ASLI INSIGHTS: Asia Unpacked | 28 July 2024
ASLI is back with more ASLI INSIGHTS: Asia Unpacked!
Stay tuned for more top news in Asia handpicked by ASLI and for our curated weekly roundup!
This week’s Asia top news:
1) Striking Balance: Thailand seeks BRICS and OECD Membership
Thailand is seeking membership in BRICS and the OECD to enhance its geopolitical influence. Foreign Minister Maris Sangiampongsa has visited China, India, and Saudi Arabia, receiving positive responses from BRICS members. While some doubt the economic benefits, Thailand sees BRICS membership as strategically important amid U.S.-China tensions. The OECD application aims to reform Thailand's economy and regulatory system. Cautious policymakers suggest Thailand might first join BRICS as an observer. The National Security Council advises against rushing full membership due to geopolitical risks, particularly with Russia. This balanced approach reflects Thailand's strategy to navigate shifting international dynamics.
Read more here:
2) Azerbaijan’s Peace Push: Targeting Agreement with Armenia
Azerbaijan is seeking an interim agreement with Armenia to establish basic principles for a future peace treaty amid ongoing negotiations over Nagorno-Karabakh. Azerbaijani President Ilham Aliyev said the treaty draft is nearly complete but requires Armenia to amend its constitution, which references Karabakh's independence. In September 2023, Azerbaijan regained control over Karabakh, causing mass Armenian displacement. Armenia has agreed to return disputed border villages to Azerbaijan. Azerbaijan's proposal, aimed at fostering neighbourly relations, is expected to progress before the COP29 climate summit in November. Armenian Prime Minister Nikol Pashinyan faces domestic unrest over his policies and constitutional stance on the peace agreement.
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3) Vietnam’s New Path to Clean Energy: Corporate Buying Power
Vietnam has introduced Direct Power Purchase Agreements (DPPAs), allowing factories to buy electricity directly from renewable energy producers, aiding companies like Samsung in meeting climate targets and easing the strain on the state-run grid. This new policy, effective since earlier this month, addresses investor concerns and promotes the construction of new solar and wind farms by ensuring a market for clean energy. The success of DPPAs will hinge on significant upgrades to Vietnam's electrical grid, estimated to cost $15 billion.
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4) Indonesia’s SEZ Expansion: Tax Benefits and $9.9 Billion Boost
Indonesia will extend tax exemptions and other benefits to investors in its Special Economic Zones (SEZs) to boost attractiveness and competitiveness. The government plans to add four new SEZs to the existing 22, with a total investment of 161 trillion rupiah (US$9.9 billion). Investors with a minimum of 1 trillion rupiah will receive a 20-year corporate income tax exemption, while smaller investments will also get significant tax breaks. Non-fiscal incentives include building use rights for up to 80 years, ease of access permits, and 100% foreign ownership in certain industries. The initiative aims to enhance economic development, industrial activities, and trade. The new SEZs will focus on logistics, energy, health tourism, and the digital economy.
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5) ASEAN Explores Trade Ties with GCC
The Association of Southeast Asian Nations (ASEAN) hinted at the possibility of establishing a free trade agreement (FTA) with the Gulf Cooperation Council (GCC) to enhance trade with external partners. ASEAN Secretary-General Kao Kim Hourn mentioned that the GCC has requested an FTA, and ASEAN views this as a positive development. A framework document outlining potential cooperation areas has been agreed upon, and further consultations are planned to develop a framework arrangement for economic cooperation. While the start date for negotiations was not specified, this initiative is seen as pivotal for future trade cooperation. ASEAN and the GCC held their first summit in Riyadh last year, where leaders from Indonesia and Malaysia discussed promoting a trade framework. ASEAN-GCC trade exceeded USD 110 billion, encompassing Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE.
Read more here:
- https://www.bernama.com/en/world/news.php?id=2320549
- https://jakartaglobe.id/business/asean-hints-at-forming-trade-pact-with-gulf-cooperation-council
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