ASEAN Market Watch: Cambodian Corruption, Telecoms Bidding in Myanmar, and Increasing Philippine Trade Deficits

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Cambodia: Cambodia Ranked as ‘Most Corrupt’ Country in the Region

Transparency International’s 2015 Corruption Perceptions Index (CPI) ranks Cambodia as the ‘Most Corrupt’ country in Southeast Asia. Cambodia score was 21 out a possible 100 points, which is the same as the country’s score in 2014.

Cambodia’s Anti-Corruption Unit Chairman, Om Yentieng dismissed the score. Meanwhile, Preap Kol, executive director of Transparency International (T.I.) Cambodia said that the country’s score landed it in the ‘highly corrupt’ category. Local analysts believe that graft in the judicial system is responsible for the low ranking.

The ranking may not completely reflect corruption in Cambodia. However, it does reflect a higher level of corruption relative to other Southeast Asian countries. For instance, Singapore garnered a score of 85, the highest in the region and eighth highest in the world and even Myanmar, which was ranked the same as Cambodia in 2014, received a better score in 2015.

As a result of these results, corporations or individuals that are planning to invest in Cambodia should ensure that they account for the risks that corruption may pose to their operations in the country.

 

Professional Service_CB icons_2015 RELATED: Corporate Establishment Services from Dezan Shira & Associates

 

Myanmar: Foreign Firms May Bid for Telecom Licenses

 Seven foreign firms are set to bid for Myanmar’s fourth telecom license. Chit Wai, deputy permanent secretary of the Ministry of Communications and Information Technology (MCIT) said that the companies had expressed interest in procuring the licenses in early January; however, he did not give any details about the foreign firms. The firm that wins the 15-year license will become a minority shareholder in a joint venture (JV) along with 11 other public companies.

The entry of a new player in the telecom market is bound to increase competition in the telecoms sector and ensure better services for the end-user. However, the complex nature of the JV and additional concerns such as US sanctions on some individuals in Myanmar may dilute the benefits of the increased competition.

In addition, the new player will also have to compete with three established competitors that have consolidated their end-user base. Companies that successfully navigate the complex market landscape of Myanmar stand to gain by investing in the telecom sector in the country.

 

Related-Reading-Icon-Asean Link RELATED: Minimum Wages in ASEAN – All You Need to Know in 2016

 

Philippines: Surge in Imports Widens Trade Gap

The Philippine Statistics Authority on 19 January release trade data showing that imports rose to US $ 6.09 billion in November, 2015. This marks a year on year increase of 10 percent.

While imports have been rising, export growth has not been able to keep up and amounted to just US $ 5.12 billion in November 2015. This marks a deficit of  US $ 977 million, up from US $ 361 million in November 2014.

Industry experts believe that the trend of growing trade deficits is set to continue in 2016 with imports expected to surge. Current imports have been rising with double-digit growth rates, driven by purchases of electronics, industrial equipment, telecommunications products, and goods related to transportation.

The largest sources of imports were China, Japan and the US. However, it is interesting to note that despite this, The Philippines has a trade surplus with Japan and the US, highlighting the country’s ability to add value to products and exports. Investors must also keep in mind that the trade patterns of countries often provides an excellent snapshot of a given country’s economic climate, which can be used as an aid for economic decision making.


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