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Adoption of skills framework boosts competitiveness of MSMEs

Micro, small and medium enterprises (MSMEs) are advised to adopt a skills framework for enhancing their workers’ skills for specific job roles to boost productivity and competitiveness, better positioned to compete in both local and global markets.

Jayvie Guballo, resource person for human capital development (HCD) in Philippine Trade Training Center-Global MSME Academy, said the Philippine Skills Framework (PSF) has been developed for logistics and supply chain, and creatives (digital arts and animation and game development), and HCD and business development.

Guballo said the PSF is a comprehensive and authoritative document that identifies the actual jobs available in the industry and the skills needed to qualify and improve curriculum.

“(PSF) enhanced productivity. Upskilling and reskilling employees lead to more efficient operations and higher productivity. When training and skills of our employees are updated, expect that your business operations run smoothly and business become competitive,” he said during the recent MSME Week 2024 celebration in mixed English and Filipino.
  
Guballo said the PSF also guides businesses for their workforce become more capable of adopting new technologies and innovative practices  

“Especially in marketing, if we want to upgrade the skills of our sales person, they should have an idea on the digital way of marketing,” he said.

Guballo said the skills framework also enhances the ability of business to compete in the markets.

“Because of the training and because of the capacity-building, employees and business owners will have an idea how to integrate their products to be sold in local and global markets,” he added.

Guballo further said investing in employee development can also lead to higher job satisfaction and retention rates.

 “Training is a good thing. Business owners should realize that training needs to be integrated as part of their budget,” he said.

August 2, 2024

Asean and the Middle East: Deepening ties to unlock economic and trade opportunities

AT A time of increasing trade turbulence, economic diversification has become a dominant theme. Against this backdrop, the Asean-Middle East corridor is gaining in prominence as the two regions enjoy economic and connectivity potential, solid growth prospects and favourable demographics.

Although the links between the 10-member Asean bloc and the Middle East are not as extensive as those with other regions, there are reasons to believe that there is a great deal of untapped potential.

Take trade, for example. At present, bilateral trade, which totalled more than US$126 billion in 2023, is uneven. Aside from certain products, Asean’s exports to the Middle East remain rather limited. While Asean’s exports to the Middle East and North Africa (Mena) – defined as the Gulf Cooperation Council (GCC) countries plus Egypt – has grown over the years, the absolute level of exports is only a third of that of total imports from Mena.

On the flip side, 6 per cent of Asean’s imports come from the Middle East, on average. They are heavily concentrated in the energy sector. While non-fuel imports have risen steadily over the years, fuel imports dominate with a share close to 80 per cent.

It is worth stressing the role of Singapore as one of the world’s top three oil trading and refining hubs, despite having no hydrocarbon resources. Around half of Singapore’s crude oil imports come from the Middle East, particularly from the United Arab Emirates (26 per cent) and Qatar (13 per cent).

According to the US Energy Information Administration, Singapore has a refining capacity of 1.3 million barrels per day, before exporting its refined petrochemical products to its Asian neighbours. Asean peers, along with China, consume the lion’s share of Singapore’s petrochemicals exports.

That said, the heavy reliance on energy trade points to significant opportunities for Asean in the non-energy space.

International Trade Centre data indicates that the region’s unrealised potential exports approach US$$30 billion, on a par with its actual exports. Electronic equipment and electric machinery stand to benefit as Asean deepens its integration in the global electronics supply chain.

At the same time, Mena’s unrealised export potential to Asean is estimated at US$18 billion, with plastics, chemicals and metals being the promising exporting industries.

With the average tariffs in the two blocs remaining elevated, increasing efforts are being made to promote trade opportunities between the two regions. Singapore, for example, is the only Asean country that has signed a free trade agreement (FTA) with the GCC while others have either launched or signed FTAs with individual economies.

On a regional level, it is encouraging that Malaysia proposed an Asean-GCC FTA last October. While negotiations may take time, the conversation is moving in the right direction.

Apart from trade, investment is also an emerging area for cooperation between the two regions, particularly given the financial strength of Mena. However, the bulk of flows are in the form of portfolio investment rather than foreign direct investment (FDI).

From the perspective of FDI into Asean, Asian investors dominate whereas FDI from Mena accounts for a marginal share. However, it is interesting to note where Mena’s investment flows into Asean are.

A third went into Asean’s property sector, followed by the finance and mining sectors. In recent years, rising interest from Mena investors in Asean’s tourism, renewable energy and food sectors has been attracting attention.

However, for now, Mena’s portfolio inflows take the lead. Despite limited data availability, the trend is clear: Malaysia, Indonesia and Singapore are the main beneficiaries. For example, Singapore is no stranger to investment flows from private equity firms and sovereign wealth funds in the Middle East.

In addition to goods and investment flows, people-to-people integration is another key focus. As a region that offers a diverse range of tourism products, Asean has gained popularity among Mena tourists since the pandemic.

Thailand stands out, attracting more than half of the 1.1 million Mena tourists who visited the region in 2023. While the number of visitors is still limited, spending power matters. Mena tourists not only tend to stay for twice as long as the average tourist, but they also spend 30 per cent more – almost US$200 per day.

