CARI Captures Issue 588: Indonesia to set up office to deal with Myanmar crisis

Indonesia to set up office to spearhead ASEAN’s response to Myanmar crisis
(11 January, 2023) As chair of ASEAN for 2023, Indonesia will set up an office to spearhead ASEAN’s response to the ongoing Myanmar crisis. Called the Office of Special Envoy, it will be headed by Indonesian Foreign Minister Retno Marsudi. Marsudi stated that she will seek to engage with ‘all stakeholders’ in Myanmar, noting that it is crucial to enable a national dialogue to address the crisis afflicting the country. Marsudi said Indonesia’s moves are in line with a five-point consensus on Myanmar that ASEAN had earlier adopted. Marsudi added that ASEAN is “disappointed” with the lack of progress that the Myanmar junta, which seized power in a military coup on 01 February, 2021, is making toward implementing the consensus. The five-point consensus calls for an immediate cessation of violence, dialogue among all parties concerned and a visit by the ASEAN special envoy to Myanmar.

Thailand rescinds policy requiring visitors to show proof of COVID-19 vaccinations
(09 January 2023) On 09 January, 2023, Thailand rescinded a policy announced on 07 January 2023, requiring visitors to show proof of COVID-19 vaccinations. Thailand’s health minister stated that requiring visitors to show proof of vaccination was inconvenient, and that enough vaccinations had been administered globally to forgo the policy. Thailand’s aviation authority had initially announced the policy as effective on 09 January, 2023, ahead of an expected deluge of Chinese visitors. Thailand is now expecting some 7 to 10 million Chinese visitors, compared to an earlier estimate of some 5 million visitors. Thailand’s tourism authority is expecting arrival numbers for 2022 to have exceeded 11.5 million, just over a quarter of the record of nearly 40 million in 2019.

Malaysia to operate special lanes for Chinese visitors at international entry points
(10 January 2023) Malaysia’s Immigration Department will operate special lanes for travelers from China at its international entry points. This is part of Malaysia’s efforts to contain the COVID-19 virus. Travelers who are suspected to be COVID-19 positive will then be referred to health ministry officials who are stationed onsite. Thermal scanners will be set up at international entry points, with symptomatic travelers having to undergo throat swabs as well as the rapid antigen test. Travelers who test positive will subsequently have to either isolate themselves at home or at their lodging residences, or be referred to the hospital depending on the severity of their symptoms. On 08 January, 2023, Malaysia’s tourism minister had announced that his ministry will station officers who are fluent in Mandarin at all international airports to help Chinese travelers who have difficulty communicating in English.

Malaysia’s economy expected to grow by 4.1% in 2023, reflecting high base effect and weakening external environment
(09 January 2023) According to the Socio-Economic Research Centre (SERC), Malaysia’s economy is expected to grow by 4.1% in 2023, reflecting the normalization of technical high-base effects and a weakening external environment. Growth in 2023 is expected to face headwinds including moderating exports, normalization of domestic demand, inflation and high cost of living, and interest rate hikes. The SERC foresees mild and shallow recessions in advanced economies like the US and Europe, but this is likely to be mitigated by the reopening of China. Meanwhile, global inflation will likely cool throughout 2023, and central banks are unlikely to cut rates. Bank Negara Malaysia is expected to raise its overnight policy rate by an additional 50 basis points in 2023, bringing the benchmark interest rate to its pre-pandemic level of 3.25%.

The Philippines’ trade deficit shrank 21.9% year-on-year in November 2022 as exports grew
(10 January 2023) The Philippines’ trade deficit shrank to 21.9% year-on-year in November 2022 as exports continued to improve amidst a smaller import bill. The trade deficit stood at US$3.68 billion in November, larger than the $3.31 billion gap recorded in October 2022. The country’s external trade grew by 3.6% year-on-year to US$17.89 billion in November, slower compared to the 12.5% annual growth in October. Exports grew by 13.2% year-on-year to US$7.1 billion in November, while imports dropped by 1.9% year-on-year to US$10.78 billion. Should the trade deficit continue to narrow, the pressure on the peso is expected to ease. However, the declining import of capital goods is a cause for alarm, as it may suggest lower infrastructure and investment spending.

