Mekong Monitor: Myanmar and Laos records first COVID-19 cases

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Mekong Monitor: Myanmar and Laos records first COVID-19 cases

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TRADE, ECONOMY, AND INVESTMENT

VIETNAM

Myanmar and Laos records first COVID-19 cases
(24 March 2020) Myanmar has recorded its two first cases of COVID-19 infections as of 24 March. According to its Ministry of Health and Sports, the two individuals tested positive for COVID-19 on 23 March. The first case is a 36-year-old man who arrived from the US on 13 March while the second case is a 26-year-old man who arrived from the UK on 22 March. The two individuals showed no symptoms of acute respiratory distress and are now in isolation in different hospitals in the country. In Laos, two new cases of COVID-19 infections have been detected as well. According to Deputy Minister of Health Phouthone Meuangpak, the first case is a 36-year-old woman who works as a guide and attended to visitors from Europe in early March while the second case is a 28-year-old man who works at a hotel in Vientiane and had attended a workshop in Bangkok. The two individuals are receiving medical treatment at Mittaphab Hospital and are in stable condition.
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THAILAND

PM declares state of emergency amid COVID-19 outbreak
(24 March 2020) Thai Prime Minister Prayut Chan-ocha announced in a televised address that an emergency decree, together with a series of new restrictive measures, will come into effect on 26 March. Under the decree, the Prime Minister will be granted sole authority in implementing policies created to combat the pandemic through the Centre for Resolution of Emergency Situation. The centre is expected to meet on a daily basis to monitor the situation and take the necessary actions. Specific measures involving the public will be announced at a later date, however, the emergency decree empowers authorities to impose curfews, travel bans, and closure of buildings without warrants. The emergency situation will be in place from 26 March until 30 April.
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VIETNAM

Fresh fruit, fisheries exports to US, EU hit by pandemic
(25 March 2020) Vietnamese exporters of agro-forestry and fisheries are feeling the impact as export markets after China such as the US and Europe are being hit by the COVID-19 outbreak. A company that exports fresh fruits to major markets, said that fruit exports by air to the US and EU declined 70%-80% since many airlines had stopped flights. He expects vegetable and fruit exports to these markets to drop sharply at least in the next month. According to insiders, agricultural exports in the first two months of 2020 were estimated at US$5.34 billion, down 2.8% year-on-year. Main seafood exports are similarly affected by COVID-19. In the first two months of 2020, seafood exports were worth nearly US$935 million, a decline of 15.9% from the same period in 2019. Exports to China decreased by 46.8% to US$80 million, and to the EU by 17.4% to US$106 million and to South Korea by 16.0% to US$90 million. According to the Vietnam Association of Seafood Exporters and Producers, shrimp exporters expect the China market to recover in April and will focus on shipping by sea.
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CAMBODIA, VIETNAM

Trade between Cambodia and Vietnam continues, despite COVID-19
(24 March 2020) Trade between Cambodia and Vietnam is expected to continue as normal even though new border control measures have been implemented to curb the spread of COVID-19. According to a Vietnamese embassy official in Cambodia, it is business as usual in terms of trade between the two countries despite Vietnam restricting the movement of people across the border. Nevertheless, the official said a drop in trade volume is expected due to the pandemic affecting economic activity at the global level. Cambodia and Vietnam have pledged to achieve US$5 billion in trade a year by the end of 2020. Data from the Vietnam embassy showed that trade in 2019 reached US$4.7 billion, an increase of 23.8% from 2017.
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THAILAND, LAOS

Thai-Lao friendship bridge in Nakhon Phanom to close from 22 March
(22 March 2020) The 3rd Thai-Lao Friendship Bridge across the Mekong river linking the northeastern Thai province Nakhon Phanom with Khammouane province in Laos will be closed effective 10:00pm on 22 March as a precaution against COVID-19. The bridge closure, made under an issue ordered by governor Sayam Sirimongkol, is expected to be in effect for an indefinite period. With the order, individuals of all nationalities will not be allowed to travel across the border. Exception is given to vehicles transporting cargo but the drivers and crew will be subject to strict health screening. Temporary border checkpoints in four border districts of the provinces will also be closed under the same order. According to Somkiat Somjai, the Nakhon Phanom immigration police chief, Lao migrant workers returning to their home country from Bangkok will not be able to cross the border, but a solution to the problem will be worked out in due time.
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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.

China-ASEAN Monitor: Thailand’s condominium sector expected to face 10-year low due to shortage of Chinese buyers

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Economy, Investment and Trade

Thailand’s condominium sector expected to face 10-year low due to shortage of Chinese buyers
(24 March 2020) Condominium sales in Thailand are expected to be below 35% in the first quarter of 2020, which would be its lowest in 10 years, according to a global real estate firm. On average, sales for new units per quarter is normally between 50% and 55%. The downward trend in condominium sales continued from 2019 when the Thai real estate sector was affected by a stronger baht, weaker yuan, the slowing Chinese economy and an underperforming Thai economy amid a global slowdown. The real estate sector accounts for 6% of Thailand’s GDP, according to an economic think tank. Foreign buyers accounted for 14% of condominium purchases in 2019, with Chinese buyers accounting for around 60%-70%. The real estate sector has been adversely affected by travel restrictions imposed by Beijing since the beginning of the outbreak in January, as well as the subsequent economic slowdown caused by lockdowns imposed in several Chinese cities. However, a property portal believed that there would be a sharp rise in purchases once the COVID-19 outbreak settles down.
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Malaysia’s Ministry of Health receives medical supplies from China’s CCC-ECRL
(24 March 2020) The main contractor of the East Coast Rail Link (ECRL) project, Communications Construction Sdn Bhd (CCC-ECRL) donated medical supplies to Malaysia’s Ministry of Health (MOH) to assist the country in its fight against the COVID-19 pandemic. The medical supplies, to be used by 26 hospitals, particularly in the treatment of COVID-19 cases, consist of 3,000 N95 face masks; 2,000 KN90 face masks; 20,000 surgical masks and 1,200 medical protective glasses. Meanwhile, Malaysia’s Transport Ministry stated that the country has directly purchased some 10 million face masks from China due to the fact that local manufacturers were unable to meet demand. The Ministry of Domestic Trade and Consumer Affairs had recently banned the export of face masks and also rescinded the sales tax and import duties for the import of face masks.
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Myanmar resumes exports of around 50,000 bags of rice to China at border
(23 March 2020) Myanmar has resumed its exports of rice to China at the Muse 105th mile border crossing at the Myanmar-China border. The country is reportedly exporting around 50,000 bags of rice to China via Muse daily. Trade flows were suspended on 7 January due to the COVID-19 outbreak in China. As of 21 February of the 2019/2020 fiscal year, Myanmar exported over 1.29 million tonnes of rice worth US$373.35 million. Exports to China during that period reached more than 320,000 tonnes, worth US$97 million, and accounted for 36% of total rice exports. During the five months of the current fiscal year, Myanmar exported 178,000 tonnes of rice and broken rice worth nearly US$47 million via border trade, accounting for 13% of total exports.
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China ships medical equipment including test kits and face masks to Indonesia
(24 March 2020) The Chinese government has shipped much-needed medical equipment from Shanghai to Indonesia to help with the COVID-19 outbreak, with the shipment including test kits, face masks, protective gear and portable ventilators. Indonesian President Joko Widodo had previously stated that the government had received complaints of medical equipment shortages, and that the Indonesian military had been flying military aircraft to China to transport medical kits back. China had also donated 10,000 COVID-19 test kits and surgical masks to the Philippines on 21 March. Other medical equipment provided included 100,000 test kits, 10,000 personal protective equipment, 100,000 surgical masks and 10,000 N95 masks. The Philippines Foreign Secretary Teodoro Locsin stated that China’s shipment of medical supplies comes amidst a low supply of COVID-19 test kits. The main island of Luzon is currently on an enforced lockdown ordered by President Duterte on 12 March.
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Myanmar receives US$6.7 million from China under LMC Special Fund
(24 March 2020) Myanmar received over US$6.7 million from China under the Lancang-Mekong Cooperation (LMC) Special Fund on 23 March. The fund will be used for 22 projects in several areas including agriculture, education, and information and communications technology. During the ceremony on the agreement of the transfer of the fund, Chinese ambassador to Myanmar Chen Hai said that China and Myanmar will act as co-chairs of the LMC in 2020. The agreement for the first batch of projects under the LMC Special Fund for Myanmar, worth US$2.4 million was signed in January 2018 to aid 10 projects. China initiated the LMC Special Fund during the first LMC leaders’ meeting in March 2016 with the aim of supporting the small and medium-sized cooperation projects put forward by the six Lancang-Mekong countries. The six Lancang-Mekong countries consist of China, Cambodia, Laos, Myanmar, Vietnam and Thailand.
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CARI Captures 446: “Aggressive” action needed to stop COVID-19 in Southeast Asia, says WHO

