CARI Captures Issue 126 (20 MAY 2013)
Captures is CARI’s weekly news monitoring report, each time presenting the top 10 stories affecting ASEAN
20 MAY 2013 CARI CAPTURES • ISSUE 126 CARI CAPTURES ASEAN REGIONAL COOPERATION 01 ASEAN ON THE RISE ASEAN N I N S DIA C HI TH K EAN LAND AREA GDP (US$ TRILLION) 25,928,067 POPULATION POPULATION DENSITY LIFE EXPECTANCY (YEARS) WORKFORCE (BILLION) ASEAN is stepping up cooperation in different aspects, including the creation of an economic partnership with its six major free trade partners, simplifying visa procedures and bidding to host the World Cup. The five-day Regional Comprehensive Economic Partnership (RCEP) meeting involving ASEAN and its six free trade agreement partners, namely Australia, China, India, Japan, South Korea and New Zealand, concluded on 13 May 2013 The 16-nation initiative aims to create, by 2015, a free trade deal encompassing 3.4 billion people with a combined gross domestic product (GDP) of US$ 20 billion Members have agreed on scopes and programmes for further talk in the trade of goods and services, as well as investment ASEAN is also working towards a common tourist visa for non-ASEAN 19.84 UNEMPLOYMENT 3.38 6.56% POPULATION POVERTY 70.44 BELOW LINE 1.72 19.84% (PERCENTAGE) (BILLION) (INDIVIDUALS PER SQ KM) 130.65 ZEA JAPAN NA AS (SQ KM) OU EW RE A A LI A O S TR LA AU ND THE REGIONAL COMPREHENSIVE ECONOMIC PARTNERSHIP (LIVING ON LESS THAN US$ 1.25 PER DAY) visitors intending to visit multiple ASEAN countries and an ‘ASEAN business traveller card’ which would allow ASEAN business travellers to travel between member states without a visa On 17 May, ASEAN and European Union (EU) senior officials met in Ho Chi Minh, Vietnam to discuss disputes in the South China Sea, with EU supporting a peaceful settlement in accordance to international laws including the United Nations Convention on the Law of the Sea (UNCLOS) Meanwhile, ASEAN has expressed interest in working together to host the 2034 World Cup Borneo Bulletin CCTV News Gulf Times Rappler Goal.com (15 (14 (19 (17 (16 May May May May May 2013) 2013) 2013) 2013) 2013) 20 MAY 2013 CARI CAPTURES • ISSUE 126 02 HICCUPS MAR PHILIPPINE ELECTION PHILIPPINES The Philippine midterm election held on 13 May 2013 saw allies of President Benigno Aquino III bag the majority of the senatorial seats pushing the main Philippine Stock Exchange Index to its 30th a l l - t i m e h i g h fo r t h e ye a r a s investors see a confirmation of the administration’s continuous economic reforms, despite being marred by hiccups. TAXATION & TAX EVASION Th e 2 0 1 3 m i d te r m e l e c t i o n covers candidates for senators and congressmen, including provincial and municipal officials Th e e l e c t i o n wa s , h oweve r, marred by malfunctioning p re c i n c t co u n t o p t i c a l s c a n machines, late and wrong delivery of election paraphernalia, poor communication signal in some precincts, and disenfranchised voters At le ast seven peo ple we re killed when supporters of rival candidates for mayor on a small southern island in the Sulu archipelago opened fire on each other while in the violenceplagued south, where a Muslim separatist insurgency has been waged for decades and political warlords employ private armies San Teodoro town in Mindoro Oriental province saw Marvic Feraren triumph over Boyet Py in a mutually agreed coin-toss after both candidates received 3,236 votes each with Feraren winning at the second attempt after a first round saw yet another draw; under the election code, a tie can be settled by drawing of lots with coin tosses also acceptable GMA News Online Digital Journal Channel News Asia BBC News EFFICIENCY OF TAX COLLECTION (%) SIN 90 US CHN JPN UK VIE GER IDN 70 LAO Being below the yellow line indicates that countries have weak institutions MAS 60 2013) 2013) 2013) 2013) BRA RUS PHI 50 May May May May Most countries with strong institutions follow the yellow line, which corresponds to Laffer’s Curve of Taxation which says that tax revenue increases when the tax rate increases, until a certain optimal point. 100 80 (14 (13 (13 (16 THA CAM 40 0 TAXN MA 03 10 SINGAPORE World’s fourth largest offshore financial centre Singapore has now made it compulsory for all financial institutions to identify suspicious accounts involved in tax crimes and close such accounts if necessary, before 1 July 2013 A joint statement by the central bank, finance ministry and tax authority announced plans to change the law so that the tax office, Inland Revenue Authority of Singapore, will be able to get information from banks and trust companies without a court order Singapore will also sign up to the Organisation for Economic Cooperation and Development's (OECD) multilateral treaty on 30 40 50 60 04 70 TAX BURDEN (%) www.tackletaxhavens.com SINGAPORE COMBATS INTERNATIONAL TAX EVASION While Swiss banks paid a brutally expensive price in the settlement of tax evasion issues with the US, Singapore is now quick to tighten regulations and join in the cooperation on fighting crossborder tax evasion. 