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Businesses brace for near shutdown (nationthailand.com)

Businesses brace for near shutdown

Dec 21. 2020The image shows the street of Myeongdong, one of Seoul’s most visited tourist spots, on Dec. 8. (Yonhap) 

By The Korea Herald, Song Su-hyun

Retailers to suffer the most; exporters likely to be spared from restrictions

As South Korea’s daily coronavirus tally rose to a new record on Sunday, local businesses are bracing for a possible upgrade in the country’s social distancing rules to the toughest level yet – a partial shutdown.

While Level 3 of the government-set five-tier social distancing scheme is expected to decimate conventional retail industries, export-driven sectors such as mobile phones and semiconductor chips are less likely to be massively affected, experts and industry insiders said.

The government and health authorities are taking a cautious approach, given the weight of a decision, but when an upgrade is deemed inevitable, there will be no hesitation, said Prime Minister Chung Sye-kyun.

“When we move to Level 3, over 200 million business outlets and facilities will have to close or limit their operations,” he said Friday.

Not included in that 200 million would be factories of Samsung Electronics, Hyundai Motor and other major conglomerates that buttress the country’s economy, and biotech companies developing COVID-19 treatments, diagnostic kits or vaccines.

These companies are currently operating their production facilities as usual and are expecting no immediate impact from the country’s distancing rule changes, if any.

Company officials contacted by The Korea Herald said they were not letting their guards down by strictly limiting travel and meetings.

Samsung Electronics, the world’s largest memory chip provider and the biggest exporter shoring up the Korean economy, sees no problem in running its chip fabrication lines under its own guidelines to prevent the virus from getting into its production facilities.

“A minimal workforce is allowed to work to keep the lines operate as usual, while employees in the back office and research centers are advised to not hold any business meetings within the workplace and refrain from traveling and having personal gatherings,” a Samsung official said.

Despite the unrelenting pandemic over the past 11 months, Korea’s electronics industry saw its overseas sales steadily grow.

According to data by the Ministry of Trade, Industry and Energy, total semiconductor exports rose 3.5 percent to $89.7 billion from January to November compared to the same period last year.

Chip exports accounted for 19.4 percent of the country’s total exports. If the trend continues, chip exports are estimated to claim over 20 percent of the export-driven Korean economy by the end of the year.

When asked if Level 3 social distancing would hamper the exports, an official from a leading local diagnostics firm told The Korea Herald that, “There has been no noticeable link between social distancing and exports so far.”

“Work from home has not been required, and we have only seen an increase in manufacturing and exporting this year,” she said.

“However, should the government raise the distancing measures to Level 3, the regulations will become stricter, for which we are internally preparing guidelines to minimize disturbance in work,” added the official.

Pharmaceutical exports rose to a record high in Korea in 2020 on the back of increased global demand for Korean coronavirus prevention tools. As of October, the country marked over $10 billion in yearly exports of pharmaceuticals and medical devices, for the first time.

COVID-19 diagnostic kits towed the figure, according to Korea Customs Service.

Korea Pharmaceutical Traders Association seconded the opinion, saying that if Level 3 distancing affects pharmaceutical exports, it would apply differently per product.

However, overall, domestic distancing would not affect overseas sales of Korean drugs, he said.

The situation is starkly different for domestic market-oriented businesses.

Stores that sell daily necessities such as groceries, glasses and medicine would be exempt from Level 3 measures, but businesses considered not essential will have to close completely or partially. Department stores, electronics stores, duty-free stores and clothing and cosmetics sections inside discount chains could be those facing such limitations.

In a regular briefing Friday, the Ministry of Health and Welfare’s spokesperson Son Young-rae hinted that measures could regulate even supermarkets from being crowded.

“It is under review to allow the sale of daily necessity corners inside convenience stores and supermarkets, but the number of customers allowed inside will be limited,” said Son, adding that the same will apply to large discount store chains.

Such measures will limit the operation of 50,000 stores nationwide and 25,000 stores in the Seoul metropolitan area alone.

