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Invest in Indonesia now or miss the boat, says Trade Minister

Indonesian Trade Minister Mari Elka Pangestu has put foreign investors on notice: if you want a share in Indonesia's growth, best do it soon.

The country's solid economic performance lately has put it back on the global investment radar. International ratings agencies have raised Indonesia's sovereign credit ratings and global funds are buying into local financial assets, raising the value of the local currency to its highest point in 33 months and the main stock index to record levels.

Mari said the Indonesian government was also working to create a better investment environment, particularly with its logistics blueprint to ungrade local port and ground transport infrastructure.

Chinese Premier Wen Jiabao will also visit in late April, bringing hopes of more investment attention from the world's fastest growing economy.

source & article: The Jakarta Globe

Asian Development Bank predicts 7.5% growth

The worst of the global financial crisis has passed for 'Developing Asia', a region including China, India and most of Southeast Asia, according to the Asian Development Bank (ADB), which predicted economic growth of 7.5% this year and 7.3% in 2011.

The optimism is based on a recent rebound in global trade and has been led mainly by China and India, according to the ADB. Stimulus packages and monetary easing strategies have contributed to a regional increase in investment.

Regional GDP grew only 5.2% last year, an eight-year low.

The ADB warned that there were still risks if global trade slowed, commodity prices increased or unless regional leaders maintained responsible fiscal and monetary policies.

source & article: Philippines News Agency

Singapore to showcase Asian fashion to the world

Singapore will launch trade fashion show "Blueprint" this month, showcasing 50 mostly Asian designers to an international audience and shoppers from the general public.

Organizers hope the event will become the basis of the Asian Fashion Exchange (AFX), Asia's answer to New York and Milan's Fashion Weeks.

Singapore seems a fitting location for the event, with the city-state opening a raft of famous brand and designer stores and attracting shoppers from across Asia over the past years, despite poor economic conditions. These shopping travelers have been arriving in increasing numbers recently; their spending an indicator of better things to come.

While Singapore is not yet famous as a fashion capital, AFX organizers hope a growing annual event featuring the region's best fashion talent will put it into the league of cities like New York and Tokyo.

source & article: Reuters (via Yahoo)

Malaysia's e-commerce industry will grow in 2010

Malaysia's e-commerce industry could grow by 20% this year thanks to private industry and government support, says the nation's information and communications technology association PIKOM.

PIKOM has organized National IT Month to highlight the benefits of the online economy. Events in July-August 2010 will include: the PC Fair 2010, E-Commerce Media Supplement, Strategic Review 2010, Leadership Summit, Business Success Forum, SME Business Success With ICT Series and the World Cyber Games Final Round.


The government sees e-commerce development is vital to promoting the interests of small and medium-sized enterprizes, increasing their visibility and creating opportunities for international business.

As it stands, Malaysia's e-commerce industry represents around US$6 billion in business-to consumer-transactions, and around $20bn business-to-business.

source & article: Business Times 

Asean Infrastructure Fund coming soon?

Asean leaders last week advanced the idea of the Asean Infrastructure Fund (AIF), with some saying it will become reality in May 2010.

The AIF, which will be operated through the Asian Development Bank in Manila, is intended to support entrepreneurial infrastructure projects other than those already able to raise investment through ADB bonds. Roads and transport are expected to get most attention.

The smooth flow of goods and services around the region is essential to economic development, and advances Asean's goal of becoming a more integrated economic community by 2015. 

sources & articles: Bernama  thestar online

Microfinance: robbing the poor to feed the rich?

As microfinance lenders grow to the point where IPOs are necessary to raise adequate capital for their operations, some are raising questions about the industry's purpose and ethics.

This comes as SKS Microfinance announced it was going public; the first Indian microfinance company to do so. The offering is expected to raise US$250-350 million.

Since the microfinance industry exists to serve poor clients, a debate is emerging over what happens once wealthier shareholders start demanding higher returns on their investments.

source & article: FinanceMarkets.co.uk

Cheaper airfares to attract Indian students to Malaysia

Malaysia Airlines will offer Indian students around 50% discounts on flights and other incentives to promote Malaysia's image as an international education hub.

