Latest ASEAN news

Brunei economy to grow 4.1pc

Brunei Darussalam’s economic growth is forecast to pick up this year at 4.1 per cent benefitting from high oil and gas prices, ongoing global recovery and low-base effect. Next year, the gross domestic product (GDP) growth is projected to be 2.3 per cent.

This was highlighted by ASEAN+3 Macroeconomic Research Office (AMRO) in its annual ASEAN+3 Regional Economic Outlook (AREO) report on Tuesday.

The report said the Sultanate’s economy declined for four consecutive quarters year-on-year (y-o-y) through third quarter (Q3) of 2021. Real GDP declined by 1.7 per cent y-o-y in the first nine months of 2021, driven mainly by contraction in the oil and gas sector.

Turnaround activities and a limited onsite workforce because of COVID-19 reduced the sector’s ability to recover from unscheduled deferment of well, reservoir and facilities management activities.

The non-oil and gas sector registered positive growth in Q3 2021, thanks to subsectors such as finance, communication, health services and manufacturing of food and beverages.

Growth in the non-oil and gas sector was mainly driven by increased domestic demand.

The AMRO report added that retail sales performed well in the first nine months of 2021 as restrictions on overseas travel prompted a rise in domestic consumption. However, it dropped by 5.2 per cent in Q3 2021 as movement restriction mandates took effect.

Read the full article here.


Lao PDR Reforms Boosted Business Development, but More Needs to be Done

Lao PDR Reforms Boosted Business Development, but More Needs to be Done — New Report

MANILA, PHILIPPINES (31 March 2022) — The regulatory environment for business development has improved across all provinces in the Lao People’s Democratic Republic (Lao PDR),

but more needs to be done to accelerate the country’s economic recovery from the coronavirus disease (COVID-19) pandemic, according to a joint report by the Asian Development Bank (ADB) and the Lao National Chamber of Commerce and Industry (LNCCI).

The second edition of the Provincial Facilitation for Investment and Trade (ProFIT) Index report recommends that the government take steps to reduce regulatory requirements to encourage companies to register formally, improve transparency, and remove informal charges levied on enterprises. The index analyzes the experiences and perceptions of the business community in complying with regulations at the local government level, based on a 2019 survey of 1,357 enterprises in 17 provinces.

“Reforms since 2018 have helped local governments remove hurdles to business development and encourage economic diversification,” said ADB Country Director for the Lao PDR Sonomi Tanaka. “Further reforms, implemented with efficiency and integrity, are needed to spur new business opportunities and create jobs to help the Lao PDR build a more competitive, productive economy after the COVID-19 crisis.”

The joint report focuses on six key areas: the ease of starting a business, transparency and access to information, regulatory burden, informal charges, consistency in policy implementation, and the business friendliness of the provincial administration.

“Overcoming the unprecedented challenges posed by the pandemic will require the central and local governments to work closely with the private sector to attract new domestic and international investments,” said LNCCI President Oudet Souvannavong. “The ProFIT report offers detailed analysis on the strengths and weaknesses of the business environment procedures and practices at the local government level.”

The Lao PDR’s economy and business community were hit hard by the COVID-19 pandemic. The country’s economic growth is expected to be below 4.5% in 2022 and 2023, compared with an annual average expansion of 7% in the 2 decades prior, says the report.

The government’s 2018 reforms reduced the cost and the processing time of business registration by one-third, the report says. But the survey found a high prevalence of irregular practices, including informal payments to officials, underreporting of enterprise income, and difficulty in accessing official information. The cumbersome and complex regulatory framework means the government is missing out on substantial tax revenue collections needed to fund spending on critical public services. The government has acknowledged the importance of making business registration and tax payments easier in its Ninth National Socio-Economic Development Plan, 2021–2025.

second ADB–LNCCI report, also released today, finds that women-led enterprises have lower levels of compliance and tend to be smaller in size than men-led businesses. Female entrepreneurs reported that their business registration takes longer and costs more. The report urges the government to train staff to overcome hidden gender biases and make it easier for women to create and run businesses.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.

