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[PREMIUM] Country Update: 4-17 March 2021

18 Mar [PREMIUM] Country Update: 4-17 March 2021

Myanmar

‘Nothing is moving’: CDM freezes foreign trade, raising fears of shortages (12 March)
The military’s takeover on 1 February has brought Myanmar’s international trade to a standstill, with export volumes through Yangon’s ports estimated to be down as much as 90% since the takeover and imports down by about 80%. This is due to a Civil Disobedience Movement (CDM) that is in response to the military’s actions. With the CDM, thousands of workers in both the public and private sectors such as truck drivers, bureaucrats, bank workers and an estimated 70% of custom agents, have decided to go on strike until democracy is restored. Nearly all major shipping lines have also suspended services.

There are fears that this will cause a shortage in essential goods, particularly palm oil and fuel. Already, the UN World Food Programme has warned of a “very serious” economic crisis in Myanmar, with food and fuel prices climbing. Notably, a shortage of fuel will stop industrial machinery, construction machinery and transport. To address the problem and ensure trade flows, the military government has been strong-arming foreign banks to help alleviate payment problems.

Source: Frontier Myanmar, The Guardian

Chinese-funded factories set on fire in suspected arson attacks (14 March)
32 Chinese-funded factories in Myanmar’s commercial heart of Yangon were attacked on Sunday (March 14), causing US$37 million in damages and leaving two employees injured. The attacks came as Myanmar security forces launched a bloody crackdown on pro-democracy protests, killing 38 people in the deadliest day since the military seized control of the government on February 1. It is unclear who the perpetrators of the fires were and no group has claimed responsibility, although the Chinese Embassy in Yangon has accused protesters of attacking the factories. Anti-coup protesters have been suspicious of China, accusing Beijing of supporting the coup and junta.

Martial law has been declared in the six areas where the factories are located and where violent protests have occurred. This gives the head of the military’s local command power to try offenders in a military court where they could face much more severe penalties, including death.

Sources: CNA, CNN, Business Times

Indonesia

Jokowi’s chief of staff named head of opposition (5 March)
A top aide of Indonesian President Joko Widodo has been named as the chairman of the Democratic Party in an extraordinary meeting held by a party faction. Dr. Moeldoko, President Jokowi’s Chief of Staff, has never been a member of the Democratic Party, which was founded by former President Susilo Bambang Yudhoyono. The latter has accused Dr. Moeldoko of taking the leadership from his son, Agus Harimurti Yudhoyono. Dr. Moeldoko’s appointment has been challenged by Mr. Agus, who says he remains the party chairman. Mr Agus has been identified as a leader who could run for the presidency in 2024.

Critics have accused President Jokowi of orchestrating the move as a way to broaden the President’s coalition and tighten his grip on Parliament. Jokowi’s coalition already controls 74 per cent of the 575 parliamentary seats, and the support of the Democratic Party would give him 9 percentage points more. Jokowi’s office has denied these allegations.

Sources: Nikkei Asia; Straits Times; CNA

Indonesia sees first annual import growth in 20 months as manufacturing picks up (16 March)
Indonesia has reported its first annual import growth since July 2019, indicating a sign of recovery in factory activity and manufacturing investment. Statistics Indonesia (BPS) reported that the value of Indonesia’s imports was up 14.86 per cent year-on-year (yoy) to $13.26 billion in February, ending the trend of negative growth. Indonesia’s exports also rose 8.56 per cent yoy to $15.27 billion in February, continuing the recovery trend since November 2020. Manufactured goods accounted for the majority of the country’s exports, recording a 9 per cent annual growth to $12.15 billion in February.

Trade Minister Muhammad Lutfi said the import growth was in line with expectations, especially after the government began waiving luxury taxes (PPnBM) on certain automobile to nudge automakers to spur factory activity. The tax incentive is expected to boost auto exports by between $3 billion and $4 billion this year.

In addition, the Finance Ministry has issued a draft regulation that will cut tax breaks for hybrid cars, as Indonesia strives to become a global EV battery hub. Battery-powered electric vehicles will retain their 0% luxury tax rate, while plug-in hybrid vehicles will see their tariff increase to 5% from 0%. The new rates will apply only to locally-produced vehicles.

Sources: Jakarta Post; Bangkok Post

Malaysia

World Bank report: Malaysia to cross the high-income country threshold by 2025, while need for structural reforms to attract investments (16 March)
Malaysia is likely to cross the threshold to become a high-income country from an upper middle-income economy by 2025, according to the World Bank. The World Bank’s flagship report, “Aiming High — Navigating the Next Stage of Malaysia’s Development”, said Malaysia’s GNI per capita is at US$11,200, only slightly over a thousand US dollars short of the current threshold level that defines a high-income economy. However, the report highlights that Malaysia needs to improve its competitiveness, inclusiveness, efficiency and increase women participation in the workforce.

