29 OCTOBER 20 12 I SSUE 99

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ASEAN

Laos, China

0102

Doing Business inDex: How DiD

AseAn fAre?

LAos

CommitteD The World Bank recently released

its Ease of Doing Business Index

and while many ASEAN countries

improved in rankings, there is still

room for improvement. As a region, ASEAN’s overall rankings

improved with the top gainers being

Cambodia, Brunei, and Laos, moving up

eight, four, and three places respectively

Cambodia improved by making credit

more accessible to investors, while Brunei

improved its construction permit allocation,

and Laos simplified regulatory barriers

to starting businesses and trading across

borders

In ASEAN, Singapore maintained its

position at the top of the list, while Malaysia

followed in second

Malaysian Minister of International Trade

and Industry, Mustapa Mohamed claimed

that Malaysia’s performance validates the

Vientiane will invest US$7 billion in

a high-speed rail network after the

Chinese Export-Import (EXIM) Bank

and its firms pulled out of the project. The Trans-Mekong high-speed rail network

was launched two years ago between China

and Laos and would connect Kumming and

Vientiane

The high-speed rail would also connect to

Thailand through the pre-existing Thai-Lao

border

China’s EXIM bank announced that the

rail network with Laos was not feasible and

cancelled joint investment plans

Laos National Assembly decided to

go ahead with the 420-km rail project

despite Beijing’s withdrawal, believing in

the importance of rail connectivity for the

landlocked country

The high costs of the project is due to the

need of building 76 tunnels and 154 bridges

through mountainous terrain

Why it Matters: Despite close ties between

Laos and China, Vientiane will not wait on

Beijing showing that it is committed and

ready to invest in its own infrastructure. It

is possible that this potentially opens doors

to other partnerships with ASEAN members

and India in similar projects. This would be a

strategic and favourable decision on the part

of ASEAN governments in diversifying the

Laotian investment ties away from China.

Travel News Daily (24 October 2012)

success of the Prime Minister’s economic

policies, despite the country slipping

four positions to 25th in the Global

Competitiveness Index

The Philippines lagged behind Cambodia,

falling two places to the 136th position

It is worrisome that the Philippines has not

made significant gains in the Doing Business

index in the last decade

Why it Matters: Ease of Doing Business

reflects how the business and investment

environment in a particular country

is. It does not indicate the economy’s

competitiveness like the World Economic

Forum’s Global Competitiveness Index.

ASEAN policy makers and the private sector

has to understand this nuance and make

adjustments accordingly to improve the

country’s performance in both indices.

The World Bank (23 October 2012)

to HigH-speeD rAiL,

Despite CHinese

witHDrAwAL

Source: Doingbusiness.org

ease of Doing Business

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.

output of plastic(2011 - 2012)

ASEAN

Vietnam, Philippines

ASEAN

05

03

04 AseAn Aims to Corner gLoBAL

pLAstiCs mArket

VietnAm AnD pHiLippines At oDDs

on AseAn eConomiC Community

AnALysis:

impLiCAtions

Members of the ASEAN Federation of

Plastics Industries (AFPI) discussed

ways to become a global hub for

plastic production at the 14th AFPI

council in Ho Chi Minh City last week. The plastic industry is expected to grow

only 2-3% this year, similar to last year

The industry is facing many challenges

such as shrinking demand, decline in

plastic prices, volatile material prices, rising

With less then three years away

from implementation of the ASEAN

Economic Community, the Philippines

is uneasy about new competition,

while Vietnam is eager to learn from

its neighbours. Speaking at the Punongbayan & Araullo

CEO Business Forum in Makati City, Jollibee

Foods Corp chief finance officer Ysmael

Baysa warned that the Philippines could

stand to lose out in certain sectors of

the economy because the country is not

sufficiently prepared

Ysmael hypothesised that his fast food

chain, Jolibee, could source chicken and

sugar from Thailand, and rice and pork from

Vietnam over domestic producers after the

The signing of the peace agreement

between the Philippines government

and the Moro Islamic Liberation Front

(MILF) ended a four-decade conflict

and build an autonomous region in

Mindanao — to be called Bangsamoro

— has significant implications for

ASEAN neighbours. Three prime ministers from Malaysia

oversaw the negotiations for over a decade,

and the signing reinforced Prime Minister

Najib Razak’s international credentials and

Malaysia’s position as a promoter of peace

and stability in ASEAN

The prospect of peace may slow the influx

of illegal immigrants through Sabah

A successful peace may also give Thailand

a morale boost as it faces insurgency in its

three southernmost provinces adjoining

Malaysia

Indonesia also facilitated the peace

process and sent observers to participate

in the International Monitoring Team, and

it likewise faced insurgencies in provinces

which include Aceh and the former

province of East Timor

Eurasia Review (24 October 2012)

tariff wall of 45% is brought down

Conversely, public feeling on the free

movement of skilled labour in Vietnam’s

medical services is positive; Vietnamese

medical and IT professionals expressed

excitement about going abroad to learn

new skills and enjoy higher wages

Le Quang Trung, deputy director of

the Ministry of Labour, Invalids and

Social Affairs noted that “the arrival

of foreign workers will provide many

more opportunities in trade, investment

and employment, new knowledge and

advanced technology and raise the quality

of domestic labour”

Head of the nursing division of the

Ministry of Health, Tran Quang Huy, said

that Vietnam may be behind some of its

neighbours in nursing skills; the quality of

service and work was competitive

A survey by the International Labour

Organization showed that Vietnam’s

biggest disadvantage was poor English

skills

Why it Matters: The sentiments from

Vietnam and Philippines on the AEC on

jobs are different. On one hand, some in

the Philippines are anxious of competition

and the prospect of losing jobs. Meanwhile,

although many in Vietnam have not

heard of skilled labour mobility, they are

excited about growing their talents and

taking advantage of regionalisation and

competition.

GMA News, Rapller, Viet Nam News

(23 October 2012)

of BAngsAmoro

Agreement for

AseAn

energy prices, and labour shortage

The AFPI secretary general urged

members to improve productivity to

become a global hub for plastics, adding

that as costs increase further, the industry

will need to shift to higher value-added

activities

Vietnam News (24 October 2012)

Source: Vietrade

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

monitor06Politics

Around 84 people have been killed and

more than 28,000 people displaced in

recent communal clashes in Rakhine state in

western Myanmar. Survivors of the clashes

have criticised the government for the lack

of action.

Associated Press (30 October 2012)

President Thein Sein held his first ever

press conference for local press last week.

After being interviewed many times during

his recent visit to the US and after surviving

the hard questions on the inquisitorial BBC

program HardTalk, he said he is no longer

afraid of meeting with the media.

The Washington Post (21 October 2012)

Economy

Myanmar plans to build more than a

million residential flats in the next 15 years,

sources from the Construction Ministry

said. Myanmar is facing a housing shortage

but only 240,594 flats have been built

from 1989. It is estimated that 32.6% of the

country’s population live in urban areas.

Eleven News (26 October 2012)

The price of cars in Myanmar will continue

falling as the market opens up, according

to Commerce Minister Win Myint. “It is now

possible to buy a relatively new car for just

20 million kyat (US$23,000), whereas in the

past it would have cost 15 to 20 times that

amount.” The ministry recently authorised

the import of more than 60,000 motor

vehicles.

The Irrawaddy (24 October 2012)

Germany will provide technical and

financial assistance to Myanmar’s new

Hantharwaddy international airport.

Germany will also make investments in

construction and maintenance of sea ports

in Myanmar. Germany is Myanmar‘s second

largest donor after Japan with Myanmar still

owing an estimated ¤700 million (US$903

million) in unpaid debt

Mizzima (23 October 2012)

Foreign Affairs

Surin Pitsuwan, ASEAN’s Secretary-

General calls on ASEAN to act on the

escalating violence in Myanmar’s Rakhine

state, adding that without action there is

a serious risk that the country’s Rohingya

population becomes radicalised.

