Today Trends

Author: Suiwah Leung, ANU Vietnam currently benefits from China’s COVID-19 lockdowns and the geopolitical tensions between the United States and China — especially in electronics manufacturing. The country flirted with its own zero-COVID-19 policy and lockdowns in 2021 but changed course quickly to have two-thirds of its population vaccinated by December 2021 . News leaked that Apple would move its iPad production from China to Vietnam in June 2022. China’s Xiaomi also moved the production of some of its devices to Vietnam in June 2021 thanks to investments by DBG Technology, a subsidiary of Hong Kong’s DBG Electronics Investment Limited. Samsung, an early entrant into Vietnam, invested in a US$670 million manufacturing plant in the northern province of Bac Ninh in 2014. It increased its investment to US$17.3 billion nationwide in a little over a decade. Intel, another early entrant, opened a US$1 billion semiconductor assembly and testing facility in Ho Chi Minh City in 2006. It ...

Author: Krisna Gupta, CIPS Indonesia received a visit from some of the managers of Australia’s largest superannuation funds in August 2022. The target of the visit was the Indonesia Investment Authority (INA), Indonesia’s sovereign wealth fund. This development is welcome as both countries try to improve economic ties following the 2020 Indonesia–Australian Comprehensive Economic Partnership Agreement (IA–CEPA). Australian pension managers are not the only ones seeking to invest in the Indonesian sovereign wealth fund. The INA has received interest from various fund managers from Canada, the Netherlands and Abu Dhabi. Australian funds will help the INA achieve its target of managing US$20 billion from its current holdings worth US$28.5 million. There are several ways the INA can attract more investment in Indonesia. The INA facilitates investment pooling, which enables foreign investment in a country with shallow capital markets. As a government initiative, the INA can help in...

Author: Editorial Board, ANU When we think of countries that risk ‘growing old before they grow rich’, we usually think of China. But an equally stark illustration of the challenges facing a country with developed-world demographics and a middle-income economy is Thailand. Thailand is facing a rapidly ageing demographic profile, with none of the fiscal ammunition that Northeast Asian economies like Japan, Taiwan and South Korea can draw on to support a growing aged population. There are serious questions about whether Thailand can make up for its looming workforce challenges through productivity improvements, with the education system in dire need of reform and major industries dominated by politically-connected oligopolists. The overarching challenges of the economy look uncannily Northeast Asian: ‘Middle- and working-class households, stressed by growing debt, inflation and mediocre employment prospects, are hardly eager to have more children … Southeast Asia’s second largest an...

Author: Richard Yarrow, Harvard University and ANU Southeast Asia’s second largest and once one of its most dynamic economies is struggling under the weight of an ageing population, a deteriorating education system and low yield rice farming. Thailand looks trapped as a middle-income country, unable to get rich, and stuck between a younger, dynamic Vietnam and larger Indonesia. Getting out of its economic rut won’t be easy, but investment in education and higher quality human capital and agricultural and governance reform should be priorities. Thailand has the lowest fertility rate in Southeast Asia, bar Singapore. Its demographics are arguably more worrisome than those of South Korea, which has a fertility rate close to 0.8. Between 2000 and 2021, South Korea’s population aged 20–24 declined by 15 per cent. In Thailand, that number fell by 20 per cent, moderately better than the 27 per cent decline in Japan. But Japan and South Korea generate over four times the per capita GDP of...

Author: Sulistiyo Aridyono, ANU Indonesian export and foreign direct investment (FDI) inflows have slowed over the last two decades despite the robust performance of neighbouring Southeast Asian countries. To attract FDI and streamline its regulatory environment, Indonesia enacted the Omnibus Law in November 2020. To revive domestic competitiveness and create more jobs, the Omnibus Law reformed Indonesia’s labour-related regulations . But while the relaxation of labour laws can induce higher private investment , it can also harm workers. The competition between countries to attract FDI is influenced by the locational preferences of multinational firms. In Southeast Asia, Vietnam is a success story. Its long-term economic reforms have attracted significant FDI inflows, especially after the country’s WTO accession in 2007. From 2005–2021, Vietnam’s FDI per capita increased seven times from approximately US$270 to US$2000. Vietnam’s rise as an FDI destination has had a negative...

