prime Minister Datuk Seri Najib Razak both regionally and internationally since 2010. This is no surprise given the rising threat the government perceives from the Islamic State. The second is on a people-centered Asean, in line with Malaysia’s theme for its Asean chairmanship of “Our People, Our Community, Our Vision” which seeks to bring the grouping closer to the people. In line with this theme, Anifah said separately that Malaysia has chosen to convene the summit in both Kuala Lumpur and in Langkawi – rather than the usual practice of having it in just one location – in a symbolic attempt to include people living outside the capital. The plenary session will be held in Kuala Lumpur, while the retreat session will be held in Langkawi. Of course, Asean is a ten-member grouping so there will be other regional and global concerns raised at these meetings beyond just Malaysia’s priorities. To take just one example, the Philippines has been saying that it wants to raise the issue of China’s land reclamation in the South China Sea with other Asean leaders – more so than it did during the last summit. By The post 26th Asean Summit: what are Malaysia’s priorities? – Prashanth Parameswaran appeared first on Asean Investment | Marc Djandji Blog.