JAKARTA — Southeast Asia is bucking the global trend of falling direct foreign investment, as the low-cost fast-growing region solidifies its position as an attractive location for multinationals. James Dyson’s recent decision to relocate the headquarters of his eponymous technology business to Singapore is not about Brexit, the company said. Rather, the British tycoon said he is looking to a region that continues to exhibit solid growth — “future proofing” as his chief executive termed it. The move follows an October announcement that Dyson — famous for its vacuum cleaners — will make electric vehicles in Singapore, citing the city-state’s proximity to “high-growth markets” in emerging Asia, where annual gross domestic product could grow by 6.1% between now and 2023, according to the Organization for Economic Cooperation and Development. Asia received a third of global investment in 2018 and accounted for nearly all the year’s investment growth, according to the United Nations Conference on Trade and Development. This is despite global foreign direct investment (FDI) declining 19% in 2018. Japanese retailer Aeon opened a second large mall in Cambodia in June as part of its regional expansion plans, which this year will include new shopping centers in Hanoi and Bogor, Indonesia. “As for South East countries, generally speaking, they have been showing rapid economic growth and will keep their pace in future, too,” an Aeon Asia spokesperson said.
WhatsApp grapples with growing influence ahead of elections – Nikkei Asian Review
JAKARTA — When Mahathir Mohamad’s Alliance of Hope coalition surprised the world — and perhaps even themselves — by winning last May’s parliamentary vote in Malaysia, it was not just the first-ever opposition election win in the country’s history. Some saw it as the result of the first “WhatsApp election,” where the platform’s encrypted private messaging provided a sanctuary for citizens to discuss politics away from the raucous finger-pointing of social media platforms such as Twitter and Facebook. WhatsApp “offered security in that messages would come from ‘trusted’ contacts and thus be more ‘believable'” than open services such as Facebook or Twitter, said Serina Abdul Rahman, whose election research for the Singapore-based ISEAS-Yusok Ishak Institute took her to rural areas in the south and north of Malaysia. Apprehension over commenting publicly was likely heightened by Prime Minister Najib Razak’s anti-fake news law, which was announced ahead of the elections. Some saw the law as a tool for Najib to avoid public discussion of corruption allegations related to the scandal-riddled sovereign wealth fund, 1MDB.
Public debt in “emerging Asia” creeps past 50% of GDP – Nikkei Asian Review
Government debt in emerging Asian economies hit 50% of gross domestic product in the third quarter of last year, according to estimates by the Institute of International Finance, in a trend that suggests a regional shift away from fiscal conservatism. “Entering a financial crisis with a weak fiscal position worsens the depth and duration of the ensuing recession, particularly in emerging-market economies, because fiscal policy tends to be procyclical in these cases,” said Vitor Gaspar, director of the International Monetary Fund’s Fiscal Affairs Department. While government debt in emerging Asia is creeping up, it remains low compared with Japan’s 223.1% of GDP and 100.8% in the U.S. “The relatively low public debt gives the region more buffer against a potential global downturn, enabling policymakers to use expansionary fiscal policy to support demand,” said Frederic Neumann, co-head of Asian economic research at HSBC.
Asian countries seek to pull millions out of informal economy – Nikkei Asian Review
JAKARTA — Governments across Asia are seeking to bring millions of informal workers into regulated employment, and stem a major economic drag on the world’s fastest-growing region. Bangladesh, Indonesia and China have taken steps this month that could help formalize employment for a vast pool of workers that are struggling on the margins of their economies, many as self-employed merchants or agricultural laborers. The World Bank estimates that informal workers make up 47% of jobs in the East Asia and Pacific region, with the figure rising to between 60% and 80% in lower income countries such as Myanmar and Laos. The government in Dhaka last week signed a $250 million deal with the institution aimed at supporting efforts “to create large-scale, better-paid and inclusive jobs.”
