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07 NOVEMBER 2011

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ISSUE 50

FORMER BRITISH PM MAKES CASE FOR ASEAN ECONOMIC INTEGRATION WHAT IS THE ASEAN BUSINESS CLUB?

ASEAN

Tony Blair lent his support to ASEAN’s integration programme at the recent launch of the ASEAN Business Club , urging ASEAN economies to learn from Europe’s experience but insisting that ASEAN stay open, saying that free trade provides greater benefits to all. The launch and inaugural gala dinner of the ASEAN Business Club was attended by 300 prominent business leaders, government officials and diplomats Blair delivered a timely and relevant keynote address on the lessons from Europe’s

regional integration Blair acknowledged the difficult path ahead of the EU and attributed some of its troubles to the implementation of its integration and the rush to expand its membership Dato’ Sri Nazir Razak (Advisory Council Member, ASEAN Business Club) said B2B (business to business) will determine the success of economic integration, and called on businesses to support its governments, as the path toward regional integration will be challenged by political integration Jakarta Globe (1 November 2011)

From left : Patrick Walujo, Chew Gek Khim, Tan Sri Tony Fernandes, Dato’ Sri Nazir Razak, Surin Pitsuwan, Simon Cheong, Cesar Peralta Consing and Jaime Augusto Zobel de Ayala celebrating the launch of the Asean Business Club in Kuala Lumpur on Friday

An association of the chief executives of ASEAN’s most important business enterprises. It is a forum for ASEAN’s top business leaders to network, collaborate and play a leading role in the process of ASEAN economic integration. Membership is by invitation. An Advisory Council provides guidance and advice to ensure the quality of the ASEAN Business Club’s activities: Cezar Peralta Consing Partner of Rohatyn Group Chairul Tanjong Chairman of Paragroup Chartsiri Sophonpanich President of Bangkok Bank Chew Gek Khim Executive Chairman of The Straits Trading Co., Ltd. Jaime Augusto Zobel Ayala CEO of Ayala Corporation Dato’ Sri Nazir Razak Group CEO of CIMB Group Patrick Walujo CEO of PT Northstar Pacific Simon Cheong Founder of SC Global Developments Tan Sri Tony Fernandes CEO of Air Asia Tos Chirathivat CEO of Central Retail Co., Ltd. www.aseanbusinessclub.org.


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COMPETITION DEEPENS IN THE SOUTH CHINA SEA Philippines, Vietnam, China, India, Japan, US

Vietnam and the Philippines have formed a loose alliance and drawn in regional powers India, Japan, and the US, to counterbalance China’s claim to sovereignty in the South China Sea. Vietnam and the Philippines have strengthened bilateral security ties through maritime pacts signed on 27 October 2011 concerning information sharing, natural disaster response, smuggling and piracy prevention, and marine resource protection Vietnam and the Philippines have also pushed for a multilateral, ASEAN-led agreement to the South China Sea conflict

Philippines’ president Benigno Aquino boosted its naval ties with Japan during his official visit to the country on 27 September 2011 while Vietnam’s president Truong Tan Sang signed an oil and gas exploration agreement with India during his official visit on 12 October 2011 The US has rhetorically pledged support to the Philippines and Vietnam at the ASEAN Defence Ministers Meeting on 18-22 October 2011 The South China Sea conflict is expected to be a hot topic in the East Asia Summit in Bali, Indonesia on 19 November 2011 Asia Times (3 November 2011)

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MYANMAR GETS

SUPPORT TO LEAD ASEAN Myanmar

Indonesia’s Foreign Minister, Marty Natalegawa returned from his meeting with Myanmar’s President Thein Sein and Aung San Suu Kyi stating that the democratisation process in Myanmar is “irreversible” Myanmar is on course for the ASEAN 2014 chairmanship. These comments are important for Myanmar, as it attaches a great deal of importance to chairing ASEAN and winning international recognition Marty urged the U.S. and EU to ease sanctions, which were due to a long record of human rights abuse in Myanmar, saying that the embargoes are damaging the country The Jakarta Post (3 November 2011)

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CAEXPO RECORDS TOTAL TRADE VOLUME OF US$1.8 BILLION China, ASEAN

The 8th China-ASEAN Expo, held in Nanning, China from 18-26 October 2011, themed around environmental protection cooperation, played host to 4,700 ASEAN and Chinese booths and marked the 20th anniversary of the China-ASEAN relationship. The expo has been held annually since 2004

The China-ASEAN Expo was held concurrently with the China-ASEAN Business and Investment Summit, ChinaASEAN Environmental Cooperation Forum, China-ASEAN Ministerial Meeting on Technical Barriers to Trade, CAEXPO Roundtable Meeting on Investment Cooperation and Inauguration of ChinaASEAN Plaza

Wen Jiabao (Prime Minister, China) highlighted connectivity, investment, and socio-cultural cooperation as means to enhance the implementation of the ChinaASEAN Free Trade Agreement Bernama (27 October 2011)

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.