ASEAN

“Aggressive” action needed to stop COVID-19 in Southeast Asia, says WHO
(18 March 2020) The World Health Organization (WHO) has called for “aggressive” action in Southeast Asia on 17 March to stem the rise in COVID-19 infections. It said some countries were nearing towards community transmission of the disease. The number of infections across the region has rapidly increased in recent weeks, forcing several countries to enforce drastic measures including closing their borders to foreign arrivals, imposing night-time curfews to closing schools, and cancelling sports events. “More clusters of virus transmission are being confirmed. While this is an indication of an alert and effective surveillance, it also puts the spotlight on the need for more aggressive and whole of society efforts to prevent further spread of COVID-19,” said Poonam Khetrapal Singh, WHO’s regional director. She emphasised that measures such as washing hands and social distancing were “critical” in the fight against the virus and could “substantially reduce transmission”.

ASEAN

Central banks in the region cut interest rates
(19 March 2020) The Philippines’ central bank, Bangko Sentral ng Pilipinas (BSP), slashed key rates aggressively on 19 March as focus shifts to alleviating an economy battered by the COVID-19 outbreak. BSP Governor Benjamin Diokno announced a 50 basis point (bps) cut to the central bank’s overnight reverse repurchase facility, bringing it down to 3.25% effective 20 March. Elsewhere in the region, Bank Indonesia (BI) slashed its benchmark interest rate, its seven-day reverse repo rate, by 25 bps to 4.50% after a similar-sized cut in February. BI governor Perry Warjiyo said the country’s monetary policies remain accommodative. Meanwhile, in Vietnam, the State Bank of Việt Nam (SBV) announced it would cut many key interest rates, starting from 17 March, in an attempt to support the economy. The refinancing rate has been reduced by 1 percentage point to 5.00% while the discount rate has been lowered to 3.50%. The country’s overnight lending rate in the interbank market has been also adjusted down to 6.00% from 7.00% and the open-market-operation (OMO) rate, to 3.50% from 4.00%.

THE PHILIPPINES

Philippine stock market plunges by 24% after two-day shutdown, making it worst performer in Asia
(19 March 2020) The Philippine Stock Exchange Index opened on 19 March with a 24.0% drop following a controversial two-day shutdown that accompanied the government’s month-long lockdown of the capital region which began on 15 March. The drop was the index’s biggest intraday-loss in 33 years and brought this month’s loss to about 40.0%, making it the worst performer in Asia. Market volatility has been affected by the virus outbreak, with foreign investors fleeing emerging markets and seeking safe haven assets such as US Treasuries. Foreign investors have sold off US$480.5 million net of local stocks this year, the fastest withdrawals since 1999. The country’s central bank governor warned of a “large and protracted” economic fallout if the current Luzon island-wide community quarantine to fight the virus outbreak fails.

SINGAPORE

Singapore’s economy forecasted to contract by 0.5% in 2020
(19 March 2020) A recession in Singapore “appears inevitable” as its economy is projected to contract by 0.5% in 2020, a downgrade from the 0.9% growth forecasted in February 2020, according to DBS Bank. This new forecast comes with significant downside risks should the COVID-19 outbreak worsen. The bank expects contractions of up to 2.0% for the first two quarters of 2020 and a contraction for the third quarter before an improvement by the end of 2020. Total retrenchments for 2020 is expected to reach 24,500, slightly above the 23,430 of workers laid-off during the 2008/2009 global financial crisis. DBS Bank also expects the Singaporean government to release a second stimulus package of between US$9.7 billion and US$11.0 billion. It also expects the Monetary Authority of Singapore to take aggressive monetary responses in light of falling inflation and a significant downside risk to growth.

INDONESIA

Government allocates US$8 billion to stimulate economy
(13 March 2020) The Indonesian government announced the allocation of US$8.0 billion from its state budget to support the economy by providing tax incentives and subsidies for workers, businesses, and families affected by the COVID-19 outbreak. Accounting for 0.8% of its GDP, the stimulus includes measures such as the exemption of some workers in the manufacturing sector from paying income tax and discount on corporate taxes, Finance Minister Sri Mulyani Indrawati said in a news conference. The stimulus package is expected to widen the country’s budget deficit in 2020 to 2.5% of GDP, up from the initial target of 1.8% of GDP. The tax relief for manufacturing workers will be given to those who earn US$13,000 or less a year while companies in 19 manufacturing sectors will be exempted from paying import tax and given a 30% discount on corporate tax. In addition, refunds for value added tax will be made easier for companies, especially for exporters, to help manage cash flows. Indrawati did not provide details on the rest of the latest stimulus, but said the government would maintain its planned spending despite pressures on state revenue.