Thunderstorms batter tsunami-hit Java and Sumatra on anniversary of 2004 Indian Ocean catastrophe – France 24/TRT World
Updating on the recovery operations in Indonesia after the Dec. 23 tsunami that hit the coast of Sumatra and Java, both sides of the Sunda Strait
Indonesia’s volcano-tsunami death toll nears 400 – France 24/RTÉ
TV and radio from Jakarta about the December 22 tsunami in the Sunda Strait
Tsunami linked to volcano kills over 200 in Indonesia – Los Angeles Times/RTÉ/France 24
JAKARTA — The sea rose up without warning Saturday night, crashing into coastal villages on Indonesia’s two most populous islands. It killed at least 220 people, washing away buildings, roads and a rock concert on the beach, officials said Sunday evening. The tsunami that struck the western tip of Java and the southern tip of Sumatra was believed to have been triggered by an underwater landslide from the flank of an erupting volcano. Officials in Jakarta said hundreds more people were injured and 30 were missing after the tsunami, the latest in a string of deadly disasters that have killed thousands in Indonesia this year. About 600 buildings were damaged, officials said. Soldiers and rescue workers moved quickly to clear roads blocked by debris; television and social media video showed survivors pulling at wreckage trying to find loved ones. “People are still afraid to go back to their homes since there were still rumors that a tsunami might strike again,” said Aulia Arriani, a spokeswoman for the Indonesian Red Cross.
As Malaysia nears high-income status, focus turns to neighbours – Nikkei Asian Review
KUALA LUMPUR — Malaysia is on track to achieving high-income status, according to the World Bank, while many of its Southeast Asian neighbors face the prospect of being caught in a middle-income trap. “Malaysia is well on its way to cross the threshold into high-income and developed country status over the coming years,” Victoria Kwakwa, the World Bank vice-president for East Asia and Pacific, said this month after meeting Prime Minister Mahathir Mohamad. Malaysia’s gross national income per capita has grown from $1,980 in 1981, when Mahathir first became prime minister, to $9,650 in 2017. Even so, the country still has some way to go to reach the World Bank’s developed country benchmark of $12,055. “As long as the country does not face growth stagnation, it is inching toward the high income level as defined by the World Bank,” said Yeah Kim Leng, Professor of Economics at Sunway University Business School in Kuala Lumpur. “Hence, it’s a question of when, give or take a couple of years, as long as it is able to sustain its current growth momentum.”
Southeast Asia braces for more oil price swings ahead of OPEC meeting – Nikkei Asian Review
JAKARTA — Rattled by rapid oil price swings in recent months, Southeast Asian economies are on tenterhooks ahead of an OPEC meeting this week that is expected to result in a supply cut to boost prices. The recent plunge in prices — the benchmark Brent crude dipped under $60 a barrel last week — has benefited economies such as Indonesia and the Philippines that are net importers of oil. This is helping to blunt the inflationary effects of currency slides against the U.S. dollar in these countries, which are caught in the crossfire of the U.S.-China trade war. Oil rebounded as much as 5% on Monday after the U.S. and China agreed to a truce in their trade conflict. This latest move follows a 30% slide in crude last month, after it touched four-year highs at the start of October. While nations in the region welcome the break in trade tensions — Singaporean Prime Minister Lee Hsien Loong said on Sunday that he hoped to see the U.S. and China take further “constructive” steps — they have to be prepared for further volatility after the meeting of the oil producing cartel that starts on Thursday.
Asian wage growth far outstrips Western countries – Nikkei Asian Review
JAKARTA — Wages in Asia grew by an average of 3.5% last year, nearly ten times faster than the 0.4% increase seen among the wealthiest members of the Group of 20 countries, whose leaders will meet in Argentina later this week. Driven largely by Asian economies and China in particular, wages in the G-20’s emerging or developing economies — including Indonesia and India — have tripled overall in the two decades since the Asian financial crisis, according to a new report by the International Labour Organization. The disparity between developed countries such as Japan — where wages declined by 0.4% last year — and less-developed countries in Asia, is partly due to emerging economies growing much faster and enjoying lower inflation than other emerging or developing regions such as Africa, Latin America, Eastern Europe or the Middle East.