ASEAN Market Watch: Malaysia Manufacturing, Philippines Economic Freedoms, and Singapore SME Digitization
Malaysia: “Most attractive manufacturing market” status retained
Malaysia retains the top position as the most attractive manufacturing market of choice for future relocations according to the new Cushman & Wakefield “Manufacturing Risk Index 2017” report. The “Manufacturing Risk Index” is an annual survey of the manufacturing sector, which considers investment policies, costs, and risks including political, economic, technological, and environmental risks for their assessment. Malaysia’s ranking is attributed to its infrastructure quality, trade, and logistics performance.
The report also highlights Asia Pacific’s varying degrees of innovation such as automation and smart manufacturing which offers diversity for manufacturers. Almost half of the top 15 positions in the index are occupied by Asia Pacific countries. ASEAN countries such as Singapore, Thailand, Philippines, and Indonesia are ranked 12th, 14th, 19th, and 20th respectively. Based on the overall assessment, cost remains the most significant criteria for relocation currently, with further changes anticipated as the manufacturing industry moves to Industry 4.0, which incorporates automation and data exchange in manufacturing technologies.
Philippines: Improvement in Economic Freedom ranking
Philippines jumped 12 spots from 70th to 58th in the 2017 Index of Economic Freedom. The index measures the effects of policy changes on the overall quality of life. The study attributes fiscal gains, monetary stability, consumption, and government spending for the rise in the rankings. In spite of a weak global demand in 2016-17, Philippines grew at 6.8 percent driven by an increase in investment and consumer spending. The country was rated their highest on fiscal health (97.2) followed by government spending (89.4) as it maintained its public debt levels at 37.1 percent of gross domestic product. Financial freedom was ranked at 60, while monetary freedom was higher at 80.6 in line with the Central Bank’s policies for maintaining price stability, issuing new banking licenses, and maintaining low inflation.
Reduction in cost and time for managing licensing requirements led to a gradual improvement in the business climate rankings while investment freedom witnessed no change due to investment restrictions in several sectors. Philippines scored low in property rights, judicial effectiveness, and government integrity due to a weak state of law. The government is pursuing tax and legislative reforms to facilitate entrepreneurship, eliminate corruption and improve the ease of doing investments to attract investments and achieve a growth of eight percent by 2022.
Singapore: SME digitization program announced
Singapore recently unveiled the SMEs Go Digital Program in their 2017 Budget, to help SMEs build digital capabilities and enhance the country’s data and cybersecurity infrastructure. The Info-communications Media Development Authority (IMDA) and Standards, Productivity and Innovation Board (SPRING) Singapore agencies will implement the US$80 million program. SMEs will be advised on the use of technology to increase productivity, especially in the retail, food services, wholesale trade, logistics, cleaning and security sectors. SMEs can also reach out to IMDA through SME Centers and Technology Hub for funding and technology advice.
With increase in digitization, the Cyber Security Agency of Singapore (CSA) under the program will also focus on data and cybersecurity. To ease access to Intellectual Property (IP), SPRING affiliate Intellectual Property Intermediary and Agency for Science, Technology and Research (A*STAR) will co-develop IPs and guide SMEs for licensing. A*STAR will also be responsible for providing access to advanced machine tools for prototyping and testing along with the government to reduce costs for SMEs.
Asia Briefing Ltd. is a subsidiary of Dezan Shira & Associates. Dezan Shira is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in China, Hong Kong, India, Vietnam, Singapore and the rest of ASEAN. For further information, please email email@example.com or visit www.dezshira.com.
Stay up to date with the latest business and investment trends in Asia by subscribing to our complimentary update service featuring news, commentary and regulatory insight.
Dezan Shira & Associates Brochure
Dezan Shira & Associates is a pan-Asia, multi-disciplinary professional services firm, providing legal, tax and operational advisory to international corporate investors. Operational throughout China, ASEAN and India, our mission is to guide foreign companies through Asia’s complex regulatory environment and assist them with all aspects of establishing, maintaining and growing their business operations in the region. This brochure provides an overview of the services and expertise Dezan Shira & Associates can provide.
An Introduction to Doing Business in ASEAN 2016
An Introduction to Doing Business in ASEAN 2016 introduces the fundamentals of investing in the 10-nation ASEAN bloc, concentrating on economics, trade, corporate establishment and taxation. We also include the latest development news in our “Important Updates” section for each country, with the intent to provide an executive assessment of the varying component parts of ASEAN, assessing each member state and providing the most up-to-date economic and demographic data on each.
Human Resources in ASEAN
In this issue of ASEAN Briefing, we discuss the prevailing structure of ASEAN’s labor markets and outline key considerations regarding wages and compliance at all levels of the value chain. We highlight comparative sentiment on labor markets within the region, showcase differences in cost and compliance between markets, and provide insight on the state of statutory social insurance obligations throughout the bloc.