MALAYSIA

Visit Malaysia 2020 campaign cancelled in light of COVID-19 pandemic
(19 March 2020) The Malaysian Tourism, Arts and Culture Ministry has cancelled the Visit Malaysia 2020 tourism campaign in light of the ongoing COVID-19 pandemic, which has affected both the country’s domestic and international tourism industry. The cancellation will cover a freeze of all over-the-counter and online services for the ministry’s tourism licensing services, including for tour guides, tour drivers, tourism training institutes, and the registration of tourism accommodation premises. In line with the recently implemented movement control order in place until the end of March 2020, tourist accommodations will be permitted to continue operating but only at a very minimum level. While new local tourists will not be permitted, guests who are forced to extend their stay due to the movement order may register with tourist accommodations.

MYANMAR

Myanmar’s government enforces closure of all land borders to foreign tourists
(19 March 2020) Myanmar’s Ministry of Foreign Affairs announced the closure of land border checkpoints to foreign tourists as a preventative measure against the COVID-19 outbreak. Even though COVID-19 has caused several thousand deaths globally, Myanmar has not confirmed any COVID-19 cases yet. Residents on both sides of the border with border passes will still be able to cross, as long as they undergo health screening, while foreign tourists will still be able to use international airports at Mandalay, Yangon, and Naypyidaw for arrival and departure. Myanmar has a total of 27 land checkpoints with Bangladesh, India, China, Laos and Thailand, but not all of them open to foreign tourists. The border checkpoints with China in Kachin State and northern Shan State and those with Thailand and Laos will now close. Approximately 200,000 foreign tourists use Myanmar’s land borders on a monthly basis, according to the country’s Ministry of Hotels and Tourism.

CAMBODIA, JAPAN

Cambodia, Japan reaffirm trade commitments amid COVID-19 outbreak
(20 March 2020) Cambodia and Japan have pledged to reach US$2.0 billion in bilateral trade in 2020 despite the impact of the COVID-19 outbreak on their economies. The pledge was made on 16 March at a meeting between senior Cambodian and Japanese officials, according to Cambodia’s Ministry of Foreign Affairs and International Cooperation spokeswoman Chea Kimtha. In 2019, trade between the two countries exceeded the US$2 billion mark. The officials committed to expanding bilateral trade and investment, and agreed to urge the relevant institutions to work closely together to improve the investment environment in Cambodia to attract more Japanese investors. “The Japanese side reaffirmed its commitment to continue assisting Cambodia, especially in priority sectors such as logistics, infrastructure, industry and human capacity building,” Kimtha said. Cambodia exported more than US$1.7 billion worth of products to the Japanese market in 2019, an increase of 7.7% from 2018, according to the Japan External Trade Organisation (JETRO).

BRUNEI

Bruneian banks agree to defer financing and loan repayments for up to six months
(20 March 2020) The Bruneian government and banking industry agreed to defer financing and loan repayments for up to six months for four sectors to help mitigate the economic impact of the COVID-19 outbreak. Among the areas which this policy will apply to include tourism, hospitality/event management, food and beverage, and aviation, as well as importers of food and medical supplies. The deferral on repayments will apply to principal repayments and not on interest and profit rates. The interim deferments were initiated by Brunei’s central bank, Autoriti Monetari Brunei Darussalam (AMBD), along with the Ministry of Finance and Economy (MOFE) and the Brunei Association of Banks (BAB). In addition, all bank fees and charges related to trade and payment transactions for companies in these sectors will be waived for six months, while local interbank transfer fees for all customers will also be waived for the same period.

BRUNEI

Brunei allocates US$2 million to prepare for ASEAN chairmanship
(12 March 2020) The Bruneian government has set aside US$2.0 million to prepare for the hosting of the ASEAN Summit in 2021, the second finance and economy minister Mohd Amin Liew Abdullah said during the 16th Legislative Council (LegCo) sitting on 12 March. The fund was allocated as part of the ministry’s miscellaneous expenses for the 2020/2021 financial year. Brunei has established the ASEAN national committee that will oversee preparations for the summit. According to second foreign affairs minister Erywan Pehin Mohd Yusof, Brunei can play a bigger role in regional and international fora together with other ASEAN member states. The country last hosted the ASEAN Summit in 2013. Erywan said it is imperative for the country to continue strengthening its diplomatic relations with neighbours to ensure foreign policy strategies can be properly executed. “In a world of unprecedented geopolitical and economic turmoil, such as the crude oil production dispute; trade disputes; COVID-19 outbreak; climate change; terrorism and extremism threats, Brunei as a small developing nation cannot stand alone in this interconnected and globalised world,” he said.

Mekong Monitor: Thailand’s economic growth to weaken to 1.0% in 2020

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TRADE, ECONOMY, AND INVESTMENT

THAILAND

Thailand’s economic growth to weaken to 1.0% in 2020
(19 March 2020) International credit rating agency Fitch Ratings has forecasted that Thailand’s economic growth will weaken to 1.0% in 2020, a significant drop from 2.4% in 2019. This has been attributed to the COVID-19 outbreak, which will significantly affect the country’s tourism sector. The credit agency noted that while Thailand’s sound external and public finances can cushion against economic shocks, it will be countered by poor governance scores and low income per capita. Pointing to factors that will support growth moving forward, the expected approval of the fiscal 2020 budget will help to boost infrastructure investment, while the government has also approved an estimated US$12 billion stimulus package, which includes targeted soft loans for small and medium-sized enterprises.
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VIETNAM, CAMBODIA

Vietnam closes border crossings with Cambodia, affecting bilateral border trade
(9 March 2020) Prime Minister Nguyen Xuan Phuc announced the allocation of US$15.16 million to combat drought and salt intrusion in the Mekong Delta provinces. The money will be awarded to Long An, Tien Giang, Ben Tre, Kien Giang and Ca Mau provinces. Drought and salinity across the five provinces have damaged around 40,000 hectares of rice paddies and caused water shortages affecting 95,000 families, according to the Ministry of Agriculture and Rural Development. The Mekong Delta, home to Can Tho City and 12 provinces, has been experiencing especially harsh droughts and salinisation, with experts warning salinity levels would exceed the 2016 record in March 2020. The Mekong River flows 4,880 km through six countries, 2,130 km in China. Out of the 19 hydropower projects it plans along the river, China has completed 11
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THAILAND

Thailand’s electric vehicle industry grew to 420 companies in 2019
(18 March 2020) The number of companies in Thailand’s electric vehicle industry jumped from 76 in 2015 to 420 in 2019, according to its Electric Vehicle Association. The production of electric vehicles in the country is reportedly growing, with firms such as SAIC, Honda, and Toyota currently operating manufacturing plants there. Thailand also recently welcomed a Mercedes-Benz battery production facility which had set up in Bangkok. The government currently offers tax incentives for automotive companies focusing on electric vehicle parts production and fuel-efficient vehicle assembly. Thailand is the largest producer of vehicles in ASEAN, producing more than 2.17 million units in 2018.
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MYANMAR