Tesla close to preliminary deal to set up factory in Indonesia
(11 January 2023) Electric vehicle maker Tesla is close to a preliminary deal to set up a factory in Indonesia, with the automaker hoping to capitalize on Indonesia’s rich deposits of nickel, a key component of EV batteries. The plant would produce as many as 1 million cars a year, in line with Tesla’s ambition for all its factories globally to eventually reach that capacity. The discussions include plans for multiple facilities in Indonesia serving different functions, including production and supply chain. Indonesian President Joko Widodo had visited Tesla CEO Elon Musk in May 2022, and subsequently struck a US$5 billion nickel-supply agreement with the carmaker in August 2022. An Indonesian factory would be at least the third Tesla plant outside the US market, joining facilities in China and Germany.

700 families office currently in Singapore, up from 400 in end-2020
(12 January 2023) There are currently 700 family offices in Singapore, up from 400 at end-2020 and a sevenfold increase from 2017. This comes as more ultra-high net worth families set up offices in Singapore to manage their wealth. These families come from Asia, Europe and the United States, with demand from Asia particularly prominent given that private wealth has grown faster within the region than elsewhere in the world. The COVID-19 pandemic had forced affluent families to reconsider their wealth management and succession plans to better prepare against future uncertainty, prompting many to open offices in Singapore. Observers have pointed to several factors that make Singapore an attractive destination for setting up family offices, including its stable political and regulatory environment, a developed financial services sector, and good living standards.

RCEP Monitor

Australia on track to record fifth consecutive year of trade surpluses in 2022
(12 January 2023) Australia is on track to record a fifth consecutive month of trade surpluses in 2022 as November 2022 data showed ongoing strength in metals exports due to higher prices. Australia’s windfall came in at US$9.1 billion, according to statistics by the Australian Bureau of Statistics. Overall exports saw little change, while imports declined 1%. Australia has posted monthly trade surpluses since January 2018, underpinned by the sale of commodities such as iron ore and natural gas. Australia is also a major exporter of wheat, which has also seen rising prices due to the ongoing war in Ukraine. Australia’s debt and deficit positions are among the best in the developed world. Australia’s trade report showed the value of metal ores and minerals climbed 7.9% month-on-month.

Foreign investors sold record US$82.9 billion more in Japanese government bonds than they bought in 2022
(13 January 2023) Foreign investors sold a record US$82.9 billion more in Japanese government bonds than they bought in 2022, playing a prominent role in driving up yields. The yearly tally is based on medium- and long-term debt securities, and was the highest in comparable data going back to 2005. It topped the level in 2009, when investors dumped bonds for cash in the wake of the global financial crisis. Net selling hit an all-time monthly high in September 2022 as central banks overseas began tightening monetary policy, spurring bond selling that extended to Japan. Rising short selling reflects expectations that the Bank of Japan will not continue to hold down 10-year JGB yields for much longer.

South Korea to unveil measures in coming months to open domestic financial markets to foreign investors
(12 January 2023) South Korea will unveil a series of measures in the coming months to open its domestic financial markets to foreign investors. According to South Korea’s finance minister, the government will announce in February 2023 plans to extend trading hours on the onshore foreign exchange market and allow offshore market players to participate in the market. Authorities plan to put those measures in the foreign exchange market into force from the second half of 2024. The government also plan to draw up measures to make the country’s stock market more attractive to long-term investors, such as by increasing dividend payouts by listed companies and easing rules on foreign investors. South Korea is pursuing the addition of its government bonds to FTSE Russell’s World Government Bond Index and of its stocks to the Morgan Stanley Capital International’s developed market index, in order to attract more foreign investment.

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