although its exports and currency have

declined

Investors have sold off Indonesian assets,

but the central bank believes that it has

enough foreign reserves to protect the

Rupiah

Why it matters: ASEAN must prepare

contingency measures should there be a

Eurozone contagion. It should strengthen

cooperation in financial security and agree

on a release mechanism for the funds in the

Chiang Mai Initiative.

Carnegie Endowment for Peace

Straits Times, Yahoo! News (1 June 2012)

exploration, Petronas LNG’s Nazlee

Aziz said. ASEAN gas prices paid by end users have

been kept artificially low, but they should

now face real world gas market prices, said

1 1 JUNE 20 12 I SSUE 80

CARICAPTURES

BETA

14

82

5

9 3

7

610

Although ASEAN withstood the

2008 US subprime mortgage crisis,

its commodities trade and financial

markets are closely tied to European

markets making it vulnerable to the

disaggregation of the Eurozone. Most Southeast Asian economies are

already showing signs of slowing export and

GDP growth in the first quarter of 2012

Malaysia reported unchanged growth in

exports in April due to weak demand from

European markets

Indonesian officials downplayed the

impact of the deepening global crisis,

ASEAN

02 ASEAN NAtioNS NEEd to fAcE

rEAl world gAS mArkEt

ASEAN must address inefficiencies

created by policies such as natural

gas subsidies initially meant

to diversify sources, but which

now hamper gas investment and

ASEAN, EU

01 ASEAN rEActS to thE EurozoNE

criSiS

Aziz on 5 June at the World Gas Conference

2012 in Kuala Lumpur

With the exception of Singapore, all other

ASEAN countries have a gas price that is

regulated and normally lower than market

conditions

The low, regulated gas prices have

discouraged exploration of new reserves,

Aziz added, saying that the situation was

unsustainable and puts security of supply

at risk

Most gas in ASEAN countries will be

for power generation, with the exception

of Indonesia, which will continue to rely

heavily on coal because of its status as the

largest coal producer in the world

Platts (5 June 2012)

top 5 ASEANtrade Partners 2010

Source: ASEAN Secretariat

11 15 0606 ‘12 ‘12

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.

chairman of Fortis Healthcare, said the free

flow of talent should happen earlier rather

than later as a more open market would

encourage competition and investment

Why it matters: The ASEAN Economic

Community project to be realised in 2015

will pave the way for the free flow of skilled

labour in eight professions comprising

doctors, dentists, nurses, engineers,

architects, accountants, surveyors and the

tourism industry.

Bangkok Post (5 June 2012)

The Indonesian government is riding

off strong economic performance

and passing a wave of new policies

which pose obstacles for foreign

investors in several sectors including

banking, mining, and construction. The government annulled international

tenders for the construction of a new

port at Tanjung Priok in North Jakarta

and contracted the government-linked

Indonesian Ports Corporation for the US$1.9

billion project

Indonesia’s Chamber of Commerce and

Industry (Kadin), capped the export of

14 metals, in order to increase upstream

production in the country

The central bank will limit foreign

ownership of domestic banks to 40%,

which would block the acquisition of Bank

Danamon by the Singaporean-based DBS

Holdings, although there are hints that this

deal may be exempted from new laws

Meanwhile, lawyers for Churchill Mining

are suing the Indonesian government for

US$2 billion for an uncompensated asset

seizure in East Kalimantan, attracting the

attention of other mining companies and

highlighting the uncertainties of investing

in Indonesia

Why it Matters: While analysts say

Indonesia’s new rules are part of a trend

in resource nationalism, a closer look at its

banking sector shows that it is has been

more liberal than other ASEAN members

and these new laws level the playing field.

