NEWS MONITORING 15 AUGUST 2011 ISSUE

CARICAPTURES

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BETA

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ASEAN

The recent report by the Asian

Development Bank (ADB) stressed

Asian exposure to volatility from its

short-term foreign capital inflows and

recommended integration efforts such

as promoting cross-border holding

of bonds and equities, and a savings

pool among regional central banks and

governments such as the Asian Bond

Market Initiative. The “Asia Capital Markets Monitor 2011” report

covers China, Hong Kong, India, Indonesia,

South Korea, Malaysia, the Philippines,

Singapore, Taipei, Thailand and Vietnam

The report states Asia must brace for an

ADB: HOT MONEY TO ROCK

ASIAN MARKETS

Asia

increase in volatile capital inflows stemming

from the loss of confidence in Europe and the U.S.

Asian economies must improve transparency,

regional integration and the breadth of its capital

markets to reduce the impact of volatility

“It’s not the amount of the flows, but the

volatility that is the No. 1 enemy… Most of the

excessive liquidity we have goes to financial

assets” (Iwan Azis, Head, Office of Regional

Economic Integration, ADB)

“In the long term, Asia will attract more

capital inflows while the U.S. and EU economies

might stagnate for ten years or more, similar

to Japan’s lost decades during the 1980s and

1990s” (Inhyung Lee, Head, Capital Markets,

Korea Capital Market Institute)

Bangkok Post (August 10, 2011)

Thailand is prepared to liberalise aqua

culture and animal raising, cultivation

and plant variety development, and

reforestation but will retain restrictions

in subsectors which, by Thai law, are

reserved solely for Thai nationals. Subsectors contained in the exclusion list

are rice cultivation, orchards, forestation and

fisheries in Thai territorial waters

The exclusion list needs approval from the

newly elected Thai cabinet and parliament

Atchaka Sibunruang (Secretary General, Board

of Investment, Thailand) said the government

needs time to consider the impacts of liberalisation

before approving the exclusion list

The ASEAN Comprehensive Investment

Agreement (ACIA) and the ASEAN Framework

Agreement on Services (AFAS) have been

signed by ASEAN nations and were scheduled

to take effect in 2010 but members remain at odds

over the sensitive lists for trade liberalisation

The ASEAN Comprehensive Investment

Agreement covers liberalisation, facilitation,

protection and promotion of investment while

the ASEAN Framework Agreement on Services

is set to allow free flow of services within ASEAN

Bangkok Post (August 11, 2011)

THAILAND

MAINTAINS

RESTRICTIONS

DESPITE PROMISES

TO LIBERALISE

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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.

0503Wimboh Santoso, Director of

Banking Research and Regulation of

Bank Indonesia (BI) said BI and Bank

Negara Malaysia have formed a task

force to formulate a framework for

banking integration. The framework will still account for the

financial and economic benefits of banking

liberalisation in each country and is targeted

to be achieved in 2020

Indonesia and Singapore have the most

liberalised banking sectors among

ASEAN BANKING

FRAMEWORK BY 2020

ASEAN

S&P has assured that its downgrade

of the US sovereign debt ratings from

AAA to AA+ on 5 August 2011 will not

immediately impact the sovereign

ratings of Asia-Pacific nations. Most Asia-Pacific sovereigns remain stable

because of support from sound domestic

demand, healthy private sectors, plentiful

external liquidity and high domestic savings

rates, assuming sudden shocks do not occur in

developed nations’ financial and real economies

Disruptions to developed nations’ economies

will adversely impact export driven

economies with large exposures to the US

and Europe; Thailand, Taiwan, South Korea,

Malaysia, the Philippines, Japan, Australia

and New Zealand through weaker demand

and/or lower prices

Exports to the U.S. and Western Europe

remains significant despite losing importance

to intra-regional, Central and Eastern European,

Middle Eastern and Latin American trade

Offshore market reliant financial systems in

Indonesia, Pakistan, Sri Lanka, Fiji, Australia,

New Zealand, and South Korea may face

reduced liquidity and an increase in financial

risk in the short term

A separate statement by S&P said the

impact on Asia-Pacific non-sovereign

ratings; corporates, financial institutions

and structured finance would be limited

The Star, Malaysia (August 9, 2011)

S&P:

DOWNGRADE

HAS NO IMMEDIATE

IMPACT ON ASIA-PAC

Asia Pacific Nations

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Indonesia

Bank International Indonesia’s chief

economist Juniman warned that

Indonesia may not benefit from the

flow of investment to emerging

economies if it fails to improve its

infrastructure. Indonesia’s chief economic minister Hatta

Rajasa said the government is expecting more

foreign funds to enter Indonesia as its risks

INDONESIA’S INFRASTRUCTURE

DEFICIT A BARRIER TO FDI

are minimal compared to developed markets

Juniman suggested that the government

accelerate deliberation of the land procurement

bill at the House of Representatives to allow

more certainty to foreign investors

Juniman predicts the U.S. and Europe debt

crises may hurt Indonesia’s growth in the

middle and long term

The Jakarta Post (August 4, 2011)