Source: Lao National Chamber of Commerce and Industry

The future of agrifood tech in Southeast Asia: Agriculture in the digital decade

Agriculture is a key sector in Southeast Asian economies. According to the World Bank, agriculture accounted for about 11% of ASEAN’s gross domestic product (GDP) in 2020. In countries such as Cambodia and Myanmar, the sector contributed more than 20% to national GDP. Agriculture is also a major employer in the region. In 2019, it accounted for more than 35% of total employment in countries like Laos, Myanmar, and Vietnam.

In recent years, the global agricultural industry has faced numerous challenges. One is climate change. In Southeast Asia, the sector has taken a battering due to more extreme weather events driven by global warming. According to a 2021 research report by the Asian Development Bank, from 2008 to 2018, the region suffered USD 21 billion in crop and livestock production losses due to climate-related disasters.

This was worsened by the COVID-19 pandemic, which led to a shortage of agricultural labor and disruptions in global supply chains. In 2020, the pandemic was estimated to have caused a 3.1% reduction in the aggregate volume of agricultural production (29.58 million tons) in Southeast Asia, which represents a 1.4% decrease (USD 3.76 billion) in the region’s GDP.

Amid these challenges, there are silver linings—the region’s agricultural industry is rapidly adopting new and innovative technologies, especially in rural and urban farming activities.

Tech-enabled farming
Agriculture in Southeast Asia is in the midst of a technological transformation. For example, smartphones are harnessing artificial intelligence (AI) and big data to more effectively control crop management, while drones are helping farmers improve their farming practices and increase crop yields. For many of the region’s smallholder farmers, who are defined as growers who operate in land areas smaller than two hectares, these digital technologies have not only enhanced the efficiency of their operations, but also boosted their income.

In Vietnam, MimosaTEK is bringing precision agriculture to smallholder farmers with cloud-based devices and sensors that aid crop monitoring. At the same time, the startup leverages internet-of-things (IoT) technology to develop a smart irrigation system that allows farmers to use smartphones to monitor weather conditions and irrigate their crops while optimizing water use. The Vietnamese government has successfully piloted this system in Cần Thơ Province, and is planning to scale the program across the rest of the Mekong Delta.

Agritech and “smarter farming” will also play a bigger role in Thailand’s agricultural sector as the Thai government encourages its farmers to adopt smart farming practices. To incentivize local farmers to adopt digital technologies in their operations, since 2020, Thailand’s Digital Economy Promotion Agency has been awarding farmers and community enterprises agritech grants between THB 10,000 (USD 300) and THB 300,000 (USD 9,000). As a result, some farmers in Thailand have started using drones in farming activities such as planting seeds and spraying pesticides.

Drones have also been used in agriculture in other parts of Southeast Asia for purposes such as weather forecasting, disaster management, crop damage assessment, and crop monitoring and mapping.

A good example is Poladrone, a Malaysia-based drone technology startup, which provides pest management solutions for Malaysian oil palm farmers. Not only can its drones carry out precision spraying of pesticides, they can also help to reduce the farmers’ exposure to toxic pesticides.

Digital technologies are crucial to improve farmers’ resilience to tackle climate change and COVID-19 challenges. To support the adoption of digital technologies among smallholder farmers, Deloitte and the World Economic Forum (WEF) have engaged in a multi-year partnership to support the design and execution of the 100 Million Farmers program. The program aims to incentivise and enable farmers to adopt sustainable practices to support the global transition towards net-zero, nature-positive food systems.

Urban farms
Besides catalyzing the digital transformation of the agricultural sector, climate change and the COVID-19 pandemic have also highlighted the importance of urban agriculture.

According to a recent report on Singapore’s agrifood tech ecosystem by Deloitte’s Center for the Edge and the Singapore Economic Development Board (EDB), urban farms help build a more secure and resilient food system. This would explain why the Singapore Food Agency set up a SGD 60 million (USD 44.4 million) Agri-Food Cluster Transformation Fund in 2021 to encourage local farms to adopt sustainable, tech-enabled farming practices.

Urban farms are key to building a more robust food system in cities which tend to be heavily dependent on food imports. These farms provide a buffer for market supply, in the event of disruptions to food supply chains.

Urban agriculture also allows farmers to grow a wide variety of produce all year round. By using soilless agricultural systems such as aeroponics or hydroponics, growers can reduce problems associated with soil-borne pests and diseases, as well as increase crop yields.