The World Bank cited that the development model that used to work for Malaysia in the past is no longer enough to propel the country forward towards its next stage of development. “Malaysia needs high-quality foreign investment to boost growth, but that requires broad reforms in everything from the education system and labour participation to its investment promotional framework,” according to Mr Richard Record, the World Bank’s lead economist for Malaysia.

Sources: Straits Times; The Star; The Star (2); The Edge

Talks about a collaboration between PKR and UMNO draw mixed reactions (16 March)
Opposition Leader, Anwar Ibrahim, said in a press conference he met with several Umno leaders to discuss a political collaboration, but talks were still in their early stages. Anwar’s press conference comes amid rumours about a coalition between PKR and UMNO for the next general elections. Anwar also said the recent defections of three MPs from PKR to Prime Minister Muhyiddin’s coalition was not indicative that the Perikatan Nasional coalition had a majority in parliament.

The two leading parties in the Perikatan Nasional coalition have been at loggerheads in recent months, with Umno indicating it plans to cut ties with Muhyiddin’s Bersatu. Umno president Ahmad Zahid Hamidi’s faction claims that Umno has been handed a raw deal despite being the largest party in government. However, others in Umno, including Foreign Minister Hishammuddin Hussein, claim that Umno has to unite with other Malay parties.

Sources: The Star; Straits Times; SCMP; Straits Times (2)

Malaysia Outlaws ‘Fake News’ on Covid-19 and State of Emergency (12 March)
Malaysia has introduced a new emergency law that aims to tackle “fake news” related to Covid-19 and the state of emergency. The law, which took effect on 12 March, made it illegal to publish or reproduce any “wholly or partly false” content related to the pandemic or the emergency declaration. The ordinance carries a sentence of up to three years in prison. The introduction of the law is largely seen by critics and human rights activists as a way for Mr. Muhyiddin to strengthen his position. The emergency law did not require parliamentary approval.

Sources: Straits Times; Bloomberg; The Diplomat 

Thailand

Thailand to cut COVID-19 quarantine period for vaccinated travellers (8 March)
Starting April, Thailand will reduce its mandatory quarantine from 14 to seven days for foreigners arriving in the country who have been vaccinated against COVID-19. They will however, still be required to show negative COVID-19 test results within three days of their departure. According to its Deputy Premier and Health Minister Anutin Charnvirakul, these “vaccine passport” holders may even get a complete waiver from quarantine on arrival from October. Those not yet inoculated but with coronavirus-free certificates would be quarantined for 10 days. Notably, the new measures will not apply to those travelling from Africa, who would still have to undergo a 14 days quarantine due to concerns about other variants of the virus.

Given Thailand’s reliance on its tourism industry, with tourism accounting for about 20% of the country’s GDP before the pandemic, the country’s economic recovery hinges greatly on the success of its “vaccine passport” plan. A smooth reopening by Thailand will set the stage for other tourism-reliant nations to follow suit.

Source: CNA, Straits Times

Thailand seeks more prison space for new political prisoners (11 March)
At least 382 people, including 13 minors, are facing charges related to the student-led pro-democracy movement and demonstrations from July 2020 through the end of last month. More than 60 of the people have been charged under the lese majeste law which makes defaming the monarchy punishable by up to 15 years in prison per incident.

The Bangkok Remand Prison and Klong Prem Central Prison, where most detained political prisoners are held, have recently become congested when families and supporters made visits to see their loved ones. As the country arrests more political prisoners, Thailand is mulling over expanding its prison space. However, authorities have denied speculations that a separate new prison would be built for political prisoners.

Source: CNA, The Guardian

Vietnam

Vietnam begins human trials of home grown COVIVAC vaccine (15 March – ongoing)
Vietnam began trials of its COVIVAC vaccine on Monday, 15 March at the Hanoi Medical University. It is the second home grown vaccine Vietnam is developing and is made by the Institute of Vaccines and Medical Biologicals (IVAC). The country’s first local vaccine, Nanocovax produced by Nanogen Pharmaceutical Biotechnology JSC, went through its second phase of human trials in February and is expected to be available by the fourth quarter.
Apart from the UK’s Astrazeneca, Vietnam has also procured US and Russian vaccines and its ability to develop its own vaccines helps to diversify supply. Vietnam appears to have continued to manage the pandemic successfully. Authorities report that 12 localities previously hit by the COVID-19 outbreak have had at least 20 days without new community infections. These include the major cities of Hanoi and Ho Chi Minh City.

Sources: VNExpress, Nikkei Asian Review, VGP

Foxconn looking to expand in Vietnam, investing $700 million (15 March – ongoing)
Apple supplier, Foxconn, is looking to invest $700 million to expand its operations in Vietnam. The company received a license to build a computer factory in Bac Giang and is planning for a $1.3 billion plant to manufacture electronic components. Foxconn’s total investments last year into Vietnam amounted to $1.5 billion. Its 2020 revenue from Vietnam was $6 billion with expectations that it could rake in $10 billion this year. Vietnam is seen as an attractive destination for tech investments and the government has emphasized moving up the value chain in its economic policies.

Sources: VN Express, Taiwan News