CARI Captures Issue 521: Low vaccination rates are hurting Southeast Asia’s economy

 

ASEAN
Low vaccination rates are hurting Southeast Asia’s economy
(22 September 2021) The Asian Development Bank (ADB) downgraded its growth projections for Southeast Asia (including Timor-Leste) from 4.4% to 3.1% for 2021 and 5.1% to 5.0% for 2022 as it expects the region to “recover at a much slower pace than projected” due to lockdowns and restrictions caused by recurring COVID-19 outbreaks and uneven vaccination rollouts. Thailand, Indonesia, Malaysia and Vietnam are expected to be the hardest hit due to the pandemic, while Myanmar’s outlook was downgraded from a 9% contraction to an 18.4% contraction due to its political climate. Singapore is the only country to receive an upgrade as it has fully vaccinated 75% of its population.

ASEAN
Privatized vaccination schemes gain traction in Southeast Asia
(20 September 2021) ASEAN governments have been turning to the private sector to supplement national vaccine supply and distribution efforts following the COVAX program’s failure to secure adequate vaccines for developing countries. Indonesia’s private vaccination scheme, which was launched in February 2021, received over 10 million employee registrations from over 22,000 companies within three months. Most of these private schemes, which focuses on on-site employees and their immediate families, are utilizing Sinopharm vaccines since—according to the Philippines’ vaccine czar—Pfizer, Sinovac, and Sputnik V prioritize government orders while Moderna, Johnson & Johnson, and AstraZeneca do not accept private vaccine orders.

ASEAN 
Southeast Asia-focused private equity funds raise US$1 billion in H1 2021
(17 September 2021) ASEAN-focused private equity funds raised US$1 billion in dry powder in the first half of the year, up from US$1 billion raised in all of 2020 and US$1.3 billion in 2019, according to a recent DealStreetAsia report. Asia Partner’s debut US$384 million fund and Mekong Capital’s US$246 million fifth fund accounted for the bulk of the sum. Another 28 ASEAN-focused private equity funds are currently in the market to raise US$6.8 billion, with Navis Capital Partners leading the way in the second half of the year with its US$900 million eighth fund and US$450 million continuation fund.

INDONESIA
Inclusivity and sustainability among Indonesia’s G20 presidency priorities
(23 September 2021) Indonesia’s priorities when it assumes the G20 presidency in 2022 will include inclusiveness, a sustainable green economy, climate resilience, and “vulnerable groups that must be prioritized”, according to Indonesian President Joko Widodo’s recorded statement to the UN General Assembly. The premier called for countries to work together to reorganize global health security resources to better facilitate funding and vaccines, and establish a standardized global health protocol for travel. He also stressed that “concerns on the marginalization of women and violence in Afghanistan, Palestine’s elusive independence, and the political crisis in Myanmar must be our common agenda.”

INDONESIA  
Ooredoo and CK Hutchison join forces in US$6 billion telco merger
(20 September 2021) Qatar’s Ooredoo and Hong Kong’s CK Hutchison have agreed to merge their respective Indonesian telecommunications businesses—Indosat and Hutchison 3 Indonesia—in a US$6 billion deal to form Indosat Ooredoo Hutchison. The deal, which is expected to close by year-end, would make the new entity the second-largest telecommunications operator in the country with annual revenue of around US$3 billion and cost savings of approximately US$300 to US$400 million to be realized over three to five years. Ooredoo Hutchison Asia will retain a controlling 65.6% stake in the merged entity and will remain listed on the Indonesian Stock Exchange.

THAILAND  
PTT and Foxconn to begin manufacturing electric vehicles by 2024
(20 September 2021) Taiwanese electronics contract manufacturer Foxconn and Thai state-owned oil company PTT have formed a joint venture to produce electric cars in Thailand as part of the country’s hopes to become an electric vehicle hub. According to Foxconn, production is expected to commence in two to three years with initial output of 50,000 vehicles per year and 150,000 vehicles per year later on. The Eastern Economic Corridor (EEC) is said to be a potential location for the planned production plant, which will house “the entire electric vehicle value chain” from research to battery production and vehicle assembly.

MALAYSIA
Domestic capital market totalled US$813 billion in 2020
(21 September 2021) Malaysia’s domestic capital market grew from approximately US$574 billion (RM2 trillion) in 2011 to US$813 billion (RM3.4 trillion) in 2020 with over 900 listed companies and the third-largest bond market in Asia, according to the Securities Commission Malaysia’s Capital Market Masterplan 3 (CMP3) launched this week. The CMP3 outlined six key pillars for the 2021 to 2025 period which include Sustainable and Responsible Investment, Islamic Capital Market, as well as greater use of regulatory technology and supervisory technology. The country’s domestic economy expanded at an average rate of 5.1% annually from 2011 to 2019 before contracting by 5.6% in 2020.

---

RCEP Monitor

---