A similar trend can be seen in Singapore. Visitors from the Middle East last year rose to 130,000, almost back to pre-pandemic levels while overall tourist numbers are at only 70 per cent of the 2019 total. As Singapore is not a traditional tourist destination per se, but rather a global hub for business travel, its people-to-people exchanges with the Middle East are likely to be defined by the increasing business connectivity.

While the links between Asean and the Middle East are not as far-reaching as those with other regions for now, the journey does not stop here. The potential remains untapped, and the two regions are set to benefit from further connectivity.

Source: The Business Times
Link: Here

Steady growth for Asean+3 on export growth, tourism recovery and domestic demand

Growth across the region is expected to ease slightly next year as the global economy continues to stabilise and monetary easing in major economies resumes

THE Asean+3 region – China, Japan, South Korea and the 10 Asean member states – is expected to expand at a steady pace of 4.4 per cent this year, the Asean+3 Macroeconomic Research Office (Amro) said on Tuesday (Jul 16).

The macroeconomic surveillance organisation attributed the sustained growth momentum to resilient private consumption, export growth and a sustained recovery in global travel.

The revival of tourism lifted domestic spending significantly and this – coupled with improving prospects in key export markets – helped bolster business sentiment in recent months, noted Amro in a quarterly update of its flagship outlook report on the 10 Asean member states plus China, Hong Kong, Japan and South Korea.

The updated July prediction of 4.4 per cent gross domestic product growth is marginally lower than April’s estimate of 4.5 per cent.

Said Amro’s chief economist Khor Hoe Ee: “Real estate aside, China’s economy continues to grow robustly. Tourism has rebounded close to pre-pandemic levels for most economies in the region, and the global semiconductor recovery is broadening to benefit more economies and sectors in Asean+3.”

In particular, brighter global demand prospects are reflected in the upward growth revisions for Vietnam – which saw a 0.3 per cent increase to 6.3 per cent – and South Korea, whose growth estimate rose to 2.5 per cent from 2.3 per cent, said Amro.

These increments helped offset Japan’s half-percentage-point cut. Compared with projected growth of 1.1 per cent in April, Japan is now expected to expand by 0.5 per cent this year, in line with slashed forecasts across the board.

Dr Khor explained in a virtual press briefing that the country has had a “very weak” first half of the year that was bogged down by sluggish consumption.

“But we do expect the economy to begin to recover and strengthen,” he continued, pointing out Amro’s growth forecast of 1.4 per cent for Japan next year.

Growth estimates for 2025 were broadly maintained as well.

Amro expects growth across the Asean+3 region to ease to 4.3 per cent next year, marginally higher than April’s estimate of 4.2 per cent, as regional economies converge to their trend growth.

This comes as the global economy continues to stabilise and monetary easing in major economies resumes, said Amro.

“The recovery in China is also anticipated to normalise next year, with the help of targeted policy interventions to steer the property sector into a more sustainable growth trajectory,” the report said. “Tourist volumes should be back to pre-pandemic levels by next year for most economies, alongside a stronger pick-up in manufacturing exports.”

Inflationary pressures subside
Inflation this year is anticipated to ease to 2.1 per cent from April’s projection of 2.5 per cent, on the back of softer-than-expected food prices in several economies and lower imported inflation, said Amro.

This is excluding Laos and Myanmar, where inflation is largely driven by persistent currency depreciation.

While inflation for the 12 economies is expected to trend upwards to 2.3 per cent next year as economic momentum gains traction, higher cost pressures are unlikely to trigger a large spike in inflation, noted Amro.

That said, Amro maintains that downside risks remain, particularly if geopolitical tensions escalate and trigger global commodity and shipping price hikes.

Brighter skies ahead
The overall risk landscape assessment for the region has improved since April, said Amro, which earlier maintained that the overall balance of risk to Asean+3’s outlook is tilted towards the downside.

Potential trigger factors – such as price shocks, weaker-than-expected growth in China and sharp growth slowdowns in the US and Europe – remain broadly the same, but their underlying risks to growth and inflation receded, added Amro.

“The bad news is that the region’s outlook next year could be significantly affected by the outcome of the US elections,” said Khor.

“The good news is, the region has weathered similar shocks before. Our economies need to keep rebuilding policy space and pursue policies to enhance resilience to shocks.”

Source: The Business Times
Link: Here

Asean bourses to increase region’s attractiveness through sustainability, market connectivity initiatives

Investors in the region could potentially have greater access to opportunities in neighbouring countries

THE chief executive officers of six major stock exchanges across Asean are pushing to make the region more attractive to investors by working on four proofs of concept (POCs) over the next three years, the bourses said in a joint statement on Tuesday (Jul 16).

The initiatives include establishing a regional data infrastructure and a standard ESG curriculum for listed issuers.

The POCs were discussed at the 37th Asean Exchanges CEOs Meeting held in Malaysia on Friday. The meetup included top executives from Singapore, Malaysia and Thailand, among others, while representatives from the Cambodia and Laos bourses were present as observers.

