ASEAN Regulatory Brief: Bankruptcy in Singapore, Lackluster Economic Plans in Myanmar, and Licenses in Indonesia.
Singapore: Government Implements New Bankruptcy Laws
Singapore’s new bankruptcy laws have been in effect since 1 August 2016. The rules were created to enable a more rehabilitative environment for bankruptcies. Under the new laws, the minimum debt owed by a person before being declared bankrupt has been increased to SGD $15,000 (US$11,158) from SGD $10,000 (US$7,438).
The new laws also provide a timeline for resolving bankruptcies. A first-time bankruptcy will now be discharged in five years, once creditors have been paid off. The payout to creditors is based on the bankrupt individual’s earning potential. The new laws also mandate that institutional creditors nominate private trustees when applying to make a debtor to be declared bankrupt.
The news laws seek to improve the business climate in the country through the streamlining of the bankruptcy processes. Changes are also touted as means of improving the quality of debt available in the market.
Myanmar: New Economic Policy Launched
Myanmar has recently outlined their new economic policy. The Ministry of Planning and Finance launched the new policy in the capital Napyitaw. The policy is only three pages long and analysts state that it is significantly short on details. The new economic policy broadly expands on 12 related policies, including prioritization of labor-intensive enterprises and privatization of a few state-owned companies.
Economic analysts state that the new policy is more an outlook rather than an actual policy. The current policy does not elucidate plans for economic development. As a byproduct of its brevity, the new policy strengthens the voice of critics, which have stated that the National League for Democracy (NLD) ruling party is not committed to business in Myanmar. The private sector in particular is extremely weary of the government attitude towards business.
It is important to note, that while the new policy is well-intentioned, it might not yield results. This stems from the lack of concrete plans to accomplish the goals that the new economic policy sets forth.
Indonesia: Stricter Environmental Law will Affect New Licenses
Joko Widodo, the Indonesian President, recently issued Presidential Instruction No. 8 of 2015 (PI 8/2015), which places a moratorium on the issuance of new licenses in primary natural forest areas and peatland. The specific areas are stated in the Indicative Map of Suspension of New Licenses. However, the new PI does not apply to applications that have received primary approval from the Ministry of Environment and Forestry (MOEF), vital nationals development industries, businesses that have valid licenses to operate in such areas and applying for extensions and for ecosystem restoration.
The new law independently will not affect business significantly; however, it is indicative of a proactive attitude from the government towards environmental law and policy. For instance, Widodo also integrated a few departments in the government to form the Ministry of Environment and Forestry. It is vital for companies to factor in such policy changes in their business plans. Companies that undertake regular tracking of the government’s policy environment are often able to respond in a better manner to regulatory changes from the government.
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