http://www.asia-monitor.com Asia Monitor RSS Feed from Business Monitor International en Copyright 2008, Business Monitor International Ltd Tue, 13 May 2008 06:30 GMT Tue, 13 May 2008 06:30 GMT AFP RSS Generator Vietnam and North Korea are to boost bilateral co-operation in trade, investment, sports and culture after a visit by Deputy Foreign Minister Vu Dung visited Pyongyang on May 7-9. The visit was a follow-up to that of Communist Party General Secretary Nong Duc Manh to Pyongyang in November last year and we foresee increased interaction going forward as North Korea attempts to follow Vietnam's path of economic reform without budging on one-party rule. Indeed, Vietnam could conceivably become a conduit for South Korea and the US to indirectly influence policymaking in Pyongyang. This falls in line with our view of Hanoi taking a more prominent part in regional affairs. http://www.asia-monitor.com/file/64775/Hanoi-Pyongyang-Links-Strengthened.html Mon, 12 May 2008 00:00 GMT The first stage of the Karnataka state elections began on May 10 in what has become a key gauge for the next national elections, due before May 2009. The election campaign was hard-fought, with the ruling Indian National Congress Party and the main opposition Bharatiya Janata Party (BJP) seeking to outdo each other with pledges to alleviate the situation for Karnataka's poor, who are feeling the pinch from accelerating inflation. The BJP is trying to pin Congress down on its pledges to deliver 'inclusive growth' and has therefore made rising inflation a key feature of its campaign, a tactic which, if successful, could be rolled out on a national scale. http://www.asia-monitor.com/file/64774/Karnataka-Elections.html Mon, 12 May 2008 00:00 GMT BMI View: For faster expansion, the economy needs a much more benign monetary policy environment than it currently has, and in the end this boils down to resolving the core problem of weak infrastructure. Without a major overhaul in the country's infrastructure development programme - which can now only be feasibly introduced by the next government - authorities will be forced to choose between keeping a lid on prices and higher GDP growth rates. Recent remarks from officials suggest that the former objective will take precedence in 2008. For now, we see real GDP growth slowing from an estimated 8.5% in FY2007/08 to 7.9% in FY2008/09. http://www.asia-monitor.com/file/64773/Macroeconomic-Forecast-India.html Mon, 12 May 2008 00:00 GMT BMI View: North Korea's submission of 18,000 pages of documents detailing its nuclear programme to the US should relieve external pressure on Kim Jong Il's regime in the near term. However, it is as yet unclear whether the documents cover Pyongyang's covert uranium enrichment programme, and we continue to have doubts that the regime will ever give up its nuclear weapons. http://www.asia-monitor.com/file/64772/Nuke-Declaration:-Will-It-Be-Enough.html Mon, 12 May 2008 00:00 GMT BMI View: We believe the parliamentary elections on April 9 accorded President Lee Myung-bak with a firm mandate to pursue economic reform. Lee's most ambitious expenditure plans are, however, likely to be checked by more conservative elements of the new National Assembly, led by his intra-party rival Park Geun-hye. http://www.asia-monitor.com/file/64365/Elections-Give-Conditional-Support-For-Reform.html Thu, 10 Apr 2008 00:00 GMT Malaysia's economy expanded at its fastest pace in three-and-a-half years in Q407, growing 7.3% y-o-y after recording 6.6% growth in Q307, as domestic demand continued to compensate for a downturn in the country's key export sector. This took full-year growth for 2007 to 6.3%, accelerating from 5.9% in 2006 and beating the government's target of 6.0%, but economic expansion now looks to have peaked. http://www.asia-monitor.com/file/63684/Macroeconomic-Forecast-Malaysia.html Fri, 11 Apr 2008 00:00 GMT Indonesia's economy expanded by 6.32% in 2007, marginally higher than our own 6.20% GDP growth forecast and it has, in our view, reached its medium-term peak. The country managed to maintain the robust growth rate of 6.25% y-o-y in the final quarter of 2007, thanks to a series of interest rate cuts - which buoyed consumer spending and private investment - as well as strong commodity exports. However, given the unfavourable global headwinds, we expect that the momentum from last year's expansion will fail to push the growth rate higher over the coming year. http://www.asia-monitor.com/file/63683/Macroeconomic-Forecast-Indonesia.html Fri, 11 Apr 2008 00:00 GMT A parliamentary commission has approved the appointment of Chief Economic Minister Boediono as the new governor of the central bank, ending fears that a monetary policy void would be created at a time when rapidly accelerating inflation threatens to derail economic and social stability. The selection of