The concepts aim to establish a sustainability ecosystem – one of the group’s two focuses to boost the region’s competitiveness, with the other tenet being promoting regional market connectivity.

The president and CEO of the Philippine Stock Exchange (PSE), Ramon Monzon, noted that “sustainability is a collective endeavour”. 

The PSE was in July this year included in the Asean-Interconnected Sustainability Ecosystem, which seeks to boost sustainable development by implementing common ESG metrics in its members’ respective data infrastructures.

The CEOs of the exchanges also agreed to jointly pursue offering depository receipts (DRs) in their bourses. Investors across the regional bloc could have greater access to investment opportunities in neighbouring countries, if DRs grow into an Asean-level initiative. 

The agreement follows the launch of Singapore DRs last year, under a collaboration between the Singapore Exchange and the Stock Exchange of Thailand.

Source: The Business Times
Link: Here

More Singapore firms want to expand into Europe, using Germany as a springboard

MUNICH - About an hour’s drive out of Munich in a town called Bad Tolz is a production facility that produces equipment such as valves for aircraft. It might be miles from home, but the facility is owned by Singapore Aerospace Manufacturing, a subsidiary of Singapore precision engineering and technology group Accuron Technologies.

It has 250 staff and serves customers like Boeing and Airbus.

Accuron’s group chief executive Tan Kai Hoe said the acquisition was a way for the company to diversify its service and product offerings, while allowing further investments in Europe. Accuron also has facilities in France, Austria, Britain and Northern Ireland.

“If you want to grow, you do have to go overseas, there’s no two ways about it because the market in Singapore is just not able to sustain an international engineering manufacturing group,” he said.

“So you select where to go, based on where customers are, the kinds of skilled workers and technology that you need.”

Indeed, more Singapore companies are setting their sights farther than the immediate region of South-east Asia and China, with a growing interest in expanding into Europe, according to Enterprise Singapore (EnterpriseSG).

In 2023, the agency supported 220 companies in exploring Europe, including markets in Germany, the Netherlands, France, Sweden and Britain. This was 20 per cent higher than in 2022 and nearly 50 per cent more than in pre-pandemic 2019.

EnterpriseSG director for Europe Alan Yeo said: “These numbers have increased steadily, especially post-Covid when there was pent-up demand, and we saw a spike in the number of companies willing to come out to see opportunities in Europe in the last few years.”

He noted that Europe has some of the world’s largest economies and offers opportunities in technology and innovation. Singapore companies can leverage the region’s tech expertise and partner companies to acquire technologies. Sectors that hold promise include advanced manufacturing, healthcare, digitalisation and biomedicine, he added.

Singapore companies can play in Europe’s green economy space, as Europe’s governments and companies are keen on the green transition, he said. The green economy includes the offshore wind sector, e-mobility, smart cities and agri-food tech.

Europe has a large consumer base, which provides opportunities for Singapore’s lifestyle products and services.

In particular, Europe’s consumers are ready for sophisticated products or those with sustainability attributes, Mr Yeo said.

Mr Lee Pak Sing, EnterpriseSG assistant managing director for trade and connectivity, said that Singapore firms can play a role in trade and logistics, such as in helping European products to reach Asian markets or taking Asian products to Europe as materials.

For instance, local firm Apeiron collects used cooking oil in the region and sells it to European firms to make biofuel, hence playing a role in the sustainability chains of European companies.

Germany as the gateway
When it comes to picking which European country to start in, Germany is a good bet as one of the world’s largest economies that offers a gateway into the region.

Mr Yeo said it has a strong manufacturing sector that contributes about 20 per cent of the nation’s economy, which mirrors Singapore’s as well. It is also a leading innovation hub in Europe, he added.

Some Singapore companies have used acquisitions in Germany as their entry point into the continent.

For Accuron’s Mr Tan, Germany’s strategic location in the middle of Europe makes it a good place to start the company’s expansion into Europe.

Other draws of the country include its stable political and economic environment, which ensures a secure setting for long-term investments, he said.

He added that Germany’s strong industrial base and its dedication to a strong education in science, technology, engineering and mathematics mean there is a skilled manpower pool available.

Accuron chose the merger and acquisition approach so that it could quickly establish a market foothold, tapping existing networks and integrating technologies, processes and expertise into the company, Mr Tan said.

Another company that took the acquisition approach in Germany is Singapore-listed Nanofilm Technologies International, which acquired thin-film coating solutions provider AxynTeC, which serves the industrial, decorative and medical industries in areas like Southern Germany, Austria and Switzerland.

Its group chief commercial officer Ian Howe said: “Today we have a very strong footprint in Asia, but we also see big potential in European markets. We see that advanced materials are established in Europe and the lead original equipment manufacturers are open to the technologies we deploy. So we do see business in Europe for Nanofilm, starting with the advanced materials space.”

Advanced materials solutions are those that have novel or enhanced properties, such as enhanced wear resistance.

Mr Howe added that Nanofilm agreed to join forces with AxynTeC because it was important for Nanofilm to start its European expansion in Germany, which is the largest and most active market for its products.

