cari captures issue 40 (1 aug 2011)
DESCRIPTION
Captures is CARI’s weekly news monitoring report, each time presenting the top 10 stories affecting ASEAN.TRANSCRIPT
US COMPANIES FIND ASEAN
MOST COMPELLING INVESTMENT
DESTINATION
ASEAN, US
NEWS MONITORING 01 AUGUST 2011 ISSUE
23/05/1127/05/11CARI
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BETA
Alexander Feldman (President, US-
ASEAN Business Council) said American
companies find ASEAN to be the most
compelling investment destination in
Asia, especially with the formation of the
ASEAN Economic Community in 2015. The recent 2011 US
mission to Malaysia
represents the largest
delegation of American
companies brought to
Malaysia by the US-
ASEAN Business Council
General Electric, Abbott Labs, Coca Cola,
Google, Guardian Industries, Kohlberg, Kravis &
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Roberts, MasterCard and Raytheon Corp were
among the participating US companies
Feldman expects US FDI to ASEAN to
accelerate after the AEC
“China and India may be large but because of
the free trade agreement and comfort level of
American companies, ASEAN provides the best
of both worlds”
(Feldman)
Joseph Alhadeff
(Chairman, US-
Malaysia Business
Committee) said
ASEAN economies
are pushing for reforms and policies to help
businesses flourish in the region
Business Times, Malaysia (25 July 2011)
ASEAN
MINISTERIAL
MEETINGS LEAD
TO PROGRESS
ON REGIONAL
SECURITY ISSUES
ASEAN, China, US
ASEAN ended the biggest security
talks in the region in Bali on 23
July 2011. Thailand and Cambodia asked
Indonesia to continue mediating the
countries’ border dispute beyond its
term of ASEAN chairmanship
ASEAN ministers support Indonesia’s
continued efforts to work with Thailand
and Cambodia, including on the
assignment of an Indonesian Observer
Team
After eight years, ASEAN and China
have agreed on guidelines on a code of
conduct in the South China Sea
Marty Natalegawa (Foreign Minister,
Indonesia) said Indonesia now has a set
of action plans to be completed by the
next ASEAN summit in November 2011
ASEAN will decide on Myanmar’s
proposal to chair ASEAN in 2014, at the
ASEAN summit in November
The Jakarta Post (25 July 2011)
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25 0107 08‘11 ‘11
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.
ASEAN’S NEWEST MEMBERS TAKE
STEPS TO FACE CHALLENGES OF
ECONOMIC INTEGRATION
Cambodia, Laos, Myanmar, Vietnam
A cooperation between the Vietnamese
Ministry of Foreign Affairs and Germany’s
Hanns Seidel Foundation aims to help
ASEAN’s newest members face the
challenges of regional integration. A seminar was held in Hanoi among senior officials
from Cambodia, Laos, Myanmar and Vietnam
to share experiences in implementing economic
integration policies
Hang Chhuon Narong (Secretary of State, Ministry
of Finance, Cambodia) said Cambodia’s inflation of
6.5% is curbing economic growth
Chan Sophal (President, Cambodian Economic
Association) said despite ASEAN’s efforts to narrow
03
the development gap, years of war and strife
puts Cambodia well behind its neighbours
Doan Xuan Hung (Vietnamese Deputy Foreign
Minister) suggested that the four countries
coordinate closely to maximise opportunities,
minimise challenges from integration, and
contribute to building the ASEAN community
Tomoyumi Kimura (Country Director, Asian
Development Bank) said there are strong prospects
for cooperation in the Greater Mekong Sub-region
ADB will cooperate with the four countries
and assist existing sub-regional cooperation
mechanisms to support their integration and
maintain sustainable development
Xin Hua (25 July 2011)
MALAYSIA
SHARES
KNOWLEDGE
WITH CAMBODIA
Cambodia, Malaysia
Cambodian Deputy Prime
Minister Dr Sok An said
Cambodia is keen to learn
from Malaysia in the fields
of cyberlaw, cyber-security,
e-commerce and e-government. Dr Sok An said this when he met
Malaysia’s Science, Technology and
Innovation Minister, Datuk Seri Dr
Maximus Ongkili in Phnom Penh on 23
July, at a specialised ICT trade mission
to Indochina
According to a statement issued by
Dr Ongkili’s office, Cambodia, which
joined ASEAN in 1999, is new to ICT
development, and holds high regards
for Malaysia in this area
The ICT trade mission also covers
Hanoi (Vietnam) and Vientiane (Laos)
Malaysia was Cambodia’s top investor
and trade partner in the early 1990s
before the economic crisis hit the
region
In 2010, the bilateral trade between
Cambodia and Malaysia was worth US$
185.46 million
The Star, Malaysia (24 July 2011)
04 VIETNAM
STRUGGLING
TO KEEP INFLATION
BELOW 17% IN 2011
Vietnam
Increasing food prices forced the
Vietnamese government to admit the
increasing challenge of meeting its
annual inflation target. Nguyen Tien Thoa (Head, Price Management
Department, Vietnamese Finance Ministry)
said Vietnam will struggle to achieve its 17%
inflation target after consumer prices increased
in recent months
Increasing farm produce & food prices are
major contributors to the CPI rise in July
Supply & demand imbalances of food &
produce, augmented by a sudden rise in exports,
contributed to increased prices of local goods
Many factors for commodity price hikes have
yet to be identified which hinders the Vietnamese
government’s ability to fight inflation
The Saigon Times Daily (28 July 2011)
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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.
