PHNOM PENH – Chinese telecommunications giant Huawei predicted in late December that the number of 5G connections worldwide would jump from around 20 million in 2019 to over 200 million by the end of 2020. Nowhere will the corporate and geopolitical contest to lead that rollout be more hotly contested than in Southeast Asia. Since a successful launch of commercial 5G services last April in South Korea, where around 3.5 million people have signed up for more expensive high-speed 5G and are using three times the data of 4G subscribers, mobile network providers across Asia could be set to cash in if the technology is made widespread soon. If those millions can soon become tens or even hundreds of millions, 5G, which promises download speeds between 20 to 100 times faster than the current leading 4G system, could revolutionize fields from public transport to healthcare to manufacturing, a potential that Dutch bank ING suggests could be “an economic light-bulb moment.”
BANGKOK — A confluence of drought and dams along the Mekong River has renewed concerns about the future of the 4,763 kilometer waterway, upon which tens of millions of people depend for their livelihoods in Cambodia, Laos, Myanmar, Thailand and Vietnam. The number of dams impeding the Mekong’s flow is fast multiplying, drying up segments of the once fast-flowing river and leaving the region facing imminent drought, according to the Mekong River Commission (MRC), a regional intergovernmental body that aims to jointly manage the river’s water resources. “China’s operators of the Jinghong Dam and the Thai operators of the newly opened Xayaburi dam in Laos conducted operations that actually exacerbated the drought,” said Brian Eyler, director of the Southeast Asia program at the Stimson Center, a US think tank. “Those dams and more than 70 others now operational in Laos and China all contribute to deteriorating downstream conditions related to the drought.”
BANGKOK — Indonesian leader Joko Widodo is bidding to put a new generation shine on his second term administration with the appointment of young business entrepreneurs and other experts to his 12-member presidential staff. Whether the new blood appointments can counter the influence and power of the many old school politicians appointed to Widodo’s new Cabinet will likely determine the new government’s reform legacy. Re-elected to a new five-year term at polls in April, Widodo recently appointed seven new top advisors aged between 23 and 36. The move came after he tapped Nadiem Makarim, the 35-year-old founder of ride-hailing giant Gojek, as his education minister.
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 – Perhaps trying to pick up the pieces after President Donald Trump skipped an October 31-November 4 series of summit meetings organised by the Association of Southeast Asian Nations (ASEAN), a ten country regional organisation, the United States Secretary of Defense Mark Esper spent the last week exchanging bromides and handshakes in South Korea, Thailand, the Philippines and Vietnam. The trip’s purpose, Esper said on the flight to Asia on November 13, is “to reinforce the importance of allies and partners, discuss key issues to make sure that they understand clearly that the INDOPACOM [Indo-Pacific] theater is DOD’s [Department of Defense] number one priority.”
PHNOM PENH — The world’s proposed biggest free trade agreement was dealt a blow on Monday when India made a last minute but unsurprising withdrawal from seven-year-old negotiations during a series of weekend meetings of Asian governments in Bangkok. The Regional Comprehensive Economic Partnership, or RCEP, would have encompassed all ten members of the Association of Southeast Asian Nations (ASEAN), as well as Australia, China, India, Japan, New Zealand and South Korea. It also would have made for the world’s biggest trade deal measured by population and factoring in the combined gross domestic products (GDPs) of the putative signatories, though India’s withdrawal could see it drop below the Canada-Mexico-United States deal formerly known as NAFTA in combined GDP. India would have been the third largest economy in the tariff-reducing trade deal.
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 – 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.
JAKARTA — While global foreign direct investment (FDI) dipped in 2018 for a third consecutive year, Asia bucked the global trend with rises nearly across the board, including record inflows to Southeast Asia’s booming economies. New United Nations Conference on Trade and Development (UNCTAD) data released today (June 12) shows total worldwide FDI fell 13% to US$1.3 trillion in 2018, as global economic uncertainties grew over the US and China’s increasingly antagonistic trade and investment policies, particularly in strategic sectors such as digital and mobile technology. But “developing Asia”, a region encompassing most of the continent aside from wealthy countries such as Japan, saw a 4% rise in foreign direct investment to $512 billion, representing 39% of the global total, according to UNCTAD’s 2018 World Investment Report.
SINGAPORE — China’s top security official articulated today (June 2) an uncompromising defense of his country’s stance on the contested South China Sea and threats to invade Taiwan in an anticipated address at a top security conference in Singapore. “Building facilities on one’s own territories is not militarization,” Lieutenant General Wei Fenghe said, responding to accusations that China has militarized islands in the sea as a means of taking effective control of what the US and others regard as international watersWei also warned of a “fight to the end” with the US in their escalating trade spat, and a “fight at all costs” for “reunification” with Taiwan, the island country China considers a renegade province. The US has recently upped its strategic support for the democratically-run Taiwan, much to Beijing’s chagrin.“No attempts to split China will succeed. Any interference in the Taiwan question is doomed to failure,” said Wei, dressed in his People’s Liberation Army (PLA) uniform.