AxynTeC has a 25-year history and is well respected in the industry, which makes it a good platform for Nanofilm’s growth and accelerated entrance into Europe.

Opportunities for start-ups
While big companies may be able to acquire small and medium-sized enterprises to get a foot in the European door, Singapore start-ups also have opportunities to enter Europe through Germany.

EnterpriseSG runs a programme called the Global Innovation Alliance, which has networks in 21 cities globally, including Munich and Berlin.

Since 2019, the agency has supported more than 500 Singapore tech companies through the programme, which has benefited over 700 participants in their firms’ overseas expansion efforts.

On average, the number of Singapore firms that participated in the programme in Europe grew at a compound annual growth rate of 43 per cent from 2020 to 2022.

Germany is an innovation hot spot that offers opportunities for Singapore firms in med-tech, climate tech, smart city and Industry 4.0 solutions, said Start2 Group’s Linda Nguyen Schindler, who is director of the Artificial Intelligence Competence Centre, Asia.

Start2 Group is EnterpriseSG’s partner for the global innovation alliance acceleration programme in Munich and Berlin. It also helps to bring German start-ups to Singapore for collaborations that can allow both sides’ entry into their respective markets.

One Singapore start-up that benefited from the global programme is TeleMedC, which develops artificial intelligence diagnostic technologies to detect early changes in the eye to prevent blindness.

The company started operations in 2017 and participated in the EnterpriseSG programme in Germany in 2021. Through the programme, TeleMedC met a contact who helped the firm to settle in Hamburg, getting a two-year research grant to work with the local university hospital.

“TeleMedC is now signed with multiple healthcare partners to roll out this summer. Having progressed well in Germany, we now feel confident that it can be our gateway to other markets in Europe,” said the company’s founder and chief executive Para Segaram.

He added: “It takes time to understand the local market, laws governing hiring, accounting, and we had to rely on translation software and the internet search engines to learn the subtle nuances of communication and work culture.”

Start2 Group chief executive for global and Europe Matthias Notz noted that there are opportunities for German start-ups to connect with those in Singapore, adding that Singapore is a launchpad for the Asian market.

“That’s important because the start-up ecosystem consists of collaborations. You cannot innovate without collaboration. It’s not the collaboration within Munich or between Munich and Frankfurt. It’s the collaboration on a truly international level,” he said.

German company Tiramizoo, which develops software to help companies optimise last-mile deliveries, came to Singapore in 2019 and opened a subsidiary in Kuala Lumpur in 2023.

Along the way, it worked with Singapore start-up dConstruct Robotics, which delivers solutions for mobile robotics applications. Through this collaboration, dConstruct Robotics opened a subsidiary in Munich.

Tiramizoo chief executive Martin Straeb said: “We have gained partners and been working with other companies in Singapore, which helps us gain knowledge in robotics, for example.”

Source: The Straits Times
Link: Here

Singapore and Laos to deepen cooperation in carbon credits, education and renewable energy

SOUTH-EAST Asian neighbours Singapore and Laos intend to continue promoting collaboration in the areas of clean energy, food security, carbon credits and capacity building.

Making this point was Lao Prime Minister Sonexay Siphandone, speaking in his native tongue, at an official lunch hosted in his honour by Singapore Prime Minister Lawrence Wong on Tuesday (Jul 9).

The Lao leader is on his first official visit to Singapore.

His one-day trip commemorates 50 years of diplomatic ties between both South-east Asian countries, which first established relations on Dec 2, 1974.

“Our close ties at the highest levels reflect our shared interests as small states with similar geographies,” said PM Wong.

The Singapore leader remarked that while Laos is a larger country in terms of land mass, both nations have populations similar in size and grapple with geographical constraints – the former is landlocked while Singapore, as an island state, is “sea-locked”.

“We both have shared interests in upholding an open, stable and rules-based global order,” continued PM Wong, who was sworn in two months ago.

Both prime ministers witnessed the signing of two memoranda of understanding in the areas of carbon credits and education cooperation.

Singapore and Laos pledged to collaborate on carbon credits in line with Article 6 of the Paris Agreement, which governs rules on the bilateral and international transfer of such credits.

Both nations intend to work towards a legally binding implementation agreement that sets out a bilateral framework for the international transfer of correspondingly adjusted carbon credits.

Singapore has so far inked similar agreements with Papua New Guinea and Ghana.

Strong bilateral ties
PM Wong added that both countries’ cooperation on renewable energy illustrates how geographical challenges can be translated into mutually beneficial opportunities.

Under the Lao PDR-Thailand-Malaysia-Singapore Power Integration Project (LTMS-PIP), Singapore began in June 2022 to import up to 100 megawatts of renewable hydropower from Laos, via Thailand and Malaysia using existing interconnectors.

PM Wong said: “We look forward to the enhancement and expansion of the LTMS-PIP into its second phase, which will also be in line with Laos’ plans to become the ‘battery of Asean’.”

He added that the Republic fully supports Laos’ Asean chairmanship.

This year is Laos’ third time heading the regional alliance. Since it formally joined the 10-member bloc in 1997, the mountainous country has helmed the role twice – once in 2004 and again in 2016.

