CARI Captures Issue 660: Thailand surpasses Singapore as primary financier of military equipment to Myanmar regime

Captures has widened its scope to include news related to all the members of the Regional Comprehensive Economic Partnership (RCEP) agreement which was signed towards the end of 2020. Besides the ASEAN Member States, this includes Australia, New Zealand, China, Japan, and South Korea. The other weekly newsletters under CARI, China-ASEAN Monitor and Mekong Monitor will also be consolidated into the Captures newsletter. We hope this new version of Captures will serve you better and look forward to providing a curation of stories relevant to ASEAN and its trading partners.

Thailand surpasses Singapore as primary financier of military equipment to Myanmar regime
(26 June 2024) A U.N.-sponsored investigation reveals that Thailand has surpassed Singapore as the primary financier and supplier of military equipment to Myanmar’s regime, the State Administration Council (SAC). This shift occurred after Singapore imposed restrictions on Myanmar-related accounts. The SAC’s weapon procurement through formal banking channels fell by one-third to US$253 million in 2023 due to heightened Western sanctions. Thailand’s arms transfers to Myanmar doubled to over US$120 million in 2023, with Siam Commercial Bank handling 80% of these transactions, increasing from US$5 million in 2022 to over US$100 million in 2023. The report, released as Thailand seeks a U.N. Human Rights Council seat, notes that Thai authorities did not publicly oppose arms transfers to Myanmar. In contrast, Singapore’s military exports to Myanmar dropped by 90% after similar scrutiny. The U.N. special rapporteur emphasised the importance of international financial pressure to curb Myanmar’s military activities, urging banks to sever ties with Myanmar’s state-owned banks. The investigation documented over US$630 million in arms-related transactions facilitated by banks in multiple countries, including Thailand, China, and Russia. Kasikornbank, another major Thai bank, ceased its dealings with Myanmar after U.S. sanctions.

Malaysia must address fuel subsidies first before introducing carbon tax
(25 June 2024) Malaysia is in discussions with the World Bank to develop a carbon tax scheme aimed at curbing emissions. Malaysia’s Natural Resources and Environmental Sustainability Minister stated that Malaysia needs to address its fuel subsidies before introducing a carbon tax. The country, an export-driven industrial economy, has been reliant on these subsidies. Malaysia aims for net-zero emissions by 2050 and has recently removed most diesel subsidies, with plans to target gasoline next. The finance ministry is spearheading efforts to establish a carbon tax, focusing on hard-to-abate sectors such as steel.

Indonesia to digitize permits and licenses to attract high-quality international events
(27 June 2024) Indonesia is digitising permits and licences to attract high-quality international events, as announced by Indonesia’s Tourism and Creative Economy Minister. Bureaucratic hurdles have previously deterred events, including concerts by high-profile artists like Taylor Swift. Indonesia’s international tourist arrivals reached 11.7 million last year, with a 40-50% increase in spending per person. The World Bank forecasts steady GDP growth of 5.1% annually from 2024 to 2026. President-elect Prabowo Subianto aims for 8% GDP growth within two to three years. Uno emphasises the need for green transformation, digital infrastructure investment, and enhancing interconnectivity, particularly in Bali. He advocates for educating tourists on respectful behaviour and developing five ‘super priority’ destinations. Uno also highlights the importance of promoting Indonesia’s creative economy globally, including fashion and culinary arts.

BSP leaves policy rates unchanged at 6.5%, accompanied by dovish commentary
(27 June 2024) The Bangko Sentral ng Pilipinas (BSP) has left policy rates unchanged at 6.5%, with unexpectedly dovish commentary. Despite the Philippine peso being the second weakest Asia-Pacific currency this quarter, BSP Governor Eli Remolona indicated a possible rate cut in August 2024, ahead of the anticipated US Federal Reserve cut. Inflation forecasts for 2024 and 2025 have been reduced to 3.1%, largely due to a cut in rice tariffs from 35% to 15%, effective 5 July. Rice tariffs, accounting for about half of Philippine headline inflation, are expected to alleviate inflation pressures. The market response was muted, with the peso weakening slightly but recovering quickly. BSP has been intervening to support the peso, aiming to prevent sharp depreciation. A rate cut in the fourth quarter is preferred, given the challenges of front-running the US Fed’s rate policy.

Government to court foreign buyers to address condominium supply glut
(26 June 2024) The Thai government is considering easing land leasing regulations to allow foreigners to buy up to 75% of condominium projects, up from the current 49%, and to lease land for 99 years, an increase from the previous 50 years. Prime Minister Srettha Thavisin announced these potential changes during a visit to Pattaya, aiming to address an oversupply of condominiums amid weak domestic purchasing power. The government believes these measures could stimulate the economy. Economists have mixed reactions, some seeing potential to reduce the condominium surplus, while critics argue it may primarily benefit large real estate companies. The Real Estate Information Centre reports an oversupply of about 440,000 condominium units, lower than during the 1997 Asian financial crisis.