20 MALAYSIA UNVEILS NEW CABINET MALAYSIA sharing tax detail, which includes 45 countries currently Singapore also announced it plans to finalise an agreement with the United States on the Foreign Account Tax Compliance Act (FATCA), which requires banks and other financial institutions to disclose information about Americans’ accounts with more than US$ 50,000 The new measures are expected to enhance Singapore’s reputation as a clean and efficient financial centre Reuters (5 May 2013) Reuters (14 May 2013) Business Times (16 May 2013) Re-elected Prime Minister Najib Razak has unveiled his cabinet following his Barisan Nasional party’s win in the 13th Malaysian G e n e r a l E l e c t i o n s t o m i xe d reactions. Several prominent young upand-coming leaders have been introduced as part of the new cabinet, headlined by the popular and articulate UMNO Youth Chief Khairy Jamaluddin appointed to Minister of Youth and Sports and Maybank chief executive Abdul Wahid Omar as head Minister of the Economic Planning Unit in the Prime Minister’s department; Jamaluddin had been overlooked i n R a z a k ’s f i r s t c a b i n e t i n 2008 but has been growing in stature, taking the polls in his constituency of Rembau with a tripled majority of over 18,000 votes It is the first time since the c o u n t r y ’s i n d e p e n d e n c e i n 1957 that the federal cabinet h a s n o m i n i s t e r s f ro m t h e Malaysian Chinese Association (MCA) party, keeping in line with MCA President Datuk Seri Chua Soi Lek’s promise that the party would not accept any government posts if its results in the recently concluded election were poorer than that of the previous election in 2008 Sabah and Sarawak have also been rewarded for their vital contribution to the coalition p a r t y ’s w i n i n t h e e l e c t i o n with six and seven members of parliament appointed as full ministers respectively, out of a total of 31 full ministers, marking an increase of two ministers from four full ministers from Sabah in the previous cabinet The Star Asia One Straits Times The Borneo Post DISCLAIMER: The news articles contained in this report are extracted and republished from various credible news sources. As such, CIMB ASEAN Research Institute (CARI) does not make any guarantee, representation or warranty, express or implied, as to the adequacy, accuracy, completeness, reliability or fairness of any such information and opinion contained in this report. Should any information be doubtful, readers are advised to make their own independent evaluation of such information. (15 (15 (15 (16 May May May May 2013) 2013) 2013) 2013) 20 MAY 2013 MBOD MBOD GOLD MINING EXPANSION M R NM YA SUGARCANE PLANTATION EXPANSION COPPER MINING EXPANSION R M A LAND GRABS IN ASEAN IA CA IA CA CARI CAPTURES • ISSUE 126 IA M NMA YA AYS AL MEGA PLANTATION EXPANSION D AILAN H AILAN 05 TOURISM DEVELOPERS’ SEIZURE OF TSUNAMI AFFECTED LANDS TIMBER & PALM OIL EXPANSION LAND GRABBING STILL A PROBLEM IN ASEAN COUNTRIES VIETNAM MYANMAR L a n d g ra b b i n g i s ra m p a n t i n several ASEAN countries, and according to a new report by a UK environmental and development watchdog land grabbing is supported by international banks and organisations. The report by Global Witness accuses Deutsche Band and the World Bank’s International Finance Corp (IFC) of backing a series of opaque deals in which the privately owned Hoang Anh Gia Lai (HAGL) and state-owned Vietnamese Rubber Group (VRG) acquired more than 200,000 06 D TH T MILITARY BASE EXPANSION M IA AY AL S MALAYSIA hectares of land from the Lao and Cambodian governments Deutsche Bank has significant holdings in both companies while the IFC invests in HAGL, according to Global Witness Demand in Vietnam for land for rubber plantation is very high due to high international prices, and the government is planning to grow nearly 2 million acres of rubber by 2020 and reap an export value of US$2 billion Meanwhile in Myanmar, about 40 activist groups met in Yangon and called for a stop to land grabbing, deforestation and the STARBUCKS PLANS ASIAN EXPANSION THAILAND MYANMAR Starbucks has set its eyes on the Asian market, announcing management reforms and plans for new stores in countries including Thailand, Myanmar and China and India. Starbucks announced on 2 May a series of management changes including the strengthening of its China and Asia Pacific region, where it plans to add about 600 new cafes this year The company celebrates its 15 years in Thailand by opening its first community store out of the US in the Langsuan n e i g h b o u r h o o d o f B a n g ko k , which will