The airline has inked an arrangement with with the Malaysia Study Centre (a division of the AEC Business School India) to cater for the growing number of overseas students from Tamil Nadu in India's south east.

Malaysia Airlines currently operates 29 flights a week between Malaysia and five Indian gateways: Bangalore, Chennai, Hyderabad, Mumbai and New Delhi.

source & article: Bernama

Restore workers' wages after recession: Singapore minister

Singapore's Manpower Minister Gan Kim Yong has called on successful companies to acknowledge the sacrifices made by their workers during the global financial crisis by restoring wages and pay rises.

Several companies asked their workers to accept pay cuts or salary freezes from 2008 in desperate attempts to survive the recession. Companies that managed to prosper should now reward workers in order to retain them and move forward, Mr. Gan said.

He also announced new initiatives to encourage older workers to rejoin the workforce and remain there past age 55, including offers of extra training and upgrading of workplaces to make them more friendly to older employees.

source & article: The Straits Times

Science & Technology entrepreneur workshops

The National University of Singapore Faculty of Science will hold a number of workshops for entrepreneurs in late April.

Guest speaker at the events will be Dr. Gunther Festel of Festel Capital, an investment firm specializing in environmental, health, energy, materials and nutrition technologies. Topics will cover the importance of entrepreneurs and start-ups in innovation, an introduction to start-ups and practical advice on getting things going.

article & source: SG Entrepreneurs

Use more local currencies in trade: ASEAN

ASEAN nations are studying ways to boost the use of local currencies in intra-regional trade, following similar moves by China.

Increased use of local currencies simplifies foreign exchange deal for importers and exporters. Although the US dollar remains the dominant trade currency, the global financial crisis has seen a shift in economic power away from the West and towards Asia and brought calls for less reliance on US currency.

ASEAN is making a renewed push for economic integration. ASEAN central bank governors are also said to be investigating a regional payment system for commercial trade, and the bloc completed a US$120bn regional currency swap with China, South Korea and Japan last month.

article & source: ChannelNewsAsia.com

Ernst & Young seeks Singapore entrepreneurs

Accounting firm Ernst & Young is seeking nominations for its Singapore Entrepreneur of the Year (EOY) Award.

Candidates will be judged on their entrepreneurial spirit, innovation, personal integrity or influence, strategic vision, and their companies' financial performance and global impact.


E&Y's Country Managing Partner, Steven Pham, hopes the award will "inspire more local SMEs to think beyond traditional constraints... to expand their businesses abroad". Nominations will be open from now until 30 June 2010.


article & source: Straits Times


(NB: E&Y also operates the EOY Award in other countries across the region, including Mayalsia and the Philippines.)

ASEAN economic integration poised to advance

Finance Ministers from Asean nations met in Hanoi this week to plan further steps toward economic integration.

In their meeting ahead of the 16th Asean Leaders Summit, they pledged to implement the proposed Asean Trade in Goods Agreement (ATIGA) by May 2010, and the Asean Comprehensive Investment Agreement (ACIA) by October.

The agreements are designed to facilitate the free flow of goods, services, labor and investment across the region. Six nations have already eliminated tariffs on 99.5% of tariff lines, while the 'CLMV' countries (Cambodia, Laos, Myanmar & Vietnam) have reduced tariffs to around 0.5% on 98.86% of tariff lines, with a view to complete elimination by 2015.

If all goes well, these moves will bring the region closer to the dream of a fully-integrated Asean Economic Community.

Plans to integrate economies have been progressing smoothly in the past decade. Since 2000, Asean intra-trade has tripled, rising from US$166.8 to $458.1. Between 2006 and 2008, foreign direct investment (FDI) from outside Asean rose 8.6%, while FDI within the organization rose 42.6% in the same period.

article & source: Business Times (Malaysia)

Indonesia to help industries affected by free trade agreement

Indonesia no longer plans to renegotiate the ASEAN free trade agreement with China (ACFTA) and will instead find ways to assist local industries most impacted by the change.

The powerful Indonesian Chamber of Commerce and Industry (Kadin), however, is still pushing for a delay in the implementation of ACFTA, claiming many manufacturers are not ready to compete with their Chinese counterparts.