Boediono as Burhanuddin Abdullah's successor has also calmed fears that political infighting may be set to escalate ahead of presidential and parliamentary elections in 2009. However, Boediono's move to the central bank will raise concerns over the vacancy he now leaves in the key post in charge of co-ordinating economic policy. http://www.asia-monitor.com/file/63682/Indonesia.html Fri, 11 Apr 2008 00:00 GMT Economic activity unexpectedly accelerated in Q407 from the previous quarter, as higher levels of government spending and lower interest rates boosted domestic demand. Fourth quarter GDP growth surprised on the upside at 7.4% y-o-y, increasing from the previous quarter's 6.6% expansion, taking the full-year figure for 2007 to 7.3% - a 31-year high. This robust growth momentum should be carried forward into H108, but while domestic demand should remain supportive over the remainder of the year, a weaker external environment and a stronger currency will likely weigh on the economy going forward. http://www.asia-monitor.com/file/63681/Macroeconomic-Forecast-Philippines.html Fri, 11 Apr 2008 00:00 GMT The Philippines will scrap its 300,000 tonne ceiling on rice imports, and replace its 50% import tariff on rice with a minimal PHP2/kg service fee, in an attempt to encourage the private sector to bolster the state's efforts to make up the shortfall between growing demand and dwindling supply. Private traders, as a result of restrictive government policies, have been largely marginalised when it comes to rice imports, with the 300,000 tonne annual quota rarely being fulfilled. However, with the situation becoming increasingly desperate, it is hoped that the relaxation of import policies will encourage the private sector to participate more actively in securing much needed rice supplies. http://www.asia-monitor.com/file/63680/Philippines.html Thu, 10 Apr 2008 00:00 GMT Malaysian exports grew 14.5% y-o-y in February - their quickest pace since November 2006 - as sales of crude oil and palm oil buoyed the sector. Exports of crude oil were up 55.4% y-o-y, while palm oil shipments more than doubled, expanding by a massive 103.8%, but while this is indeed a positive development, downside risks to exports still remain. Crude oil accounts for only 7.6% of total exports while palm oil contributes just 8.0%. Electronic exports - the mainstay of the sector, accounting for 37.3% of overall shipments - dropped 6.0% y-o-y in February, boding ill for export performance going forward. http://www.asia-monitor.com/file/63679/Malaysia.html Thu, 10 Apr 2008 00:00 GMT The passing of a long-awaited new bill on sharia-compliant debt by parliament on April 8 has paved the way for Indonesia to launch its first Islamic bonds this year. At this early stage, the size of any such bond - or indeed the launch date - are confined to mere speculation, although early reports have suggested that a domestic offering is being planned for August, with a maximum IDR15trn (US$1.6bn) up for grabs. However, the initial offering is unlikely to be that large, as the finance ministry has expressed a desire to issue a second Islamic bond later in the year, in the international market. http://www.asia-monitor.com/file/63678/New-Bill-Paves-Way-For-First-Sukuk-Issue.html Wed, 09 Apr 2008 00:00 GMT Prime Minister Abdullah Ahmad Badawi's grip on power continues to slip, with pressure mounting not only from opposition parties but also from within his own United Malays National Organisation (UMNO). There is an increasing risk that Abdullah will be ousted as UMNO leader when party elections take place in December, and this has prompted BMI to revise down Malaysia's short-term political risk rating from 86.3 to 83.8. http://www.asia-monitor.com/file/63677/Mounting-Pressure-On-Abdullah-Forces-STPR-Rating-Revision.html Tue, 01 Apr 2008 00:00 GMT Prime Minister Hun Sen has urged dry-season rice farmers to keep sufficient rice supply to satisfy their own demand before selling any surplus amid the recent surge in the price of rice. The price of rice has more than doubled in the past year, and this is putting an increasing strain on living conditions for hundreds of millions of people across large swathes of Asia. We see the growing mismatch between supply and demand of rice continuing to be a prime driver of inflation in lower-income Asian countries in the short-to-medium term, constituting a threat to both economic and political stability. http://www.asia-monitor.com/file/63676/Cambodia.html Thu, 10 Apr 2008 00:00 GMT BMI View: While the Bank of Thailand (BoT) is likely to keep its benchmark one-day repo rate on hold at 3.25% over the next couple of months, the weaker global environment is still likely to result in up to 75bps of rate cuts by year-end. http://www.asia-monitor.com/file/63675/Rates-Steady;-Too-Soon-To-Cut.html Wed, 09 Apr 2008 00:00 GMT