Economy & Trade

Singapore’s Chairmanship: Prospects for ASEAN in 2018

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Op/Ed by Dr. Robin Michael Garcia & Enkhzul Orgodol

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The Philippines had chaired the ASEAN four times since its inception with 2017 being its latest assumption, while Singapore had chaired three times before this year. The chairmanship of the ASEAN is based on a rotating basis with one year allocated for each chairman. With Singapore’s fourth time as ASEAN chairperson this year, what is in store for a regional grouping with big accomplishments but with even bigger aspirations?

At the onset, the fundamental question that must be asked however is: what of a chairpersonship position for a regional block that makes all decisions in consultation and consensually with one another, and that values non-interference above all? Hierarchical structures and legalistic punitive mechanisms similar to the European Union (EU) barely exist at least formally. In other words, what is the role of the ASEAN Chair aside from a glorified event organizer?

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Cambodia’s Investment Outlook for 2018

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By: Vasundhara Rastogi

Cambodia is among the fastest economies in the world, registering a stable economic growth rate of 6.9 percent to 7.6 percent every year, over the last 10 years. Though relatively less developed than its neighboring countries, Cambodia presents huge opportunities for foreign investors. Cambodia is known for its macroeconomic stability, low-cost labor, competitive investment incentives, and a pro-business government. Besides, it has the most favored nation (MFN) and generalized system of preference (GSP) status that gives it a preferential access to the world’s most lucrative markets such as Europe, North America, Korea and Japan. Cambodia has also signed numerous trade agreements, such as the US Cambodia Trade and Investment Framework Agreement (TIFA) in 2006 and ASEAN Free Trade Agreement (AFTA) starting from 2015, that facilitate and promote greater trade and investment between signatory countries.

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French FDI in ASEAN Part II: Thailand, Philippines and Indonesia

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By: Linh Tran Huy

Editor: Thibaut Minot

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In the first part of this two-part article, we discussed France’s investments in Singapore, Malaysia and Vietnam. Reiterating the continued importance of the Association of Southeast Asian Nations (ASEAN) as a FDI destination for European investors, we look at French FDI in Thailand, Philippines and Indonesia in this concluding part.

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Myanmar’s Investment Outlook for 2018

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By: Vasundhara Rastogi

Myanmar is among the fastest growing economies in Southeast Asia with significant market potential for the growth and expansion of foreign companies. Some of the strategic advantages that the economy offers include its large youthful population and workforce, its low-cost base, natural resources, and its strategic location between two of the largest economies in the world – India, and China. The country, in 2017, recorded a growth rate of 6.3 percent. Albeit relatively slow, the economy remained strong and steady.

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French FDI in ASEAN Part I: Singapore, Malaysia and Vietnam

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Editor: Thibaut Minot

The business environment of the Association of Southeast Asian Nations (ASEAN) has become increasingly favorable for foreign investment in recent years. 2014 was an exceptional year in terms of FDI, which gave way to a slightly less impressive  2015 despite significant FDI flows of about EUR102 billion (US$126.7 billion). FDI flows remained strong in the areas of finance and infrastructure and strengthened in the manufacturing sector. France’s FDI was no exception: the French FDI stock in ASEAN reached EUR17.4 billion (US$21.6 billion) at the end of 2015, with a penchant for large markets (Malaysia, more than EUR 104.7 million) and those with development prospects (Vietnam, more than EUR 81 million).

This is due to the willingness of governments in ASEAN states to promote foreign investment and the increasingly visible economic developments in the region. The weakening of the Chinese and Brazilian markets, the creation of the ASEAN Economic Community in December 2015, and the streamlining of the regulatory landscape greatly improved the perception of investors. Be it SMEs or multinationals, they now want to expand their presence in the economic region through the creation of various investment routes, production networks and regional headquarters. Despite being rich in opportunities, ASEAN remains a difficult region to define. It is therefore crucial to understand the different advantages and disadvantages that each country offers and to choose accordingly.