Myanmar government announces waiver of advance income tax for impacted exporters
(17 March 2020) The Myanmar government announced a waiver of the 2% advance income tax on exports until the end of the 2019/2020 fiscal year (which ends on 1 September 2020). The 2% income tax, introduced in 2013, impacted the value of nearly all imported and exported goods. To further prevent unemployment and enable factories to continue operating, low-cost loans and tax exemptions will be arranged for businesses in sectors such as garment manufacturing, hotels, tourism, and small-and-medium enterprises. The government also recently set up a central committee to tackle the economic impact of the outbreak. Among the measures being considered include drawing up emergency plans for the tourism sector, vocational training programmes and new job opportunities for laid off workers, and tax exemption schemes for small-and-medium enterprises.
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CAMBODIA

Cambodia to halt plans to build new hydropower dams on Mekong River for next ten years
(18 March 2020) The Cambodian government has indicated that it does not plan to develop new hydropower dams on the Mekong River for the next ten years, as it seeks electricity from other sources including coal, natural gas, and solar. The government had previously announced plans for two dams at Sambor and Stung Treng, but both plans have been put on hold. In 2019, Cambodia suffered some of its worst power shortages in years due to a surge in energy demand leading to a construction boom financed by Chinese investment. Officials attributed the shortages to low water levels at dams on other rivers and tributaries of the Mekong. About 48% of Cambodia’s electricity production comes from hydropower, and the country imported some 25% of its electricity in 2019.
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About Greater Mekong Subregion (GMS)

China-ASEAN Monitor: Malaysia begins two-week isolation to curb COVID-19

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Economy, Investment and Trade

Malaysia begins two-week isolation to curb COVID-19
(18 March 2020) Malaysia begins its two-week partial lockdown on 18 March after COVID-19 infections in the country made it the highest in Southeast Asia. A few days before the start of the partial lockdown, some buyers were seen at supermarkets stocking up on essentials like instant noodles. Malaysia and the Philippines, which has quarantined about half its 107 million population, have imposed the toughest restrictions on movements of people in the region, though capital markets in both countries will remain open. Malaysia reported its first two COVID-19 deaths on 17 March, which included a man who attended a mass Muslim gathering linked to nearly two-thirds of the country’s 673 infections. The administration of Prime Minister Muhyiddin Yassin, who took office early this month, has assured the public of sufficient stock of essentials for the country’s population of 32 million people. Malaysia has shut its borders for travellers, restricted internal movement, closed schools and universities and ordered non-essential businesses to close.
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The Philippines lifts travel ban to China for overseas Filipino workers
(16 March 2020) The Philippines has lifted a travel ban imposed on overseas Filipino workers (OFW) to China except for Hubei province. The lifting of the ban was announced by its Department of Foreign Affairs in an advisory issued on 15 March. The relaxation of travel restrictions, however, only applies to returning OFWs with official documents as well as Filipino government officials on official duty. Students, OFWs on first-time deployment, dependents of OFWs and tourists are still not allowed to travel to China. In February 2020, the Philippines government banned travel to and from China after the onset of the COVID-19 outbreak. During the period April-September in 2018, the number of OFWs was estimated at 2.3 million and total remittances sent during the same period was estimated at US$4.62 billion.
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China-Laos railway’s mechanical and electrical engineering begins construction
(15 March 2020) The mechanical and electrical (M&E) engineering of the China-Laos railway entered the construction phase on 15 March, according to Laos-China Railway Co., Ltd., the joint venture in charge of the railway’s construction and future operation. The year 2020 will see the railway’s construction of the railway track, station building, and the completion of civil engineering work such as tunnels, bridges and roadbed’s construction. Amidst the difficulties caused by the COVID-19 outbreak, China Railway Wuhan Electrification Engineering Group Co., Ltd., which is involved in the construction, has tried to organise various construction resources without any delay since January 2020. The 414.33-km railway, with 198-km tunnels and 62-km bridges, will run from Boten border gate in northern Laos, bordering China, to Vientiane with an operating speed of 160 km per hour. The project, which began in December 2016, is scheduled to be completed in December 2021.
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Thai rice exports get boost from stockpiling
(16 March 2020) Thai rice exports has seen an unexpected boost due to the global COVID-19 scare, according to Thai Rice Exporters Association president Chookiat Ophaswongse. According to him, rice importers usually preferred delivery of 50% of an order, such as 50% delivered in March while the rest would be delivered in the following month. However, rice importers have been asking for 100% full delivery. Even the price of rice exported from Thailand has seen an increase, going up from US$410 per tonne to US$450-US$460 per tonne. Thailand’s rice exports in February 2020 was estimated at 630,000 tonnes. Due to the increase in rice exports, the Thai Rice Exporters Association has set a target of 7.5 million tonnes for 2020. However, Chookiat said that should the COVID-19 situation subside, rice orders will probably drop.
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Raw fabric from China to arrive in Myanmar this week
(17 March 2020) Raw materials from China are being transported by air instead of shipping, so that garment factories in Myanmar can resume operations, according to a Yangon-based Chinese textile and garment association. The supplies for 11 Chinese-owned garment factories in the Yangon Region are expected to be flown in on 17 March. It is estimated that around 15 tonnes of raw fabric will be delivered from Guangzhou for use in factories in the Hlaing Tharyar, Shwe Pyi Thar, Shwe Lin Pan and Mya Thida industrial zones. The decision to transport the fabrics by air was made to expedite the arrival of the raw materials. Factory owners are expected to continue importing raw materials via airlines even though the logistics cost is higher.
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CARI Captures 445: COVID-19 could cut global growth by 0.1% to 0.4%

ASEAN

COVID-19 could cut global growth by 0.1% to 0.4%
(6 March 2020) The COVID-19 outbreak could trim GDP in developing Asia and around the world by 0.1% to 0.4% in 2020, the Asian Development Bank (ADB) said on 6 March. Financial losses forecasted from ADB analysis, which took into consideration best- and worst-case scenarios, could reach between US$77 billion and US$347 billion. In China and developing Asia (excluding China), economic growth could be reduced by 0.3% to 1.7% and 0.2% to 0.5%, respectively. Among ASEAN countries, under the moderate case, Cambodia could see its GDP shaved by 1.59%, followed by Thailand (1.11%), Singapore (0.57%) and Vietnam (0.41%). The rest of the ASEAN economies (except for Myanmar) is forecasted to see a reduction in GDP in the range of 0.21% to 0.30%. According to the ADB, developing Asian countries that will be significantly affected are those with strong trade and production linkages with mainland China. Many of the economies that rely heavily on tourism, especially those that see a significant share of tourists from China, will also be materially affected by the COVID-19 outbreak.