At the same time, the use of digital technologies such as LED lighting, sensors, and IoT technology help urban farms better control and optimize growing conditions for higher yields.

For example, Singapore-based agritech startup Sustenir has high-tech indoor farms that can achieve yields at least 14 times higher than traditional farms.

Meanwhile, farmers are also using e-commerce platforms to sell directly to urban consumers.

In Singapore, there is Urban Tiller, a farm-to-table agritech startup that delivers fresh produce to households within eight hours after harvest. In Indonesia, people in Java and Bali are turning to e-grocery platform Sayurbox to order fresh produce directly from local farmers.

According to the e-Conomy SEA Report 2021 by Google, Temasek, and Bain & Company, Southeast Asia’s tenacious digital growth is in part driven by e-commerce, online groceries, and food delivery. This has been in part catalyzed by the COVID-19 pandemic. Since the pandemic began, there have been 60 million new digital consumers in Southeast Asia, of which 20 million joined in the first half of 2021 alone.

Southeast Asia is a key market for agritech
Southeast Asia is poised to become a key market for agritech investment as consumers and businesses in the region go online at a rapid pace. According to AGFunder, agrifood tech startups globally raised USD 51.7 billion in 2021, almost double the USD 27.8 billion raised in 2020.

As agritech solves the challenges of agriculture and food production, it shines the spotlight on the food supply chain. Besides food production, there are many other areas in the food system where technology can be applied, including food processing and distribution.

Asia has become the largest region in the global food market, with its market share growing from 42% in 2014 to 50% in 2020. Consumers will spend an additional USD 4.4 trillion on food over the next ten years, as massive demographic changes and evolving consumer needs drive up demand for larger quantities and better quality food.

In the next article of our two-part series on “The future of agrifood tech in Southeast Asia,” we will delve into the world of food technology (foodtech) and alternative foods, and discuss the roles they play in the agrifood ecosystem.

Industry urges longer-term solutions

The government should come up with not only short-term measures, but also medium and long-term plans to cope with the impact of the global oil price surge and the Russia-Ukraine war, according to industrialists in various sectors.

They propose the administration also focus on creating more jobs, redesigning national energy management, and making the business sector more self-reliant as ways to support the overall economy and help people survive the impact of economic uncertainties over the long haul.


The cabinet recently approved a list of 10 measures to counterbalance the fuel price spike. The measures are expected to last from May until July.

Though it agrees with the measures, the Federation of Thai Industries (FTI) wants the government to start thinking about efforts that will enable businesses to be more self-reliant once the package of measures aimed at easing the cost of living expires.

The measures help households and businesses, especially those in the retail and transport sectors, but they are insufficient because the country needs medium and long-term plans to cope with the impact of the global oil price surge and the Russia-Ukraine war, said the federation.

These two problems have dealt a blow to the Thai economy, which is still staggering from the economic effects of the pandemic.

While an urgent economic cure is required for Thailand, it is more important that additional actions be taken to fully restore the economy, especially in terms of helping pandemic-ravaged tourism operators and small and medium-sized enterprises (SMEs), said Supant Mongkolsuthree, chairman of the FTI.

The business sector should eventually become more self-reliant, depending less on the state's fiscal-monetary injections, he said.

"Don't forget that if a huge amount of budget is spent to solve certain problems, authorities can hardly avoid causing a burden on the country's coffers," said Mr Supant.

This may result in a lack of opportunity in dealing with other problems, he said.

Mr Supant suggested the government help SMEs better cope with their debts so they can manage their money and keep operating their businesses over the long term.

The government should use the energy price crisis as an opportunity to redesign national energy management by using more renewable energy and reducing dependence on fossil fuels, he said.

In the tourism sector, authorities should seriously consider abandoning the mandatory Test & Go scheme, a Covid-19 screening measure that requires foreign travelers to undergo RT-PCR tests in Thailand, said Mr Supant.

This measure runs counter to the message of truly reopening Thailand to tourists, he said.

Foreign visitors who are fully vaccinated want unfettered travel that will not incur additional costs, said Mr Supant.


