Economy & Trade
By: Vasundhara Rastogi
In 2017, the value of Thailand’s border trade with Cambodia, Laos, Myanmar, and Malaysia, combined with goods re-exported to Vietnam, totaled 1.3 trillion Baht. This year, the Ministry of Commerce expects the number to grow further by 10 to 14 percent. Likely to benefit further in the light of these strong trends are businesses that choose to locate in the 10 Special Economic Zones (SEZs) in the border provinces of Thailand. The development of the SEZs is divided into two phases, with the first phase covering the provinces of Tak, Sa Kaeo, Trat, Mukdahan, and Songkhla. Other provinces include Chiang Rai, Nong Khai, Nakhon Phanom, Kanchanaburi, and Narathiwat.
Continue reading…
By Dezan Shira & Associates
Editor: Vasundhara Rastogi
As a region, ASEAN has dramatically outpaced the rest of the world in terms of its growth per capita since the late 1970s. Income growth has remained strong since 2000, with average annual real gains of more than 5 percent. Over the years, with the gradual opening up of its economies, increasing demographic dividend, low labor costs, and a steady growth, ASEAN has emerged as one of the most attractive foreign capital destinations in Asia. From the region’s financial services capital in Singapore to its low-cost manufacturing hubs in Vietnam, the ASEAN region offers numerous opportunities for businesses interested in establishing operations or trading in Asia.
In terms of low-cost manufacturing, Vietnam, in particular, has made great strides as a manufacturing hub attracting significant investment from foreign businesses. Manufacturing accounts for 25 percent of its total GDP. Over the years, Myanmar too has grown into a manufacturing base for industries producing textiles and garments, food and beverages and construction materials. Similarly, Cambodia, Lao PDR, and the Philippines have shown a significant potential in their manufacturing activities. The average monthly wage of a manufacturing worker in these countries is considerably lower in comparison to other manufacturing hubs in Asia, such as China.
Continue reading…
By Evonne Chiu and Benedict Alibasa at Grapevine Asia Partners
Economic Growth Under Duterte
In spite of President Rodrigo Duterte’s controversial ‘war on drugs’ and his acerbic language towards his critics, the Philippine economy continues to register robust growth. Latest economic data show that the Philippines’ gross domestic product (GDP) grew by 6.7% in 2017, marking the seventh straight year of GDP growth of more than 6%. Although the 2017 GDP growth was slightly below the 6.9% growth recorded in 2016, the Philippines remains one of Asia’s fastest-growing economies, only trailing behind China’s 6.9% and Vietnam’s 6.8%.
The 6.7% growth of last year was partly anchored by the government’s increased public spending. Data from the Philippine Statistics Authority (PSA) show that public construction posted a 12.6% growth in the third quarter of 2017. A primary driver of growth in public spending is Duterte’s ‘Build, Build, Build’ program. Improved public spending was also driven by higher utilization of cash allocation by government agencies.
Continue reading…
By: Vasundhara Rastogi
Strategically positioned along major sea lines connecting East Asia, South Asia, and Oceania, Indonesia holds a natural appeal for foreign investors. The country is the largest archipelago in the world, consisting of five main islands – Java, Sumatra, Kalimantan, Sulawesi, and Papua – and about 30 smaller archipelagos totaling approximately 17,508 islands. Aside from its geographical reach to major international markets, the country houses over 250 million people offering a viable domestic market for investors. In addition, the country has relatively low wage rates, which provide a cost-effective source of manpower for investors.
Economy
Indonesia is rich in natural resources, mainly energy fuels, minerals, and abundant forests that provide important raw materials for industry, thereby offering a comparative advantage for investment. Apart from natural resources, the services and industrial sectors are key economic drivers, accounting for 46 percent and 40 percent of the country’s total GDP, respectively.
Continue reading…
By: Vasundhara Rastogi
Spread across more than 17,500 islands, the Indonesian archipelago is a pivotal trading hub in Southeast Asia. The island country borders Malaysia, Timor-Leste, and Papua New Guinea by land, and Christmas Island, India, the Philippines, Singapore, Thailand, Vietnam, Australia and Palau by sea.
