Foreign investors see huge healthcare potential in Vietnam

HANOI: Vietnam’s hospital sector is on the rise as wealthier Vietnamese are willing to pay more for better patient cares, which will help drive increased foreign investment in the sector in the years ahead.





A Vietnamese trainee looks on during an operation.


The fast-growing country of 86 million is the 13th most populous in the world. Along with a growing number of wealthy and middle-class citizens, Vietnam is one of the fastest-growing markets in the global healthcare industry.


The Economist Intelligence Unit recently predicted that total healthcare spending in Vietnam would rise from nearly US$7 billion in 2010 to $11.3 billion in 2015, an annual average growth rate of 10.3%.


However, the country’s healthcare system remains largely underdeveloped in terms of both the number and quality of hospitals, clinics and doctors. Vietnamese hospitals, with two or three patients per bed in some cases, are the area in most urgent need of upgrading.


The situation looks set to change now as a lot of foreign companies have arrived in Vietnam to explore opportunities in this untapped market.


Already there are a growing number of international hospitals and clinics in the major urban centres, with French and US companies the dominant foreign players in the market. More investors are expected to enter in the next coming years, including those from Germany, India, Singapore and Malaysia.


Last year, India’s Fortis Healthcare agreed to pay $64 million for a 65% stake in Hoan My Medical Corporation, one of Vietnam’s biggest private healthcare groups with six hospitals and many other clinics and facilities nationwide.


This year, executives of a number of hospitals and pharmaceutical companies from Germany and France have come to Vietnam. They are showing the most interest in high-end healthcare market, which mainly serves wealthy people and foreigners working in the country.


“We’re targeting the Hanoi and Ho Chi Minh City markets, where there’s a concentration of many high-income people,” said Michael Sprotte, director of Germany’s TSB Technology Systems Business.


A lot of Vietnamese people travel every year to the United States, Singapore, Thailand, South Korea and China for medical care. According to the Ministry of Health, up to 40,000 Vietnamese went abroad last years and spent $1 billion for medical services overseas.


While many diseases can be treated well in Vietnam, some wealthy Vietnamese prefer the luxurious and hotel-like private hospitals of Singapore and Bangkok, which have been drawing in affluent patients from around the developing world.


In January this year, VinMec, Vietnam’s largest private, hotel-like hospital, built by the leading property developer VinGroup, was inaugurated in Hanoi. It introduced a five-star hotel standard and incorporated 25 VIP rooms and two presidential suites.


VinGroup deputy chairman Le Khac Hiep said the group aimed to make VinMec the top-quality international hospital in Vietnam and Southeast Asia.


Besides helping reduce overloading at public hospitals, he expected high-quality healthcare service providers in Vietnam could help prevent the “foreign currency drain” that results when so many Vietnamese people go abroad for health treatment.


More upscale facilities are in the pipeline. Singapore-based Parkway Group is building an $80-million, 319-bed hospital in Ho Chi Minh City, expected to open in the first quarter of next year.


Other domestic companies will also invest $95 million to build an international-standard hospital with 500 beds in Hanoi, with Phase I to be completed by the end of next year.






http://www.bangkokpost.com/business/economics/301632/foreign-investors-see-huge-healthcare-potential-in-vietnam

Asia’s carbon challenge

Asia Pacific is expected to produce roughly 45% of the world’s carbon dioxide (CO2) emissions by 2030 and up to 60% by the end of the century if current trends continue, according to the United Nations Environment Programme (UNEP).


The figures underscore the challenges the region’s policymakers face as they deal with rapid population growth, urbanisation and increasing consumption demand.





A store in Bang Phra Chonburi, uses a locally developed turbine that can generate power from wind speeds. Kaikorakosh


Emissions from transport worldwide are also expected to jump by 57% between 2005 and 2030. China and India alone will account for more than half that figure, according to the fifth edition of the Global Environmental Outlook (GEO-5), which was launched on the eve of the recent Rio+20 Summit.


With rapid growth in Asia Pacific countries leading to increasing emissions and degradation of natural resources, progress in addressing climate change has been limited compared with some other parts of the world.


Of the 10 countries in the world that are most at risk from climate change impacts, six are in Asia Pacific, according to GEO-5. Notable among them are the islands of the Maldives, 85% of which could be under water by 2100, according to some international projections.


Elsewhere in the region, South Korea and China are promoting low-carbon and green-growth policies aimed at reducing greenhouse-gas emissions. India, Indonesia and China have reduced or removed fossil fuel subsidies in an attempt to encourage their citizens to consume less energy.


“If the region would like to overcome these environmental problems, it has to have strong governance structures, sustainability approaches to integrate in all policy levels,” the report said.


Marine pollution, which is largely caused by land-based activities, is one area that has attracted far less attention than it deserves. The number of coastal “dead zones” has increased significantly.


Thirteen coastal dead zones out of 169 globally are recovering, while 415 coastal areas suffer from eutrophication, meaning that excess nutrients in the water stimulate excessive plant growth. In Asia Pacific, the dead zones are mostly found in the East Asian, Southeast Asian, Yellow, Bohai and South China seas. Marine litter has also been found in the Southeast and North Pacific, East Asian and Caribbean seas.


However, the report does identify four areas in which many countries have made significant progress: eliminating substances that deplete the ozone layer; removing lead from fuel; providing access to improved water supplies; and doing more research to reduce pollution of the marine environment.


Among major developing economies, India managed to phase out the production and consumption of chlorofluorocarbons (CFCs), carbon tetrachloride (CTC) and halons at the start of 2010.


Sri Lanka, the Maldives, China, Indonesia and Fiji eliminated CFCs nearly two years ahead of the 2010 deadline. Five of the six remaining CFC plants in China were shut down in 2007, and Indonesia banned CFC imports in 2008.


Air pollution is another concern and has been linked to premature deaths and numerous health problems, as well as reduced agricultural yields. The report estimates that global economic losses of $14-26 billion annually can be attributed to the impact of air pollution.


Water-related problems are also proving difficult to solve. Of 30 environmental goals identified by the UNEP, progress has been made on just one — access to clean drinking water. However, ensuring clean drinking water remains a challenge in many rural areas of Africa and the Pacific.


