[PREMIUM] Country Updates (10-23 March)

Indonesia

• Indonesia removes quarantine requirement for all overseas travellers
• Indonesia seeks new investors for Nusantara following Softbank’s exit
• Indonesia and Singapore signs a new climate change partnership

Indonesia has removed all quarantine requirements for overseas travellers entering the country from 21 March. According to tourism minister Sandiaga Uno, the government made the decision based on the successful implementation of quarantine waivers for vaccinated travellers entering Batam, Bintan, and Bali. Travellers now just have to produce a negative PCR test on arrival. The removal of requirements is likely to be a boost to the tourism and aviation sector. Sandiaga said the government is now looking at increasing its tourism targets for 2022.

Japanese conglomerate Softbank confirmed that it will not be investing in Indonesia’s new capital, Nusantara, project. Softbank’s Chairman and CEO, Masayoshi Son was named one of the members of the steering committee for the capital project when it was announced by President Jokowi in 2019. The Indonesian government is scrambling to find other foreign investments following Softbank’s exit, according to the Jakarta Post. Luhut Pandjaitan, Coordinating Minister for Maritime Affairs and Investment, said the government was looking at investors from Saudi Arabia and the United Arab Emirates (UAE) to bridge the gap.

Singapore and Indonesia have signed a climate change partnership. The agreement will see collaboration in carbon pricing and markets, nature-based solutions, clean technology and green financing. The MOU was developed following the Singapore-Indonesia Leaders’ Retreat and signed by Singapore’s Senior Minister and Coordinating Minister for National Security Teo Chee Hean and Indonesia’s Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan.

Sources: Straits Times; CNA; CNA (2); The Diplomat; Jakarta Post; Nikkei Asia; Jakarta Post; Nikkei Asia (2)

Malaysia

• UMNO’s victory in Johor election ramps up pressure on PM Sabri to call for general elections
• DAP warns CSA cancellation if reforms are not introduced soon as party goes through leadership transition

The push for snap polls has gathered momentum on the back of resounding wins by the Umno-led BN in at least two state elections. It won a two-thirds majority at the Johor state legislative election, just three months after a similar result in Melaka. At the UMNO assembly, UMNO president Ahmad Zahid Hamidi warns his opponents within the party, saying he has never been complacent over the pressure against him despite frequently choosing to remain silent. Ahmad Zahid is currently on trial for corruption and money laundering charges, all of which he denies. It is speculated that he wants an election to be held before any conviction might disqualify him.

Malaysia’s opposition Democratic Action Party (DAP) warned that a confidence and supply agreement (CSA) between the opposition Pakatan Harapan (PH) and the government would be severed if an anti-hopping legislation – a key reform condition of the agreement – is not tabled and passed soon. An early cancellation of the CSA – which is binding until the end of July – could free up the government to dissolve Parliament even earlier than expected to hold snap polls that are widely expected to take place this year. The warning comes as the DAP goes through leadership change. Secretary general Lim Guan Eng, who served for three terms, handed the top position to former transport minister Anthony Loke.

Sources: Straits Times; Straits Times (2); Straits Times (3); The Diplomat; Malay Mail; MalaysiaNow; Nikkei Asia

Myanmar

• ASEAN Special Envoy not allowed to meet with Aung San Suu Kyi during Myanmar visit
• Biden administration formally announces that Myanmar’s military has committed genocide and crimes against humanity
• Myanmar risks falling deeper into poverty with skyrocketing food and fuel costs

Cambodian foreign minister Prak Sokhonn began his three-day trip to Myanmar on Monday, 21 March, and met with military chief Min Aung Hlaing; the regime’s peace committee; and politicians who are not critical of the junta, such as U Ko Ko Gyi, Chairman of the People’s Party. Reportedly, the meeting with Min Aung Hlaing saw a discussion on the five-point consensus and humanitarian aid, although the military chief also tried to play down the crisis. While the Envoy was disallowed to meet with detained former leader Aung San Suu Kyi, some sources say he planned to meet representatives of the National League for Democracy (NLD) although this cannot be confirmed. The Envoy’s visit met with some anger from opposition groups saying it showed deference to military rule in Myanmar and disregarded the will of the people who see no change in the military’s behaviour despite ASEAN’s engagement.

