PHNOM PENH — The deaths of 39 migrants found dead last month in the back of a truck in the United Kingdom were a grim and tragic reminder that, despite Asia’s world-beating growth rates, poverty and low pay continue to push people to risk their lives to work overseas. Vietnam’s gross domestic product (GDP) per capita has quintupled to US$2,563 over the last 15 years, buoyed by one of the world’s fastest growing economies, but all 39 dead were economic migrants who had left impoverished areas of central and northern Vietnam in search of more gainful employment abroad. As with elsewhere in Asia, these rural regions are dominated by the so-called informal economy, outside of the reach of government protection and regulation. Based on estimates published last year by the World Bank, 47% of all employment in the East Asia and Pacific Region is informal.
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.
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.”
NUSA DUA — Asia is not yet feeling the effects of growing trade friction between China and the U.S., due to the internal strengths of the region’s “solid” economies, according to Takehiko Nakao, president of the Asian Development Bank. The trade dispute “is not as damaging right away,” Nakao told the Nikkei Asian Review on the sidelines of the International Monetary Fund-World Bank meetings being held in Nusa Dua on the Indonesian island of Bali. “The Asian economies are solid,” Nakao said, but he also warned that any escalation of the tariff war between the world’s two biggest economies could hit Asian exporters hard. “If it escalates, if it damages supply chains, as East Asia is connected to [global] supply chains, it could have a dire impact,” Nakao said. The fear is that complex supply chains, in which multinational companies make or source parts for finished goods in countries across Asia before final assembly, often in China, could be disrupted. But for now, domestic demand within Asia’s bigger economies could offset the impact of the trade restrictions, Nakao said earlier at the forum.
KUALA LUMPUR — Laos, as the incoming chair of the 2016 Association of Southeast Asian Nations, has urged member states to agree on a region-wide regime for Special Economic Zones, which have proliferated in recent years. “We think that a framework for Special Economic Zones would be good to set up because we see that in each ASEAN member state, we develop different economic zones,” Laos Minister of Industry and Commerce Khemmani Pholsena told a business forum in Kuala Lumpur during the recent ASEAN summit. Whether Laos can persuade other governments in the region to sign up for a level SEZ playing field is questionable — despite the signing of the ASEAN community in Kuala Lumpur on Nov. 22, just hours before Malaysian Prime Minister Najib Razak ceded the chairmanship of ASEAN to Laos Prime Minister Thongsing Thammavong. “SEZs in Malaysia and the industrial estates in the eastern seaboard of Thailand are much more advanced than SEZs in CLMV [an abbreviation for Cambodia, Laos, Myanmar and Vietnam]. Therefore, to create a common set of rules might be difficult,” said Vanthana Nolintha.
YANGON — Myanmar’s garment manufacturers have signaled their opposition to a proposed national minimum wage of just over $3 per day, saying the increase could force factories in the vital industry to close. “With that wage, businesses cannot survive,” said Khine Khine Nwe, secretary general of the Myanmar Garment Manufacturers Association, which represents 280 factories employing around 200,000 workers. The apparel industry’s resistance to the proposed minimum wage drew a sharp rebuke from local labor groups, as well as the International Trade Union Confederation. “The new minimum wage will still leave workers and their dependents just above the global severe poverty line of $1.25 per person, and many will still struggle to make ends meet,” said ITUC General Secretary Sharan Burrow.
YANGON – Aung Soe, deputy director general of the commerce ministry’s trade promotion department, told the Nikkei Asian Review that “we are still mainly exporting primary products, but we hope this is the beginning of an increase in productivity and competitiveness.” But billions of dollars worth of logs, gems and opium have been smuggled out of Myanmar in recent decades, distorting one of the world’s poorest economies but guaranteeing huge wealth for connected elites. Meanwhile, owners of small and medium-sized enterprises, the majority of the country’s businesses, have typically found it difficult to get bank loans due to stringent borrowing requirements, denying them vital funds to grow their businesses or to finance exports.