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EXPERTS DENOUNCE

ASEAN SINGLE CURRENCY ASEAN Experts and officials are saying that ASEAN should focus on improving,

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promoting and accelerating economic integration, and steer clear of a single currency. While ASEAN’s plans do not extend to a common currency, Europe’s woes have triggered discussions around possible integration pitfalls, including the single currency path IMF Deputy Managing Director Naoyuki Shinohara said the region’s diversity and varying levels of economic development argue against a common currency Diwa C. Guinigundo (Deputy Governor, Bangko Sentral ng Pilipinas) agreed that a common currency is not advisable and urged

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ASEAN to pursue growth by encouraging intra-ASEAN trade, harmonising and liberalising regulations on capital markets and accounts, and sharing information Fukunari Kimura (Chief Economist, Economic Research Institute for ASEAN and East Asia) said that ASEAN needs time to consider implementing a common currency due to the disparate macroeconomy of member states Xin Hua (31 October 2011)

ASEAN NATIONS PUT EDUCATION FRONT AND CENTRE ASEAN

ASEAN is enhancing regional education cooperation and raising higher educational standards through the efforts of the ASEAN University Network (AUN), providing exchange programmes, mutual quality assurance, and academic calendar synchronisation. The diversity and inequality of ASEAN higher education systems prevents the replication of the European Union’s Bologna Accord in the region The World Bank reports higher education participation in developing East Asian has increased, but is yet to produce sufficient numbers of skilled graduates and innovative research

The AUN’s regional quality assurance system, in operation since 2007, is expected to be extended to regional universities outside the network in 2012, and cover postgraduate programmes in 2013 The AUN is also encouraging regional higher education by developing the ASEAN credit transfer system, allowing students to check courses accredited by their home universities online Thailand’s Chulalongkorn University is changing the start of its academic calendar for English-medium courses from June to September to coincide with academic calendars in most other ASEAN countries The New York TImes (30 October 2011)

The regression line shows the relationship between GDP per capita and tertiary school enrolments. Cambodia, Laos and Indonesia are below the line, which means they have relatively low tertiary school enrolments compared to their GDP per capita. Click here to view the full report by World Bank on Putting Higher Education to Work.

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.


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THAI FLOODING HALTS GLOBAL

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Flooding in Thailand, the worst in 50 years, is pushing prices up locally, reflected by the CPI rising 2.89%, and has halted global production of automobiles and electronics. Figures from Thailand’s Ministry of Commerce shows the consumer price index rising 4.19% in October, compared with September’s 4.03% rise, despite static policy interest rates from the Bank of Thailand Thailand, the manufacturing base for multinationals is causing supply disruption of electronics and automotive components due to the floods Hard drive manufacturer Western Digital has suspended production in both of its factories in Thailand, causing its share prices to fall by 9% and losing its top spot in the global hard drive market Camera manufacturers Canon, Nikon and Sony, and semiconductor manufacturers On Semiconductor, Microsemi, Rohm, and Toshiba have either halted or cut back on production Supply disruptions to automotive manufacturers Toyota, Ford, Nissan, Honda, and Mitsubishi is estimated to cause a production loss of between 130,000 and 205,000 cars and small trucks The lack of critical electronic parts from Thailand is forcing Honda to reduce its production in factories in the US and Canada by 50%, and delaying the introduction of new models

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CHINA EYES CREATION OF ASEAN BANK China, ASEAN

PUSHES PRICES Thailand

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China may set up a regional bank to resuscitate its cash-strapped SMEs, facilitate investment in ASEAN, fund infrastructure projects and promote development in southwestern China, according to two independent sources. Many Chinese SMEs are reportedly turning to loan sharks as they face credit shortages, a strengthening yuan, decreasing exports and rising costs China is likely to be the largest shareholder of the bank with an initial investment of about

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US$4.7 billion, and will formally invite ASEAN member countries, Japan and South Korea, to take stakes in the ASEAN bank The source told Reuters that the bank will be a commercial and policy bank – a mini Asian development bank, that will settle China-ASEAN trade in yuan Several central banks in ASEAN have declined to comment, while others could not be reached Reuters (27 October 2011)

ASEAN SYMPOSIUM RESULTS IN JAKARTA FRAMEWORK ASEAN, Indonesia

The joint symposium of the Indonesian government, the Economic Research Institute for ASEAN and East Asia (ERIA) and Harvard University which concluded early this week, resulted in several recommendations, dubbed the Jakarta Framework. The two day symposium themed “moving ASEAN community forward into 2015 and beyond” discussed issues and challenges to the achievement of an ASEAN Economic

Community, due by 2015 The Executive Director of ERIA, Hidetoshi Nishimura, handed the Jakarta Framework to Dr. Surin Pitsuwan (Secretary General, ASEAN) to be presented to ASEAN Ministers at the impending ASEAN Summit in Bali The Jakarta Framework expands the current narrow focus to include a wider definition of geographic, industrial, and societal inclusiveness The Philippine Star (27 October 2011)

The Financial TImes (1 November 2011)

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PHILIPPINES BANS ITS WORKERS FROM 41 COUNTRIES

The Philippines, one of the world’s largest labour exporters, has ordered a ban on the deployment of its workers to 41 countries because of their failure to sign agreements protecting foreign workers from abuse. Critics say the ban will harm the Philippines’

relations with these countries and may have an adverse effect by forcing Filipinos to work illegally Countries blacklisted by the Philippines’ Department of Labour include India, Cambodia, Iraq and Afghanistan The Philippines economy relies on the funds sent home by its work force abroad

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Philippines

NINE MILLION FILIPINOS ARE CURRENTLY WORKING ABROAD

BBC (2 November 2011)

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.


CARI Captures Issue 50 (7th Nov 2011)