To support Laos’ chairmanship this year, Singapore rolled out the Singapore-Laos Enhanced Cooperation Package, announced in September 2022.

The package includes capacity-building programmes for Lao officials, such as on report writing and public presentation skills.

Separately, under the Singapore Cooperation Programme incepted in 1992, more than 16,500 Lao officials have attended courses and participated in training programmes.

Notable alumni include the likes of Lao President Thongloun Sisoulith and former prime minister Phankham Viphavanh.

On the education front, Singapore also offers scholarships to Lao students to pursue their studies locally.

“Singapore wants Laos to succeed, and we have been a steadfast supporter of (its) development,” said PM Wong.

After the lunch, Dr Sonexay – accompanied by ministers and senior officials – will call on President Tharman Shanmugaratnam and meet Senior Minister Lee Hsien Loong.

Source: The Business Times
Link: Here

Singapore firms upbeat on Johor-Singapore Special Economic Zone, but cite talent shortage and other hurdles

SINGAPORE companies are keen to invest in Johor but face challenges on talent shortages, cross-border movement needs and a fragmented investment landscape, indicated a survey of 160 businesses by the Singapore Business Federation (SBF).

Of those surveyed, 93 per cent view Johor as an attractive investment destination, with 50 per cent already operating in the state.

SBF engaged the Singapore businesses across various industries through online surveys and in-person focus groups to gather suggestions on the development of the proposed Johor-Singapore Special Economic Zone (JS-SEZ).

“The JS-SEZ concept represents a bold and exciting new chapter in our economic collaboration,” said Lim Ming Yan, chairman of SBF, during the launch of the survey report in conjunction with the JS-SEZ Joint Investor Forum on Thursday (Jul 11).

“By leveraging Johor’s resources and competitive advantages, together with Singapore’s infrastructure and connectivity, we can create a dynamic economic zone that will attract investments, foster trade and generate employment opportunities,” Lim added.

The two countries signed a memorandum of understanding in January this year to work on a JS-SEZ to strengthen economic connectivity across the Causeway.

Malaysia’s Economy Minister Rafizi Ramli, who is representing the country in bilateral talks with Singapore, revealed at a briefing in Kuala Lumpur on Wednesday that the two sides “should be able to sign a deal” and unveil the SEZ in September.

While Singapore has not mentioned any target date for such a signing, the SEZ project was among projects discussed only last month between Singapore and Malaysia’s premiers during PM Lawrence Wong’s visit to Kuala Lumpur.

Teo Siong Seng, chairman of JS-SEZ Singapore Business Working Group, said: “The enthusiastic response to our report clearly signals the JS-SEZ’s great potential for our region. This isn’t just another project – it’s a potential game-changer for both Malaysia and Singapore.”

Before the potential can be realised, talent shortages pose a major concern for Singapore companies. Nearly 60 per cent of the businesses polled reported difficulties in sourcing skilled workers in Johor, with additional challenges in attracting Singaporean talent to work across the border.

The manpower crunch is attributed to several factors: 60 per cent of businesses cited employment pass issues; 58 per cent pointed to skill gaps in the Malaysian labour force; and 21 per cent indicated salary mismatches.

The findings also highlighted the need for improved cross-border movement for both people and goods. Of the businesses surveyed, 36 per cent expressed hopes for better connectivity in terms of a special immigration lane for people, to facilitate smoother travel.

The movement of goods, on the other hand, is hindered by traffic congestion, differing import tax regimes and customs procedures, with 55 per cent of businesses citing difficulties in handling tax issues and 48 per cent indicating that more expedient cargo clearance is crucial for efficient flow.

Businesses also reported obstacles in obtaining necessary permits and licences due to the fragmented investment landscape between Singapore and Johor.

To navigate the complex landscape, 58 per cent of businesses expressed a desire for a joint investment promotion agency to market the SEZ and facilitate investor engagement, and 33 per cent desired a platform to facilitate collaboration among each other for self-help.

With the findings, the Working Group recommended that the SEZ should focus on sectors such as manufacturing, logistics, digital industries, healthcare and education. These sectors draw on the respective advantages of the two economies, including Johor’s favourable operating costs and land availability, as well as Singapore’s strengths in connectivity, branding, talent pool and headquarters functions.

Coordinated governmental frameworks and a designated governing body are necessary to ensure tailored governance within JS-SEZ, which will be crucial to the success of the zone, the Working Group noted.

It added that embracing flexible approaches such as a policy sandbox will facilitate closer economic integration and create a flexible, inclusive economic space – another key success factor.

The forum was jointly organised by SBF and Malaysia’s Invest Johor. Some 200 businesses, including those with current operations in Johor or looking to invest there, attended the event at Amara Singapore.

Source: The Business Times
Link: Here

Cambodia mulls selling its products through global titan Amazon

Cambodia is looking to expand the sale of local products to the world's largest online marketplace, Amazon. To that end, the officials from the Minister of Commerce met with Amazon representatives last week to discuss the possibility.