MANDIRI SEEKS
BANK-STAKE LIMITS
Indonesia
PT Bank Mandiri, Indonesia’s biggest
bank by assets, welcomes the limit on
commercial bank stakes, and called for a
reciprocal policy to level the playing field
with regional rivals from markets that cap
ownership. Muliaman Hadad (Deputy Governor, Bank
Indonesia) said Bank Indonesia’s plan to cap
investor ownership in commercial banks at less
06than 50% will probably be enacted this year
The proposed cap is an effort to increase efficiency
and reduce risk among the nation’s lenders
Mandiri faces obstacles opening new branches or
accepting retail deposits in other ASEAN countries,
and
hopes to capitalise on increased access,
particularly in Malaysia, before investment
restrictions fall by 2015
Zeti Akhtar Aziz (Governor, Bank Negara
Malaysia) said Malaysia may allow ASEAN banks
to open more branches as it liberalises its finance
industry – it currently restricts the number of
branches licensed foreign lenders can open,
particularly in urban areas
Bank Indonesia oversees 121 foreign and local
commercial banks in the country, with total assets
of 3,069.1 trillion rupiah (US$360 billion)
Bloomberg (24 July 2011)
REGULATION
ON FOREIGN
OWNERSHIP
OF BANKS IN
SELECTED ASEAN
COUNTRIES
ASEAN MUST FIX ITS OWN VISA
EXEMPTIONS FIRST
ASEAN
ASEAN’s senior officials will accelerate
the implementation of the 14 day ASEAN
free visa framework for ASEAN nationals,
and explore the possibility of an ASEAN
common visa for non-ASEAN nationals. Surin Pitsuwan (Secretary General, ASEAN) said
ASEAN should first completely implement its
own cooperation on a visa-free framework for
ASEAN nationals
Visa exemptions among ASEAN members are left
to bilateral arrangements
Currently Myanmar has not joined the ASEAN
free visa framework
Brunei, Cambodia and Myanmar have not
completely implemented the ASEAN free visa
framework
Hikmahanto Juwana (international law expert,
University of Indonesia) said Myanmar may not want
to apply an ASEAN single visa because they will lose
control over determining who enters their country
Hikmahanto said ASEAN has to ensure that
each member has commonality concerning the
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nationalities that are granted free visa on arrival
- Singapore grants visas to Israeli citizens, but
Indonesia does not
“The Indonesian government has to consider
the loss of non-tax income from visa fees
The Jakarta Post (24 July 2011)
25 0107 08‘11 ‘11
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.
CIMB FIRST ASEAN CORPORATE
TO BE RATED BY DAGONG
Malaysia
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THAI EXPORTERS PLAN TO TAP
SUPPLIES FROM NEIGHBOURS
Thailand, Vietnam, Cambodia
The Thai Rice Exporters Association
(TREA) predicts exports revenue losses
of BHT60-70 billion (US$2-2.4 billion)
if the government has no measures to
assist exporters. Thai exporters they may
opt for cheaper rice from
Vietnam, Cambodia or
Myanmar, to maintain their
market base and customers
The ASEAN free-trade
agreement makes such
alternatives possible
Thai rice prices, the
benchmark for Asia, have
been steadily increasing
based on optimism that the
new government will buy the grain at above-
market rates (Source: TREA)
TREA said competition from Vietnam resulted
in Thai Hom Mali’s share of traditional markets
08such as Hong Kong dropping from 85%
to 50%
Thailand is disadvantaged in terms of
logistics as the cost for shipping containers
to the US and China is more expensive
compared to Vietnam
TREA suggests
government measures
to support exporters
such as offering the
government’s stockpile
at special prices or open
bidding for the stocks
The appreciation of the
baht also makes Thai rice
more expensive
India’s plan to export at
least one million tonnes
of rice from next month - its price beats
Thailand’s by US$100 a tonne.
Bangkok Post (28 July 2011)
The CEO of CIMB Bank, Dato’ Seri Nazir
Razak, has long advocated the need for an
Asian rating agency to offer an alternative
perspective to western rating agencies.
CIMB has become the first ASEAN corporate
to be rated by a Chinese private rating house,
Dagong
“Despite being the custodian of most of the
world’s savings and holding the most attractive
investment opportunities, Asia remains
dependent on Western financial intermediation. I
don’t understand that” (Nazir Razak)
Dagong assigned a long-term local
currency issuer rating of AA and a long-term
foreign currency rating of AA-, with a positive
outlook to CIMB
The rating is higher than those assigned to
CIMB by the Big 3’ of Moody’s, Fitch Ratings
and Standard & Poor’s (S&P)
“If the world’s best banks can be rated
at AAA class, it is not unusual for CIMB to
be rated at AA or AA-, given the bank’s
systemic importance to Malaysia” (Guang
Jianzhong, Chariman & President, Dagong)
Compared to other international agencies,
Dagong placed relatively more weight on
CIMB’s growth prospects backed by the
healthy regional and domestic environment it
operates in, taking into account its governance
and development strategy
Dagong is the largest credit rating agency in
China, and in July 2010, became the world’s first
non-Western credit rating agency to issue credit
ratings for 50 countries
The Star, Malaysia (23 July 2011)
EXPORTS LED
ASIA-PACIFIC
OUT OF CRISIS: UN
ASEAN
Exports led Asia Pacific out of the global
economic crisis, but with the European
Union, Japan and the United States
facing an economic slowdown, it must
rely more on intra-regional trade to
sustain growth (Source: Report by the
UN Economic and Social Commission for
Asia and the Pacific [ESCAP]) Trade in the region has returned to pre-crisis levels
while FDI flows to selected parts of the region have
fully recovered
The report recommends Asia-Pacific countries
to lead exports of climate-smart goods and
technologies as the region comes to terms with
climate change
ESCAP estimates show that the export growth
recovery in Asia-Pacific’s developing economies in
2010, estimated at 17.3% after negative growth of
nearly 8% a year earlier, will stabilize to 9% in 2011
India Blooms (26 July 2011)
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