The elimination of lead in fuel, meanwhile, is one success story that nearly all countries can point to. The resulting health risk reduction, according to the report, can be expressed in monetary terms as $2.45 trillion a year or 4% of global gross domestic product.


In the bigger picture, though, governments will face more serious damage and degradation if current trends continue and they do nothing to cope with them, warned Achim Steiner, a UN undersecretary-general and UNEP executive director.


However, if governments carry out policies or promote technological innovations, it is still possible for them to accomplish their targets by the middle of the century.


The report makes a number of recommendations including specific long-term environmental targets, reliable data for decision-making, changes for both the short and long terms, investments, and governance measures to eliminate emissions sustainably.


Linking accurate environmental data with national economic statistics is one effective way to put environmental issues at the heart of government policymaking, the report suggests.


Some problems in the past were a consequence of a lack of statistics, or if the statistics were available, they were not considered integral to overall economic analysis. The result was slow progress in areas such as chemical pollution and waste reduction.


Similarly, electronic waste is currently the fastest-growing waste category in the world; however, the data in this area are insufficient in Asia Pacific and it receives less attention than it should.


http://www.bangkokpost.com/news/asia/303888/asia-s-carbon-challenge

Asian M&A: Riding the wave

It will be quite evident to even the most casual observers that Asia has become the focus of the world, due in no small part to the current challenges in the developed Western hemisphere. As a result, growth in and through Asia is now on the top of the agenda for most global and Asian companies.


We see mergers and acquisitions (M&A) as a critical driver of industry structure and future competitiveness in this region. However, M&A activity on a meaningful scale has been slow to come to Asia, even as the region’s growth rate significantly outpaces that of the rest of the world. Though deal activity is heating up in Asia (Asia’s share of global M&A has doubled in the last decade), the industry endgames are still far away and dealmaking is still in its infancy.


We expect the coming decade to be critical for Asian M&A and therefore for the competitiveness of Asian industry. The Asian M&A story is expected to unfold rather differently and perhaps more unpredictably compared with the patterns established in the developed markets of the West.


We see three different themes about Asian M&A:


First, there will be room for multiple local deals in the Asian consolidation, due to the extensive fragmentation of customers and markets. This is unlike the West where there is a single optimum model with a handful of companies dominating each industry. For example, while Coca-Cola and PepsiCo might be the national beverage leader in China, local beverages that cost less and come in flavours that appeal to local tastes (for example, ready-to-drink herbal tea) dominate specific segments and geographic regions.


Second, there is a tendency for cross-border M&A to happen in Asia even before local consolidation takes place, unlike in the West. Asia’s share of outbound M&A, excluding Australia and Japan, grew from 4% to 22% of global outbound M&A from 2001 to 2010. The expansion strategy via M&A is driven by five key reasons:


The quest for new markets: Asian players in different industries such as SingTel in telecommunications, CIMB in banking and Infosys in IT have all used acquisitions to expand beyond their domestic markets.


Filling gaps: These can be in market access, distribution network, brand names, or new technologies, as exemplified by Lenovo’s acquisition of IBM to gain access to the latter’s global distribution and brand, and Tata’s acquisition of Jaguar Land Rover to get access to its top-end design and engineering operation.


Expanded balance sheets: Asia’s surging stock market, easier access to global bond markets as well as cash hoards that companies have built over the years have given Asian companies the means to acquire. In addition, some countries such as China are using its huge foreign reserves to support their national corporations’ bids to buy offshore assets.


Surging Asian currencies: Gains relative to the US dollar and euro have made acquisitions of Western companies more compelling from a value perspective. Thai Union Frozen’s acquisition of MWBrands and NTT’s acquisition of Dimension Data came during periods when the euro and dollar had depreciated at least 10% relative to the local currency over a 12-month period, following a long-term trend of Asian currency appreciation.


Domestic resistance to local consolidation: Sometimes it might be too difficult to consolidate locally compared to expanding internationally due to resistance by shareholders of family-owned companies, or complex cross-holding company structures as is common in many Asian countries.


Third, most Asian economies are dominated by government-owned or government-linked companies, which are typically lethargic, ponderous and bureaucratic compared to private companies. M&A could bring about a real and transformative benefit, allowing for a mindset shift to improve their competitiveness.


This is especially true in sectors traditionally dominated by government-linked entities, such as energy, telecoms, airlines, exploration and production, refining and downstream oil and gas, mining, metals and complex manufacturing. In some cases, government-to-government links may facilitate joint ventures, partnerships and even M&A between two government companies, thus favouring government-led M&A.


Asia is clearly rewriting the rules of global engagement. We are already seeing the emergence of Asian champions, and before the decade is out, there will be many global champions originating from Asia. We have one message for Asian companies: This is your time. If you want to track Asia’s trajectory and be a future Asian or global champion, you need to think about M&A.


http://www.bangkokpost.com/business/economics/305033/asian-m-a-riding-the-wave

A sleeping e-commerce giant

Vietnam is one of Asia’s sleeping giants in terms of e-commerce with a young population eager to buy more online. But low trust in online shopping and e-payment remains the main challenge e-commerce can really take off in the country.





Other payment systems besides credit cards are important in developing economies. Thai Smart Card offers a Smart Purse Online for transactions with many local business allies.


The Vietnamese government’s efforts to promote internet use and e-commerce over the last decade have helped popularise the business. Buying and selling through e-commerce websites has become popular for goods and services such as airline tickets, tours, hotel rooms, electronics, mobile phones, computers, books, perfume and flowers.


Payment and shipping methods are also flexible to meet the requirements of buyers, many of whom still do not have credit cards, from online payments to bank transfers or cash-on-delivery.


In Vietnam, one-third of population now uses the internet, and some 60% go online to research information on products before making a purchase. Internet penetration in the country has recorded the most rapid growth in Asia, with an average annual rate of 20% from 2000 to 2010.