In a recent social media post, the ministry explained that the meeting was attended by Chea Ratha, ministry secretary of state, and Darren Ong, senior manager public policy officer at Amazon. Also in attendance was Chann Sokros, economic and commercial specialist at the US embassy in Phnom Penh.

“The meeting was aimed at discussing the possibility of cooperation between Cambodia and Amazon to promote Cambodian products on the Amazon e-commerce platform and to promote digital business development, digital services and the promotion of the digital economy between Cambodia and Amazon,” said the post.

Amazon is the world's number one e-commerce marketplace, with nearly 4.8 billion visits each year.

Ministry spokesman Sok Sopheak did not respond to inquiries from The Post regarding whether the meeting produced any concrete results.

Hong Vanak, an economic researcher at the Royal Academy of Cambodia, believes that similar promotions are very important, but only once the quality of a product is guaranteed. He suggested that the first step should be to ensure that each product enjoys an excellent reputation in local markets and with foreign visitors. Once this is assured, then they should be advertised on popular online marketplaces like Amazon.

For full article, please read here

Reporter: Niem Chheng
Source: The Phnom Penh Post 

Thailand's EEC unlocks potential for investors with new incentives

Thailand's Eastern Economic Corridor (EEC) is gearing up for a new wave of foreign direct investment (FDI) with the launch of a comprehensive incentive package aimed at unlocking a treasure trove of benefits for investors seeking a strategic location in Southeast Asia with exceptional infrastructure and a commitment to innovation.
The move comes after applications for investment promotion surged to a five-year high of 848.3 billion baht last year, up 43% from the previous year, according to the Board of Investment (BOI).
The EEC, Thailand's prime industrial area comprising Chonburi, Rayong, and Chachoengsao provinces, again led the ranking with 460.5 billion baht in investment, accounting for 54% of total pledges.
This year, the first five months saw 317 foreign companies approved to invest in Thailand under the Foreign Business Act. Foreign investment totalled 71.702 billion baht, up 58% in value and 16% in volume from the same period in 2023.
Among this year’s foreign investors, 99 or 31% expressed interest in investing in the EEC. Their foreign investment value was 18.224 billion baht, or 25% of the total value of foreign investment over the five months.
The Eastern Economic Corridor Office of Thailand (EECO) projected that the area's economy will grow 3.5% this year, exceeding Thailand's overall growth rate of 2.4%.
EECO noted that since its inception in 2018, the EEC has continued to attract foreign investment in 12 key industrial sectors: Next-generation Automotive, Intelligent Electronics, Advanced Agriculture and Biotechnology, Food for the Future, High-value and Medical Tourism, Automation and Robotics, Aviation and Logistics, Medical and comprehensive Healthcare, Biofuel and Biochemical, Digital Defence, Education, and Human Resource Development.
Auaychai Sukawong, KPMG's director of Tax and Legal in Thailand, pointed out that the EEC provides numerous opportunities for investors, including public-private partnerships (PPPs) to develop utilities, infrastructure, and public transport to connect areas across the three provinces and beyond.
"In order to achieve the ultimate benefits from EEC conditions under BOI and EEC law, Revenue Code, and the Empowering the Competition of the Country in Targeted Industry Act BE 2560, investors should be aware and well-prepared, as well as having the appropriate corporate structure and a good understanding of the requirements from the beginning," he noted.

New incentive privileges
To continue attracting foreign investment, the EECO launched a new framework of privileges in April. The privileges will cover EEC special promotion zones, as part of a new initiative to attract more investors to invest heavily in these zones.

EECO Secretary General Chula Sukmanop said that at least 30 companies set to invest 210 billion baht and create 1,500 jobs are awaiting Cabinet approval of the new EECO promotional privileges.
Details of privileges will be proposed to the EECO board, chaired by Deputy Prime Minister and Commerce Minister Phumtham Wechayachai, and then submitted to the Cabinet for approval.
Once the draft is approved by the Cabinet and published in the Royal Gazette, foreign investors can apply directly to EECO for promotional privileges.
The agency expects Cabinet approval this month, after which it will form a negotiation committee to disperse the privileges.
Chula said that the negotiation committee's goal is to ensure that everything runs smoothly as planned. The committee will be chaired by EECO's secretary general and comprise seven experts chosen according to their expertise, capability, and type of investment. The negotiation process will begin in July if the Cabinet approves the privileges draft.
The committee will negotiate with investors over privileges based on project value, including factors such as supply chain and value chain, Thai industry pioneering, jobs for local skilled workers, community support, human resource development, research and development, local content, technology transfer, business operations sustainability, and emissions reduction.
The negotiation committee will focus on the value of the investment in deciding whether projects qualify for the eight-year corporate tax exemption privilege.

