NEWS MONITORING 22 AUGUST 2011 ISSUE

23/05/1127/05/11CARI

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BETA

JOINT MEDIA STATEMENT OF THE

43RD ASEAN ECONOMIC MINISTERS

MEETING

ASEAN

The 43rd ASEAN Economic Ministers

Meeting from 10 to 11 August in

Manado emphasised trade in goods

and services as priority areas in

achieving the ASEAN Economic

Community in 2015. The tariff reduction schedules from the

ASEAN Trade in Goods Agreement are now

complete and a memorandum of understanding

between Brunei, Malaysia and Singapore

for the implementation of a Regional Self-

Certification System has been signed

Brunei, Indonesia, Malaysia, the Philippines,

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Singapore, Thailand and

Vietnam will participate

in the ASEAN Single

Window pilot project in

Q3 of 2011

ASEAN ministers plan

to engage the private

sector in the automotive,

electronics and textile

industries to identify non-

tariff measures impacting

ASEAN trade

The 5th Package

on financial services

under the ASEAN

Framework Agreement

on Services (AFAS) has

been concluded and is

to be followed by the

8th Package of AFAS

Commitments before the

end of 2011

Practical outcomes of the ASEAN

Agreement on Movement of Natural Persons

is expected by the end of 2011

Negotiations on the Trade in Services and

Investment Chapters under the ASEAN-Japan

Comprehensive Partnership Agreement and

ASEAN-India Free Trade Agreement are ongoing

Ministers are exploring framework arrangements

on trade, investment and economic cooperation

with the Gulf Cooperation Council

ASEAN Secretariat (11 August 2011)

CHINA-ASEAN

EDUCATION

COLLABORATION

ON FAST TRACK

China, ASEAN

Chicanas cooperation in education,

through mutual academic recognition,

exchange programmes and scholarships,

has led to knowledge and cultural

exchanges between students from

both regions. The number of ASEAN students studying

in China increased from 34,000 to 49,000

from 2008 to 2010, while the number of

China’s students studying in ASEAN increased

from 68,000 to 82,000 for the same period

(Source: China’s Ministry of Education)

The Chinese government promised to provide

10,000 scholarships to ASEAN students by

2010 and has signed cooperative education

agreements with Malaysia, Vietnam, Brunei,

Myanmar, Laos, Cambodia and the Philippines

China also signed mutual diploma recognition

contracts with Malaysia and Thailand and

will continue to explore similar programs

with other ASEAN countries

135 cooperation agreements have been

signed between 31 ASEAN universities and

47 Chinese universities

China has trained nearly 5,000 Mandarin

Chinese lecturers and volunteers to provide

students with language instruction

Liu Baoli, Deputy Director of Chinese Ministry

of Education says more youngsters from

China and the ASEAN are learning about

each other’s language, culture and history

Xinhua (18 August 2011)

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DISCLAIMER: The news articles contained in this report are extracted and republished from various credible news sources. As such, CIMB ASEAN Research Institute (CARI) does not make any guarantee, representation or warranty, express or implied, as to the adequacy, accuracy, completeness, reliability or fairness of any such information and opinion contained in this report. Should any information be doubtful, readers are advised to make their own independent evaluation of such information.

MARKET RATE

US$331

US$502

THAI GOVERNM

ENT

UNMILLED RICE(1 TONNE )

EXPORT PRICE

AU GUST 2011US$567 DE CEM BER 201 1

(expected)US$700

PRICY RICE

CAMBODIA INAUGURATES PART

OF ASEAN HIGHWAY

Japan, Cambodia

03Cambodia inaugurated a 9km section

of the national road No. 1 on August 16,

the main road in the ASEAN highway

scheme, connecting Bangkok, Phnom

Penh, and Ho Chi Minh City. Construction of the 9km section started in

December 2009, funded by a Japanese grant-

in-aid of US$25 million

At the ceremony, Cambodian Prime Minister Hun

Sen said the road is an international artery in

Cambodia, and is an important part of the Southern

Economic Corridor and the ASEAN highway Once

the construction of the Japan-funded Neak

Loeung Bridge is complete in 2015, the ASEAN

highway from Cambodia will be fully operational

According to the premier, Japan has provided

grant-in-aid of US$2 billion to Cambodia

The ambassador of Japan to Cambodia,

Masafumi Kuroki said Japan hopes the

assistance will strengthen the friendship

between Japan and Cambodia and that

the road will boost Cambodia’s economic

development and alleviate poverty

Xin Hua (16 August 2011)

