PHNOM PENH — Asian governments appear increasingly reluctant to implement the kind of pro-business reforms that could help offset slowing economic growth and other debilitating impacts of the US-China trade war. The World Bank’s latest “Doing Business” survey, a comparative global index of countries’ business environments previously known as “Ease of Doing Business”, shows the number of “business climate-enhancing” reforms implemented in East Asia and the Pacific fell by a quarter over the 12 months through May this year compared with the previous year. Referring to the region, the World Bank’s survey said “the overall pace of reforms slowed.” The Doing Business survey released last week compiles 11 criteria ranging from electricity access to labor market rules that it sees as crucial to the commercial success of small and medium-sized enterprises. The survey does not take into account wider issues such as national financial systems, macroeconomic policies or perceptions of political stability.
PHNOM PENH — In parallel signals that press freedom remains under duress in parts of Southeast Asia, courts in Cambodia and Myanmar recently ordered reruns of cases against prominent journalists. The decisions, announced within days of each other in late September and early October, came as other countries in the region weighed up new laws concerning freedom of speech. On Sept. 30, a court in the central Myanmar city of Mandalay ordered a re-hearing in a lawsuit against Swe Win, the editor of local news publication Myanmar Now, who was accused of defaming a prominent Buddhist monk. Then on Oct. 2 a judge in Phnom Penh ordered a reinvestigation of former Radio Free Asia journalists Yeang Sothearin and Uon Chhin, who are facing between seven and 15 years in jail over charges of espionage and the production of pornography. On the day of the Cambodia announcement, Sothearin told reporters outside the court that he was “very disappointed” with the prospect of reinvestigation, which local civil society groups said showed that the charges were politically-motivated in the first place. Both the Cambodian and Myanmar decisions mean a double prolongation of cases that otherwise had looked to have run aground, and Rohit Mahajan, RFA’s vice president of communications and external relations said that the Cambodian case decision was “an admission of there being no real evidence to convict.”
PHNOM PENH — Dependent on its increasingly assertive neighbour China for investment and on faraway markets in Europe and North America for exports, Cambodia’s 16.2 million people, like residents of any small country, are exposed to the flux and churn of fortune and influence from without. Such vulnerabilities are not just economic. The national language, Khmer, is increasingly treading lexical water, as if about to be pulled under by waves of technological and scientific neologisms. “Hundreds of new technical, scientific and legal terms are added into the English dictionary every year,”said Khoun Theara of Future Forum, a Cambodian think tank.Such terms, usually coined first in English, present tongue-twisting translation dilemmas for Khmer speakers trying to localise new words in what is the mother tongue for around 97% of Cambodians. That is not to say that other tongues in the region do not face similar dilemmas. “All Southeast Asian languages have difficulty in adapting to the modern world,” said Jean-Michel Filippi, professor of linguistics at the Royal University of Phnom Penh.
PHNOM PENH — In late September, protestors in Central Java, on Indonesia’s most populous island, stood outside a regional government office and vented their frustration at what they saw as inaction over complaints that the towering smokestacks of a nearby coal-fuelled power plant had been sputtering ash onto their farms. With “we need clean air” and “we are covered in coal dust,” among the jeremiads, the protests echoed another long-standing struggle – near Batang, also on Java. There, locals have fought for years against the imminent opening of a 2,000-megawatt coal-fired power plant, part of the government’s plans to expand the electricity grid by 35,000 megawatts to meet the energy demands of an economy growing at 5% a year. Such protests are likely to become more common across the region in the coming years, as urbanisation, industrialisation and increasing consumer spending in Southeast Asia’s growing economies spur a surge in energy demand. This in turn will likely prompt a trend-defying expansion of coal-fired power plants over the coming years even as most other regions lower their dependence on coal over environmental concerns.
BIMA — At first Kiki Mariam wasn’t too concerned as the tail end of a cyclone sent cascades of roof-rattling rain onto the riverside home she shared with her husband Robitan in Bima, a city of around 170,000 people on the Indonesian island of Sumbawa.“At first the water was low and then it got higher,” the 37-year-old recalled, one hand resting on a sawdust-speckled workman’s table, the other pointing to the riverbank a couple of yards away. Now the river is flowing as normal, about ten feet below ground level down a 70 degree angle bank. But during that mid-December morning in 2016, as the rain beat down hour after hour, Mariam saw the river’s ineluctable swell and soon forgot her breakfast-time frustration about a leaking roof. “I didn’t think it would get higher than that,” Mariam said, pointing at the riverbank. But as the rain hammered down relentlessly, the river rose and rose, until the water, ominously, was climbing close to ground level. “We saw it wasn’t going to stop – it took quite a long time, but it came,” Mariam said. “I was really scared, we were asked to leave, so we grabbed what we could and moved away from the river,’ she said, as husband Robitan, 39, pointed to a head-high spot on a nearby wall, the faded difference in hue indicating the high water mark of the 2016 deluge that destroyed their house and left 100,000 people homeless in and around Bima.