Many in Myanmar continue to struggle with daily life as a result of the political turmoil and the United Nations has warned that half of Myanmar’s  population could sink into poverty this year, with urban poverty set to triple. The price of rice has increased by 30%, the price of edible palm oil has also quadrupled since last year, and fuel prices have also seen a 15% rise since February, prompting many taxi drivers to stop driving as they can no longer afford fuel. Frequent power outages both in urban and rural areas have also caused severe disruption to business owners who rely on regular electricity.

On a separate note, the Biden administration has formally determined that Myanmar’s military committed genocide and crimes against humanity against the Rohingya. The determination is long overdue and analysts say this is a critical step in holding the regime accountable.

Sources: The Irrawaddy, The Irrawaddy (2), CNN, CNA

Thailand

• Rifts in Thailand’s coalition threaten an early election
• Thailand to scrap pre-travel Covid-19 test
• Thailand approves subsidies for oil, gas and electricity to counter high energy prices

Thailand’s ruling coalition has been facing consistent criticism over pandemic mismanagement and the country’s economic fallout. The country’s economy grew by just 1.6% last year after a 6.2% contraction in 2020 – its worst performance since the 1997 Asian financial crisis. In response to calls for political accountability, Deputy Prime Minister Prawit Wongsuwan has said that early elections could be held after Thailand hosts the Asia-Pacific Economic Cooperation (APEC) summit in November. Although the decision on when polls are held lies with the Prime Minister and not his Deputy, DPM Prawit’s statement is the first government indication on the date of national elections. While PM Prayuth Chan-Ocha previously mentioned that he intended to complete a full term which will only end in March 2023, many doubt that will be possible as ministerial rifts deepens. According to a poll conducted by the National Institute of Development Administration (NIDA) in mid-February, 59% wanted an election “as soon as possible,” and 43% said the current administration has “no stability” while 33% said it has “little stability.” The three main coalition parties, Palang Pracharat, Bhumjaithai and the Democrats, have been sparring since last year. If polls are held after the APEC summit – or sooner – analysts say they could return an unfavourable result for Prayuth.

In terms of the economy, Thailand looks set to see a current-account deficit as tourism outlook dims with rising Covid cases globally, and energy import bills ballooning amid soaring oil prices. Notably, the Russia-Ukraine conflict has significant negative implications for Thailand’s current account given its high reliance on imported energy. To boost tourism, Thailand announced that travellers to Thailand will no longer have to take a COVID-19 test before boarding the plane. To counter the impact of high energy prices caused by the Russia-Ukraine conflict, the cabinet on Tuesday, 22 March, announced subsidies for oil, gas, and electricity, which will be in place from May to July.

Sources: Nikkei, CNA, CNA (2), CNA (3), Bloomberg

Vietnam

• Vietnam reopens international travel
• Initial confusing measures on quarantine and testing
• Malaysian PM makes official visit

Total COVID-19 cases in Vietnam now exceed 8 million with daily numbers usually surpassing 100,000. Despite the rise in infections, Vietnam moved ahead to fully reopen to international tourists on 15 March. However, in the lead up to the opening, the government lacked specific guidelines with the Tourism Ministry and the Health Ministry proposing different measures i.e. no quarantine for visitors versus three-day self quarantine. On the date of reopening itself, Vietnam’s Ministry of Health released details on COVID-19 testing rules and verified that no quarantine was required. The country has now one of the more relaxed travel requirements with only a negative COVID-19 test needed.

The Prime Minister of Malaysia, paid an official visit to Vietnam from March 20-22. Malaysia is the second largest ASEAN investor in Vietnam. It is also Vietnam’s second largest commercial partner in ASEAN while Vietnam is Malaysia’s third largest commercial partner in the bloc. MOUs were signed on legal cooperation activities and the recruitment, employment and repatriation of workers. Both sides also agreed to enhance cooperation and information exchange regarding maritime issues. Vietnam and Malaysia will celebrate its 50th anniversary of diplomatic relations next year.

Sources: Straits Times, Bloomberg, Vietnam Insider, VNExpress, Vietnam News, VIR