In 2016, Indonesia exported US$140 billion worth of goods and imported US$ 132 billion, resulting in a positive trade balance. The country’s top export destinations are China (US$16.8 billion), the United States (US$16.2 billion), Japan (US$16.2 billion), Singapore (US$11.2 billion), and India (US$10.1 billion). The country imports predominantly from China (US$32.1 billion), Singapore (US$25.8 billion), Japan (US$11.3 billion), Malaysia (US$6.67 billion), and South Korea (US$6.61billion).
Continue reading…
By: Vasundhara Rastogi
Following the withdrawal of the United States from the Trans-Pacific Partnership (TPP), the 11 remaining signatories of the TPP agreed to move ahead with a revised TPP. The rechristened Comprehensive Progressive Agreement for the Tran-Pacific Partnership (CPTPP) was formally signed on March 8, 2018, and will enter into force as soon as at least six out of 11 member countries ratify it. The 11 member countries are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam.
Continue reading…
By: Vasundhara Rastogi
Landlocked by Myanmar, Cambodia, China, Thailand, and Vietnam, Laos is among the poorest economies of the world. Yet, in terms of gross domestic product (GDP), the economy continues to soar. Over the last decade, Laos has sustained an average growth rate of 7.8 percent, relatively higher than its neighboring countries.
Economy
The main source of its revenue is its huge reserves of natural resources including agriculture and forestry products, minerals such as gold, copper, zinc, and lead, and hydro-electric potential. Mining and hydropower are its biggest foreign currency generating sectors and account for 80 percent of its total FDI, with China, Vietnam, Thailand, Korea, France, and Japan being the leading source. The economy has benefited greatly from the foreign direct investment in its hydropower dams along the Mekong River. As of May 2016, China invested over US$6.7 billion in 760 projects in Laos, covering a wide range of sectors from energy and minerals industry to agricultural and service sector.
Besides, agriculture is the mainstay of the economy. It employees over 75 percent of the population and contributes approximately 29 percent of GDP. Further, the country is also investing heavily in its services sector with two new component – banking and tourism – building huge potential for foreign investment in the country.
Continue reading…
By Vasundhara Rastogi
Last month, Thailand approved the much-awaited law for the development of its US$45 billion Eastern Economic Corridor (EEC) – rolling out a series of measures to spur foreign investments in the Thai economy.
The new law provides for over a hundred regulations – amended or suspended – to sweeten business incentives and revoke legal restrictions on foreign investments in the country. It offers tax breaks for investors in the EEC project, and encourages them to rent land for up to 99 years.
In addition, the Thai government has introduced relaxed visa measures for foreign professionals and also invoked executive powers to help speed investment approval.
Continue reading…
By Dezan Shira & Associates
Editor: Vasundhara Rastogi
On February 19, Singapore’s finance minister Mr. Heng Swee Keat delivered the 2018 budget.
With an emphasis on Asia, emergence of new technologies, and an aging population, this year’s budget focused on helping businesses in Singapore prepare for future challenges and create new opportunities. As a result, much of the budget’s schemes and proposals are directed towards greater investment in and around the development of Singapore’s knowledge resources and the growth of domestic firms. At the same time, Singapore continues to strive to remain an attractive investment destination.
In this article, we present key highlights from the budget with important implications for businesses.
Continue reading…
By: Vasundhara Rastogi
Thailand is a fairly developed economy with an upper-middle-income status. Situated in the heart of Southeast Asia, the country serves as a gateway to one of the world’s most dynamic markets. Despite a decade of political instability and economic shocks, the economy grew at a rate of 3.7 percent in 2017 and is expected to touch 4 percent in 2018, led by strong exports and a vibrant domestic consumer market. However, in comparison to some of its neighbors, the country’s growth rate is among the lowest in Southeast Asia.
Investment climate
Though a moderately-growing economy, Thailand offers abundant resources and a skilled and cost-effective workforce for foreign investors. Thailand has a well-defined investment policy framework that encourages liberalization and promotes free trade. The government, through its several agencies such as the Board of Investment (BOI) and the Industrial Estate Authority of Thailand (IEAT) and its many bilateral agreements, offers numerous tax and non-tax incentives to support investors. Investors can significantly gain from agreements such as the ASEAN Comprehensive Investment Agreement (ACIA), the ASEAN Framework Agreement on Services (AFAS), and the Treaty of Amity and Economic Relations between Thailand and the US (Treaty of Amity).
Continue reading…
ASEAN BRIEFING
