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Government and Business Leaders Remain Optimistic about ASEAN Economic Outlook

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Government and business leaders at a World Economic Forum on ASEAN today said they remain optimistic about the region’s economic outlook despite threats of an escalation in the US-China trade war, rising interest rates and fear of emerging countries’ currency contagion.

Nazir Razak, Chairman, CIMB Group Holdings, Malaysia, said he is more concerned about the global economy at a time when US leadership has turned away from its traditional globalist stance and is reacting negatively to the rise of China. In contrast, ASEAN has transformed itself remarkably from “a zone of tensions and conflicts to one of peace and stability” and continues to enjoy tremendous economic growth.

Judy Hsu, Regional Chief Executive Officer, ASEAN and South Asia, Standard Chartered Bank, United Kingdom, and Sri Mulyani Indrawati, Minister of Finance of Indonesia, pointed to lessons learned from earlier regional crises that have prepared businesses and governments to manage the current bout of emerging-market volatilities triggered by problems in Turkey and Argentina. “Clients become well versed in managing these risks; they have access to hedging tools. Clients with dollar loans have locked in their interest rates,” Hsu observed.

Sound and prudent government policies, including investments in infrastructure and education, are reducing current account deficits and have supported the region’s economic growth. In addition, ASEAN’s youthful demographics – most of its more than 600 million population are young – and rapid access to technology are also fuelling domestic consumption and intraregional investments.

On the impact of a US-China trade war on ASEAN, Kevin Sneader, Global Managing Partner, McKinsey & Company, Hong Kong SAR, China, said that while there will be winners and losers, the outcome is unlikely to be dire. “This generalization is an example of ‘don’t let the facts stand in the way of a good headline’. The headline is trade war but the reality is there are lots of markets out there, and one of [the] opportunities is within ASEAN; intra-ASEAN trade is relatively modest and these markets can replace those that are hurt.”

Rising interest rates should also be seen as an opportunity for policy-makers and businesses to make the necessary adjustments and to watch reckless spending. “This is a good market discipline in signalling to policy-makers as well as players that you are not going to enjoy cheap money and you have to be very prudent,” said Indrawati.

Veerathai Santiprabhob, Governor of the Bank of Thailand, added that the US could have better coordinated its monetary and fiscal policies as its tax cuts have unleashed a new source of money supply, which has delayed the Fed’s attempts to normalize interest rates.

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UNIDO, Ethiopia and China agree to strengthen cooperation on agri-business development

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photo: UNIDO

Ethiopia, China and the United Nations Industrial Development Organization (UNIDO) have agreed today to further strengthen collaboration on improving the agricultural system in Ethiopia, in particular the livestock value chain development. This agreement will support Ethiopia in creating a modern and a highly productive agriculture system and promote trade.

A Joint Declaration was signed by Ethiopia’s Ministry of Agriculture (MOA), the General Administration of Customs of China (GACC) and UNIDO, with the overall objective of contributing to the Sustainable Development Goals (SDGs) of the 2030 Agenda for Sustainable Development. The cooperation will focus on capacity-building for food safety; promotion of bilateral trade between Ethiopia and China; and knowledge sharing on relevant best practices, regulations and technical standards.

The cooperation is designed and to be implemented within the framework of the South-South and triangular cooperation (SSTC) and Ethiopia’s Programme for Country Partnership (PCP). It also aims to fulfil the Memorandum of Understanding signed between UNIDO and GACC on 26 April 2019 on enhancing cooperation, including within PCP framework to promote inclusive and sustainable industrial development (ISID) and trade facilitation in developing countries. Moreover, a livestock value chain development project in Ethiopia, which is being implemented by MOA, GACC and UNIDO, will also benefit from this enhanced cooperation. The livestock project is funded by the contribution of the Chinese government for South-South cooperation through UNIDO.

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Energy News

ADB, Gulf PD Sign Deal to Build 2,500 MW Power Plant in Thailand

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The Asian Development Bank (ADB) and Gulf PD Company Limited (Gulf PD) today signed a $180 million agreement to build and operate a 2,500-megawatt (MW) combined cycle gas turbine power plant in the Rojana Rayong 2 Industrial Park of Thailand’s Rayong Province, about 150 kilometers southeast of Bangkok.

Gulf PD is owned by Independent Power Development, a joint venture between Gulf Energy Development Public Company Limited (GED) and Mitsui & Co., Ltd. (Mitsui).

ADB’s support is composed of a regular loan of $50 million and a B loan of up to $85 million. ADB will also mobilize $45 million through the Leading Asia’s Private Infrastructure Fund (LEAP), established in 2016 and supported by the Japan International Cooperation Agency. ADB signed the loan agreement with its cofinanciers—the Japan Bank for International Cooperation and 12 other international and local commercial banks—playing an anchor lender role in the project by catalyzing up to $764 million in commercial cofinancing. The B loan will be funded by Singapore’s Oversea-Chinese Banking Corporation and Germany’s DZ Bank.