According to a survey of 3,400 businesses operating in different fields nationwide by the Ministry of Industry and Trade, 60% of companies have applied B2B (business-to-business)


e-commerce, 95% of which received orders online. One-third of the companies said e-commerce accounted for 15% or more of their total revenues.


E-commerce transactions in Vietnam now account for 2.5% of it's GDP, or nearly US$2 billion. It's predicted to reach $6 billion by 2015.


Despite its huge potential, e-commerce growth in Vietnam is held back by a low-trust environment.





The other factors that constrained e-commerce a few years ago, including ICT infrastructure and the legal framework, have almost all been tackled, according to Nguyen Thanh Hung, deputy chairman of the Vietnam E-commerce Association.


“Current barriers now are buyers’ low trust in online shopping, customer protection and information security, and dispute settlement in online transactions,” Hung said.


Though payments can now be made easily online through cooperation between e-commerce websites and banks, they still account for a very small proportion of payments in Vietnam.


Though improvements are needed in some areas, many foreign companies are looking at business opportunities in the emerging industry, given Vietnam’s population of nearly 90 million and growing middle class. Big global players including Google, Alibaba, Rakuten, eBay and Amazon are rapidly building their presence.


In June 2012, Google became a member of Vietnam E-commerce Association, expecting to build online business with other members. Google has expressed its desire to earn $30 million a year from the Vietnamese market, targeting small and medium-sized companies.


Alibaba and eBay have also chosen official representatives in the country. While eBay bought 20% of Peacesoft Solution, the owner of the local site chodientu.com, Alibaba chose Investment and Technology JSC as its agent in Vietnam. Amazon and Rakuten have also approached local e-commerce providers for potential stake purchases or partnerships.


Foreign investors are free to form their own companies or they can buy into domestic firms to enter the market, said Tran Huu Linh, director of the Department of E-commerce and Information Technology at the Ministry of Industry and Trade.


Most Vietnamese e-commerce providers have been leaning on foreign investment, including the country’s two leading e-commerce sites, vatgia.com and chodientu.com. Heavy demand for venture capital also has led to the active participation of international financial players including IDG Ventures, DFJ Vina Capital, Softbank China and India, and CyberAgent.


Nguyen Hong Truong, director of business and technology development with IDG Venture Vietnam, said the country was an attractive target, having been ranked among the five most attractive online retail markets in the world in recent years.


“Therefore, even though the infrastructure, conditions of payment, delivery, quality of goods and transaction security are still underdeveloped, investment in this untapped market is a bold step for ambitious organisations,” Truong said.


Nguyen Ngoc Diep, director of Vat Gia Vietnam JSC, said that at the entry-level stage, development of an e-commerce website must attract foreign backers for financial support.


“Each site would need around $2-3 million to successfully pass the startup stage. Without funding from a foreign partner, Vatgia would not have been able to weather that stage,” Mr Diep admitted.


Vat Gia invested around $3 million from 2007-10, with most of this funding from IDG Ventures. Now the site is the top player in Vietnam with more than 1 million hits per day and transactions valued at $15 million a month, making up 40% of the market share.


Mr Diep said that if his companies could not raise more capital from domestic market, they might think about cooperation with foreign partners to keep the business strong and growing.


http://www.bangkokpost.com/business/telecom/306226/a-sleeping-e-commerce-giant

Indian e-commerce seeks winning formula

India has a booming retail market worth about $500 billion, but the market size of its e-commerce industry is only $10.3 billion with 81% of that total coming from travel transactions and 6% from product purchases.

However, e-commerce is likely to enter a high-growth phase in the coming years and travel will continue to lead as new business models emerge, according to B.N. Satpathy, economic adviser at the Department of Information Technology.

The federal government is working on a new information and communication technology (ICT) policy to propel the growth of low-cost, internet-enabled and handheld devices.

“India is poised to be one of the top e-commerce hubs as number of internet users increases. This will bring in a new revolution in retail industry,” he said, adding that e-commerce globally was now estimated to be worth at least $700 billion.

Accelerated innovations have expanded the online retail market to $241 billion in Europe, $176 billion in the United States, $76.4 billion in China and $10.3 billion in India. The Indian retail industry is currently estimated at $520 billion and e-commerce is a sub-set of it.

With high GDP growth, a young population with a median age of 25 years, large and relatively insulated rural tracts, coupled with people’s hunger for achievement, the country is projected to witness maximum growth coming from small towns and cities.

At present, small towns contribute 40% of all e-commerce transactions due to increasing broadband penetration.

India also has the second fastest growing travel market globally, estimated at $42 billion. Of this, the online travel market is expected to grow from $2.9 billion in 2008 to $7 billion by next year.

E-payment systems are also expanding for products such as mutual funds and insurance, and government bodies also are increasingly adopting this route for both accepting and making payments, according to Amrish Rau, vice-president and country manager of the data aggregator First Data Corporation.

Other promising segments include digital downloads and paid content subscriptions.

However, Indian e-commerce companies have been incurring huge losses by selling products at heavily discounted rates as a way to build up the market base.

The industry has suddenly become crowded with all players chasing the volume game and leaving no money on the table. With the cost of acquiring a new customer ranging between $15 and $20, many have shut up shop and the rest are trying hard to keep afloat. 
The business model is slowly finding acceptance with people ordering even groceries, vegetables and meat online. But even after 12 years, none of the e-commerce companies makes money and no one has any idea when they will break even.

Industry watchers are optimistic that online shopping may reach $40 billion by 2025.

Indiaplaza was among the first to go online and began operations in 1999 with warehouses in five cities, trying to cater fast services to new customers. By 2002, founder and CEO K. Vaitheeswaran realised that the only way to make his new business profitable was to start sourcing products from vendors and do away with the warehouses. So he closed all of them.

Most e-commerce players agree is that the high operational efficiency and a strong back-end are the most pressing needs for the industry to gain more credibility.

Myntra.com, a retailer of branded garments, shoes and accessories, whose CEO Mukesh Bansal is optimistic that like global e-commerce, the Indian counterpart will also be profitable in the next two to three years. But huge discounts are a risk that needs to be managed properly or else it will spell doom for the industry.

http://www.bangkokpost.com/business/economics/307594/indian-e-commerce-seeks-winning-formula

Indonesia looks to unclog bottlenecks

Indonesia is preparing to make major investments to improve its infrastructure, which has been blamed for holding back growth and reducing the investment attractiveness of Asean’s largest economy.