Tax and non-tax privileges
Privileges available include a variety of tax and non-tax incentives to attract businesses. The main tax breaks are a corporate tax exemption for up to 15 years, or a 50% tax reduction for one to 10 years. There are also deductions and exemptions for import duties and investment costs.
In addition to tax benefits, the EEC provides non-tax advantages such as land rights, visa options for foreign workers, and a 17% flat income tax rate.
However, Chula pointed out that investors must meet 95% of the requirements to be eligible for the maximum 15-year corporate tax exemption.
Any investors unable to obtain corporate tax exemption still have other options. These can include a corporate tax reduction of up to 50% for one to 10 years.
The 50% corporate tax reduction for 1-5 years can be renewed at the end of the contract, depending on the project value. However, its renewal term will be limited to eight years.
Other privileges include exemption of import duties on machinery, research and development equipment, and raw materials.
Non-tax benefits, meanwhile, include land rights in investment promotion zones, condominium ownership rights in the EEC, experts to work on projects, and EEC work permits.
"The fact that EECO has 14 related laws provides a solid foundation for the promotional benefits the agency can directly negotiate with investors. Following the negotiation's resolution, EECO will be able to grant building permits as well as permission for electricity and water use. These elements encourage prompt investment as well as prompt additional investment. Case-by-case negotiations will take place," Chula said.

More tailored-made special packages
To accelerate investments, the government launched the EEC Development Plan (2023-2027) last year to attract 500 billion baht in real investment over five years, or 100 billion per year. The current investment level is 70 billion baht per year.
ECCO recently processed 20 letters of intent for investments in digital, smart automotive, medical, food, wellness, and elderly care.
It has also established seven special industry promotion zones, namely the Eastern Airport City, Digital Park, Innovation Platform, High-Speed Rail Ribbon Sprawl, Medical Hub, Genomics Thailand, and Tech Park Ban Chang.
Meanwhile, 26 of the total promoted zones cover targeted industries run by private companies. Two additional zones are being established and will be announced later.
The EECO has responded to feedback showing investors want to see more demand-driven packages so that incentives meet the specific needs of each investor in each industry.

Slow but still forward progress
Although some infrastructure projects in the EEC area, including the high-speed train project connecting three airports, have been delayed by the pandemic and Russian-Ukraine war, the government is pushing for the completion of new contract negotiations by year-end.
The railway project is due for completion in 2025, as per the concession contract signed with Charoen Pokphand Group, but has yet to begin.
However, significant progress has been made on U-tapao airport and the Eastern Aviation City, particularly in terms of key infrastructure like electricity and cooling systems.
According to the EECO, the Eastern Aviation City's infrastructure is 26.4% complete, with aircraft refuelling service systems at 48.4%. Water supply and wastewater treatment systems are 98.4% complete.
EECO also has reserved a 32-hectare plot for THAI Airways’ aircraft maintenance, repair and overhaul (MRO) project as part of the Eastern Airport City, known as "aerotropolis", in Rayong province.
The U-tapao upgrade is among the EEC’s key investment projects, worth 905 billion baht or 55% of the total investment of 1.7 trillion baht. The project includes construction of a second runway, taxiway, and third terminal, as well as development of facilities such as the MRO and an aviation training centre.
The U-Tapao International Aviation Co, Ltd (UTA) and the Royal Thai Navy have partnered to expedite construction of a second runway and taxiway costing 16.4 billion baht.
Elsewhere, EECO has already expropriated 320 hectares for a smart city in Bang Lamung district, Chonburi. The remaining 912 hectares will be expropriated next year for 1.7 billion baht from the 2024 fiscal budget. The agency has been allocated two billion baht from the 2023 fiscal budget and 4.7 billion baht from the integrated budget to develop the EEC smart city.

Building skilled workforce
Aside from improving infrastructure through a comprehensive incentive package and continuous roadshow to attract potential investors in key sectors, the EEC is developing a highly skilled workforce and nurturing domestic startups and companies.
The Eastern Economic Special Development Zone Policy Committee has emphasised human resource development since the establishment of the EEC Office.
The EEC has adopted a "demand-driven approach" to create a talent pool that aligns with industry needs in 10 key sectors. This collaborative model involves the government, educational institutions, private companies, and relevant agencies. A key feature is the participation of the private sector, who contribute as co-trainers and co-funders of training programmes.
The "EEC Model" aims to transform the labour market and give Thai workers the skills needed to compete globally. It encourages collaboration among three major ministries: Education, Labour and Higher Education, Science, Research, and Innovation.

Key initiatives of the EEC Model for grooming skilled talent are:
- Develop and deliver modern training programs based on industry knowledge
- Provide internship and practical work experience opportunities
- Establish competitive and flexible vocational schools with joint investment in equipment from the private sector
- Train educators with industry expertise.
- Utilise co-consideration, cooperation, and co-payment with incentive measures to encourage participation
The success of economic and industrial development hinges on a skilled workforce. Between 2019 and 2023, an estimated 475,668 skilled workers were needed across various fields, with 53% coming from vocational education and 47% from general education. This data serves as a roadmap for targeted skill development.
Industries demanding skilled workers include aviation, logistics, rail transit, merchant marine, digital, intelligent electronics, next-generation automotive, robotics, high-value tourism, and medical.

