APR News

An International Monetary Fund (IMF) mission, led by Ana Corbacho, visited Bangkok from March 3–18, 2016, to conduct the 2016 Article IV Consultation discussions. The mission exchanged views on recent economic developments and the outlook with officials in the government, the Bank of Thailand (BOT), and other public institutions. It also met with private sector analysts and academics.
According to the IMF, the Thai economy recovered in 2015 after a slowdown induced by political uncertainty. Output grew by 2.8 percent, while headline inflation dropped to -0.9 percent. Core inflation and inflation expectations also declined. The current account surplus rose to 8.8 percent of GDP, thanks to a sizable improvement in the terms of trade, soaring tourism, and import compression associated with tepid domestic demand. Thailand’s financial markets weathered relatively well repeated episodes of global financial volatility. The recovery is expected to strengthen moderately, with real GDP growth projected at 3 percent in 2016 and 3.2 percent in 2017. Public investment would remain a key driver, rising over the next few years and crowding in private investment.
Important risks cloud the outlook. On the external front, rebalancing in China may result in a faster slowdown or larger negative spillovers. A bout of global financial volatility could accelerate capital outflows and further tighten financial conditions. On the domestic front, slower-than-expected execution of mega projects would reduce domestic demand. Negative inflation could linger longer than expected, resulting in higher real interest rates and a rising real debt burden. Household debt overhang could create headwinds to consumption and, in an adverse scenario, affect financial institutions’ balance sheets.
The mission’s recommendations focus on three main areas: (i) deploying an expansionary macroeconomic policy mix that aligns short- and long-term goals; (ii) safeguarding financial stability; and (iii) enhancing potential growth.
Press-release at the IMF official web-site

The Asian Infrastructure Investment Bank (AIIB) starts the selection of project applications by the regional members in order to form a project portfolio s and launch the financing of the most well-prepared projects this year. At the first stage the AIIB will focus on such sectors as transport, energy and water (use of water resources in commerce). However, the AIIB also admits applications for financing projects in other spheres.
The Ministry of Finance and Ministry of Economic Development established a special working group to support promising Russian projects and promote the relevant applications.
Russian companies and financial institutions are invited to send their proposals with a short description of projects to aiib@minfin.ru with a note “Project for the AIIB” and names of the projects.
For more information about the Bank’s activities as well as terms of receiving loans please visit the AIIB official web-site: www.aiib.org. Indicative terms of financing are available at: http://www.aiib.org/uploadfile/2016/0226/20160226062223493.pdf.
Press-release at the Ministry of Economic Development of the Russian Federation official web-site (in Russian)

Senior Officials from ASEAN and India, meeting at the 18th ASEAN-India Senior Officials Meeting (AISOM) held in Ha Noi, Viet Nam on 18 March 2016, reaffirmed the commitment to further enhance cooperation and strengthen relations between both sides within the framework of the ASEAN-India Strategic Partnership.
The Senior Officials agreed to ensure the effective and efficient implementation of the agreed projects and activities of the new ASEAN-India Plan of Action 2016-2020 that was endorsed by the Leaders last year.
The Meeting discussed the ASEAN Connectivity plans and noted India’s commitment to support ASEAN realise its connectivity goals, including the establishment of a US$1 billion line of credit for ASEAN Members States to tap for connectivity projects. Recognising the importance of people-to-people connectivity, the Meeting called for enhanced cultural exchanges involving youth, media and intellectuals, and in this regard noted the plan to convene the 2nd International Conference on ASEAN-India Cultural and Civilizational Links in Jakarta this year.
On economic cooperation, both sides agreed that more could be done to further strengthen trade and investment, in particular to achieve the proposed target of at least US$200 billion in two-way trade by 2022. Both sides noted the importance of the Regional Comprehensive Economic Partnership (RCEP) and agreed to work toward its completion by this year.
Vietnam is ASEAN’s Coordinator for ASEAN-India Dialogue Relations from 2015 to 2018.
Press-release at the official ASEAN web-site

In 2017, ASEAN will celebrate its 50th Anniversary. In celebration of this remarkable milestone, the ASEAN national tourism organisations have jointly developed a tourism programme under the theme “Visit ASEAN@50: Golden Celebration”.
Visit ASEAN@50: Golden Celebration will highlight ASEAN’s best 50 festivals and 50 most unforgettable travel experiences, whereby visitors will enjoy a wide range of ASEAN tourism products through diverse destinations, culinary, events, and engagements with local communities.
Targeting major regional and long-haul source markets – such as: China, Japan, Korea, India, Australia, UK, Germany, Russia, the UAE, USA and Canada, Visit ASEAN@50: Golden Celebration is targeted to achieve 121 million international visitor arrivals to the region by the end of 2017; increase tourism receipts to USD 83 billion.
The official pre-launch of the Visit ASEAN@50: Golden Celebration campaign was spearheaded by ASEAN Tourism Ministers and Leaders at the recent ITB Berlin on March 10, 2016.
For more information on the campaign of Visit ASEAN@50: Golden Celebration please contact Ms. Dee Suvimol Thanasarakij, ASEAN Tourism Marketing Coordinator at email: deesuvimol@gmail.com.
Press-release at the official ASEAN web-site