contribute 10% of b e ve r a g e s a l e s t o h e l p i n g farming communities across Thailand Starbucks currently owns a total of 168 retail stores in Thailand, VIETNAM and is aiming to double this number over the next five years CEO Howard Schultz said Starbucks will enter Myanmar w i t h i n t h e n ex t f ew ye a r s , increase its presence in India, and will build an additional 650 stores in China to bring the total up to 1500 stores by 2015 M e a n w h i l e , V i e t n a m ’s f i r s t S t a r b u c k s s t o re o p e n e d i n February 2013 has been received positively by the locals The growing potential of Vietnam has also attracted technology giant Google to launch AdSense in the Vietnamese language Reuters (2 May 2013) CTV News (13 May 2013) Bangkok Post (13 May 2013) damming of rivers I n r e s p o n s e , Ti n H t u t O o , chairman of the National Economic and Social Advisory Council (NEASAC) and presidential advisor, met with a group of ethnic activists in Naypyidaw and told them that the establishment of rule of law in Myanmar will protect ethnic communities and their land H e a l s o s a i d t h at t h e m a i n problem in Myanmar is the lack of transparency of investment projects In Malaysia, a significant report on the land grabbing of its 07 indigenous people Orang Asli did not receive much attention as it was overshadowed by the recent election The report was done following a government-assigned inquiry by the National Human Rights Commission (Suhakam), and outlined specific steps towards restitution for land already unduly taken from the communities The Diplomat UPI The Irrawaddy The Edge Malaysia (13 (14 (12 (15 May May May May 2013) 2013) 2013) 2013) SINGAPORE LAUNCHES NEW FINANCIAL CENTRE SINGAPORE Recognising the importance of a vibrant financial sector to its e co n o m i c g row t h , S i n g a p o re officially launches its brand new Marina Bay Financial Centre and reveals the design of a 290m s kys c ra p e r p l a n n e d f o r 2 0 1 6 completion. Singapore’s S$ 4 billion (US$ 3.2 billion) Marina Bay Financial Centre (MBFC) officially opened on 15 May 2013 At the grand opening, Prime Minister Lee Hsien Loong said the exceptional business environment has secured Singapore's position as a global financial hub, and there is a need to keep attracting high-quality investments to keep the financial sector vibrant MBFC comprises three office towers offering an estimated total office space of 3 million square feet, 650 luxury apartments and also a retail mall On 10 May, the design for Tanjong Pagar Centre, set to become Singapore’s tallest building upon completion in 2016, was revealed by Skidmore, Owings & Merrill LLP (SOM), the American firm behind the Burj Khalifa in Dubai The 64-storey Tanjong Pagar Centre will reach a height of 290m, consisting of offices, highend apartments, a luxury hotel, retail units and a sheltered event space in Tanjong Pagar City Park Channel News Asia (15 May 2013) Telegraph (10 May 2013) DISCLAIMER: The news articles contained in this report are extracted and republished from various credible news sources. As such, CIMB ASEAN Research Institute (CARI) does not make any guarantee, representation or warranty, express or implied, as to the adequacy, accuracy, completeness, reliability or fairness of any such information and opinion contained in this report. Should any information be doubtful, readers are advised to make their own independent evaluation of such information. 20 MAY 2013 CARI CAPTURES • ISSUE 126 08 MYANMAR MONITOR EAST TIMOR FACTOIDS FOREIGN AFFAIRS President Thein Sein heads for the United States on 20 May, where he has been invited for an official visit by US President Barack Obama. This will be the first state visit of a Myanmar head of state in 47 years, or since dictator Ne Win visited in 1966. Thein Sein will also deliver speeches at the School of Advanced International Studies of Johns Hopkins University and the United States Chamber of Commerce. EAST TIMOR & ITS PLACE IN ASEAN The Guardian (13 May 2013) Eleven Myanmar (16 May 2013) SOCIETY The cyclone headed for the Bay of Bengal weakened into a tropical storm as it made landfall on 16 May. No deaths were reported in Myanmar while 14 people died in Bangladesh due to the storm. Myanmar’s military and security forces started evacuation on Monday but authorities had trouble getting Rohingya Muslims out of their camps and to safer areas due to the ethnic minority’s mistrust in military officials. At least 50 people died when a boat carrying more than 100 Rohingya Muslims capsized off western Myanmar on 14 May in an attempt to flee the cyclone. The Wall Street Journal (17 May 2013) The Star (14 May 2013) POLITICS Myanmar has been ranked as the worst country in the world in terms of resource governance, according to a report issued recently by US-based