President Susilo Bambang Yudhoyono recently told parliament that the country would increase spending on the country’s overburdened roads, airports and power plants and pare restrictions on businesses in order to encourage investments.

Indonesia’s infrastructure is strained on all fronts. It faces a lack of power and its ports and airports are sadly outdated, hardly in line with the country’s status as a G20 economy.

Mr Yudhoyono’s budget proposed lifting infrastructure spending to 194 trillion rupiah (640 billion baht) in 2013 from a target of 169 trillion rupiah this year. The funds will be used to improve 4,431 kilometres of road, add 380km of new rail lines, build 15 new airports and expand another 120.

Indonesia has massive economic potential but is struggling to position itself to take advantage of Asean integration in 2015. Reforms related to distribution and logistics networks are the most pressing needs.

Indonesia has the highest logistics cost in Asean, estimated at 25-30% of gross domestic product (GDP), according to Lukman Hakim, chairman of the Indonesia Institute of Sciences.

Even in Thailand, which is also considered to have unacceptably high logistics costs, the comparable figure is 17% of GDP.

In a country with Indonesia’s geographical conditions, said Mr Lukman, the logistics cost should not exceed 15% of GDP.

“Indonesia’s logistics system is not efficient as there is a price gap in logistics between eastern and western regions,” he said. “Thus, some imported commodities are more affordable than local commodities.”

Distribution of goods between regions and islands is a major challenge and this means the prices of many goods outside Java are too high.

“For example, the price of rice in one province can be 64% higher than in other provinces. Also, the price of a bag of cement in the territory of Papua can be about 20-fold higher than in Java,” he said.

National logistics costs in 2010 were 1,402 trillion rupiah (about 4.6 trillion baht), or 26% of GDP. The figure is made up of inventory carrying costs of 421 trillion rupiah, transport 841 trillion, and administrative costs totalling 140 trillion.

Armida Salsiah Alisjahbana, the minister for National Development Planning, said proper funding for infrastructure development would gradually encourage better connectivity.

The ratio of infrastructure spending to GDP in 2013 is expected to reach 4% and grow to 5% in the following year. “In terms of macro funding, we have set the infrastructure spending target at as much as 5% of GDP in 2014, and it will increase to 7% or 8% afterward,” she said.

With progressive infrastructure funding and an investment ratio of 5% of GDP, the country could achieve economic growth above 7% annually on an ongoing basis, the minister said.

In terms of soft infrastructure improvement, Ms Armida is pushing continuous reform of the bureaucracy with involvement from local governments, private companies and state enterprises.

She said she had already noted more responsive management and productivity from state enterprises in charge of ports, airports, and other means of connectivity.

The World Bank recently increased the performance index of logistics in Indonesia, from 75 in 2010 to 59, reflecting improved contributions of both the private sector and the government.

It recommends two steps to improve efficiency: reducing dwell times in port and developing “dry ports” or inland container depots.

Henry Sandee, senior trade economist with the World Bank, said the average dwell time of import containers in the Jakarta International Container Terminal was still increasing, which was not a good sign.

Over the past year, the port of Tanjung Priok handled one million containers with an average dwell time of 6.7 days, up from 4.8 days a year earlier. Port officials have been working with experts at the Technology Institute of Bandung to monitor dwell time changes every three months.

“The main issue is to improve logistics efficiency to reduce dwell time and develop a dry port. Surely this must be supported with the good coordination,” said Mr Sandee.

The dry port is urgently needed to handle extra demand until work is completed on the higher-capacity Kalibaru container terminal or Tanjung Priok New Port.

“We have Cikarang Dry Port. Let’s compare it with Lat Krabang in Bangkok, which has been optimised. Indonesia has to do the same thing. We estimate 62% of containers will be directed to Cikarang,” he said.

Mr Sandee said Indonesia could learn from its neighbor. He noted the logistics cost (transport, handling, customs and excise tariffs) between Tanjung Priok and Cikarang, a distance of 55.4km, is US$750 per container. In Malaysia between Pasir Gudang and Tanjung Pelepas, a distance of 56.4km, the cost is only $450.

The Indonesia Chamber of Commerce and Industry (Kadin) has set an ambitious target to reduce logistics costs by 10% in 2014 as part of preparations for the Asean Economic Community in 2015.

http://www.bangkokpost.com/business/economics/309575/indonesia-looks-to-unclog-bottlenecks

Flexibility the key to e-commerce success in Indonesia

E-commerce in Indonesia is experiencing substantial growth, from sale and purchase transactions via Facebook to the growing presence of Indonesian versions of international online shops.

A wide variety of payment methods also serves to reassure consumers, ranging from bank account transfers to credit cards, mobile credit, and the traditional cash on delivery. The potential in the country of 240 million has encouraged international online merchants to set up shop, among them Zalora, one of the many brands of the German company Rocket Internet.

The boom in e-commerce in Indonesia is being fuelled by rapid growth in internet penetration — up 32% last year alone, according to research by MarkPlus Insight. Currently, there are about 55 million internet users, both mobile and fixed-line.

According to research by Frost & Sullivan, the total transaction value of e-commerce in Indonesia in 2011 was estimated at US$1 billion.

The biggest challenge for e-commerce in Indonesia, as in many developing countries, is to gain the trust of consumers. Unfamiliarity with English is also a barrier, although

almost all leading sites, such as Tokobagus.com and Bukalapak.com, offer Indonesian language services. Even international sites have Indonesian versions, such as Groupon (with Disdus.com) and eBay, through Plaza.com

Ichwan Sitorus, manager of public relations with Tokobagus.com, said education is needed to increase the number of visitors and turn them into buyers.

“The goal is to increase page view traffic, which will have an impact on ads,” he said. “It is important that we create more revenues which usually come from advertisements placed by third parties.” Most online shops do not charge fees to sellers or buyers, so they rely heavily on ad revenue.