Source : Bangkok Post

Loss-ridden insurance providers get licenses revoked after massive COVID claims

Thailand’s Finance Minister Arkhom Termpittayapaisith has revoked the business licenses of two financially-troubled Thai insurance companies, Southeast Insurance and Thai Insurance, effective today (Friday), following a massive amount of COVID-19 claims.

Secretary-General of the Office of the Insurance Commission (OIC) Suttipol Taweechaikarn said that the finance minister had no choice but to close the businesses, because their shareholders have refused to increase the capital.

He said that the two insurance companies now have more liabilities than assets, due to claims for compensation from many customers who took out the two firms’ “Found, Paid, Done” COVID-19 insurance policies.

The compensation claims mounted as COVID-19 spread, to the extent that their liabilities have outstripped their assets

The OIC secretary-general said that the insurance reserves and capital funding ratio of the two firms are below what is required by law, the companies have unreasonably delayed compensation payments to their customers and they have failed to record compensation payments as required, forcing the OIC to propose the revocation of their licenses.

In January, Thai Group Holdings, the parent company of Southeast Insurance, notified the Stock Exchange of Thailand of its board’s decision to wind the insurance company up and to return its operating license to the insurance registrar. The move was, however, rejected by the OIC on the grounds that it cannot simply shut down the business unilaterally without approval from the OIC.

Suttipol said that the OIC has been trying hard to solve the financial problems of the two companies for the benefit of their customers, but without success. He admitted that the revocation of the licenses will affect only the COVID-19 policy holders, whereas other life and non-life insurance policies have been transferred to other providers. Southeast Insurance still owes 13 billion baht in compensation, whereas Thai Insurance owes 4.6 billion baht.

source : Thai PBS WORLD


Digital assets stare at uncertain future in Thailand as regulators clip their wings

Ending weeks of speculation, the Bank of Thailand (BOT) and the Securities and Exchange Commission (SEC) on March 24 put in place new regulations governing the digital assets business, effectively curbing their ambitious outreach.

The authorities made it clear that the move was aimed at protecting investors and guarding against financial stability.

The crux of the measure was prohibiting the use of digital assets, such as cryptocurrency and tokens, as a means of payment. Those involved in the digital asset business, whether they are digital exchanges, brokers, dealers, investment advisers, ICO portals or fund managers are barred from creating infrastructure that could facilitate the use of cryptocurrency as a means of payment for goods and services.

They are prohibited from arranging e-wallets that could serve as a payment tool. The law goes into effect from April 1. Players in the field are barred from advertising about services of digital assets to pay for goods and services. The central bank has also imposed a limit on banks’ investment in digital assets; investment by a bank cannot exceed 3 percent of its capital.

The additional rules come as regulators are increasingly concerned about the rising investment in digital assets considered to be unsound or even harmful to retail young investors who do not understand the associated risks.

“Enthusiasm for digital assets in Thai society is high, actually we could say that it is very high,” said Roong Malikamas, BOT’s assistant governor.

She referred to the spike in investors opening accounts to trade in digital assets. From 2020 to 2021, the number of trading accounts went up more than three times, from 700,000 to 2.27 million. The number of cryptocurrency holders in Thailand tops the world list.

The ratio of cryptocurrency holders to internet users is as high as 20.1 percent, double the world average of 10.2 percent. The number of businesses engaging in this new industry is also rising. Thailand has eight digital asset exchanges and seven ICO Portals. In addition, more and more commercial banks and other types of financial institutions have expressed their intention to invest in digital assets, Roong noted.


Sourse : Thai PBS WORLD

EY start-up program lands in Thailand, Vietnam, Cambodia and Guam

Professional services firm Ernst & Young has further expanded its Foundry startup incubator program in the Asia Pacific, to now include Thailand, Vietnam, Cambodia, and Guam.

The six-month virtual program provides early-stage start-ups working in particular in the area of tax services innovation with support through individually tailored activities including workshops and piloting and scaling sessions.
First launched in 2018, the program now runs in eleven countries, having been previously rolled out to Singapore, Malaysia, Indonesia, the Philippines, Sri Lanka, Australia and New Zealand. Submissions for this year’s program will close on the 15th of April, with successful applicants to be announced in May. Participants will also receive $120,000 worth of Microsoft Azure credits.