Ministers at the 17th Greater Mekong

Sub region ministerial conference in

Phnom Penh emphasised the need

for improved transportation links to

foster economic growth in the region. A joint statement said the primary road

transport corridors are mostly complete; the

GREATER MEKONG SUB REGION’S

LINKS CRUCIAL

China, Cambodia, Laos, Vietnam, Thailand, Myanmar

effort is now to widen them through

linked feeder and rural road networks

Plans are underway to establish the

GMS Railway Coordination Office

The GMS ministers also pledged

increased cooperation on tourism, which

is a key economic driver for the region

Phnom Penh Post (August 5, 2011)

ASEAN countries

Wimboh said the level of the banking

integration will be measured by the number

of Qualified ASEAN Banks (QABs) running

cross-border operations throughout

ASEAN countries

ASEAN banks may reciprocally set up

branches in other countries within the

region by 2013

Santoso expects Indonesian banks to

expand and thrive in other ASEAN countries

despite their being comparatively less

competitive

Viva News (August 10, 2011)

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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.

A top U.S. trade official urged

Vietnam to undo a number of trade-

restrictive policies aimed at curbing

inflation and reducing the country’s

current account deficit. Deputy U.S. Trade Representative

Demetrios Marantis said Vietnam should find

less trade-restrictive ways to stabilise its

macroeconomy

Marantis said Vietnam’s policies were

hurting U.S. agricultural, industrial and

services exporters

Marantis also warned Vietnam the U.S.

would be pressing in the Trans-Pacific

Partnership Agreement (TPP) pact for

tough rules on “state-owned enterprises”

(SOEs) that account for a large share of the

country’s economy

U.S. business groups want original language

on SOEs in the agreement because of the

potential for the TPP to evolve into an

APEC-wide agreement covering China and

other countries in the region that practice

“state capitalism”

Reuters (August 9, 2011)

U.S. PRESSES

VIETNAM ON

TRADE POLICIES

US, Vietnam

Malaysia’s Ministry of International

Trade and Industry (MITI) has been

receiving feedback on non-tariff

barriers imposed by a number of

ASEAN countries against Malaysian

products, and urged ASEAN

Economic Ministers to remove these

barriers at the 25th ASEAN economic

MALAYSIA STRUGGLES WITH

NON-TARIFF BARRIERS IN ASEAN

Malaysia, Singapore, Brunei, Thailand

ministers-ASEAN Free Trade Area

(AEM-AFTA) council meeting in

Manado, Sulawesi on 10 August 2011 MITI’s minister Datuk Seri Mustapa

Mohamed said MITI will engage various

trade and industry associations within the

next month to obtain feedback on problems

faced by Malaysian businessmen in trading

within ASEAN

The issue of non-tariff barriers has been

frequently raised by the private sector from

within and outside the region

ASEAN Economic Ministers endorsed the

Import Licensing Procedures Guidelines, to

encourage greater transparency in rules and

regulations and to provide advance notice

to the private sector on any new measures

A self-certification scheme, proposed by

the private sector, where exporters make

out invoice declarations on the origin of

goods exported under AFTA has been trialled

in Malaysia, Singapore, and Brunei since 1

November 2010

Thailand is due to join the scheme in

October 2011

The scheme aims to reduce the cost

of doing business and accelerate the

movement of goods

Business Times, Malaysia (August 11, 2011)

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WHAT IS THE TRANS-PACIFICPARTNERSHIP AGREEMENT (TPP)?

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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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The Association of University

Presidents voted to synchronise

academic calendars within ASEAN

universities before the ten nations

merge under the economic

framework in 2015. Aligning semester periods is aimed at

facilitating student exchange programmes

ASEAN UNIVERSITIES VOTE

TO SYNCHRONISE ACADEMIC

CALENDARS

ASEAN

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Universities in ASEAN will soon offer

undergraduate courses that focus on

ASEAN in a comprehensive regional

and global context. The course is being developed by members

of the ASEAN University Network (AUN)

The aim of the course is to enable students

to examine the historical, political, security,

economic and socio-cultural issues that have led

to the emergence of a regional ASEAN identity

Details of the finalised course will be

available through the AUN website

The course will be available by mid-2012

ASEAN Secretariat (August 9, 2011)

ASEAN

COURSE

DEVELOPED FOR

UNIVERSITIES

ASEAN

among member countries as part of the

creation of the ASEAN Community

Further assessments will be carried out to

study the impact on the education system

before a change is made

If approved, the new semester scheme

would take effect in the 2012 academic year

Bangkok Post (August 10, 2011)