Singapore and East Timor to sign mutual visa waiver agreement
(27 June 2024) Singapore passport holders will soon be able to travel visa-free to Timor-Leste for up to 30 days, following a mutual visa waiver agreement signed on 27 June, 2024 between Singapore’s Foreign Minister Vivian Balakrishnan and Timor-Leste’s Foreign Minister Bendito dos Santos Freitas. Timor-Leste passport holders will continue to enjoy 30 days of visa-free travel to Singapore. This agreement supports Timor-Leste’s roadmap for ASEAN accession and strengthens bilateral relations. Timor-Leste has been an observer in ASEAN since 2023 and is preparing for full membership. Singapore’s Prime Minister Lawrence Wong and Dr Balakrishnan reaffirmed support for Timor-Leste’s ASEAN readiness. They also discussed enhancing cooperation in human resource development, trade, investment, energy, and education, with the Singapore embassy set to open in Dili in April 2024.

Viet Nam identified as fastest growing tourism market for Australia
(27 June 2024) Vietnamese tourist numbers to Australia have increased by over 50% compared to pre-COVID-19 levels, according to Australian Tourism and Trade Minister Don Farrell on 26 June, 2024. This growth presents opportunities for Australian businesses. To help them, the tourism research data provided now includes Viet Nam, which has been identified as Australia’s fastest-growing passenger market. The agency aims to strengthen ties with South-East Asia to attract more visitors. Australia’s top five international tourism markets are New Zealand, China, the US, the UK, and India. In 2023, 150,000 Vietnamese visited Australia, while 390,000 Australians travelled to Viet Nam, up from 383,000 in 2019. In the first five months of this year, Viet Nam saw a 35% year-on-year increase in Australian visitors, totalling 213,000, making Australia the seventh largest source of tourists to Viet Nam.

RCEP Monitor

Inflation peaks upwards to 4.0% year-on-year in May 2024
(26 June 2024) Australia’s inflation, which had decreased to 3.4% year-on-year (YoY) in December 2023 from a peak of 8.4% in December 2022, has started to rise again. The latest inflation reading for May 2024 is 4.0% year-on-year, exceeding the expected 3.8% and up from 3.6% in April. The Reserve Bank of Australia (RBA) may consider a rate hike if the upcoming June inflation report does not show a decline. The May Consumer Price Index (CPI) data showed a slight decline of 0.04%, with significant drops in motor fuel prices. However, June could see an increase in CPI due to rising gasoline prices and seasonal changes. A 0.6% increase in June CPI would result in a 3.9% YoY inflation rate, but quarterly inflation would rise to 1.1% to 1.2% from 0.88% in Q1 2024.

New Zealand emerges from 18-month recession with 0.2% in Q1 2024
(20 June 2024) New Zealand’s economy grew by 0.2% in Q1 2024, after a 0.1% contraction in the previous quarter, marking its emergence from an 18-month recession. This growth was primarily driven by population growth due to record-high immigration. On a per capita basis, GDP fell by 0.3%, the sixth consecutive decline. Economists have highlighted that this growth masks underlying economic weakness. The Finance Minister noted the persistent impact of high inflation and borrowing costs on New Zealanders and emphasized the need for careful government spending and lower taxes. The Reserve Bank of New Zealand has raised interest rates to a 14-year high to combat inflation, affecting economic activity. Prime Minister Christopher Luxon’s centre-right coalition proposed a budget with NZD 14.7 billion (US$9 billion) in tax cuts over the next four years.

Spending by foreign visitors in Japan increases fivefold over the past decade
(26 June 2024) Spending by foreign visitors in Japan has increased fivefold over the past decade, becoming Japan’s second-largest export category. In Q1 2024, nonresident households spent an annualised JPY 7.2 trillion (US$45.1 billion) in Japan. This figure surpassed pre-pandemic levels of 4.6 trillion yen (US$28.59 billion) in Q4 2019 and continued to rise post-pandemic. While still less than half of the 17.3 trillion yen (US$108 billion) in auto exports in 2023, it exceeds exports of electronic components and steel. Visitor spending grew over 60% in the five years through Q1 2024, compared to 45% and 40% growth in auto and electronic component exports, respectively. Foreign tourist numbers have also surpassed pre-COVID-19 highs, with over 3 million monthly visitors since March 2023. Inbound spending rose 38.8% between Q4 2019 and Q4 2023, outperforming other major economies. The weak yen has boosted spending, with per-visitor spending up 31% from 2019 to 2023.

15 participating countries

20 chapters

2.2 billion

US$26.2 trillion


ASEAN member states, Australia, China, Japan, South Korea, New Zealand

trade in goods and services, investment, intellectual property, e-commerce, competition, SMEs, economic and technical cooperation, and government procurement

combined population, 30% world’s population

combined GDP, 30% global GDP

global trade (based on 2019 figures)

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