“The tip is an intensive educational activity such as offline activity without forgetting the online activity,” he said.

Online shopping has become a regular habit for the most Indonesian people, especially in big cities such as Greater Jakarta, Bandung, Yogyakarta, Bali, to Makassar.

The two main online shops, with hundreds of millions of page views per month, are Tokobagus.com and the online shopping forum Kaskus. Local sites also average thousands of page views per month.

“Online shopping is common. What is new in Indonesia is the online transaction in which payment is made through a payment gateway,” said Edward K. Suwignyo, assistant vice-president for marketing communications with Multiply, one of the world’s largest online malls.

Multiply is so bullish on Asia that it even moved its headquarters to Indonesia from the United States.

E-commerce sites are not just serving as providers but also are involved in regulating the system, including ensuring the security of transactions, as operators are aware that trust is the key to their success.

One of the local sites that accommodates online transactions is Multiply Indonesia. A buyer can pay using mobile banking such as Klik BCA, a system provided by PT Bank Central Asia Tbk, one of the largest banks in Indonesia. There is also a direct payment using ATMs of large banks such as BCA and Bank Mandiri.

Also significant is that fact that the future of e-commerce in many developing countries doesn’t involve computers. Infonetics Research noted that mobile broadband users worldwide grew nearly 50% to 846 million last year, which will have a huge impact on the way people buy, sell and pay.

In Indonesia alone there are an estimated 100 million internet users who connect via mobile devices including phones and tablets. The rapid growth of mobile channels has put the country ahead of schedule for internet connectivity. Policymakers earlier had set 2015 as the deadline for having half the population, or 120 million people, online.

http://www.bangkokpost.com/business/economics/309578/flexibility-the-key-to-e-commerce-success-in-indonesia

Asean spells out tourism priorities ahead of 2015

Asean countries are now working on a clear road map to achieve the tourism objectives of the Asean Economic Community in 2015. There will be a new ‘Asean for Asean’ campaign and special promotions, along with enhanced strategic cooperation with the growth markets of China, Korea, Japan, India and Australia.

A new website and digital promotional campaigns targeting the mass markets of China and India are part of the programme endorsed by the 10-country bloc’s tourism ministers and Asean Secretary-General Dr Surin Pitsuwan

Asean will also work to attract niche markets such as experiential, creative, adventure, business, senior, and long-stay visitors. There will be special promotions for the cruise market as well to take advantage of the region’s many island and port attractions.

“Our strategy is designed to help build global recognition of Southeast Asia as a competitive, world-class tourism destination,” said Dr Surin.

“Our focus is on drawing visitors to the region and encouraging them to visit more than one country. As each has its own unique attractions, we will capitalise on the sophisticated marketing capacity and resources of our individual national tourism organisations to spread the word.”

The Asean Tourism Strategic Plan 2011-15 is the foundation of the Asean Tourism Marketing Strategy (ATMS) 2012-15, adopted by tourism ministers in January 2012.

Asean destinations attracted 81.2 million visitors in 2011, an average increase of a million visitors each year for the last two decades. Three out of four visitors to Asean come from Asia; 46.5% from within Asean and 27.6% from other Asian markets.

Niche and mass-market promotions will go hand in hand, Sansern Ngaorungsi, who chairs the Asean Tourism Marketing Working Group and is also a deputy governor of the Tourism Authority of Thailand.

“While Asean’s niche, tactical campaigns will target sectors such as adventure, experiential, business and long stay, and show the diversity of Asean, mass tourism demand for mainstream attractions is expected to keep growing and bring important economic benefits to Asean destinations,” said Mr Sansern.

One niche sector, cruises, is being favoured because river and sea-cruise vessels usually visit more than one destination. To promote cruise ship activity in Asean, Singapore will stage the Cruise Shipping Asia Pacific 2012 forum on Sept 17.

Southeast Asian NTOs will also be emphasising the group’s marketing plan at the Asean Tourism Forum in Vientiane from Jan 17-24 next year. More than 1,600 delegates will include some 150 Asean tourism ministers and officials, 800 Asean exhibitors, 400 international buyers, 150 international and local media members and 100 tourism trade visitors.

Myanmar micro-lenders could help reshape rural economy

The first of an expected wave of new micro-lenders plans to begin operating in Myanmar in the next quarter as the country lifts restrictions on a sector that could bring in hundreds of millions of dollars to help kick-start the rural economy.

Germany’s Savings Bank Foundation for International Development (SBFIC) has teamed up with two local non-government organisations, Myanmar Egress and Mingalar Myanmar, with plans to start taking deposits by the end of the year to fund a pilot lending operation.

“We are strengthening the local microfinance institutions there,” said Nicole Brand, SBFIC’s project manager for Southeast Asia, adding the project expected a government licence within a month.

Over decades of military rule and amid Western sanctions, micro-lenders were effectively barred from Myanmar, meaning the rural economy has missed out on millions of dollars in small loans poured into other developing economies such as Cambodia and Laos.

The vacuum has been filled in part by a handful of humanitarian organisations including the United Nations, whose portfolio of just US$50 million accounts for 90% of all micro-lending in the country.

But a microfinance law passed by the new civilian government late last year has prompted a “stream of foreigners” to look into micro-lending, said Akbar Usmani, senior deputy resident representative of the UN Development Program’s Yangon office.

“In terms of the potential market, we are just tiny,” he said of the UN’s microfinance operation in Myanmar.

The country’s appetite for micro-loans is thought to be about $650 million, according to the latest UN estimates, a figure that balloons to $2 billion when small loans are taken into account.

“The domestic banks haven’t really gone out into rural areas in a very big way,” said Usmani.

The UN has dispersed $440 million in Myanmar since it started lending in 1997, offering loans of $100 to $150 to groups of people – mostly women – in the centre of the country, the Irrawaddy Delta and Shan State.

“At the grassroots level people are saying: ‘Look, we have repaid our loans, can we borrow a larger amount?’” said Usmani. “But we are not a microfinance institution.”