Government assistance might take the form of loans and facilities for capacity building some industries. A working committee consiting of representatives from relevant business and economic ministries will also monitor trade developments between Indonesia and China, while China itself has promised "sustainable" and "balanced" trade, saying it will accept more imports from Indonesia should a trade surplus widen.

article & source: The Jakarta Globe

Singapore the cheapest financial center for office rents

Singapore is the cheapest major financial center in which to rent office space, according to a study, making the city-state more attractive to business start-ups.

The study, published by consultants Colliers International, put Singapore's average annual office rent at US$53.71 (S$75) per square foot, far below nearby Hong Kong at US$161.14 ($225).

Though the pace has slowed recently, Singapore's office rental costs have continued to decrease. The first stage of the new Marina Bay Financial Centre (1.6 million square feet) is already fully leased, and another 6 million square feet of space is planned for the Central Business District.

Although Singapore's position on the list was 24th most expensive, it remains cheaper than any other city regarded as a major financial center. The top three positions were filled by Hong Kong, Tokyo, and London's West End.

article & source: channelnewsasia.com

New rules will discourage M&A activity in Malaysia: CIMB chief

New rules proposed by the Securities Commission (SC) could wipe out Malaysian M&A activity, says the chief executive of CIMB, the country's second largest financial services provider.

The rules would increase the shareholder threshold for takeover of a company's assets and liabilities to 75% and may sink the deal completely if more than 10% of shareholders resist outright.

CIMB Groups holdings Bhd chief executive Nazir Razak says there is a danger that M&A activity may disappear, and suggests the plan is just a populist move.

"When people say the higher the threshold, the better it is for minorities, it is very silly. When you set a threshold where there are no deals, how is it good for minorities?" he says.

article & source: The Edge Financial Daily

Private sector sees huge opportunities in Asian healthcare

Asia's rapidly growing economies and aging populations are too much for their healthcare systems to cope, presenting new chances for private-government tie-ups.

One example is Phillips Healthcare in the Philippines, which opened up a heart center in cooperation with government health authorities, and is able to analyze images sent from all over the country.

As average ages increase across Asia, a rise in heart disorders and infectious diseases could see this kind of partnership become more common; a move that would be welcomed by the industry.

article & source: channelnewsasia.com

ASEAN's Free Trade Area: 2015 a 'stretch goal'?

A compromise by Thailand and the Philippines over rice tariffs has led to new optimism that ASEAN can indeed establish a regional Free Trade Area by 2015. But domestic interests, development gaps and the Myanmar issue still present obstacles.

Larger economies such as the USA and European Union now prefer to negotiate trade agreements with individual countries, rather than the bloc as a whole. A region-wide Free Trade Agreement with China came into effect on 1 January 2010, but is now being renegotiated with ASEAN's largest economy Indonesia, after pressure from domestic industries.

Economic gaps are obvious between member states such as Singapore and Laos. A successful Free Trade Area would also necessitate improvements in transport and financial infrastructure across borders, to ensure the free movement of capital, goods and people.

article & source: Business World

Penang for heritage tourists?

Penang has begun to re-orient itself as a heritage tourism destination, especially since the addition of Georgetown's historic center to the UNESCO World Heritage List two years ago.

Traditionally promoted as a beach resort, Penang has unique and more significant cultural attractions. Investors have only just begun to understand their potential. Recent private sector initiatives have seen the restoration of Georgetown's pre-war buildings and, together with the Malasyia My Second Home campaign, have led to the area's reinvigoration. 164 pre-war properties changed hands in the first half of 2009 alone, compared to a total of 120 in the whole year of 2008.

Many formerly neglected shophouses are now boutique apartments, cafes, and art galleries. Continued promotion of Penang's historic and cultural assets to tourists and potential businesses would be a great benefit to the local economy.

article & source: Business Times (opinion piece)

Lexus wants 10% of Thai luxury auto market

Lexus, Toyota's luxury brand, aims to increase its share of the luxury auto market in Thailand to 10% over the next five years.

Despite the economic downturn, Thai luxury sales grew 5% last year with a total of 7,700 vehicles sold. Projections indicate this trend should continue in 2011-12. Currently, Mercedes-Benz dominates the market (as it tends to do across Asia) with a 50% share.

