In this edition of ASEAN Regulatory Brief, ASEAN Briefing takes a closer look at Brunei’s new finance regulations, the US’s eased export restrictions for Myanmar, and a fight against corruption in Indonesia.
Brunei: New financial reforms will provide more options for consumers, enterprises
The Autoriti Monetari Brunei Darussalam (AMBD) recently announced new regulatory financial reforms. The changes will make a wider variety of financial products accessible to consumers. Meanwhile, the reforms will also ease the access to financing for entrepreneurs. The central bank amended several regulations to relax the conditions to obtain unsecured personal credit, financing and credit cards. In addition, the new regulations will include variable, rental and business income in the ‘gross monthly income,’ thus making it easier for financial institutions to access credit.
Local experts believe that the new changes will make the financial climate more conducive for businesses. Easier access to financing will allow businesses to expand their operations. In addition, easy availability of credit for consumers will ensure a robust domestic demand for goods and services, which will contribute to a healthier economic climate. The new regulatory reforms are a part of Brunei’s larger project of modernizing the financial market to bring it at par with other developed markets.
Myanmar: US government relaxes export-related regulations
The U.S. Department of the Treasury’s Office of Foreign Assets and Control (OFAC) recently relaxed export-related regulations. The department issued a six-month general license to authorize certain trade-related transactions. The new license permits individuals, companies and financial intermediaries to participate in regular export-related activities such as trade finance transactions, payment of port fees and payment of shipping and handling charges related with sending goods to or from Burma. The transactions will be authorized until June 7 2016. In addition, the reform also authorizes US financial institutions to unblock and return transactions that were blocked on or after April 1 2015.
Economic experts believe that the relaxed regulations will be beneficial for U.S. and Myanmar exporters. The reforms will ensure greater trade with Myanmar and will act a means to check the impact of U.S. sanctions on Myanmar. The new regulations will enable U.S. authorities to maintain targeted economic sanctions in Myanmar, without hurting the overall economic climate of the country. Before the regulation, the U.S. had prohibited a number of export-related trade transactions, which were prohibited under the Burmese Sanctions Regulations (BSR).
Indonesia: New decree to protect civil servants from graft investigations
President Joko Widodo recently said that he could issue a new decree that would protect civil servants from graft investigations. The new regulation will spur public spending and encourage economic development in the country. Economic analysts believe that a large amount of public funds are frozen, as civil servants believe that large expenditures will draw greater scrutiny from anti-corruption agencies. The new law enables civil servants to spend more confidently and the larger public spending will boost domestic demand in the country.
Prospective investors and companies already operating in Indonesia will welcome the new decree. The decree will enable easier completion of infrastructure projects. Corporations view such projects as key drivers of economic growth and development. The new decree comes amid a rising fear of underutilization of public funds by civil servants. For instance, only 40 percent of Jakarta’s annual budget of US $50 billion had been spent as of November 2015.
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