Although the new framework affords a legal status to micro-lenders while also permitting non-collateralised loans and deposit-taking for the first time, the central bank has taken the “unusual step” of fixing micro-borrowing and lending rates, said SBFIC’s Brand.

New microfinance lenders cannot charge more than 2.5% per month, a move analysts warn could put off some organisations, given the costs associated with Myanmar’s underdeveloped financial sector.

“This is not enough to allow genuine financial self-sustainability,” said Sean Turnell, an economist at Burma Economic Watch at Macquarie University in Sydney.

In other countries such as Cambodia, microfinance institutions have blossomed, offering savings rates of about 10% per year to lure investors, which in turn has allowed rapid accumulation of funds to lend at high rates of interest, but considerably lower than what informal lenders charge.

In Myanmar, these lenders typically offer cash at about 10% interest per month, while the low level of banking makes transferring money equally expensive.

“Far and away the majority of people in Myanmar have no relationship with a formal bank, or an ability to borrow from them,” said Turnell. “So they are forced into the hands of informal money lenders charging exorbitant rates of interest.”

It also remains to be seen whether micro-lenders will be willing and able to reach some of the areas with the greatest need for loans – the outer-lying ethnic areas which have in many cases have seen fighting between insurgency armies and government forces for decades

Follow ThaiBev abroad

The Stock Exchange of Thailand is pushing companies to invest in less developed neighbouring countries to benefit from higher growth rates, bourse President Charamporn Jotikasthira said in an interview.

Thailand's annual economic growth rates of four to five per cent are "not as exciting as the countries surrounding us", he said in Bangkok on Wednesday. "I'd rather see all of them going abroad more."

The exchange on Sept 1 will ease rules for listing joint ventures that are often used in cross-border transactions. It will also soon establish trading links with Singapore and Malaysia that will make it cheaper for retail investors to buy shares in those countries, Mr Charamporn said.

Bangkok-based Thai Beverage Pcl (THBEV) and PTT Exploration (PTTEP) & Production Pcl are leading an overseas push as Thai companies look for new markets. Thailand's economy is about twice the combined size of Cambodia, Laos, Myanmar and Vietnam, countries with 176 million people that the International Monetary Fund estimates will grow 6.4 per cent on average next year.

"Thailand is playing a very important role in that regional growth," Jason Cox, co-head of Asia Pacific Global Capital Markets at Bank of America Merrill Lynch, said in an interview on Wednesday. "The country is well positioned to take advantage" of higher growth rates in Cambodia, Laos, Myanmar and Vietnam, he said.

Thai companies have spent more than US$21 billion buying overseas assets from the beginning of 2008, according to data compiled by Bloomberg. That compares with about $1.5 billion from 2003 to 2007.

Massaging the numbers

A world record set in Thailand for mass massage as the government embarks on a five-year strategy to make Thailand .... a world medical hub. (Photo by Apichit Jinaku)

Qantas, A little international difficulty

QANTAS, Australia’s oldest and biggest airline, is going through what Alan Joyce, its Irish-born chief executive, calls an “exceptional period”. On August 23rd, the company announced a net loss for the year to June of A$244m ($251m). It was its first loss since privatisation 17 years ago. Qantas has a healthy record in Australia’s domestic market—the problems lie in its international division, where losses reached A$450m. The airline is now reported to be seeking a partnership with the Dubai-based carrier Emirates. Without confirming this, Mr Joyce says the company’s biggest challenge is to return Qantas International to profit in three years.

The financial carnage of its international division is a cruel irony for the airline known, from its iconic tail-fin emblem, as the “flying kangaroo”. The high value of Australia’s currency has made it cheaper than ever for Australians to travel overseas. In the year to June a record 8m people, more than a third of Australia’s population, did so. Their five top destinations—New Zealand, Indonesia, America, Thailand and Britain—are among those Qantas could once have counted on dominating. Not any more.

Mr Joyce cites three causes for his airline’s international problems: record high fuel costs; warfare with some unions, which prompted him to ground Qantas’s worldwide fleet last October (at a cost of A$194m); and the global economic downturn. But Qantas is just as worried about another, less trumpeted cause: growing price and route competition from cashed-up, and often state-backed, airlines in Asia and the Middle East that are moving into the Australian market.

China Southern Airlines, China’s biggest carrier, is the latest and probably the most aggressive competitor. Almost unknown in Australia a few years ago, it now links Sydney, Melbourne, Brisbane and Perth, as well as Auckland in New Zealand, with its base in Guangzhou. Last year, China Southern increased its services to Australia and New Zealand six-fold to 42 flights a week; it plans to raise them to 55 a week. In early August, the airline opened an Australian headquarters in a six-storey building it bought in Sydney, its first such overseas office purchase.

Some of this expansion has to do with capturing China’s burgeoning market of middle-class travellers. In the year to June, the number of Chinese tourists visiting Australia grew by 19%, the fastest growth rate for visitors from any country. “Chinese pockets are full,” says Henry Hi, China Southern’s Australia manager. But it would seem that China Southern has Qantas in its sights as well. In June, it launched thrice-weekly flights between Guangzhou and London Heathrow; they are due to go daily from October. China Southern wants to use this new service it calls the Canton Route (after Guangzhou’s old name) to compete with the “Kangaroo Route” to London that Qantas and British Airways have long operated through Singapore. So far, there is one hitch. Chinese authorities have yet to approve short-term visas that would allow travellers from Down Under to use Guangzhou as a rival to Singapore for a stopover to Europe.

If Qantas’s discussions with Emirates prove fruitful, the Australian carrier would probably end up using Dubai as a stopover for many of its London flights (Frankfurt is Qantas’s only remaining destination in continental Europe). A Qantas-Emirates alliance would have a twofold purpose. It would give Qantas passengers access to the extensive Emirates network in Europe, the Middle East and Africa. Emirates, in turn, would connect with the 65% of Australia’s domestic market that Qantas controls. In June Etihad, another Gulf airline, bought 5% of Virgin Australia, Qantas’s main domestic competitor. Mr Joyce sees Asia as the biggest growth travel market. Competing more aggressively there will probably be key to any strategy Qantas pursues in turning its international outfit around

http://www.economist.com/blogs/gulliver/2012/08/qantas

Seducing shoppers in Sticksville

GROWTH in India is slowing. The economy expanded by 5.3% in the year to the January-March quarter, the slowest for seven years. Shoppers are scrimping. Sales of consumer durables fell by 10-15% in the year to March 2012, executives say. Indian factories cranked out 30% fewer air conditioners and 15% fewer colour televisions, official data show.