The agreement for the Eastern Economic Corridor Independent Power Project was signed by ADB Deputy Director General for Private Sector Operations Mr. Christopher Thieme and the CEO of GED Mr. Sarath Ratanavadi at a ceremony in Bangkok.

“The project will build the fourth-largest power plant and one of the largest combined cycle gas turbine power plants in Thailand, which will be key in the Eastern Economic Corridor (EEC) development plan, considered as the prime economic growth driver for the country until 2028,” said Mr. Thieme. “ADB is proud to play an essential role in this transaction, which will help provide reliable power to industry and households and boost Thailand’s economic growth and development prospects. We are particularly pleased to bring in additional cofinanciers to this transaction through our B loan program and LEAP, since the financing gap will be one of the major challenges for the success of the EEC development plan.”

The plant will be fully operational by 2024, delivering at least 16,000 gigawatt-hours of electricity to users. With the state-of-the-art combined-cycle gas turbine technology to be used at the plant, the project will mean 1 million fewer tons of carbon dioxide is emitted every year compared with current electricity grid emissions. The plant will be integral to sustaining Thailand’s energy security given that more than 8,500 MW of generating capacity—equivalent to about 20% of current national energy capacity—of aging power plants will be retired between 2020 and 2025.

Gulf PD was established in 2012 to develop, construct, own, and operate the 2,500 MW power plant. GED is a leading power generation company with the largest portfolio of contracted power purchase agreements in Thailand. Mitsui, established in 1947, is one of Japan’s largest trading companies involved in the development of more than 74 power projects globally.

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UNICEF reports uneven progress in 30 years of child rights treaty

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Although the world has made historic gains over the past three decades in improving children’s lives, urgent action is required if the poorest children are to feel the impact, a new UN report published on Monday warns.

The study by the UN Children’s Fund (UNICEF) calls on countries to recommit to promises made under the Convention on the Rights of the Child, adopted 30 years ago.

Henrietta Fore, UNICEF Executive Director, noted that while increasing numbers of children are living longer, better and healthier lives, the odds continue to be stacked against the poorest and most vulnerable.

“In addition to the persistent challenges of health, nutrition and education, children today have to contend with new threats like climate change, online abuse and cyberbullying,” she said.

“Only with innovation, new technologies, political will and increased resources will we help translate the vision of the Convention on the Rights of the Child into a reality for all children everywhere.”

Uneven progress, emerging threats

The Convention on the Rights of the Child is the most widely and rapidly adopted international treaty in history, and has been ratified by more than 190 countries.

It acknowledges childhood, which lasts through age 18, as a special time in which children must be allowed to grow, learn, play, develop and flourish with dignity. 

UNICEF reported that since its adoption, the global rate for under-five mortality has dropped by around 60 per cent, while the proportion of undernourished children has almost halved.

The Convention has also influenced numerous constitutions, laws and policies that reflect its guiding principles, which include non-discrimination, the right to protection and acting in the best interests of the child.

However, the report shows that progress has not been even.

UNICEF said the world’s children continue to confront age-old threats while new hazards loom over their future.

The poorest children are still likely to die from preventable causes before reaching their fifth birthday. Millions of the most disadvantaged are still at risk due to poverty, discrimination and marginalization. At the same time, cases of the childhood killer measles are on the rise as immunization coverage rates have slowed down since 2010.

Progress in education also is dismal. The report reveals that the number of primary level children out of school has remained static for more than a decade.

“Many of those who are in school are not learning the basics, let alone the skills they need to thrive in today’s economy,” UNICEF added.

In recent years, young people have been speaking up and calling for action to address climate change. UNICEF said they are the ones most at-risk.

“Rapid changes in climate are spreading disease, increasing the intensity and frequency of extreme weather events, and creating food and water insecurity. Unless urgent action is taken, the worst for many children is yet to come,” the UN agency warned.

Inclusive dialogue planned

UNICEF believes that where there is political will and determination, children’s lives improve, as documented by the report, which has been released ahead of World Children’s Day on 20 November.

The study calls for more data and evidence to accelerate progress and advance child rights, alongside recommendations such as involving young people in creating solutions.

UNICEF will use the coming 12 months to promote an inclusive global dialogue aimed at making the promise of the convention a reality for all children.

As Ms. Fore, the UNICEF chief, stated: “The Convention stands at a crossroads between its illustrious past and its future potential. It is up to us to recommit, take decisive steps and hold ourselves accountable.”

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