Lexus sales increased by 6% last year, but its share of the Thai luxury market is still only 3.6%.

article & source: Bangkok Post

Convergys wins "BPO Employer of the Year" in Philippines

The Philippines' largest private employer, Convergys, has won the "BPO Employer of the Year" award at the Information & Communications Technology (ICT) Awards in Manila.

Cincinnati, Ohio-based Convergys, which specializes in relationship management and consulting. It now employs over 20,000 people in the Philippines, mainly in the call center/software support industry, and opened five new locations in 2009.

According to the company, the award was given "based on its leadership, size, diversity, commitment to continuous improvement, corporate social responsibility involvement, and its active support of the international information and communication technology industry in the Philippines." It is the second time the company has won the award since it was first given in 2007.


article & source: Yahoo News (reprinted media release)

Foreigners will be allowed to buy property in Indonesia

Indonesia continues to woo more foreign direct investment by allowing foreigners to buy apartments and commercial property, hopefully by the third quarter of 2010.

Until now, foreigners looking to buy property may only do so through a nominee or via a local Indonesian firm, which offers less security than buyng direct. Gita Wirjawan, head of Indonesia's investment agency, is optimistic this will change soon.


The Indonesian government also hopes to introduce further reforms in the coming year designed to attract more overseas attention, such as changes to land and labor laws.


article & source: Reuters via Straits Times

Can Hong Kong stay relevant as mainland China rises?

Shanghai's economic rise might leave corporate powers wondering why they need Hong Kong as a gateway to China, says BusinessWeek.

Shanghai's economy is now larger than Hong Kong's, for the first time in three decades. While Hong Kong's per capita GDP is still nearly three times that of Shanghai, if mainland China continues to follow its current trajectory, Shanghai's population of 19 million will match it in the long term. Even Shenzhen, near the border, is attracting investment that once would have gone instantly to Hong Kong. Can Hong Kong maintain its relevance as a stepping stone when money can go instantly to the source?

There are caveats of course, and still many reasons to prefer Hong Kong. But the writer wonders whether Hong Kong's economic and relative political freedoms might eventually make it a better haven for entrepreneurs, letting other cities handle big business.

article & source: BusinessWeek

Indonesia's investment potential

Money Morning takes a look at Indonesia's economic and investment potential, with terms such as "an open secret" and "something of a sleeper". With a strong focus on the natural resources sector, they highlight that China is actively investing and looking for partners to form joint ventures or acquire.

As well as highlighting Indonesia's wealth of copper, gold, rubber, coal and liquefied natural gas (LNG), MM says "Literacy rates are high, the middle class is large and growing, and there is a ton of potential in the domestic economy. Think of Indonesia as a South Seas version of Brazil, but without Mardi Gras."


source & article: Money Morning

Malaysia's New Economic Model announced

Prime Minister Najib Razak has unveiled Malaysia's New Economic Model (NEM) designed to help the country achieve its goal of "developed nation" status before 2020.

To achieve this, Malaysia's economy must grow by 6.5 per year until that date (it shrank by 1.7% last year but gained 4.5% in the final quarter). Highlights of the NEM announcement include:


- Facilitate foreign direct and domestic direct investments in emerging industries/sectors;
- Remove distortions in regulation and licensing, including replacement of Approved Permit system with a negative list of imports;
- Overhaul the decades-old affirmative action policy that favors ethnic Malays;
- Reduce direct state participation in the economy and divest GLCs in industries where the private sector is operating effectively;
- Phase out price controls and subsidies that distort markets for goods and services;
- A new Equal Opportunty Commission to cover discriminatory and unfair practices;
- Simplify bankruptcy laws pertaining to companies and individuals to promote vibrant entrepreneurship;
- Liberalise entry of foreign experts specialising in financial analysis of viability of green technology projects.


The government will also make certain provisions for businesses initially disadvantaged by the NEM, as well as households in the lowest 40% income bracket.

The World Bank defines a "developed nation" as one with an annual per capita income of US$11,906 or more. Malaysia's is currently $7000. The New Economic Model aims to raise that to $15,000 by 2020.