Yet there is a bright spot: small-town shoppers are starting to splurge. Godrej, a family-owned conglomerate, saw its sales of white goods drop by over a tenth in big cities in the past fiscal year. But sales in towns of less than 100,000 people rose by 19%, and in villages by over 40%. Bajaj, another conglomerate, says small-town and rural sales have risen handily in recent years, to a quarter of its home-appliances business. Sales of motorbikes and mopeds have decelerated more gently than cars, an urban luxury.

“As far as I am concerned, the slowdown is not having an effect,” beams C.S. Gurubaran, as he plies customers with fizzy drinks in his home-appliances shop in Chengalpattu. Two years ago Mr Gurubaran would sell a dozen washing machines a month at most in this dusty town of 64,000 people in south India. He now sells that many a week. Fridges, food processors and fans are also shifting more quickly. A bride’s parents often buy a whole set of white goods as a dowry.

Government subsidies, good monsoons, high land prices and a low reliance on credit have thus far sheltered these consumers. Chengalpattu’s shoppers are mostly farmers who benefit from government-fixed floor prices for crops. Some have also made big sums by selling fields to developers. Poorer shoppers from nearby villages make money from a government scheme that guarantees 100 days of work a year.

http://www.economist.com/node/21558631

Kannada, threatened at home

It has speakers, of course—nearly 50m of them, mostly in southwestern India. It’s the official language of the state of Karnataka, where active film, television, and music industries broadcast Kannada voices to millions of people. Writers have written in Kannada for nearly 1,500 years, producing a body of literature that includes a complex grammar written in 850. Kannada was the administrative language of some of the subcontinent’s most powerful kingdoms. There are Kannada newspapers and books published constantly. And writers in Kannada, an officially designated “classical language” (referring to its age), have achieved some measure of national prominence.

http://www.economist.com/blogs/johnson/2012/08/language-india

Taiwan rice farmers set for export boom

The door to both the mainland Chinese and Japanese market have been cracked open recently for Taiwan's rice farmers. In Japan, fears over radiation contamination are making the infamously picky Japanese consumers desire foreign grain, while across the Taiwan Strait in mainland China, Taiwanese rice is starting to conquer the supermarket shelves for political reasons. 

For the first time since 2002, when Taiwan joined the World Trade Organization (WTO) and thereby effectively sacrificed the domestic agricultural industry for the well-being of the high-tech ones, the island's rice producers seem to be on the right side of history. 

http://www.atimes.com/atimes/China_Business/NH07Cb01.html

Hong Kong in bid to limit homebuyers from mainland

HONG KONG - Hong Kong's leader on Thursday announced measures to prioritise the property market for locals, after years of price rises attributed to an influx of wealthy buyers from mainland China.

Chief executive Leung Chun-ying said he had instructed officials to draft laws to restrict sales of certain properties only to the seven million Hong Kong residents under a so-called "Hong Kong land for Hong Kong people" policy.

"This is to give priority to the housing need of the local residents," said Leung, who took office in July after winning an election on a platform that included pledges to boost public housing supply.

"We will continue to monitor the property market closely and introduce more measures if necessary," he added.

The measures include boosting land supply by converting 36 sites meant for government and public use to residential use to provide space for nearly 12,000 residential units, Leung told reporters.

Leung's 10-point plan also includes speeding up approval for permits for private home sales, to provide 65,000 additional units over the next three to four years.

The southern Chinese city has been trying to tackle its ever-rising property prices, which has made home ownership beyond the reach of even the upper middle class and has further fuelled public discontent.

Property prices in Hong Kong, famous for its sky-high rent and super-rich tycoons, have surged over the past few years due to record low interest rates and the flood of wealthy people from mainland China snapping up homes.

Analysts, however, said the measures were inadequate to help tame the housing market.

"While the pledge to introduce more land in order to improve longer-term supply is welcome, the immediate impact appears limited, judging by the small amount of supply that will come through soon," Standard Chartered said.

"Overall, we think the latest measures will at best help to calm the market," the bank added in a research note.

The city's average home prices have risen about 13 per cent so far this year, according to Dow Jones Newswires.

A luxury apartment in the city was reportedly sold for a record HK$470 million (S$76 million) recently, making it the priciest condominium in Asia and the world's second most costly apartment outside London's One Hyde Park.

http://business.asiaone.com/Business/News/Story/A1Story20120830-368698.html

free expression on the Internet.

KUALA LUMPUR - A Malaysian minister said Thursday the government will not change a legal amendment that has drawn protests from critics who call it an attempt to stifle free expression on the Internet.
http://www.asiaone.com/News/AsiaOne%2BNews/Malaysia/Story/A1Story20120830-368616.html

Asia's territorial disputes continue to escalate

Tensions in Asia's territorial disputes continue to escalate. A dangerous mix of nationalist sentiments and domestic politics in China, Japan, South Korea, Vietnam and the Philippines, have exacerbated long simmering disputes over several island clusters throughout the region. 

http://www.atimes.com/atimes/Southeast_Asia/NH29Ae01.html

An Internet Asia

http://www.internetworldstats.com/stats3.htm

Thein Sein shuffles to restart reform

Asia Times Online :: Thein Sein shuffles to restart reform

Opportunities & challenges through Asian Highway

http://www.unescap.org/ttdw/common/TIS/AH/files/wgm4/ESCAP-ppt/wgm4-Agenda4-Status.pdf

Loss for the American consumer ?

“Today’s verdict should not be viewed as a win for Apple, but as a loss for the American consumer,” Samsung

http://www.wired.com/gadgetlab/2012/08/what-apple-v-samsung-means/?utm_source=googleplus&utm_medium=socialmedia&utm_campaign=googleplusclickthru

Vietnam’s anti-corruption measures fall short

It should be no surprise that corruption can sometimes occur alongside economic growth in authoritarian regimes. But Vietnam is pro...