From the ASEAN side the meeting was attended by the Permanent Representatives of ASEAN Member States to ASEAN and representatives of the ASEAN Secretariat, from the Russian side - the inter-agency delegation.
Apart from its usual agenda in reviewing the cooperation and exchanging views on the issues of common concern, more attention was also paid to the preparation for the Commemorative Summit on the occasion of the 20th Anniversary of the ASEAN-Russia Dialogue Partnership to be held on 19-20 May 2016 in Sochi, Russia, particularly the elaboration of its final documents as well as efforts to endorse the Russian project proposals to be implemented during the commemorative year, in particular in the areas of biological safety, biotechnology, legal support, maritime environment, universities interactions, youth contacts and others.
The meeting adopted the Draft Guidelines for Appraisal, Approval, Financing and Reporting on ASEAN-Russia Joint Activities and Cooperation Projects Funded by the ASEAN-Russia Federation Dialogue Partnership Financial Fund (ARDPFF) and its annexes.
Press-release at the official ASEAN web-site

With the launch of its new trade portal, the government of Bangladesh’s is making import and export information more easily accessible to traders interested in doing business in the country. Bangladesh is moving towards full compliance with a new WTO agreement that asks countries to promptly publish trade-related information in an easily accessible and transparent manner.
The portal, a website that provides documents and information on the trade process, is hosted by the Ministry of Commerce with support from the World Bank Group and is expected to accelerate growth in Bangladesh and increase investments.
Currently, it takes most traders in Bangladesh between one and five days to obtain information on rules and regulations relating to their business. Now, with only a few clicks the trade portal provides information relating to existing trade regulations and procedures, including but not limited to laws, administrative procedures, guidance notes, applicable fees, forms, licenses, permits and penalties applicable in case of breach. Users can view the portal in both English and Bangla.
Press-release at the World Bank official web-site

Actions on the table were focused on boosting regional economic integration and quality growth, the regional food market, micro, small and medium enterprise modernization and labor productivity. The discussion was based on exchanges between technical officials over the preceding two weeks.
APEC economies are drafting the collective strategic study on issues related to the realization of the Free Trade Area of the Asia-Pacific, or FTAAP. It aims to pinpoint how undertakings like the Pacific Alliance, Regional Comprehensive Economic Partnership and Trans Pacific Partnership could lead to an APEC-wide agreement for harnessing new trade and growth opportunities.
Parallel emphasis is on facilitating investment and infrastructure development that supports food supply chains, helping Peru and other agriculturally rich APEC economies export to the increasing numbers of middle class consumers in the region, as well as harmonizing their regulations and standards to strengthen food safety.
Senior Officials are advancing new measures to promote regulatory reform and the application of digital tools that make it easier for people in APEC economies to start and grow a business, and to do business across borders.
Concurrent focus is on ensuring healthy, productive workforces through the introduction of policies that spur innovation within the sector while improving access to healthcare and controls against emerging health threats such as the Zika virus. Senior officials are moreover taking steps to facilitate cross-border exchanges of students and academics as well as career skills development and digital literacy to bolster people’s job prospects and social mobility in a globalized marketplace.
Press-release at the official APEC web-site

The Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with India on February 12, 2016.
The Indian economy is on a recovery path, helped by a large terms of trade gain (about 2.5 percent of GDP), positive policy actions, and reduced external vulnerabilities. Since late 2014, a collapse of global oil prices has boosted economic activity in India and underpinned a further improvement in the current account and fiscal positions, and engendered a sharp decline in inflation. Due to its further-reduced vulnerabilities and improved growth prospects, India has experienced large foreign direct investment inflows in 2015. As a result, and in conjunction with the continued much-smaller current account deficit (largely due to continued low global commodity prices), international reserves have increased by $46.7 billion since end-March 2014, standing at US$350.4 billion at end-December 2015. Nonetheless, persistently high household inflation expectations and large fiscal deficits remain key macroeconomic challenges, resulting in limited policy space to support growth through demand management measures. Furthermore, anemic exports as well as headwinds from weaknesses in India’s corporate financial positions and public bank balance sheets weigh on the economy.
Growth is projected at 7.3 percent for fiscal year FY2015/16, picking up to 7.5 percent in FY2016/17 (at market prices), supported by stronger domestic demand. With the revival of sentiment and picking up of industrial activity, an incipient upturn in private investment is expected to help broaden the recovery.
While the balance of risks has improved, economic risks remain tilted to the downside. On the external side, despite the reduction in imbalances and strengthening of buffers, the impact from intensified global financial market volatility could be disruptive, including from unexpected developments in the course of U.S. monetary policy normalization or China’s growth slowdown. Absent disruptive global financial market volatility, slower growth in China would have only modest adverse spillovers to India, given weak trade linkages. Domestic risks include continued weaknesses in corporate financial positions and public bank asset quality, as well as setbacks in the reform process, which could weigh on growth, accelerate inflation and undermine sentiment. On the upside, further structural reforms could lead to stronger growth, as would a sustained period of low global energy prices.
Executive Directors commended the authorities for their appropriate policy actions that—along with favorable terms of trade—have underpinned India’s improved economic performance and reduced external vulnerabilities. They welcomed in particular recent measures aimed at increasing public infrastructure spending, rationalizing subsidies, creating more flexible labor and product markets, and enhancing financial inclusion.
Directors saw as priorities for the authorities to accelerate reforms to remove supply-side bottlenecks, especially in the agricultural and power sectors; and to facilitate land acquisition. Further reforms are also essential to boost employment in the formal sector, encourage female labor force participation, and enhance labor market flexibility more broadly.
Press-release at the official IMF web-site

The IMF’s Regional Office for Asia and the Pacific (OAP) and Hitotsubashi University hosted the conference “Advances and Challenges in Regional Integration,” in Tokyo on March 3-4, to discuss Asia’s experience with economic integration, including in the areas of trade, financial markets, and labor mobility.
The discussion by conference participants highlighted that while further financial integration could be beneficial to Asia, the associated risks also need to be managed. In particular, some participants stressed that financial sector liberalization and capital market liberalization need to be accompanied by the development of financial and macroeconomic institutions to manage the attendant rise in risks and vulnerabilities.
In his opening remarks, IMF Deputy Managing Director Mitsuhiro Furusawa stressed that Asia has made significant progress in economic integration and collaboration. “The region has come a long way in terms of economic integration, helped by many successful rounds of multilateral trade agreements that have reduced barriers,” he said. “In addition to trade Asia has made important strides in the area of financial integration as well. Motivated by the Asian financial crisis of 1997-98, significant steps have been taken, such as regional liquidity support arrangements through the Chiang Mai Initiative Multilateralization, the Asian Bond Fund, and the Asian Bond Market Initiative.”
In her keynote speech, Professor Anne O. Krueger of Johns Hopkins University stressed the synergies between pursuing regional and global trade integration. “In order to fully reap the benefits of regional trade agreements (RTAs) and make sure they do not result in regional protectionism, it is crucial to pursue RTAs in the context of multilateral trade liberalization,” she said. “As the fastest growing region in the world, Asia has a special responsibility in providing leadership and pushing the international community for a revival of WTO agreements.”
The conference brought together senior policymakers, academics, and representatives of the IMF, the Asian Development Bank, think tanks, and the private sector. The Japanese government financed the conference, which is part of OAP’s capacity building activities in the region.
Australia, Cambodia, China, Hong Kong, Indonesia, Japan, Korea, Lao P.D.R., Malaysia, Mongolia, Myanmar, Philippines, Sri Lanka, Thailand, and Vietnam were represented at the conference.
The conference’s program and presentations
Press-release at the official IMF web-site

Participants of 40 APEC working groups’ meetings to be held in February 2016 will discuss new, cross-cutting policies for ensuring “Quality Growth and Human Development”. The proceedings of the two weeks meetings will culminate with the First APEC Senior Officials’ Meeting (SOM1) on March 3-4, 2016.
According to Ambassador Luis Quesada, Chair of the 2016 APEC Senior Officials’ Meeting, “We are experiencing challenges in the global economy, which affects growth in the region and how APEC approaches its agenda.” “APEC’s challenge is to take policies for building trade and sustainable, resilient economies across the Asia-Pacific to the next level,” he explained. “Our agenda is focused on positioning the region’s 3 billion people to take advantage of new economic opportunities stemming from the delivery of higher quality growth.”
Initiatives to be taken forward in Lima include APEC’s collective strategic study on issues related to the realization of the Free Trade Area of the Asia-Pacific (FTAAP), environmental services development, regulatory reform for improving the ease of doing business, and policies to make it easier, cheaper and faster for people and goods to move throughout the region.
Boosting electronic commerce, small business participation in trade, and defense against corruption, increasing disaster risk due to climate change and emerging health threats like the Zika virus will be among other points of emphasis.
Officials will also consider recommendations to come out of the first APEC Business Advisory Council meeting in 2016 in San Francisco, United States on February 24-28, 2016.
Press-release at the official APEC web-site