EECO emphasised that the EEC's focus on human resource development demonstrates its commitment to building a future-proof workforce that can power Thailand's economic growth.
To strengthen domestic companies, the EEC Office and Stock Exchange of Thailand are working together on a feasibility study with the approval of the Securities and Exchange Commission and the Bank of Thailand to gain insight into developing an appropriate trading infrastructure to support the EEC Fundraising Venue.
This initiative will assist businesses in raising capital, reporting financial statements in foreign currency, or using foreign currency in their operations.
Their collaboration has also resulted in the Digital Path via the Thai Digital Assets Exchange (TDX), establishing a new means of raising funds for innovative businesses, whether through project finance or start-up.
Meanwhile, as a strategy to get the Thailand 4.0 strategy on the right track after the failure of previous schemes, the EEC is offering incentives for Thai companies under the 3C strategy: Cooperation, Connection, Community-Based.
Thailand serves as an important gateway to Asia thanks to its position at the centre of Southeast Asia.
With the Eastern Economic Corridor (EEC) as its megaproject magnet for foreign direct investment (FDI), plus a mutual benefit-driven neutral stance on the global stage, Thailand is committed to becoming a world-class destination for international investment to thrive.

Source : THE NATION

Cambodia aims for 770,000 EVs by 2030

Cambodia introduced the National Policy on Electric Vehicle (EV) Development 2024-2030 today (July 11), targeting the registration of 770,000 EVs by 2030 to reduce environmental impact and seize new opportunities to boost economic base diversification.

According to the policy, by 2023, the country aims to register 25,000 cars and other light EVs and 5,000 heavy EVs, such as trucks, for business activities.

Over the same period, the use of electric motorcycles is expected to reach 720,000, while tuktuks are expected to hit 20,000.

"As the development of the EV sector in Cambodia is in its early stages, building an effective and efficient ecosystem for EVs requires high attention and active participation from relevant ministries and institutions, including the private sector. The focus will be on the supply, installation and distribution of EVs, technology and infrastructure support, especially the construction of power stations, waste management and environmental impact mitigation,” said the policy document.

"Through the introduction of this national policy, the Royal Government has shown a strong commitment and belief in developing the EV ecosystem in Cambodia. The goal is to promote the use of EVs in the medium and long term, contributing to the sustainable development of Cambodia by balancing economic, social and environmental aspects,” it added.

Prime Minister Hun Manet stated in the preface of the document that the EV sector is an urgent and necessary matter in preparing the country to seize new opportunities and contribute to the momentum of economic base diversification.

For full article, please read here

Reporter: Niem Chheng 

Source: The Phnom Penh Post 

Cambodia: Raw cashew exports see sharp increase in first half of year

Cambodia witnessed a surge in the export of raw cashew nuts in the first six months of 2024. Total exports were valued at nearly $1 billion, already surpassing the total for the entirety of 2023.

The figure accounted for approximately one-third of the value of Cambodia's total agricultural exports, ranking cashew nuts as the highest earner of the Kingdom’s agricultural products. 

Khim Finan, spokesman for the Ministry of Agriculture, Forestry, and Fisheries, noted that the majority of cashew exports were in raw form. 

“One of the ministry’s top priorities is improving Cambodia’s processing facilities to ensure that we can add value before they are exported,” he told The Post.

Achieving this objective necessitates substantial investment in processing infrastructure, transportation networks and other essential facilities. 

Finan expressed optimism about the future expansion of these efforts to bolster the local economy and increase the value retention of cashew nuts within the Kingdom.

Currently, 94 per cent of Cambodia's agricultural exports are directed to three main markets: Vietnam, Thailand and China. 

“Vietnam imports cashew nuts, cassava and fresh mangoes, while Thailand receives cassava, fresh mangoes and pepper. China takes bran, bananas, rice, cassava and mangoes,” said Finan. 

For full article, please read here 


Reporter: Hong Rasmey 

Source: The Phnom Penh Post 

Photo: Hong Menea 

Cambodia: SaaS, e-commerce startups dominate Cambodia’s fledgling ecosystem

Tech startups ruled the roost when it came to Cambodia.

Of the 129 Tech Startups, Software-as-a-Service (SaaS) is the dominating sector with a 17.1 percent share, followed by e-commerce with the second largest share of 13.95 percent; together making up nearly one-third of the ecosystem.

It’s been a good year for startups in general. Data from the Ministry of Economy and Finance’s initiative Startup Cambodia shows that 2023 saw the growth of as many as 177 startups in 2023, nearly double the number (98 startups) functional in 2022. Of the total startups, 177, 129 were tech startups and 21 were tech-enabled startups.

Total funding raised by the startup ecosystem in 2023 was around 22.6 billion riels ($5.49 million riels).

After SaaS and e-commerce, the other sectors startups are coming up are online media, Cleantech, EdTech, Fintech, influencer economy, transport and delivery, healthtech, Podcasts, Online Travel, AgriTech and Blockchain.

To promote innovation, Startup Cambodia said the country has seen as many as 11 accelerators, six incubation centres and six hackathons conducted.

When it came to total funding of 22.6 billion riels ($5.49 million riels), the Startup Cambodia Insight Report said most of the funding is in seed, pre-seed and series-A funding levels.

For full article, please read here


Reporter: Rachel David 

News: Khmer Times

Source: Startup Cambodia 

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