THE PHILIPPINES

Metro Manila to be placed on lockdown for 30 days
(12 March 2020) Metro Manila, a region of 12 million people, will be placed on lockdown between 15 March to 14 April, 2020, to help contain the spread of COVID-19. This was announced by President Rodrigo Duterte in an address on 12 March after declaring that the alert level for the virus outbreak has been raised to its maximum level of Code Red Sublevel 2. The lockdown involves 16 cities and one municipality, and will prevent inhabitants from travelling outside the city. The lockdown bars all land, domestic air and domestic sea travel to and from Metro Manila, and also includes “community quarantine” although this was not elaborated. As of 12 March, the Philippines has recorded a total of 52 cases.

THE PHILIPPINES

More than 300 workers in the tourism industry have lost their jobs since February 2020
(11 March 2020) More than 300 workers from 19 tourism-related establishments have lost their jobs since February 2020 due to the COVID-19 outbreak, in particular, due to curtailed travel from China, which is the Philippines’ largest tourism market. The businesses which laid off more than 300 workers are expected to be closed by April, June or August 2020, depending on when their operations would return to normal. A total of 47 companies with 4,416 workers have implemented flexible work arrangements including reduced working hours and forced leave, and these included hotels, restaurants, and manufacturers. Should the COVID-19 outbreak last until June 2020, the National Economic and Development Authority expects job losses in the tourism sector to range between 30,000 and 60,000. It also predicted that there could be a 0.5%-1.0% cut in GDP growth in 2020.

THAILAND

Thailand announces US$12.5 billion stimulus package
(10 March 2020) The Thai cabinet approved a stimulus package worth US$12.6 billion on 10 March to mitigate the impact of the COVID-19 outbreak. The package will cover all sectors and is designed to benefit 14.6 million low-income earners who account for 22% of the Thai population. According to Finance Minister Uttama Savanayana, the package includes “soft loans” valued at US$4.7 billion, which the Government Savings Bank (GSB) will lend to commercial banks at just 0.01% interest. In addition, the package includes a moratorium on principal payments, debt payments extension, and the right to borrow from special financial institutions such as the GSB and the Bank for Agriculture and Agricultural Cooperatives. Withholding tax will also be reduced from 3.0% to 1.0% from April to September 2020. Prime Minister Prayut Chan-o-cha said the package is a first-phase measure “that could be followed by second-phase action if the impact persists.”

CAMBODIA

Cambodia allocates up to US$2 billion to counter economic fallout from COVID-19
(10 March 2020) Cambodia announced on 10 March the allocation of between US$800 million to US$2 billion to address the adverse impacts on the economy from the COVID-19 outbreak. The government’s allocation of funds is based on two scenarios of the pandemic. US$800 million is to be allocated for a period of six months and US$2 billion is to be allocated if the outbreak lasts longer than a year, Prime Minister Hun Sen said. According to a spokesperson from the Ministry of Economy and Finance, the government has collected higher-than-expected tax revenues from robust economic growth over the last five years and it would be used to pay workers affected by factory suspensions and for tax breaks announced for tourism-related businesses. The Cambodian government had previously announced on 5 March that it would spend US$30 million to finance screening and monitoring efforts, as well as halve capital expenditures at all ministries and state institutions.

INDONESIA

Indonesian government to relax import restrictions to help struggling manufacturing industries
(12 March 2020) Indonesian Finance Minister Sri Mulyani Indrawati stated that the government is planning on reducing restrictions on imports to help manufacturing factories facing supply chain disruptions of raw materials from China due to the COVID-19 outbreak. The government plans to reduce the number of restricted import goods by up to 50%, with as many as 749 harmonised system codes to be scrapped. Among the items included in the list of restricted import goods include ceramics, textiles, health equipment, and footwear. Around 20% to 50% of raw materials for Indonesia’s industries are usually sourced from China, its largest trading partner. The government is also preparing several stimulus packages, including one that would reduce logistics costs in ports across the country.

MALAYSIA

Tech firms in Penang state suffers due to supply chain disruptions
(10 March 2020) Tech firms based in the Malaysian state of Penang have seen their revenue growth for 2020 flattened due to supply chain disruptions caused by the COVID-19 outbreak in China. This is in contrast to 2019, when the island state benefited from historically high inbound investment as firms fled the US-China trade tension. The investment target for 2020, about US$1.2 billion, is a third of what it received last year. Penang state accounts for about 8% of global back-end semiconductor output. Penang-based firms had also seen record sales in 2019 as customers sought to escape US tariffs on Chinese exports. Analysts and local firms said the impact of the virus outbreak on sales will be felt during the April-June 2020 period, when stockpiles run out. One analyst predicted that the forecast for year-on-year growth of the semiconductor sector will fall from 5.5% to a range of between -20.0% (worst case scenario) and 2.5% (best case scenario), but will most likely be -3.0%.

BRUNEI

Brunei government expected to face budget deficit of US$1.47 billion
(11 March 2020) Brunei’s government expects to face a budget deficit of US$1.47 billion in the 2019/2020 fiscal year due to declining revenue from the oil and gas sector. This is despite Brunei enjoying 3.90% GDP growth in 2019, its highest rate in 13 years. The kingdom is projected to face budget deficits for both the 2019/2020 and 2020/2021 fiscal years. The government predicts that GDP will increase by between 4.9%-7.1% in the 2020/2021 fiscal year, but will still face a budget shortfall as government revenue in Brunei is less correlated to GDP growth as other countries. The 2020/2021 budget will be focused on four main thrusts: increasing investment activity, increasing ease of doing business, generating high-value human capital, and preserving public welfare.

MALAYSIA-LAOS

Malaysia strengthens ties with Laos to boost tourist arrivals
(9 March 2020) Tourism Malaysia launched the “Malaysia Tourism Seminar and B2B Session,” as part of the Malaysian Golden Month Holiday Campaign to promote the country to the ASEAN market, at the Landmark Hotel in Vientiane, Laos. The event provided a networking and collaboration platform especially for package development and promotional efforts in conjunction with Malaysia’s Visit Malaysia 2020 (VM2020) campaign. Aside from boosting arrivals from Laos, the programme was also initiated to strengthen cooperation between Laos and Malaysia, as both countries have a long-standing relationship. Malaysia’s Ministry of Tourism, Arts and Culture and Tourism Malaysia has identified ASEAN countries as a key market to mitigate losses due to the negative effects of COVID-19. From January to September 2019, Malaysia received 20,959 tourists from Laos, an increase of 13.8% compared to the same period in 2018. Malaysia hopes to welcome a total of 30 million tourists, and US$24.4 billion in tourist receipts for VM2020.