Asia Sentinel, New York Times

(6 June 2012)

ASEAN

ASEAN

Indonesia

04

03 05

ViEwS mixEd oN ASEAN lAbour

flow

dEbAtE hEAtS uP oVEr ASEAN

bANkiNg iNtEgrAtioN

mouNtiNg

EcoNomic

Integration in some areas in

ASEAN such as labour should come

gradually to ease the risk of a “brain-

drain”, said Joseph E Stiglitz, Nobel

Laureate in economics and professor

at Columbia University, at the World

Economic Forum on East Asia. With countries investing in people who

later on move somewhere else, there

needed to be a form of compensation for

The ASEAN Banking Integration

Framework (ABIF) which was

endorsed in April 2011 by ASEAN

central bank governors has invoked

vigorous debates on ASEAN’s efforts

to integrate its banking sector, wrote

Joko Siswanto and Maria Monica

Wihardja, Bank Indonesia. One debate is on the definition of

integration and its benchmark indicators

The ASEAN Framework Agreement on

Services (AFAS) says banking integration

is measured by cross border bank flows,

consumption abroad, commercial banks

presence and the movement of people,

Services integration:banking debate

that country, said Stiglitz

“We have to invest in the creativity of

our people, and countries moving fast will

attract more. That’s why competition in

ASEAN is important. A lot of multinational

corporations are creating an advantage in

this landscape, and we have to encourage

ASEAN labour to move around and help

develop all these economies”, said ASEAN

secretary-general Surin Pitsuwan

However, Malvinder M Singh, executive

while ABIF’s concept of integration is based

on the commercial presence of Qualified

ASEAN Banks

Another debate is on the benefits,

opportunities, costs and risks of ABIF

ASEAN is also being urged to reconsider

the varying impact of ABIF on Malaysia,

Indonesia, Singapore, Thailand, the

Philippines versus Brunei, Cambodia, Laos,

Myanmar and Vietnam

Less financially developed countries may

not be able to bail out large international

banks, deterring banks and capital from

entering those markets

Jakarta Post, East Asia Forum (7 June 2012)

NAtioNAliSm iN

iNdoNESiA

ASEAN Framework Agreement on Services - Promotes liberalisation of trade

in services by 2015. The agreement was signed on 15 December 1995.

ASEAN Banking Integration Framework – Promotes banking liberalisation.

The multilateral framework was endorsed by ASEAN central bank governors on

7 April 2011.

11 15 0606 ‘12 ‘12

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.

mYANmAr

moNitor06Economy

Myanmar will hold an investment summit

in Yangon from 20-21 June. The New

Myanmar Investment Summit 2012 will

review the outlook and and opportunities

for investments in Myanmar and serve as

a platform for foreign investors to gather

information.

Daily Star (6 June 2012)

PTT, Thailand’s biggest oil and gas

conglomerate, plans to open petrol service

stations in Myanmar next year, saying the

time is right to enter the newly opening

neighbour before competition from other

major brands intensifies. PTT will set up

a company in Myanmar within a year for

the retail network to be developed next

year, said Nuttachat Charuchinda, chief

operating officer of downstream petroleum

business.

Bangkok Post (5 June 2012)

Politics

Myanmar‘s state run press, the New

Light of Myanmar, praised Aung San Suu

Kyi on 5 June for her work with President

Thein Sein, calling the pair “the hope of

Myanmar”. The publication came amid

reports of tension between the president

and the opposition leader after her trip to

Thailand.

Associated Press (7 June 2012)

Myanmar’s government is open to

changing the constitution to reduce the

role of the military, which now has 25% of

all parliamentary seats according to the

2008 constitution, said Defence Minister

Hla Min. “This 25% participation could

be reduced in the future if and when it

is appropriate”, he said. Changing the

constitution requires support from more

than 75% of lawmakers.

Bloomberg (3 June 2012)

Foreign Affairs

Switzerland is planning to open an

embassy in Myanmar this summer as its

government expects the presence of Swiss

citizens to increase in Myanmar. It will be

the 24th country to open an embassy in

Myanmar.