Kerry B. Collison Asia News: Vietnam’s anti-corruption measures fall short: 

Fixing China's Economic Imbalances: Michael Pettis | Economy Watch

Fixing China's Economic Imbalances: Michel Pettis | Economy Watch

Neil Armstrong, the first man to walk on the moon, has died, his family said Saturday. He was 82. -- CNN Breaking News (@cnnbrk)

Rethinking The East Asian Miracle: Andrew Sheng & Xiao Geng | Economy Watch http://t.co/2lWiPwPD -- EconomyWatch (@EconomyWatch)

Fixing China’s Economic Imbalances: Michael Pettis | Economy Watch http://t.co/hpD1iqj3 -- EconomyWatch (@EconomyWatch)

Thailand Signals Slower Growth As Export Outlook Wanes: Economy

Thailand signaled growth in the second half of this year may be weaker than previously forecast as a global slowdown hurts exports from Southeast Asia’s second- biggest economy.

Gross domestic product is forecast to expand 5.5 percent to 6 percent, compared with a previous growth range of 5.5 percent to 6.5 percent, Arkhom Termpittayapaisith, secretary-general of the National Economic and Social Development Board, said in Bangkok today. It reduced the forecast for export growth to 7.3 percent from 15.1 percent on concern Europe’s crisis will damp demand, he said.

Enlarge image

Yingluck Shinawatra, Thailand's prime minister, has shelved politically contentious legislation to focus on the economy as Thailand recovers from the worst floods in almost 70 years in 2011. Photographer: Dario Pignatelli/Bloomberg

Thailand’s warning underscores the need for Asian economies to rely on domestic demand for expansion as Europe’s crisis and elevated U.S. unemployment erode export gains. While Thailand joined Malaysia and Indonesia among Southeast Asian nations reporting accelerated growth in the second quarter as policy makers implement fiscal stimulus, its downgraded forecast may reflect regional struggles with sales abroad.

http://www.bloomberg.com/news/2012-08-20/thai-growth-accelerates-as-domestic-demand-counters-global-woes.html

Sharp Shares Fall After Reports On Restructuring: Tokyo Mover

Sharp Corp. (6753), Japan’s biggest maker of liquid-crystal displays, fell the most in five days in Tokyo trading on reports the company may eliminate more jobs and seek investments from companies other than Foxconn Technology Group.

The shares dropped as much as 4.9 percent to 175 yen and changed hands at 177 yen as of the 11:30 a.m. trading break, extending the loss this year to 74 percent. Sharp is the worstperformer in the Nikkei 225 (NKY) Stock Average this year.

http://www.bloomberg.com/news/2012-08-20/sharp-shares-fall-after-reports-on-restructuring-tokyo-mover.html

Toyota Faces 20% Drop In Japan Industry Sales As Aid Ends

Toyota Motor Corp. (7203) and Honda Motor Co. (7267) can thank government aid for helping auto industry sales grow faster in Japan than any major market this year. As state subsidies are about to run out, so may the euphoria.

Japan vehicle sales, after surging about 53 percent in the first seven months, will drop as much as 20 percent next quarter as the payouts expire, analysts at BNP Paribas SA and IHS Automotive said. Toyota is counting on a cheaper version of the Prius hybrid to sustain demand, while Nissan Motor Co. (7201) has said it will offer support to dealers.

http://www.bloomberg.com/news/2012-08-19/toyota-faces-20-drop-in-japan-industry-sales-as-aid-ends.html

Rice Harvest In India Seen At Record As State Prices Increased

Rice production in India, the second-largest grower, is set to climb to a record after local prices were raised, potentially allowing the nation to sustain exports for a second year and swelling a global cereal glut.

The monsoon-sown harvest may gain 10 percent in the year beginning July 1 from 90.8 million metric tons a year earlier, said Tarsem Saini, president of the Federation of All India Rice Millers Association. An end to a three-year ban on exports last year and a forecast for normal rain will spur farmers to increase planting, he said. The monsoon crop, sown from this month, accounts for about 80 percent of annual output.

http://www.bloomberg.com/news/2012-06-26/rice-harvest-in-india-seen-at-record-as-state-prices-increased.html

India, Inflation near 3-year low

India's wholesale inflation unexpectedly fell in July to a near three-year low but economists doubt the drop will be enough to persuade the RBI to cut interest rates at its September meeting to try to revive the struggling economy.




http://in.reuters.com/article/2012/08/14/july-wpi-inflation-eases-idINDEE87D03M20120814

India “More Than Likely” To Lose Investment Grade Status: Fitch | Economy Watch http://t.co/N2BQuIDW -- EconomyWatch (@EconomyWatch)

North Korean leader tells his troops to be ready for "sacred war" during U.S.-South Korea exercises. http://t.co/PGE1fdYj -- CNN Breaking News (@cnnbrk)

NDTV's $1.5 bn suit bares media ratings

NDTV accused executives of the New York-based global market research giant ACNielsen, the London-based Kantar, and their joint venture Television Audience Measurement (TAM, India) of
accepting bribes from rival channels to fudge ratings data.

Asia Times Online :: NDTV's $1.5 bn suit bares media ratings

China's Olympic gold loses some glitter

As China celebrates its victories in the just-concluded London Olympics, with its athletes winning 38 gold medals, the price the nation paid for each of those honors and cost of the the state-sponsored sport system are sparking an intensive debate, raising questions about the legitimacy of the government's focus on promoting nationalism with sports, something that was inherited from the Soviet Union. 




Asia Times Online :: China's Olympic gold loses some glitter

China's Olympic gold loses some glitter

As China celebrates its victories in the just-concluded London Olympics, with its athletes winning 38 gold medals, the price the nation paid for each of those honors and cost of the the state-sponsored sport system are sparking an intensive debate, raising questions about the legitimacy of the government's focus on promoting nationalism with sports, something that was inherited from the Soviet Union. 




Asia Times Online :: China's Olympic gold loses some glitter