VIETNAM

Trade, security issues expected to dominate Vietnam’s ASEAN chairmanship
(9 March 2020) As the chair of the Association of Southeast Asian Nations, or ASEAN, analysts say Vietnam is expected to feature trade and security at the top of its agenda. Out of the several priorities announced for its ASEAN chairmanship, economic and defence cooperation are the two areas expected to make the most progress. For 2020, Vietnam said it will push for more tariff reductions, including dropping its sugar tariffs, an important industry for its domestic firms. This resolve to conduct more trade in the region has made foreign investors optimistic about the Southeast Asian region, according to Eduardo Pedrosa, secretary-general of the non-profit Pacific Economic Cooperation Council. On the part of security, Vietnam has been the most vociferous in its claim to parts of the South China Sea (SCS), even though several other ASEAN member states also claim parts of the SCS. Hanoi has all the more reason to rally its neighbours around a code of conduct. Beyond that, Vietnam is also supported by its relationship with the US, which also wants to ensure no single power dominates the sea.

Mekong Monitor: Vietnam to put in place trade defence early warning system by 2025

Photo credit: Petrotimes/VN

TRADE, ECONOMY, AND INVESTMENT

VIETNAM

Vietnam to put in place trade defence early warning system by 2025
(9 March 2020) Vietnam intends to develop an early warning system for trade defence by 2025, with the aim to promote sustainable exports. The goal was approved by Prime Minister Nguyen Xuan Phuc on 8 March. By 2025, an information technology infrastructure system, analysis software and an e-portal would be completed to effectively operate the early warning system and to calculate dumping margins and analyse damages. The early warning system would provide support to investigators and relevant agencies in the investigation and handling of trade defence cases in domestic and foreign markets, as well as handling disputes at the World Trade Organization (WTO). As of the end of 2019, there were 156 trade defence investigation cases initiated by 19 countries and territories on Vietnam’s exports while Vietnam initiated 16 cases on imported products, according to the Vietnam Chamber of Commerce and Industry’s WTO Centre.
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VIETNAM

Vietnam to allocate US$15 million in Mekong Delta drought fight
(9 March 2020) Prime Minister Nguyen Xuan Phuc announced the allocation of US$15.16 million to combat drought and salt intrusion in the Mekong Delta provinces. The money will be awarded to Long An, Tien Giang, Ben Tre, Kien Giang and Ca Mau provinces. Drought and salinity across the five provinces have damaged around 40,000 hectares of rice paddies and caused water shortages affecting 95,000 families, according to the Ministry of Agriculture and Rural Development. The Mekong Delta, home to Can Tho City and 12 provinces, has been experiencing especially harsh droughts and salinisation, with experts warning salinity levels would exceed the 2016 record in March 2020. The Mekong River flows 4,880 km through six countries, 2,130 km in China. Out of the 19 hydropower projects it plans along the river, China has completed 11
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LAOS

Lao crop exports to China hit by fears over COVID-19
(6 March 2020) In January and February 2020, border trade in Lao provinces neighbouring China, particularly Oudomxay and Luang Namtha, was quieter, according to an anonymous official from the Oudomxay provincial Industry and Commerce Department. The main agricultural exports of Laos to China consist of rubber, maize, beans, sugarcane, watermelons, bananas, cassava, sweet potato and other fruits. Chinese markets have reopened and are back to normal, but buyers are paying less for Lao products. The trade value between Laos and China continues to increase every year as cooperation between the two governments deepens. China is Laos’ biggest foreign investor and the country’s second-largest trading partner. According to the Ministry of Industry and Commerce, the value of bilateral trade reached about US$3.22 billion in 2019 and US$2.88 billion in 2018.
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LAOS

Laos’ domestic energy consumption rises, import decreases
(6 March 2020) Laos’ domestic distribution of electricity is likely to rise to 28,886 million kilowatt-hours (kWh), worth about US$2,465 million by the end of 2020 based on its 8th five-year energy development plan for 2016-2020, according to its Ministry of Energy and Mines. In 2020, the government is expected to further invest in electricity infrastructure to ensure 95% of its population has access to electricity. Laos buys electricity from neighbouring countries to provide energy to those living close to the borders. Under the energy development plan for 2016-2020, Laos expects to import 2,972 million kWh valued at US$170 million, a 52% decrease compared to the 2011-2015 period. During the period 2020-2030, the ministry expects Laos to generate about 20,000MW of electricity which will be in excess of domestic requirements and the surplus will, therefore, be available for sale to countries in the region.
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MYANMAR

Myanmar’s Ayeyawady Integrated Food Industry Complex to be completed in 2021
(9 March 2020) Myanmar’s Ayeyawady Integrated Food Industry Complex, which is being constructed on 900 acres of land in Pantanaw Township, is expected to be completed in 2021, according to the Commerce Ministry. It added that 90% of goods produced at the complex will be exported. The complex is being implemented by Global Earth Agro and Aqua Public Company, established by the Myanmar Fisheries Federation (MFF). The company will conduct aqua feed processing, fish breeding, fish processing, and set up a laboratory at the complex. Drying factories, fish and aqua feed processing factories, breeding stations, packaging factories, cold storages, fish disease diagnostics laboratory, warehouses, and apartments for workers will be included in the project. The complex has so far created more than 2,000 jobs and is expected to employ over 7,000 workers within five years with a production value estimated at around US$200 million, according to the MFF.
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About Greater Mekong Subregion (GMS)

China-ASEAN Monitor: China to ship raw materials for Cambodian garment and footwear factories

Photo Credit: AFP

Economy, Investment and Trade

China to ship raw materials for Cambodian garment and footwear factories
(10 March 2020) Cambodian Prime Minister Hun Sen announced that China has arranged to ship raw materials for the country’s garment and footwear factories until May 2020. According to Hun Sen, the first shipment arrived on 9 March and the second shipment is scheduled to arrive on 11 March. The garment and footwear industry is Cambodia’s largest export sector, and has been affected by a disruption in raw materials from China due to the COVID-19 outbreak. Around 60% of the raw materials supplied for Cambodia’s garment and footwear industry come from China and it was reported in February 2020 that the supply disruptions have caused the partial suspension in operations of a few factories, affecting almost 20,000 workers. The Cambodian government has also initiated a “Green Lane” to facilitate shipments, logistics and customs processing clearance to expedite the delivery of raw materials.
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Indonesian state-owned airline Garuda impacted by China travel ban
(11 March 2020) Indonesia’s state-owned flag carrier Garuda is in the process of enacting cost-cutting measures as it feels the impact of the international travel restrictions, particularly the government’s ban on travel to China in light of the ongoing COVID-19 outbreak. According to the airline’s new CEO Irfan Setiaputra, 5% of the company’s revenue comes from flights to China. Among the measures which the company will adopt include debt refinancing, cutting unprofitable routes, and relocating large-bodied aircraft to crowded domestic flights. Since the start of 2020, Garuda’s shares have fallen by 50%, the largest drop among regional rivals. The company reportedly has a total of US$798 million worth of debts due by the end of 2020.
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Thailand may impose mandatory quarantine for Chinese tourists to combat COVID-19 outbreak
(7 March 2020) The Thai government may impose mandatory 14-day quarantine for travellers affected by the COVID-19 outbreak, including China, Hong Kong, Macau, South Korea, and Iran. The government stated on 7 March that it would prefer if travellers from said countries self-quarantined themselves for 14 days to prevent the spread of the coronavirus, and may face fines for non-compliance. It remains unclear, however, if the measures are merely advisory or are mandatory. Chinese tourists account for a quarter of Thailand’s foreign tourist receipts and spent more than US$17 billion in 2019. Over the last few days, the Thai government has flipped-flopped on whether the quarantine measures will be mandatory or merely recommended.
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Singapore and China to co-host 2020 Smart China Expo
(8 March 2020) Singapore and China’s Chongqing Municipality will co-host the 2020 Smart China Expo, which focuses on smart technology. This is part of the fifth anniversary of the intergovernmental initiative China-Singapore (Chongqing) Demonstration Initiative on Strategic Connectivity, and will see Singapore become one of the hosts of the expo for the first time (the last two expos have been held in Chongqing since 2018). Since the initiative’s launch in 2015 until the end of February 2020, 55 cooperation agreements and 204 cooperation projects worth more than US$30 billion have been signed. During the 2019 expo, a total of 530 projects worth some US$117.88 of investments were signed.
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China supplied 25.5% of Philippines total imports in January 2020
(10 March 2020) China was the Philippine’s largest supplier of imported goods in January 2020, accounting for 25.5% of total imports, according to the Philippine Statistics Authority. Import payments from China increased to US$2.37 billion, from US$2.04 billion in January 2019. China was also the Philippine’s fourth-largest export trade partner in January 2020, with US$685.58 million in export value recorded. Total external trade in goods in January 2020 amounted to US$15.08 billion, an increase of 4.1% year-on-year.
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CARI Captures 444: ASEAN manufacturing conditions show small improvement for first time in nine months