Mizzima (4 June 2012)

Myanmar will host the World Economic

Forum (WEF) on East Asia in 2013,

according to Klaus Schwab the founder

and executive chairman of WEF. Myanmar

is also scheduled to host the 2014 ASEAN

summit.

Mizzima (4 June 2012)

07 PhiliPPiNES-uk trAdE

booSt

Philippine President Benigno Aquino

witnessed the signing of more than

US$1 billion in business agreements

between British and Filipino

companies. Aquino visited Britain from 4 to 6 June

and the US from 7 to 9 June

The Philippines would like to get direct

government and private investments to

generate jobs and not just developmen-

tal aid, said Presidential Communications

Development and Strategic Planning Office

Secretary Ricky Carandang

Once one of Asia’s laggards, the Philip-

pines is performing much more strongly

after Aquino launched a drive to tackle cor-

ruption and reduce waste from government

spending

His initiative helped lead the country to

a series of credit-rating upgrades in recent

months, restoring investor confidence in

the country

ABS-CBN (6 June 2012)

ASEAN

08 ASEAN fArES bEttEr iN trAdE

AccESS rANkiNg

ASEAN members improved in their

ability to ease trade flows, according

to the Global Enabling Trade Report

2012. Singapore retained its top position as the

most prominent enabler of world trade,

while other ASEAN countries recorded

marked improvements

The biennial report released by the World

Economic Forum, covering 132 economies

worldwide, measures the extent to which

individual economies have developed

institutions, policies and services

facilitating free flow of goods over borders

to destinations

The report also found that traditional

notions of trade are increasingly outdated

as global value chains require new

measurements, policies and cooperation

Why it matters: The 2012 results

demonstrate that the ASEAN Trade in

Goods Agreement has facilitated trade

since its entry into force in 2010, according

to Margareta Drzeniek Hanouz, Senior

Economist of the Global Competitiveness

Network

Philippine Daily Inquirer (5 June 2012)

global trade openness ranking for ASEAN

countries

(Brunei, Laos, Myanmar were not included in the survey)Source: World Economic Forum

Philippines, UK

11 15 0606 ‘12 ‘12

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.

Editorial Team: Angela Goh, Manissa van Geyzel, Han Fang Rong, Chayut Setboonsarng, Manoj Nair

Consultant Editor: Tunku ‘Abidin Muhriz Designer: Iqbal Hakim

ASEAN

10 culturAl iNtEgrAtioN

imPortANt for ASEAN

The push for regional integration

tends to focus on economic

initiatives, yet cultural integration

can also create economic value,

said Mari Elka Pangestu, Indonesia’s

Minister for Tourism and Creative

Economy. ASEAN countries share similar cultural

roots in food, music, arts and film, and

those industries could become valuable if

linked to tourism and trade, she explained

Government could assist those by

implementing supporting policies, noted

Karim Raslan, group chief executive officer

of KRA Group

In the education sector, an ASEAN

curriculum sourcebook will be launched in

July 2012 for classroom training in primary

and secondary schools across the region

The sourcebook includes topics to help

students understand their neighbours

cultures; how depleting biodiversity affects

the ecosystem; or how the United Nations

Declaration of Human Rights applies to

ASEAN

Bangkok Post, ASEAN Secretariat

(5 June 2012)

Singapore

09 SiNgAPorE to ExPANd rolE AS

ASiAN iP hub

Singapore’s Ministry of Law (MinLaw)

is aiming to expand Singapore’s role

as an Asian Intellectual Property

(IP) hub, and service the potential

growth in demand for such services

in the region. MinLaw had announced earlier the

setting up of an IP Steering Committee to

formulate the IP Hub Master Plan to guide

Singapore’s development as an IP hub

Industry players have also earmarked

China and India as potential contenders

vying to be the next IP hub in Asia

Why it matters: Intellectual Property is

increasingly important as a key component

of the global economy.

AsiaOne, Channel News Asia (4 June 2012)