FREE TRADE

AGREEMENT

CONSOLIDATION

PROPOSED

China, Japan, South Korea, India,

Australia, New Zealand, ASEAN

Japan has proposed the consolidation

of free trade agreements between

ASEAN and dialogue partners -

China, Japan, South Korea, India,

Australia, and New Zealand- into a

single multilateral agreement from

the current bilateral arrangements. The 17th consultation between ASEAN

Economic Ministers and the Ministry for

Economy Trade and Industry of Japan

was held on August 13 in Manado

China and Japan would like to have

negotiations announced by the next ASEAN

Summit in Phnom Penh in November 2012

China would prefer to exclude India,

Australia and New Zealand from the

ensuing multilateral FTA

Srirat Rastapana (Director General,

Department of Trade Negotiations, Ministry

of Commerce, Thailand) said about 90% of

products traded between ASEAN and China

have no tariff and both sides are in the process

of cutting tariffs to below 20% of products

on the sensitive list by January 2012

Bangkok Post (16 August 2011)

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THAI RICE POLICY MAY

RIPPLE ACROSS ASIA

Thailand

The Thai Government’s promise to raise

rural incomes through higher rice prices will

cause inflation and complicate monetary

policy making throughout Asia, a region that

consumes 87% of the world’s rice. Rice prices increased by 55% in the past year

according to futures traded on the Chicago Board

of Trade

The acceleration of policies to boost consumption

in Thailand risks complicating monetary policy

across Asia, as soaring food costs add pressure for

higher interest rates while the region braces for a

growth slowdown

Food makes up an average of 30% of inflation

indexes in Asia

The weighting of rice in consumer-price indexes

varies from 9.4% in the Philippines, 4.7% in Indonesia

and 2.9% in Thailand (Source: Bank of America)

Interest rates in South Korea, Malaysia, and the

Philippines remain unchanged while rates in China,

India and Thailand were raised rates to tame inflation

Gulf News (18 August 2011)

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DISCLAIMER: The news articles contained in this report are extracted and republished from various credible news sources. As such, CIMB ASEAN Research Institute (CARI) does not make any guarantee, representation or warranty, express or implied, as to the adequacy, accuracy, completeness, reliability or fairness of any such information and opinion contained in this report. Should any information be doubtful, readers are advised to make their own independent evaluation of such information.

SBY SEEKS BIG GROWTH IN

INFRASTRUCTURE FOR 2012 BUDGET

Indonesia

In his annual speech assessing the state of the republic on Tuesday, President

Susilo Bambang Yudhoyono proposed an expansive budget for 2012 that

focuses on infrastructure spending and social programs, while making modest

cuts in some subsidies, as the country aims for faster economic growth.

Jakarta Globe (16 August 2011)

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INDONESIAN GOVERNMENT

ANNOUNCES TAX HOLIDAY FOR

HIGH-VALUE, INNOVATIVE INVESTORS

Indonesia

Indonesia’s Finance Minister Agus

Martowardojo said on August 15 that

Indonesia plans to grant tax holidays for

major investors in select sectors, in an

effort to boost foreign direct investment. Agus said the exemption would be granted

to companies investing at least IDR 1 trillion

(US$117 million) in sectors including base

metals, oil refining, petrochemicals, renewable

energy, machinery and telecoms equipment

“We have prepared the criteria for a tax

holiday and a regulation to that effect will be

issued later this month” (Agus Martowardojo)

The tax holiday will exempt investors

from paying taxes for between 5 and

10 years from the start of commercial

operations, although investors that have

operated for less than a year can also apply

Agus said the companies must have at least

IDR 1 trillion (US$117 million) in investment

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and be considered pioneers in their industries