ASEAN

ASEAN manufacturing conditions show small improvement for first time in nine months
(3 March 2020) Operating conditions in the ASEAN manufacturing sector marginally improved for the first time in nine months, according to a UK-based information company’s purchasing managers’ index (PMI) data. In February 2020, the headline PMI for the region increased to 50.2 from 49.8 in the previous month (a PMI reading of above 50 represents an expansion). This slight increase since May 2019 signalled the first improvement in the ASEAN manufacturing sector. The Philippines recorded the best performance in February among the ASEAN countries monitored. Its PMI of 52.3 showcased the fastest improvement in operating conditions since December 2018 while Indonesia’s PMI rose for the first time in eight months to 51.9. The rest of the ASEAN countries monitored saw deterioration of varying degrees. According to the UK-based information company, firms remained, on average, positive that output would increase in the coming year but overall optimism slipped to a four-month low.

MALAYSIA

Muhyiddin Yassin sworn in as eighth Malaysian PM
(2 March 2020) Parti Pribumi Bersatu Malaysia president Tan Sri Muhyiddin Yassin has been appointed by Malaysia’s King, Sultan Abdullah Sultan Ahmad Shah, as Malaysia’s eighth Prime Minister. Muhyiddin was sworn in at Istana Negara on 1 March. He succeeds Tun Dr Mahathir Mohamad who had been the interim prime minister after resigning as the seventh PM on 23 February due to the political crisis. In Muhyiddin’s first address to the nation on 2 March, he asked the Malaysian people to allow him a chance to rule. Malaysia has since delayed its parliamentary sitting which was initially scheduled for 9 March to 18 May. In a statement dated 5 March, the Prime Minister’s Department said the two-month postponement was needed to give reasonable time for the Cabinet line up to understand the duties of the ministries and the respective departments.

MALAYSIA

Malaysia’s central bank cuts OPR to 2.50% as COVID-19 weakens global economy
(3 March 2020) Bank Negara Malaysia (BNM) has decided to reduce the overnight policy rate (OPR) by 25 basis points to 2.50% to provide a more accommodative monetary environment amid the global COVID-19 outbreak. The ceiling and floor rates of the OPR corridor are therefore reduced to 2.75% and 2.25% respectively. According to BNM, the ongoing COVID-19 outbreak has disrupted production and travel activities, particularly within the region and this has also led to greater risk aversion resulting in tighter financial conditions and a resurgence in financial market volatility. The central bank added that the Malaysian economy grew at 4.3% in 2019 and that future growth, particularly in the first quarter of 2020 (1Q2020) will be affected by the COVID-19 outbreak and weakness in the agriculture sector is also likely to persist in 1Q2020. This OPR cut is the second so far for 2020. On 22 January, BNM reduced the OPR to 2.75%.

INDONESIA

Indonesia’s central bank confident economy can grow 5.4% despite COVID-19
(2 March 2020) Bank Indonesia (BI) said the country’s economic growth of 5.4% could still be achieved despite the ongoing COVID-19 outbreak. The central bank had previously cut its economic growth projection for 2020 to the range of 5.0%-5.4% from the earlier projection of 5.1%-5.5%. In 2019, the country’s GDP grew 5.02%, its weakest in four years. Bank Indonesia Economic and Monetary Policy Department director IGP Wira Kusuma said on 29 February that BI’s decision to lower its benchmark interest rate by 25 basis points to 4.75% was one of the ways it can achieve the economic growth target. He added that the government should optimise state budget allocations and conduct structural reforms to support growth through fiscal policy. The virus outbreak has affected Indonesia’s economy especially since China contributed US$2.38 billion foreign exchange in the country with a market share of 14.1% of its total foreign exchange. The country also welcomes around 2 million tourists from China annually and according to a minister, the outbreak has caused an estimated loss of around US$500 million to its tourism sector.

INDONESIA

Indonesian coal exporters concerned over government’s new shipping rules
(5 March 2020) Indonesian thermal coal suppliers and shipping companies are growing increasingly concerned about a government requirement to use local shipping for exports scheduled to be implemented on 1 May, due to the uncertainty over what constitutes an “Indonesian-controlled ship.” The requirement to use Indonesian insurance and ships for coal exports was introduced in 2017, but the implementation was delayed until 1 May 2020. Most Indonesian coal exporters use other shipping providers due to the limited number of Indonesian-flagged ships. Only 8.8% or 63 of the 717 coal ships plying the region are Indonesian flagged, according to a US-based energy information provider. Indonesian coal exporters are worried coal exports could be disrupted due to the limited time and lack of technical guidelines provided to facilitate the implementation. Market sources believe the most practical solution for ship owners would be to register their ships under Indonesian companies.

SINGAPORE

COVID-19 outbreak dims Singaporean job market outlook in 2020
(5 March 2020) Singapore’s manpower ministry said it would be difficult to sustain the same momentum achieved in 2019 for this year due to the COVID-19 outbreak. Government data showed that a total of 63,200 jobs were created in 2019, the highest number of jobs created since 2014. However, Singapore’s manpower minister Josephine Teo warned that it will be difficult to sustain the momentum in 2020. To address the challenges to the economy, the Singaporean government has allocated US$4.02 billion to support businesses and households during the outbreak. From that amount, US$1.7 billion has been allocated to help companies pay wages and retain workers. Singapore has been viewed by several analysts as economically vulnerable to the virus spread due to its close economic links with China, which is its largest export market and biggest source of international tourists.