To qualify, the early-stage start-ups (Series A funding or earlier) will need to demonstrate that their technology- or product-related offering adds value to the EY business in at least one of four outlined innovation areas covering disruptive technologies, ESG and sustainability, client experience, and human resources. They will also need a working prototype or be working toward one which is internationally scalable.

“Our incubator program has a new focus on innovation,” said EY Asean Tax managing partner Amarjeet Singh. “Start-ups from all sectors are invited to collaborate with us in developing pilot solutions to enhance our clients’ experience and develop the services of tomorrow, leverage disruptive technology to create new markets and business models, meet sustainability goals, and stay centered on people and wellness.”

In addition to gaining insights from EY subject matter experts and the firm’s collaborators, participants will be able to choose from a series of workshops which best suit their particular backgrounds and business needs, including sessions on tax and R&D incentives and grants, company law, raising capital, people management, and generally pitching and selling products to corporates and large enterprises.

“EY Foundry is a program all startups that fit the criteria should consider,” said program alumni Vivian Zhou, a former Accenture senior consultant who co-founded data security and collaboration platform Karlsgate. “The program was tailored based on our needs with the focus being to help grow and scale our business through access to EY networks, Microsoft Azure credits and subject-matter professionals.”

Growth outlook needs rejig

The Finance Ministry plans to revise its 2022 forecast for Thai economic growth next month, focusing on the impact of rising inflation and spiking energy prices, says a ministry source who requested anonymity.

The ministry is worried the Russia-Ukraine war will affect its target for foreign tourist arrivals this year, the source said.

In January the ministry projected 2022 economic growth in the range of 3.5-4.5%, with average growth of 4%, based on the assumption of rising domestic spending following an improvement in the global pandemic situation.

That month the ministry also forecast a 4.5% expansion in private consumption for 2022 and the arrival of 7 million foreign tourists. Exports are expected to post growth of 3.6% based on recovering global demand.

Thailand's exports surged by 16.2% year-on-year in February, which was higher than expected, the commerce minister said on Thursday. Reuters said its own poll forecast a 10.2% rise in February, following January's 8% increase.

The ministry source said next month the global credit rating agency Moody's will assess the country's rating. The ministry is confident it can service state debt in the long run, although the government has borrowed heavily, to the tune of 1.5 trillion baht over the past two years.

The government collected net revenue of 911 billion baht during the first five months of fiscal 2022, surpassing the target by 46 billion baht.

Last year S&P Global Ratings maintained Thailand's sovereign credit rating at BBB+ and rates the country's economy as having a stable outlook.


Sourse : Bangkok Post

Bank of Thailand to keep steady policy hand as growth trumps inflation

BENGALURU, March 28 - Thailand's central bank will not raise interest rates from a record low for more than a year in a bid to support an economy still struggling to recover from the pandemic despite a jump in inflation, a Reuters poll found.

While inflation in the tourism-dependent economy hit a 13-year high in February, driven mainly by higher energy prices, policymakers expect price pressures to be temporary.

But Russia's invasion of Ukraine has triggered a spike in global energy and food prices that will make it harder for the Bank of Thailand (BOT) to contain inflation, as found by other central banks who until recently said high inflation was transitory.

Still, the BOT was expected to keep its policy accommodative to revive growth which has yet to return to pre-pandemic levels due to a subdued tourism recovery and tighter mobility restrictions.

All 22 economists in a March 16-25 Reuters poll predicted the BOT would leave its one-day repurchase rate (THCBIR=ECI) at a record low of 0.50% at its March 30 meeting. Median forecasts showed no change in rates until the second quarter of 2023.

"Under the hood of an unchanged policy rate, the MPC is likely to deliberate on rising inflationary pressures amid elevated commodity prices and supply shocks, against a backdrop of a fragile economy that is facing high uncertainties and downside risks from geopolitics and the pandemic," said Chua Han Teng, economist at DBS.

The BOT was predicted to raise rates to 0.75% in the second quarter of next year, making it the last Southeast Asian central bank to raise interest rates.

However, there was a near split among economists with six of 13 expecting no change to rates in the second quarter of next year, indicating weak conviction about the central bank's policy direction.

Among the remaining seven, four were in line with the median view, two expected rates to reach 1.00% with a lone voice predicting 1.25%.

