Photo Credit: Myanmar Times
TRADE, ECONOMY, AND INVESTMENT
Myanmar to liberalise its gold market after five decades
(15 August 2018) Myanmar’s Ministry of Commerce (MOC) aims to remove gold from its restricted commodities and exports list in an effort to liberalise the country’s gold market. At the moment, the exports of gold are forbidden by MOC. By opening its gold market for international trade, Myanmar could combat the growing illicit gold trade to the China and Thailand through the Myanmar border which has resulted in lost taxation opportunities. Myanmar will establish a service centre near Yangon to permit the legal trading of gold. A pick-up in legal gold exports will generate tax revenue directly to the government and increase the supply of U.S. dollars into the country, helping to stabilise the exchange rate and increase foreign currency reserves.
Laos’s decision to halt new dams welcomed by Mekong River Commission
(15 August 2018) A decision by Laos to suspend new hydropower investments and review existing projects was applauded by the Mekong River Commission, after a deadly dam collapse swept away the entire village last month. The US$1.2 billion Xe-Namnoy dam, a joint effort between South Korea, Thai and Laotian firms collapsed on the July 23 after heavy rains, killing at least 39 people. Laos supplies electricity to Thailand, Vietnam, Cambodia and Myanmar accounting for 30 per cent of its total exports. Laos is currently operating 46 hydropower plants, with 54 more planned or under construction. The country has long announced its quest to become the “Battery of Southeast Asia” by selling power to neighbouring countries.
Vietnam’s economic growth losing steam
(13 August 2017) Vietnam’s economy cooled in the second quarter of this year, although GDP growth came in at 6.79 per cent according to the National Centre for Socio-economic Information and Forecast (NCIF). This was down from the 7.38 per cent that was registered in the first quarter of 2018, the highest first-quarter growth rate recorded in the last decade. Vietnam’s economy is showing signs of cooling further with projected growth rate of 6.72 per cent and 6.56 per cent in the third quarter and fourth quarter respectively. The economy is projected to moderate due to a fall in the growth of the manufacturing and processing sectors. This slowdown is attributed to the appreciating U.S. dollar and the possibility of two interest hikes by the U.S. Federal Reserve from now to the end of the year.
US-China trade war may benefit Cambodian travel goods exporters
(13 August 2018) The ongoing trade dispute between the United States and China is yielding more opportunities for Cambodia to increase exports of travel goods. The Trump administration is considering increasing the rate of tariffs on Chinese travel goods to 25 per cent from the current 10 per cent. This would affect the US$5 billion worth of travel goods that China exports to the U.S.annually. The new tariffs will affect Chinese goods such as handbags, travel items and other accessories. Any hike in tariffs will impact investors’ confidence in China as a manufacturing base for travel goods and which will open doors to Cambodia to be the production hub for those items.
Thailand to push Vietnam for Mutual Recognition Agreement on automotive industry standards
(12 August 2018) Thai Commerce Minister, Sontirat Sontijirawong stated the country will send delegates to negotiate for a Mutual Recognition Agreement (MRA) with Vietnam’s Transport Ministry in the hope of minimizing the cost and delivery time for Thailand’s automotive exporters. They also hope to remove overlapping testing processes which has been problematic for Thailand’s automotive industry. The move was prompted by Vietnam’s new regulation (Decree 116) on automotive imports announced this year which has hindered the flow of imported cars. Decree 116 aims to protect the local automotive assembly industry in Vietnam. According to Vietnam Automobile Manufacturers’ Association (VAMA), the sales of imported cars plummeted by 45 per cent whereas the sales of locally assembled cars chalked up by 12 per cent last year.
About Greater Mekong Subregion (GMS)
The Greater Mekong Subregion (GMS) Economic Programme was launched by the Asian Development Bank in 1992 connecting five developing ASEAN countries, namely Cambodia, Laos, Myanmar, Vietnam and Thailand, and Chinese provinces of Yunnan and Guangxi Zhuang Autonomous region. The region has some of the most robust economies sharing the Mekong River Basin thanks to its reform and liberalisation. The subregion is growing at a faster pace than the whole of East Asia and the Asia Pacific as the GDP growth rate for 2017 was at 6.4 percent, according to the World Bank. The population at the subregion as of 2016 is at 340 million while the GDP at PPP is at US$3.1 trillion in 2016. In 2015, trading within the region was at US$444 billion.