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”.
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.
PHNOM PENH – Cambodia appears to be the latest beneficiary of the US-China trade war, joining the already exhaustively profiled Vietnam among the countries enjoying increased exports to the US as tariffed Chinese goods open the door for other cheap suppliers. Latest US government data show annual imports from Cambodia rising significantly since the start of the year, with the US$1.8 billion registered from January-May a roughly 20% increase on the same period last year. Like Vietnam, Cambodia has duty-free access to American markets under the Generalized System of Preferences, a trade program designed to promote economic growth in the developing world. Trade represented 125% of Cambodia’s gross domestic product (GDP) in 2017, according to the World Bank. In 2018, the bulk of Cambodia’s goods exports to the US were clothing and footwear, with the Office of the US Trade Representative listing the top four sectors as knit apparel ($1.8 billion), woven apparel ($628 million), leather products ($390 million), and footwear ($329 million). Cambodia’s 2018 trade surplus with the US was $3.4 billion — which, though relatively-small compared with Vietnam’s near-$40 billion for the same year — will continue to rise this year as Cambodia’s exports to the US surge. Parsing the numbers for a direct trade war link is not as clear-cut as it may seem, however, with both Vietnam – where trade represented 188% of GDP in 2018 – and Cambodia expanding their commerce with the US since before the start of the tariff war.
KUALA LUMPUR — At an age when most people would either be dead or coming up on three decades’ retired, Mahathir Mohamad shows no signs of slowing down in his second coming as Malaysia’s prime minister. It has been a hectic year-and-a-bit back in office for the world’s oldest head of government, who turns 94 today. From renegotiating multi-billion-dollar railway construction deals with China to lambasting the European Union over proposed curbs on palm oil imports, he has arguably been as dynamic as any leader living. Making regular public appearances and often giving lengthy speeches – hands on podium and his back goalpost-straight throughout – Mahathir is, as he put it in March, “in a hurry”. “I realise I don’t have much time,” he explained. It’s not just Mahathir’s prodigious age that has the clock ticking. After he led the Pakatan Harapan (PH, Alliance of Hope) coalition to a historic first-ever opposition win in Malaysia’s parliamentary elections last year, the idea was that Mahathir – the country’s longest-ruling leader by dint of his first 1981-2003 tenure – would step down after a year or two in favour of former protégé-turned-nemesis-turned-ally Anwar Ibrahim, the leader of the Parti Keadilan Rakyat (PKR, People’s Justice Party), the biggest party in the PH alliance.
KUALA LUMPUR — “We do not want to choose between the United States and China.” So said Malaysia’s Deputy Defense Minister Chin Tong Liew during a speech last week on his country’s relations with China. Earlier this month the U.S. Secretary of Defence and his Chinese counterpart told a conference of defence ministers in Singapore that they do not expect other countries to takes sides. But many in Southeast Asia fear this is a choice they will have to make, given the increasingly-acrimonious Chinese-American rivalry.
KUALA LUMPUR — The United States has kept Malaysia on its watch list of countries that do not meet minimum efforts for the elimination of human trafficking. The 2019 Trafficking in Persons (TIP) report, launched on June 20 by U.S. Secretary of State Mike Pompeo, said Malaysia’s government had not demonstrated overall increasing efforts compared with the previous year. But the report noted that Malaysia’s year-old government led by Prime Minister Mahathir Mohamad had initiated an official Royal Commission of Inquiry into the mass graves of human trafficking victims at Wang Kelian near the border with Thailand. “In general, the situation has not changed in any significant way,” said Dobby Chew of human rights group Suara Rakyat Malaysia.
KUALA LUMPUR — The Philippines appears to have won its long-running and often heated dispute with Canada over 69 shipping containers brimming with Canadian waste left to rot at two Philippine ports since 2013.Ottawa announced on Wednesday (May 22) that it had hired a private company to take back the refuse, which the Philippines has said was wrongly classified as recyclable. Officials said the waste would be back on Canadian soil by June.Ottawa’s announcement came after the Philippines said it would ship the containers back to Canada after a May 15 deadline announced by Philippine President Rodrigo Duterte had lapsed.
SINGAPORE — Just over a year ago the United States moved its embassy in Israel from Tel Aviv to Jerusalem, sparking protests in Muslim-majority countries and drawing official condemnation at the United Nations. An estimated 30,000 people demonstrated in Jakarta as Indonesian President Joko Widodo said his country “rejects” the American move as it “may disrupt the peace process in Israel and Palestine.” In late 2017, when US President Donald Trump announced he would live up to his campaign promise to move the embassy, the Malaysian government endorsed a huge protest at the US embassy in Kuala Lumpur, while Asia’s Muslim UN representatives lined up in New York to excoriate the US.
KUALA LUMPUR — New economic data shows that foreign remittances sent to Asian countries hit US$300 billion for the first time last year, underscoring the ever-rising importance overseas work for the region’s laborers despite world-beating economic growth rates. Freshly released World Bank statistics put the total amount of remittances for 2018 to countries in South Asia, Central Asia, Southeast Asia, East Asia and the Pacific at $299.6 billion, a sum that does not include what are believed to be substantial informal flows of money sent home by regional migrants. Globally and in Asia, remittance figures are growing year by year, despite heady 6-7% gross domestic product (GDP) growth in countries such as the Philippines, a nation which has around 10 million of its citizens working abroad across various vocations. The 2018 amount of regional remittances was around $25 billion greater than in 2017 and $125 billion more than in 2008. Worldwide, remittance flows now account for more than foreign direct investment to middle and low income countries excluding China, the World Bank data shows.
KUALA LUMPUR — Laguna Restaurant, a two minute walk downhill from St. John’s Cathedral – the centre of Catholic worship in Kuala Lumpur – is a home away from home for Philippine expatriates in Malaysia hankering for a taste of the motherland. Owner Ronnie Tan launched Laguna six and half years ago after spotting a gap in the market in a country where hundreds of thousands of Filipinos live. They work in a diverse range of industries – from construction to casinos, and IT to domestic work – but at the weekend many can be found in the Laguna. “On weekends it is full. If you say Sunday, I believe 95 per cent are Filipino customers,” Tan said.