Posts tagged economy
Malaysia yesterday announced 15 initiatives, including nine new projects and seven recaps, as part of its Economic Transformation Programme (ETP). According to Prime Minister Najib Razak, the ETP is already bearing fruit despite running for only a short time.
Yesterday’s announcement was the sixth regular update of the ETP, and sees the programme reach 50% (or 65) of its 131 ‘Entry Point Projects’ launched. The 15 new initiatives promise to bring in RM2.77 billion (US$913.8 million) in investment, add RM66.31 billion ($21.87 billion) to Malaysia’s Gross National Income and create 36,595 new jobs by the target year of 2020.
The initiatives (with their national key economic areas) are: (more…)
Here’s some food for thought for anyone who says Singapore’s impressive GDP growth is entirely due to its China connections: Singapore’s GDP overtook Hong Kong’s in the first quarter this year and is projected to be larger at the end of the year.
Singapore’s quarterly nominal GDP was US63.9 billion, 10% higher than Hong Kong’s at $57.9 billion, according to a report by Bank of America Merrill Lynch economist Chua Hak Bin. It’s worth noting that Singapore’s dollar is free-floating while Hong Kong’s is pegged to the USD. The S$ has gained 8.2% against the Hong Kong dollar in the past year and 23.3% in the past decade. Still, Chua says it would have been “far fetched” to predict such a development just a decade ago, given Hong Kong’s greater proximity to China and Singapore’s more volatile neighborhood at the time of the Asian financial crisis.
Singapore’s population is also just 5.1 million, while Hong Kong’s is 7.1 million. The two find themselves frequently compared due to their status as independent (or autonomous) city-states, majority ethnic Chinese populations and the significant role played by the financial services sector in both places. Singapore recently revised its GDP growth forecast for 2011 up from 4-6% to 5-7%. Hong Kong is still no slouch, with 7.2% growth in Q1 2011 and its own upward-revised annual projection of 5-6% (from 4-5%).
source & article: Economic Times (India)
The Iskandar Malaysia Special Economic Zone project is already benefiting the economy and people of Johor “profoundly”, said the state’s Menteri Besar (Chief Executive) Abdul Ghani Othman. Since Iskandar’s beginnings just five years ago, it has delivered to the region increased demand, higher wages, greater business opportunities and a higher standard of living.
Special attention from the federal and state governments has helped too. Under the Ninth Malaysia Plan (9MP) Johor state received RM6.83 billion (US$2.25 billion) in federal funds to improve infrastructure and other public amenities, while its current successor the Tenth Malaysia Plan (10MP) has promised another RM1.39 billion ($459.9 million) between now and 2015. The state government responded with RM313.33 million ($103.5 million) of its own in 2010.
Almost all the funds went towards improving economic efficiency, accessibility and connectivity. Highway improvements alone took advantage of Iskandar Malaysia’s location between Kuala Lumpur and Singapore, allowing it to attract big name and ‘prestige projects’ like the Legoland theme park. Ghani said the property sector in particular has seen a sharp increase in demand, restarting projects stalled after the financial crisis and creating higher-end development opportunities in locations like Danga Bay.
As another sign of its commitment, Johor state relocated its administrative functions to a new development at Kota Iskandar, Nusajaya City, in 2009. The federal government also located its local departments there as part of the Johor State New Administrative Centre (JSNAC), a 1.3 sq km development complete with public plazas, gardens and parks.
source & article: New Straits Times via CBC BNet
The Institute of Public Affairs (IPA) is an Australian think-tank with a focus on economic and political freedom. In operation since 1943, it has long taken an interest in the emerging markets of its immediate Asian neighborhood. Last week it published this 15-page report entitled Innovating Indonesian Investment Regulation: the need for further reform, examining Indonesia’s progress and politics since the Asian Financial Crisis of the late 1990s.
Indonesia is symptomatic of the challenges facing developing countries” and “a model for governance reforms”, the report claims. Economic progress has been stunning in the past decade, after the full restoration of democracy and a succession of market liberalizations. GDP growth is currently at 6.5% per year, there was only minimal exposure to US and European markets during the financial crisis, and foreign direct investment (FDI) has flowed in, particularly from Singapore. Further reforms in 2007-09 opened up more sectors to foreigners and saw a scramble to invest in mining and energy, among others.
While the report claims all this is a good foundation for growth, further liberalization and continued vigilance is needed to compete with other Asian countries and improve Indonesians’ livelihood. The oft-heard transport and infrastructure inadequacies are addressed. Government ownership requirements are still a hindrance to FDI, while increasingly assertive local administrations contribute to unpredictability with new licences, taxes and conflicting regulations. Foreign investors in Indonesia’s future will need a clearer understanding of their obligations and further signs of the national government’s commitment to reform.
source: Institute of Public Affairs
Lutts is enthused by what he saw on a 10-day Southeast Asia tour. Singapore’s economy, he says, rises and falls alongside global trade volumes with its dominance in financial services, insurance and property management. Its busy port also serves as a ship management and repair hub. Singapore’s leaders are “very savvy… really great business leaders” with policies that help drive the economy.
