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