Companies that already received a tax

allowance are not

eligible for the

exemption

Responding to the

announcement, the

Jakarta Composite

Index rose by 1.8%

and construction-

firms gained on

expectations

of a pick-up in

building projects

Jakarta Globe (16 August 2011)

MEASURES

WEIGHED

FOR AEC

Thailand

The Finance Ministry is considering tax

measures to improve the competitiveness

of Thai businesses to cope with increased

competition once the ASEAN Economic

Community (AEC) is formed in 2015,

says Satit Rungkasiri, director-general

of the Revenue Department. Mr. Satit says if Thailand is not ready to

handle the changes in the market, it will lose

opportunities in ASEAN

For the service industry, tax measures

will be used to attract foreign investments and

promote exports

One of Mr. Satit’s concerns is for the loss of

tax income from the changes brought by the

AEC which will allow business transactions to

take place more freely around the region

Mr. Satit is also concerned that Thai nationals

will struggle to compete for local jobs once a

free-flow of skilled labour takes effect

Bangkok Post (16 August 2011)

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DISCLAIMER: The news articles contained in this report are extracted and republished from various credible news sources. As such, CIMB ASEAN Research Institute (CARI) does not make any guarantee, representation or warranty, express or implied, as to the adequacy, accuracy, completeness, reliability or fairness of any such information and opinion contained in this report. Should any information be doubtful, readers are advised to make their own independent evaluation of such information.

SINGAPORE TIGHTENS RULES

FOR HIRING FOREIGNERS

Singapore

6TH PAN-BEIBU

GULF ECONOMIC

COOPERATION

FORUM KICKS OFF

China, ASEAN

According to the new rule by Singapore’s

Ministry of Manpower, starting in

January 2012, foreigners must earn at

least SG$3,000 (US$2,471) a month to

qualify for an employment pass to work

in Singapore.

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09The economic corridor is a project between China’s Guangxi Zhuang

Autonomous Region & ASEAN involving transportation links through rail & roads,

as well as economic cooperation through cross-border industrial zones

The Forum on Pan Beibu Gulf Economic

Cooperation (PBGEC) represents China’s

newest initiative for sub regional

cooperation with ASEAN, the focus of which

is to create coastal industrial areas,

making the most of the strategic position

of Pan-Beibu Gulf as the largest sea

gateway which is closest to ASEAN. The forum took place on August 18-19 in

Nanning, China

On June 3, a panel of experts approved the

feasibility study on the cooperation

PBGEC emphasizes maritime-based cooperation

– improving ocean trade, port development,

and maritime-related private sector investment

The cooperation involves China and oceanic

countries of ASEAN - Vietnam, Malaysia,

Singapore, Indonesia, Brunei and Philippines

One of the PBGEC’s main projects is the

building of an economic corridor from

Nanning to Singapore

Transport facilities in the zone are currently

unable to support the expanding trade activity

and ASEAN was urged to improve transportation

networks which are vital to the ASEAN-China

cooperation and development

Jiang Yaoping, China’s Vice Minister of Commerce

said the ministry will jointly set up an exclusive

committee to boost the development of

infrastructure, ports, and logistics

Officials from China’s ministry of commerce

stressed the need for PBG countries to harmonise

custom procedures and eliminate trade barriers

to ensure the efficiency of transport networks

Ma Biao (Governor of the Guangxi Zhuang

Autonomous Region) also urged ASEAN to

expand industrial cooperation in technology and

energy in the Guangxi, which will enhance agri-

culture, manufacturing and other industries

Bernama (18 August 2011)

Singapore’s government tightened

its rules on August 16 following

complaints from residents who are

competing for jobs

Labour shortages mean Singapore

has to rely on immigrant workers for

many jobs, especially in hotels and

offshore marine industries

Foreigners who do not qualify can

continue to work in Singapore but

their employers will be subject to

various quotas and levies

The new rule is not applicable to

permanent residents

The tighter requirement for mid-level staff

has sparked complaints by employer groups

such as the Singapore International Chamber of

Commerce and Singapore Business Federation

Reuters (16 August 2011)

PRIORITY DEVELOPMENTS IN

THE NANNING - SINGAPORE

ECONOMIC CORRIDOR