PHNOM PENH — Visiting Dili in late August to mark the 20th anniversary of East Timor’s blood-soaked vote for independence from Indonesia, Australia’s Prime Minister Scott Morrison declared the opening of a “new chapter” in bilateral relations. “In a region where some boundary disputes remain unresolved,” Morrison said, in a seeming reference to the disputed South China Sea farther north, “Australia and Timor-Leste have set an example by sitting down, as neighbours, partners, and friends, to finalise a new maritime boundary.” Though Morrison followed up by announcing plans to help upgrade East Timor’s internet connectivity and its navy, his Timorese counterpart Taur Matan Ruak was less gushing. “Today will mark a new beginning, a new phase for both countries,” he said. The implication, of course, was that the previous two decades of the relationship had been less than amicable. While Australia stood by the hundreds of thousands of East Timorese who defiantly voted for independence in the face of scorched-earth Indonesian-backed intimidation, sending 5,000 soldiers to the country shortly after the vote, it later stood accused of strong-arming its tiny and impoverished neighbour out of billions of dollars of vital oil and gas revenues – in part by refusing to delineate a maritime boundary in the Timor Sea until 2018.
PHNOM PENH – Going by the sometimes breathless reports about how well Vietnam has done out of the US-China tariff joust, a reader would be forgiven for thinking that an authoritarian single-party state where farmers make up 40% of the workforce has been transformed into a kind of scaled-up Singapore, which despite its small size usually sucks in around half the annual foreign investment bound for Southeast Asia. The numbers in so far suggest that Vietnam’s trade war triumph is indeed nigh. Its economy grew by just over 7% in 2018 – though that has dipped a notch, according to government statistics, to around 6.7% so far this year. But even that slight fall-off will nonetheless make for high growth – due in part to record levels of foreign investment, including some business seemingly diverted to Vietnam as American tariffs add to the cost of exporting to the US from China. “Following the US-China trade tensions, there is evidence of companies making adjustments to avoid the high tariffs situation,” said Bansi Madhavani, economist at ANZ Research, part of Australia and New Zealand Banking Group. According to Madhavani’s counterparts at Maybank Kim Eng, part of Malaysia’s Maybank, Vietnam “is emerging as the biggest beneficiary” of those adjustments, “with FDI [foreign direct investment] registration up by +86% in the first quarter of 2019”.
PHNOM PENH — With no end in sight to the so-called trade war between the US and China, the European Union (EU) sees a chance to act as the guardian of free trade and hold its own against the two giants. But as the bloc gets increasingly bogged down in spats with individual Southeast Asian countries, prospects for a wider regional trade relationship look increasingly precarious. With Cambodia’s eligibility for preferential market access to the EU coming under question and with the likelihood growing that Myanmar could be put under similar scrutiny, the EU appears to be hedging against any consequent damage to its relations with Southeast Asia by seeking free trade agreements and closer defence ties with some of the region’s countries. While for now Cambodia can export duty-free to the 28-country, 513 million-population European Union market, this week saw the end of the “monitoring and engagement” phase of a review of that access, potentially putting $5 billion worth of Cambodian garment exports at risk. A European Commission spokesperson said in an August 12 email that “over the next six months, the Commission and the European External Action Service will analyse all the evidence collected”.
KWANGKO, SUMBAWA ISLAND — As afternoon turns to evening and the high and blinding sun sinks slowly toward the horizon, Zubaidi still keeps the peak of his cap tilted slightly down, all the better to run an eye over the sky-blue paint job on the small skiff he and his small team are putting the finishing touches to. Behind Zubaidi’s seaside house, set about three feet up on stilts to keep the floor above any high tide, the whine of the electric saws and planes readies another batch of precision-cut timber for the next boat, each one to be sold to eager local fishermen at 1.5 million Indonesian Rupiah (US$106) a pop. Less than two years before, Zubaidi and team had to saw the planks by hand. It was only a year and a half ago that his tiny village of Kwangko on the coast of the island of Sumbawa was connected to the national electricity supply. “I can do three times as much now, more than I had before we got power,” Zubaidi says. “Now you have to pre-order if you want a boat.”
PHNOM PENH – Tax And Spend has rarely been part of the Southeast Asian governance lexicon. And judging by the region’s dismal tax-to-gross domestic product (GDP) ratios, it doesn’t look like that will be changing anytime soon. Newly published revenue statistics compiled by the Paris-based Organisation for Economic Co-operation and Development (OECD) show that the five biggest Southeast Asian economies have ratios of half or less than the 2017 OECD average of 34.2%, though most countries in the region showed small increases in revenues compared with the previous year. The OECD defines the tax-to-GDP ratio as “total tax revenue, including social security contributions, as a percentage of GDP”. While more prosperous countries in Southeast Asia’s vicinity such as Australia, Japan and New Zealand all come in around the 30% mark, Southeast Asia’s own numbers were much lower, with Indonesia at 11.5%, Malaysia on 13.6 and Singapore only slightly above on 14.1. This last number in particular seems surprisingly low given that Singapore’s economy more resembles higher-tax Western counterparts than its neighbours in Southeast Asia.