The full plan will be released in June 2010 after the government receives feedback from the public.

articles & sources:
Bernama
The New York Times
The Malaysian Insider

More Asian exports staying in Asia

Asian economies are becoming less dependent on sales to the Big Three as more and more exports are shipped to China and stay there. Exports to the United States and European Union are 12-15% below their peaks, while import volumes in Asia (excluding Japan) are 6% higher than the previous high.

In the past, this might have been due to supply chain trading links with goods heading on to more advanced economies, but recently the Asian trading volume has surpassed US retail sales. According to HSBC economist Frederic Neumann, this may be a sign that Asian economies are indeed 'decoupling' from the largest economies and becoming less reliant on them as final customers.


article & source: The Business Times

Eco-tourism in far east Indonesia

The Guardian has a feature on the Misool Eco Resort in Raja Ampat, far eastern Indonesia, one of the most biodiverse marine locations in the world. Not only is the dive focused resort built to strict ecological standards, its presence (and others like it) in the region have actually helped to save the local environment. Once infamous for illegal fishing by old, polluting vessels, the Misool area is now a fishing free zone enforced by local business groups, happy with the financial injection from foreign eco-tourists.

This is exactly the kind of sophisticated tourism development Indonesia should be pursuing. One that showcases a beauty mostly unknown to outsiders while protecting its heritage. So many islands, so much potential.

source & article: The Guardian

Invest Malaysia 2010 conference begins Tuesday

Around 600 participants representing local and international companies will meet in Kuala Lumpur this week for the two day "Invest Malaysia 2010" conference. Now in its 6th year, the conference's theme will be "Powering Global Excellence". International investors will have access to Malaysian corporate and government leaders alike at private meetings and open discussions, including 27 presentations by local companies and policy statements by senior government figures.


The conference is being sponsored and organized by Bursa Malaysia, Maybank Investment Bank and Nomura Holdings.


source & article: The Star
see also: Bursa Malaysia conference page

Malaysia & Thailand compared

With Malaysia's Prime Minister due to announce new liberalization measures to boost investment at next week's "Invest Malaysia" conference, The Malaysian Insider gives a brief comparison of investment rules between Malaysia and Thailand. Main areas are currency trade regulations, corporate/capital gains tax rates, and shareholding rules.

source & article: The Malaysian Insider

"Growth does not happen by itself" -- Indonesian VP

Indonesian Vice President Boediono has stressed the urgency for infrastructure development if the country is to improve growth by another percentage point to 7% per year.

Indonesia would need around US$220bn every year in investment to achieve the 7% figure by 2014. The government will provide $50bn, but the rest will need to come from the private sector. This can be achieved by gaining more global attention for Indonesia, which has fallen off the investment radar of late.

He made the remarks before investors at the high profile Indonesia Summit, organized by a division of the Economist Intelligence Unit (EIU).

source & article: The Jakarta Post

Singapore is World's Best Airport

Asian airports have shone in the 2010 Skytrax World Airport Awards, taking out six of the top 10 places and all of the top three, with Singapore's Changi Airport returning to World No.1.

South Korea's Incheon International and Hong Kong International took the silver and bronze places respectively. Kuala Lumpur came 5th, Beijing 8th and Bangkok 10th.

The World Airport Awards™ are based on the results from 9.8 million questionnaires completed by airline passengers in 2009/2010, covering more than 210 airports worldwide. The survey evaluates traveller experiences across 39 different airport service and product factors -  from check-in, arrivals, transfer through to departure at the gate. 


source: Skytrax

Economist Podcast: Najib Razak on Malaysia

This week's Economist podcast interviews Malaysian Prime Minister Najib Razak. In the 11 minute chat he talks about how Malaysia can compete in the global market, the challenges it faces, and (since this is The Economist) also the trial of Anwar Ibrahim and the murder of Altantuya.

Najib mentions the Free Trade Agreement negotiations with India, the success of affirmative action, and the need for bold and radical actions to "excite people". According to him, Malaysia will profit most by becoming a center for Islamic finance and focusing on sectors like resources and aerospace.

source: Economist Audio & Video