Author: Krisna Gupta, CIPS Indonesia received a visit from some of the managers of Australia’s largest superannuation funds in August 2022. The target of the visit was the Indonesia Investment Authority (INA), Indonesia’s sovereign wealth fund. This development is welcome as both countries try to improve economic ties following the 2020 Indonesia–Australian Comprehensive Economic Partnership Agreement (IA–CEPA). Australian pension managers are not the only ones seeking to invest in the Indonesian sovereign wealth fund. The INA has received interest from various fund managers from Canada, the Netherlands and Abu Dhabi. Australian funds will help the INA achieve its target of managing US$20 billion from its current holdings worth US$28.5 million. There are several ways the INA can attract more investment in Indonesia. The INA facilitates investment pooling, which enables foreign investment in a country with shallow capital markets. As a government initiative, the INA can help i...

Author: Gloria Lai, IDPC In October 2022, Singapore reportedly executed one person, bringing the total number of people executed in the city-state between March–October 2022 to 11. While the details of the reported 11th execution have not been made public, the 10 people who were executed earlier in the year were all sentenced to death after being convicted of drug trafficking. They were mostly of an ethnic minority background or Malaysian citizens . All but one of the death sentences was related to heroin trafficking, with one person executed for trafficking cannabis. At a time when an increasing number of jurisdictions around the world are revising their drug laws, such as Thailand regulating the sale and use of cannabis, executing a person for carrying cannabis highlights the extreme nature of death penalty sentences. Singapore’s concurrent Minister for Home Affairs and Minister for Law Kasiviswanathan Shanmugam justifies his insistence on retaining the death penalty by arguin...

Author: James Curran, University of Sydney Within days of each other, revealing portraits of the United States and China have been unveiled. In Washington, the Biden administration released its  national security strategy . It says much about American psychology at a critical juncture. And Beijing witnessed the opening of the  20th Party Congress  on 16 October that will see Xi Jinping confirmed as president for a record third term. It comes as the White House launches arguably its biggest move to compete with, and restrain, China in its technology war , curbing the ability of world and US chip makers to sell semiconductors and chip-making equipment to Chinese customers. As Bloomberg notes, it strikes at the foundation of China’s efforts to build its own chip industry. This represents a dramatic escalation in technology decoupling and has been met with a forceful Chinese response. Furious officials in Beijing already threaten economic retaliation. With Trump’s trad...

Author: Abul Rizvi, University of Melbourne The Albanese government’s announcement that it will increase the intake of permanent migrants from 160,000 to 195,000 over 2022–23 should set Australia on a path of faster population growth. This growth will be significantly faster than that of Australia’s major trading partners, such as China and Japan, and faster than most developed nations, where populations are projected to decline — with the exception being traditional migrant settler nations. The populations of most of these nations are projected to both age faster than Australia and to shrink as deaths gradually exceed births for the foreseeable future. According to UN population projections , the median age of all developed nations is now well past the sweet spot of 25–35 and over the next decade or two, most will approach a median age of 45–50 and beyond. Ageing and shrinking populations will slow economic growth, not least by putting downward pressure on participation rates an...

Author: Yoshihide Sakurai, Hokkaido University Former Japanese prime minister Shinzo Abe was shot dead on 8 July 2022 in Nara Prefecture while giving a campaign speech in support of a Liberal Democratic Party (LDP) candidate standing in the House of Councillors election. The assassination has led to public scrutiny of the links between the Unification Church and the LDP despite the suspect, Tetsuya Yamagami, telling police that the assassination ‘was not [an act of] revenge against [Abe’s] political faith’. Yamagami alluded to the assassination before the incident, posting on his blog that ‘[Mr Abe was] one of the most influential Unification Church sympathisers’. Yamagami remains imprisoned for psychiatric evaluation. The Japanese media has tended to avoid cult-related issues since the 1995 Tokyo subway sarin attack in which members of the Aum Shinrikyo cult (now known as Aleph) killed 13 civilians and injured another 6000. There is now significant uncertainty in Japan about the ...