"The current situation makes it increasingly difficult for policymakers to strike a balance between managing risks to economic growth and price stability," said Somprawin Manprasert, chief economist at Bank of Ayudhya.


Sourse : Reuters

ASEAN Launched Progress Report on Financial Inclusion

ASEAN developed the Report on "Measuring Progress - Financial Inclusion in Selected ASEAN Countries 2021" under the leadership and guidance of the Working Committee on Financial Inclusion (WC-FINC) and with the support of the UN Capital Development Fund (UNCDF).


The report serves as an annual reflection on the progress of measurable indicators on financial inclusion based on an assessment of data availability and collection processes at the national level.


The publication is available here.

Thailand’s finances stable despite pandemic, global slowdown: govt

Thailand is financially stable despite the Covid-19 crisis and global economic woes, the government spokesman said on Sunday.

Spokesman Thanakorn Wangboonkongchana said the country is economically strong even though the government has had to offer subsidies to ease the burden on citizens affected by the pandemic and global oil crisis. He added that the country’s financial stability has been maintained because the government has implemented support measures under strict financial discipline.

Thanakorn added that the country’s financial stability is evident from the fact that the treasury had about 418.59 billion baht in cash for the first five months of the 2022 fiscal year (October 2021-February 2022).

During these five months, the Finance Ministry earned about 901.44 billion baht in revenue, while government spending came in at 1.43 trillion baht, forcing it to borrow 394.47 billion baht to offset the deficit.

The spokesman added that the government had made provisions for a budget deficit of 700 billion baht for the 2022 fiscal year and the more than 400 billion baht cash in the treasury was in line with its plan to maintain a reserve of 400 billion to 500 billion baht.

The spokesman said the government was confident that its revenue for the entire fiscal year would meet the target of 2.4 trillion baht, adding that the country’s foreign exchange reserve is also strong at US$245 billion.

Thanakorn added that the government was able to keep the price of consumer goods stable and the inflation at a manageable rate.

Rising global energy prices pushed inflation up to 3 per cent in January and 5 per cent in February. However, if the rising price of fuel is not taken into account, then the rate of inflation comes in at 0.5 per cent in January and 1.8 per cent in February, he said.

The spokesman added that the government has set up 10 measures to help mitigate the burden on people affected by the rising prices of fuel and consumer goods, adding that the measures are adjusted according to the situation.

He added that the rate of unemployment dropped to 1.6 per cent in the fourth quarter last year when the government loosened Covid-19 restrictions in November. Its Rao Tiew Duay Kan (We Travel Together) co-payment tourism scheme also helped create jobs.

He went on to say that the export sector has been improving since 2021 after the factory quarantine policy was implemented, allowing factories to resume operations.

Thanakorn said the value of exports in 2021 rose by about 17-20 per cent and is expected to expand by another 5-10 per cent this year.

He added that Thailand can expect to enjoy economic growth this year thanks to agriculture and border trade as these two sectors have not been affected by Covid-19. He pointed out that Asean countries still require consumer goods made from agricultural products made in Thailand.

The spokesman said growth would also be fuelled by export and government spending, as well as the expansion of investment by the private sector, especially in the electric vehicle industry thanks to supportive measures offered by the government.



Fresh elephant foot yam from Chin State - a popular export product

Chin State’s elephant foot yam, which has already penetrated external markets, has proven a popular export product over the years. Yam production has become a lucrative business. According to Myanmar Fruit, Flower, and Vegetable Producer and Exporter Association, Myanmar is mostly exporting only raw yam, and value-added products made from yam will help the market grow in the long term. Myanmar is only producing semi-processed yams at present.
Elephant foot yams are the main product of Chin State, where they are cultivated on over 8,800 acres of land. The Kanpetlet, Mindat, and Matupi townships produce about 1 million visses (a viss is equal to 1.6 kilogrammes) of elephant foot yams. Elephant foot yams can be planted across the country. In addition to Chin State, yams are being grown in Kayin, Mon, and Shan states, and Taninthayi and Bago regions.
Yams produced in Chin State are getting a higher price than those from other regions as they have better quality and taste, traders said. - Salai Ko Kee, KK/GNLM