WIDE-RANGING ASEAN ISSUES
Everything seems to be coming up roses for Indonesia.
Investors are flocking to pour their money into the country due to inflation being under control and favorable economic growth prospects. In mid-June offshore investors boosted holdings of Indonesian government debt by 4.7 percent this month through June 13 to 235.91 trillion rupiah (US$27.6 billion), according to data from the Indonesian finance ministry.
The currency (the rupiah) neared a seven-year high in June as global funds pumped money into the nation’s stocks and bonds. Growth in Asean’s largest economy may reach the upper end of the central bank’s forecast of 6 percent to 6.5 percent this year, Bank Indonesia said June 9.
On the trade scene, Indonesia and the European Union (EU) held the first of a series of negotiations toward a Comprehensive Economic Partnership Agreement (CEPA) in Jakarta on Wednesday, June 15. Recommendations from the Indonesia-EU Vision Group, which was established in December 2009 by Indonesian President Susilo Bambang Yudhoyono and European Commission President Jose Manuel Barroso, to “invigorate the Indonesia-EU partnership”, especially in the trade and investment sectors were presented.
Indonesian Trade Minister Mari Elka Pangestu said that over the next few months Indonesia and the EU would be engaged in intensive consultations regarding the CEPA, comprising the governments and the private sectors of both parties.
In mid-June, the 20th World Economic Forum on East Asia (WEF) was held in Jakarta and raised some issues about Indonesia’s rapid growth..........
The most dramatic event in the election was the selection of Yingluck Shinawatra as the candidate for the opposition Pheu Thai party. She was handpicked by her brother, fugitive former prime minister Thaksin Shinawatra, who frequently calls in from Dubai via video and audio links. Before that selection, Pheu Thai appeared to be rudderless and leaderless.
In Thailand, a country that places much emphasis on physical appearance, the 42-year-old Ms. Yingluck is seen as photogenic but lacking in political experience, although she has had top jobs in her brother’s Thai companies.
She has pledged to give amnesty to her brother as well as red shirt leaders who have joined Pheu Thai as candidates for parliament.
It is doubtful that would bring reconciliation to the country. It is widely accepted that Thaksin Shinawatra financed the red shirt protest in Bangkok that resulted in 91 deaths and a subsequent arson attack on private and public facilities. Granting the proposed amnesties would likely bring street politics back into play by those opposed to Thaksin and his sister, whom he has described as his “clone.”
It appeared that the incumbent Democrat Party of Prime Minister Abhisit Vejjajiva was caught off-guard by the move. A cluster of polls show Pheu Thai inching ahead. However, as Thailand uses the parliamentary system, a party can only come to full power by winning an absolute majority of 250 votes.
Most observers believe that neither of the two major parties, Democrat or Pheu Thai, will have a majority and that will force the party with the most MPs to form a coalition with smaller parties...........
Malaysian laws require that an election must be held every five years and that means a general election must be held in Malaysia in or before 2013. However, a rule of thumb followed in election strategy is not to hold an election in a recession year.
Several economists are saying that 2012 is going to be a recession year, which translates into a hunch that the 13th General Election may be held this year, maybe sometime in October or November after the budget is passed, or else the ruling Barisan Nasional party of Prime Minister Najib Razak could be tossed out. Some say November 11 could be the date.
One of the key weapons in the prime minister’s arsenal is the Economic Transformation Programme. Since its unveiling last year it has raked in RM170 billion (US$ 56 billion) in investments gained through 65 entry point projects (EPPs), and boasts 50 percent completion of the 131 identified EPPs in less than a year.
It is projected to contribute RM220.2 billion ($72.5 billion) in gross national income (GNI) and is expected to create 362,396 new jobs, Najib said in his latest announcement on June 13 that included nine new National Key Economic Area (NKEA) initiatives.
Six other initiatives have already been unveiled independently by project owners since the last ETP update in April. These 15 initiatives are expected to generate RM63.4 billion in investments, RM66.3 billion in GNI and 63,531 new jobs............
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