INDONESIA

Indonesian automotive exports on an upward trend since 2018
(5 March 2020) Indonesia’s car exports have been on an upward trend since 2018, overcoming a sluggish global automotive industry in 2019. Indonesia exported a total of 332,000 CBU (Completely Built Up) units in 2019, an increase of 25.5% from 2018 while exports of CKD (Completely Knocked Down) vehicles reached 511,000 kits, an increase of 523.5% from 2018. Domestically, the car industry has been impacted by the global economic slowdown, with sales in 2019 falling by 10.8% to only 232,000 units. In view of the positive trend, Indonesia’s Industry Ministry has set a target of 1 million units of CBU vehicle exports by 2024. Meanwhile, the domestic automotive sector is expected to grow by 6% in 2020.

LAOS

Lao government borrows US$22.5 million from World Bank to address rural poverty
(5 March 2020) The Lao government has borrowed US$22.5 million from the World Bank via a low-interest loan to fund a programme that would address nutrition improvement and poverty reduction in four northern provinces from 2020-2024. The programme will target the provinces of Huaphan, Xieng Khuang, Phongsaly and Oudomxay during that period. The government also intends to invest US$1.46 million in agricultural infrastructure in the provinces of Luang Namtha, Luang Prabang, Savannakhet, Saravan, Xekong and Attapeu provinces. These programmes form part of the government’s five-year socio-economic strategic development plan which focuses on rural areas and broader national poverty reduction.

CAMBODIA

Number of tourists to Angkor Archeological Park fall 37% in first two months of 2020
(3 March 2020) Cambodia’s most popular tourist destination, the Angkor Archeological Park, received a total of 341,494 foreign visitors in the first two months of 2020, down 37% over the same period last year. The share of tourist arrivals from China during the same period constituted only 2%. Revenue made from ticket sales of the park also fell 35% to US$16.2 million during the January-February period this year. The decline in visitors and revenue was attributed to the COVID-19 outbreak. Cambodian Prime Minister announced on 24 February that the government would provide tax breaks for all hotels and guesthouses in northwestern Siem Reap province (where the park is located) from February until May 2020.

SINGAPORE

Singapore aims to cut 2030 peak emissions by 2050
(29 February 2020) Singapore is aiming to halve the amount of carbon emissions it produces from its 2030 peak by the year 2050, with the goal of achieving net-zero emissions “as soon as viable in the second half of the century,” according to Senior Minister Teo Chee Hean. He noted that it would be challenging for Singapore to emit just 33 million tonnes of carbon dioxide equivalent by 2050, considering its limited access to renewable energy options. While Singapore’s share of global emissions only amounts to 0.11%, Teo said it was important to take action since the effect of climate change on the country will be disproportionately large and existential. The government plans to capture more energy from the sun and phase out internal combustion engine vehicles by 2040. It will also invest in research on emerging low-carbon and carbon capture utilisation and storage technologies, as well as collaborate with the international community in establishing carbon markets and regional power grids. In the nearer term, Singapore wants its emissions to peak at 65 million tonnes by 2030. This would mean that even if the economy continues to grow, the amount of emissions produced should not.

Mekong Monitor: Thai government offers tax waiver on cash-back scheme “Eat, Shop, Spend” stimulus package

Photo credit: Channel News Asia

TRADE, ECONOMY, AND INVESTMENT

THAILAND

Thai government offers tax waiver on cash-back scheme “Eat, Shop, Spend” stimulus package
(4 March 2020) The Thai government agreed to waive personal income tax on financial privileges provided to registered consumers under the government’s economic stimulus package “Eat, Shop, Spend” in phase 2 and 3. The campaign ran from the third quarter of 2019 to early 2020, and was designed to promote domestic tourism and consumption to boost the country’s economy due to the global economic slowdown caused by the international trade war. The maximum amount returned to each person under the scheme is US$270 if they spend at least US$1,590 on domestic travel, products or services during the campaign period. According to government spokeswoman Narumon Pinyosinwat, the waiver will cost the government US$242 million in lost revenue but it would leave the Thai people with more disposable income which should help promote further domestic consumption in 2020.
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CAMBODIA

Factories in Cambodia face disruption due to COVID-19
(2 March 2020) Cambodia’s Labour Ministry warned that as many as 200 factories and enterprises in the country could run out of raw materials due to supply disruptions from China owing to the COVID-19 outbreak. The ministry warned that in a “worst-case scenario” some 160,000 workers may be affected. As of 2 March, 10 factories have filed for temporary suspension. Labour Ministry spokesman Heng Sour said the government was making all efforts to restore relations with buyers, factories and other governments, including negotiating with China for Cambodia to be given priority over their supply of raw materials.
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VIETNAM

Vietnam to purchase US$3 billion in farm products from the US to allay trade tensions
(4 March 2020) Vietnamese companies signed 18 agreements with American producers to purchase some US$3 billion worth of farm products in the next two to three years. The deal included the purchases of 100,000 cows and US$800 million worth of wheat and barley. This comes amidst attempts by Vietnam to address complaints by the US over Vietnam’s trade surplus and difficulties by US companies in accessing Vietnamese markets. In 2019, Vietnam Prime Minister Nguyen Xuan Phuc promised to buy more US products including Boeing aircraft, while Vietnam National Coal-Mineral Industries announced in August 2019 that it was negotiating to purchase US coal.
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VIETNAM

Vietnamese business sectors including aviation and tourism hit by virus outbreak
(3 March 2020) Certain business sectors in Vietnam including aviation, services, and tourism have been affected by the COVID-19 outbreak in China. The tourist city of Danang is expected to experience a loss of US$ 30.4 million over the last two months. Danang’s city tourism association said the epidemic would cause a 31.0% drop in the number of tourists visiting the city in the first quarter of 2020 and a 20.7% decrease in revenue. Vietnamese airlines also saw a 13.7% drop year-on-year in airline passengers. Vietnamese airports also saw an 11.6% drop in the number of arrivals and departures at airports in February 2020.
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THAILAND

Thai economy may contract in 2020 due to COVID-19
(4 March 2020) A group of leading Thai business associations have warned that Thailand’s economy may not grow in the first half of 2020, and could potentially contract over the full year should the COVID-19 outbreak last longer than a few months. The associations have cut their 2020 economic forecast to 1.5%-2.0%, a downgrade from their initial projections of a 2.0%-2.5% growth. The new projection is based on estimates that the impact of the virus will end by June 2020, causing no economic growth in the first half of the year. Thailand’s economy grew by 2.4% in 2019, its weakest in five years.
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About Greater Mekong Subregion (GMS)