NGO Revenue Watch Institute. Myanmar ranked lower t h a n co u n t r i e s l i ke Z i m b a bwe a n d Afghanistan. The report states that there is almost no information available on the management of the extractive sector, no freedom of information law, no requirement of environmental and social impact assessments, and it is unclear which authority receives payments from extractive companies. Mizzima (16 May 2013) ECONOMY A new securities and exchange law is to be enacted in July, but the opening of a stock exchange by is being planned for 2015. The Central Bank of Myanmar has signed a memorandum of understanding (MoU) with Daiwa and the Tokyo Stock Exchange to establish an exchange in Yangon by 2015. U Win Aung, president of the Union of Myanmar Federation of Chambers, said a number of companies are becoming public in order to list on the stock exchange but most companies in Myanmar know very little about listing on a stock exchange but that will change by 2015, he added. The Myanmar Times (13 May 2013) BUSINESS AND INVESTMENT Heineken, the world's third-largest beer maker, has signed a joint venture with local company Alliance Brewery Co Ltd (ABC) to brew and sell its beers in Myanmar. The US$60 million brewery will be built near Yangon and should become operational by the end of 2014. Reuters (13 May 2013) Malaysia retail chain Parkson opened its department store in Yangon last week, in a joint venture between Parkson Retail Asia (70%), Yoma Strategic Holdings (20%) and First Myanmar Investment (10%). Parkson is operated by Malaysian Lion Group. POPULATION 1,176,000 GDP US$ 1.054 BILLION UNEMPLOYMENT INFLATION 18.4% TOTAL EXPORT 18 13.5% GDP per capita US$ 8,800 52.9% LIVE ON LESS THAN US$ 1.25 A DAY MAIN EXPORT US$ MILLION OIL COFFEE SANDALWOOD MARBLE ECONOMIC GROWTH 2011-2012 10.6% MAIN IMPORTS FOOD, GASOLINE KEROSENE, MACHINERY IMPORTS US$ 689 MILLION Source: wikipedia.org, hdr.undp.org 09 ON ASEAN’S PROSPECTIVE NEW MEMBER: EAST TIMOR EAST TIMOR ASEAN Two years after submitting its application to join ASEAN, the eleven-year old nation of East Timor is now one step closer to becoming a member of the regional bloc. East Timor enjoyed a high economic growth of 10% in 2012, and is more politically stable compared to its early years of independence, gearing it up for joining the ASEAN community. At the 22nd ASEAN Summit held in Brunei, the regional body discussed a greater role for East Timor in future ASEAN activities ASEAN Secretary General Le Luong Minh said a working group has been formed to study East Timor’s membership bid based on economic integration into ASEAN, politicalsecurity and socio-cultural aspects Khabar Southeast Asia (16 May 2013) Jakarta Post (27 April 2013) 10 PANDA POLITICS THAILAND CHINA Giant panda bear Lin Ping and her family have been the centre of a diplomatic mission which concluded on 10 May 2013 when Foreign Minister Surapong Towichukchaikul announced that China has authorised Thailand to keep the pandas for a while longer, reinforcing the celebrity status of the one-time Thai reality television show star in Thailand. Discussions over extending the stay of the pandas had reached high-level negotiations, going as far as Prime Minister Yingluck Shinawatra and then-Chinese Premier Wen Jiabao taking part in talks which have resulted in the special exemption demonstrating the close ties between the two countries and discussions between the leaders Normally, every panda in the world is loaned from China to various country’s zoos and will return to China to breed but this latest agreement will see Lin Ping find a mate in China and return to Thailand to breed in a loan deal which sees the cost per year for each giant panda lent to Thailand of US$250,000 rise to US$1 million when Lin Ping returns with her mate Whilst the annual fee of US$1 million may seem an extravagant price to pay for a panda, various zoological officials have come out in defence of the deal citing the annual revenue generated for the region, estimated at some THB3 billion (US$101 million) annually by former director of the Zoological Park Organisation Sophon Dumnui Eleven Myanmar (13 May 2013) The Nation (11 May 2013) Bangkok Post (15 May 2013) U-T San Diego (14 May 2013) Editorial Team: Sóley Ómarsdóttir, Oh Joo Ken , Lim Zhi Bang Designer: Hizzad Dinno Consultant Editor: Tunku ‘Abidin Muhriz DISCLAIMER: The news articles contained in this report are extracted and republished from various credible news sources. As such, CIMB ASEAN Research Institute (CARI) does not make any guarantee, representation or warranty, express or implied, as to the adequacy, accuracy, completeness, reliability or fairness of any such information and opinion contained in this report. Should any information be doubtful, readers are advised to make their own independent evaluation of such information.