Bangkok Post (28 October 2012)

Myanmar will be invited to send observers

to the annual Cobra Gold exercise, a major

US and Thai-led multinational military

exercise, a step towards increased US

engagement with the Myanmar military.

Reuters (19 October 2012)

Malaysia, Indonesia

Myanmar

08

07

mALAysiA’s pArkson rAises

stAkes in inDonesiA’s mALL Boom

myAnmAr jumpstArts two more

speCiAL eConomiC Zones

Malaysian-based Parkson group,

which penetrated Indonesia’s retail

industry in 2011, has announced that

it will develop its first 150,000 sq ft

Parkson-branded department store in

the St. Moritz development, which is

owned by the Lippo Group. Alfred Cheng, executive director of the

Singapore listed Parksan Retail Asia Ltd

(PRA) says it plans to open at least four

stores a year for the next three years under

As plans for the Dawei Special

Economic Zone (SEZ) are becoming

clearer with the involvement of

Thailand and Japan, Myanmar is

jumpstarting the other two planned

SEZs in Thilawa and Kyauk Phyu. The Thilawa SEZ is located 25km south

of Yangon and should become operational

early next year

The Japan External Trade Organisation

will hold a 49% share in the project and

Myanmar’s Federation of Chambers of

Commerce and Industry (UMFCCI) will hold

51%, but the UMFCCI plans to sell its shares

before the launch of the project, giving the

Myanmar public a chance to invest in the

SEZ

The Myanmar government plans to reduce

the company registration time down to only

its own brand or the Centro brand

Cheng says Indonesia’s market is growing

rapidly and he intends to raise Indonesia’s

contribution to the group’s revenues from

its current 3% to 10% by employing a

differentiation strategy

The rapid growth of Indonesia’s middle

class had also attracted Thailand’s Central

Retail Corporation, which plans to launch

its first department store branch at

Jakarta’s Grand Indonesia Mall in 2014

Forbes Asia (24 October 2012)

three hours and investment registration

time down to no more than 15 days, and

it will set up a one-stop service centre for

the SEZ

The Kyauk Phyu SEZ will be located in

western Rakhine State, between Kyunk

Phyu Township and Yanbye Island

The Kyauk Phyu SEZ Management

Committee and Nippon Koei Co. Ltd. from

Japan are currently surveying the area,

calculating costs, establishing a National

Master Plan and enacting the Kyauk Phyu

SEZ law

After drawing out a conceptual plan with

civil society, the government will call for

an open tender with priority given to local

investors

Eleven News (23 October 2012)

The Irrawaddy (24 October 2012)

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: Manissa van Geyzel, Chayut Setboonsarng, Sóley Ómarsdóttir

Consultant Editor: Tunku ‘Abidin Muhriz Designer: Iqbal Hakim

Philippines

Singapore

09

10

pHiLippines eyes working witH us AnD AseAn

on genetiCALLy moDifieD Crops

singApore pioneers worLD’s

first VertiCAL fArm

The Philippines, a leader in

biotechnology in Southeast Asia, is

willing to share its expertise with

the US and ASEAN countries on how

biotechnology improves farmers’

income and productivity. The statement by the Philippines’

Singapore has opened the world’s

first commercial vertical farm, which

uses 9-metre aluminum towers to

house various types of vegetables. Sky Green Farms began working on the

prototype in 2009 and now has built 120

towers over 3.65 hectares and hopes to

expand to 300 by next year

Produce prices are 10-20 cents more

department of foreign affairs was made

at the agriculture and food security

conference in Washington, D.C

The Philippines was the first country in

Southeast Asia to established a regulatory

system for biotech products, and to grow

a major biotech crop of Bt corn for food,

feed, and processing

expensive, but are expected to decrease

overtime

With only 710 km2, the city state does

not have ample space for agriculture

production, and only 7% of Singapore’s

vegetables are grown locally

Today Online, Channel News Asia,

Inquirer Global Nation (24 October 2012)

Although the Philippines’ policy is to

promote safe and responsible use of

biotechnology, it is also very active in

promoting organic agriculture, according

to Dr. Josyline C. Javelosa, Philippines

Agriculture attaché

GMA (24 October 2012)