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Malaysia’s Digital Free Trade Zone

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By: Vasundhara Rastogi

Malaysia’s Digital Free Trade Zone (DFTZ) went live in November 2017 as a joint undertaking between the Malaysia Digital Economy Corporation (MDEC) and China’s Alibaba Group. It seeks to establish Malaysia as a leading logistics center for global marketplaces by opening opportunities for companies both in Malaysia and other ASEAN countries to leverage a platform that enhances competitiveness and market access. Besides, it aims to develop an internet ecosystem in the country that drives innovation in e-commerce and digital economy.

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Malaysia’s Investment Outlook for 2018

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By: Vasundhara Rastogi

Malaysia is the fourth largest economy in Southeast Asia known for its high labor productivity and diversified economy. Over the years, the country has transformed itself from being a primary commodities exporter into a leading exporter of electrical appliances, electronic parts, and components and natural gas. Moving up the industrial value chain, it has also established itself as an attractive regional hub for services, information and technology, and the logistics sector.

The service sector assumes the largest share of gross domestic product (GDP) accounting for more than 54 percent of GDP and serves as the engine of growth to propel and sustain the country’s economy. Manufacturing, on the other hand, contributes about 23 percent to the GDP. Some of the other major economic activities in Malaysia include the mining and agriculture sectors. In 2017, the service sector is projected to grow at a faster rate – approximately 6 percent, reflecting stronger expansion across most sub-sectors, particularly wholesale and retail trade, information and communication, and food, beverages, and accommodation, and increasing its share to 54.8 percent of GDP.

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Rules of Origin Criteria of ASEAN’s Free Trade Agreements

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By Dezan Shira & Associates
Editor: Vasundhara Rastogi

Rules of Origin (RoO) are guidelines that help importers and manufacturers determine the country of origin of a product. RoOs establish the product’s eligibility for preferential tariff treatment available under FTAs. In other words, products qualifying as originating under a FTA may be allowed to pay lower or no import tariff when imported into another FTA member country.To qualify as originating goods, imported items must either be:

  • Wholly-obtained or produced entirely in an FTA member country; or
  • Must have undergone a ‘substantial transformation’.

For the goods that are partially produced within an FTA member country, substantial transformation guarantees that a meaningful manufacturing process has taken place in the free trade area for the good to qualify as originating. The criteria to determine the country of origin for such goods is based upon three methods as explained below.

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The Philippines’ Investment Outlook for 2018

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By: Vasundhara Rastogi

The Philippines is now among the fastest growing economies in Asia. Driven by a broad-based expansion in domestic demand, its economy has continued to perform strongly in 2017. The country’s gross domestic product (GDP) grew by 6.7 percent in the first three quarters of 2017, in comparison to the projected 6.6 percent. The Philippines has grown at an average of 6.3 percent over the past five years in what economists expect will be a sustained trend in the next few years for the country.

The sustainability of economic growth and the economy’s limited exposure to uncertainty in global markets makes the Philippines an attractive investment destination in Asia for overseas investors. Duterte’ ascension to the presidency in 2016 has further strengthened the economy’s growth prospects. Known as a pro-reform, pro-infrastructure and anti-corruption president, Duterte has already introduced several big infrastructure projects that have the ability to make the country grow stronger in the coming years.

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How to Set Up in Thailand – New Issue of ASEAN Briefing Magazine

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ASB 2017 issue 04_Web pic (002)The latest issue of ASEAN Briefing Magazine titled, “How to Set Up in Thailand“, is out now and available to subscribers as a complimentary download in the Asia Briefing Publication Store.

In this issue of ASEAN Briefing

  • Corporate Establishment in Thailand: What You Need to Know
  • Investing in Thailand: Tax and Non-Tax Incentives
  • Thailand’s Eastern Economic Corridor

 

 

 

 

 

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