While he thinks Malaysia’s drive to achieve developed nation status by 2020 is “a tall order”, he believes the government’s policies are on the right track, are “constructive to capital development” and will grow GDP somewhat.
Inflation remains a major concern for governments right across Asia with no signs of success yet, he says, but hopes that higher wages will help drive inflation. He also thinks Asia offers some lessons for the US: governments that destroy capital will see investment go elsewhere, while Asia’s leaders seem to know how to balance budgets and keep debt to a minimum.
source & article: International Business Times
The Philippines economy actually grew 7.6% and not the 7.3% originally reported, says its government. President Benigno Aquino announced the news yesterday at a government forum, saying the original figure was ‘a mistake’.
This is, though, the kind of mistake you want to see in the headlines. Even the original figure marked the Philippines’ highest annual growth since 1986, when the Marcos regime was overthrown and democracy restored. It’s also a huge increase on 2009′s figure of 0.9%.
The growth is another sign of worldwide recover from the global financial crisis, but also signals investor confidence in the Philippines new administration, which came to power last year with promises to fight corruption.
source & article: Channel NewsAsia
Here’s a short BBC video report on Indonesia’s growth and its effects on a growing middle class, whose new wealth and access to cheaper credit is allowing them to expand their businesses and afford major consumer goods, like private vehicles. There’s still a note of caution, however, since at least half of Indonesia’s population still live on $2 a day, and are hit hard by the boom’s inflationary side effects, especially on food.
Good news from a country long deserving of it: the Philippines economy more than doubled market forecasts and grew by 7.6% in the final quarter of 2010, its highest rate since the glory days of the mid 1970s. Industry and agriculture strengthened to make up for government spending cuts and the Philippines’ famous population of overseas workers is expected to send over US$20 billion back home this year.
The central bank might even need to increase interest rates to stave off inflation, as food and fuel prices also rise.
Like Indonesia, the Philippines is looking for investment for public-private partnerships in 10 key infrastructure projects likely to be auctioned off in the first half of 2011. Also like other countries in the region, forecasters predict growth will be more subtle in the coming year, leveling off to around 5% but with hopes for growth long promised but not seen until now.
source & article: Reuters via Yahoo! Singapore
Jakarta is overflowing with both people and traffic and this has a severe impact on public health and economic development, according to this Jakarta Globe editorial. The central city has nowhere left to grow and simply cannot accommodate more traffic with current infrastructure, but the population is expanding rapidly and may reach 11 million by 2020. Population density currently stands at 14,400 per sq km, according to the Central Statistics Agency (BPS).
The cost to the economy is huge, says the Presidential Working Unit for Development, Supervision and Oversight (UKP4), reporting the damage at Rp12.8 trillion (US$1.4 billion) a year in lost productivity, health problems and vehicle running costs. With nowhere left to build downtown, two solutions gaining attention are (a) moving the capital to somewhere outside Java, and (b) expanding Jakarta’s city limits to Purwakarta and Sukabumi.
The editorial favors the latter option but calls for sensible planning in whatever measures are made. Progress on elevated road construction has been slow, and access to newly established satellite towns around the city is inadequate. Even the island of Java itself, where Jakarta is located, is disproportionately dense with over half of Indonesia’s 230 million population crammed into 7% of its landmass.
Indonesia requires urgent action to rectify the situation as it becomes a major world economic player. Its capital should be a world-class showpiece of development and livability, standing alongside other regional centers Kuala Lumpur and Singapore.
source & article: The Jakarta Globe
Over at the CNBC’s Squawk Box segment they speak to Karim Raslan, columnist with The Edge Malaysia and CEO of consultancy the KRA Group, about Indonesia taking its rightful place next to the ‘BRICs’ emerging economies of note.
“Unlike Russia, the population is younger and growing,” he says. The economy is currently around US$750 billion and will probably hit $1 trillion by 2015, more if Indonesia can sort out its various physical infrastructure issues. “Imagine when the highways, the ports, are all up and running properly.”
He acknowledges there’s a great geographic disparity along with the economic one, but that recent decentralization of the economy has unleashed the ambitions of millions across Indonesia. The government has been “assiduous” in courting teachers and civil servants, bringing them into the mainstream economy with wage increases. There is also the question of the “push and pull” effect on Indonesia’s sensitive environment, as Indonesia balances its need to protect its natural resources with the voracious appetite of a fast growing economy.