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CRCC units win rail contract in Thailand (nationthailand.com)

CRCC units win rail contract in Thailand

Dec 21. 2020China Railway employees pave a road in Batang county, Sichuan province, in July. [Photo provided to China Daily] 

By China Daily, ZHONG NAN

Two subsidiaries of China Railway Construction Corp, the State-owned rail construction contractor, have won a $415 million contract to build civil engineering projects for the China-Thailand high-speed railway, the Beijing-headquartered group said in a statement.

Under the deal, the group’s two contractors－China Railway 11 Bureau Group Co Ltd and China Railway 23 Bureau Group Co Ltd－will build construction projects spanning 39.79 kilometers, including railway beds, bridges and railway stations for the first phase of the 250-km-long line linking the Thai capital Bangkok and the northeastern province of Nakhon Ratchasima.

An additional line connects Nakhon Ratchasima to the Thai border at Nong Khai province. A railway bridge linking Nong Khai province with the Laotian capital Vientiane will connect Thai railways with the Laos network. The planned length for this railroad, with a designated speed of 250 km per hour, is 900 kilometers.

Experts said it is one of the major connectivity projects between China and Thailand under the Belt and Road Initiative.

Upon completion, the railroad will be Thailand’s first high-speed railway running across the country and connecting with Laos’ Vientiane until it reaches China’s Kunming, Yunnan province, said Feng Hao, a researcher at the Institute of Comprehensive Transportation of the National Development and Reform Commission.

The railroad is part of the involved countries’ plan for a network of links across Southeast Asia, that had its start in a memorandum of understanding on railway cooperation signed by the Chinese and Thai governments in 2014.

Under the agreement, China will provide expertise and supervision, while Thailand will provide equipment and materials. At the request of Thailand, China will also use a number of Thai engineers and architects to help transfer expertise in maintenance, operation and management of the high-speed railroad, according to information released by the Chinese embassy in Bangkok.

CRCC said this is a significant breakthrough for the group’s branches to jointly develop the overseas market. It has not only successfully extended the company’s business in Thailand, but also enhanced cooperation and mutual trust with local partners and created a solid foundation for the company’s future expansion in Thailand.

Apart from creating growth opportunities such as trade in goods and services, cross-border investment and tourism, the project is also vital for boosting connectivity between China and the Association of Southeast Asian Nations through the China-Laos railway and other economic corridors in the region to better connect with other ASEAN economies such as Malaysia and Singapore, according to the CRCC statement.

In addition to supporting growth arising from the future implementation of the Regional Comprehensive Economic Partnership agreement, the China-Thailand high-speed railway project will be a showcase for effective alignment between the BRI and Thailand’s infrastructure development plans, said Zhang Jianping, director-general of the Beijing-based China Center for Regional Economic Cooperation.

Serving Thailand’s northeastern regions and covering major cities, the railway network will be a powerful engine for economic development and better standards of living in the region, he said.

Chiyawan Chongvatana, commercial minister of the Thai Embassy in China, said the RCEP will not only reinforce the cooperation of regional and global value chains, but also enrich participants’ ability to attract foreign direct investment amid the global fight against the COVID-19 pandemic.

Market access and other traditional business areas aside, the RCEP agreement also includes a number of new components, such as intellectual property protection and collaboration, e-commerce and small and medium-sized enterprises, indicating the agreement is a modern and high-quality agreement, and it also promotes transparency and predictability of trade, she said.

Together with better developed infrastructure facilities, the Thai diplomat said the RCEP will help the region gain more economic and trade advantages.

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Future of export hinges on continuity of EU duty benefit PRI study says (nationthailand.com)

Future of export hinges on continuity of EU duty benefit PRI study says

Dec 21. 2020

By The Daily Star

The future of Bangladesh’s exports heavily depends on the continuation of duty-free privileges to the European Union, the country’s largest export bloc, following the 2024 status graduation, according to findings of a study released yesterday.

If the EU extends the duty privileges, then other developed countries will follow suit, said MA Razzaque, research director of Policy Research Institute (PRI).

As a least developed country (LDC), Bangladesh currently enjoys duty-free access to the EU under the latter’s Everything But Arms (EBA) initiative, with around 61 per cent of its yearly exports destined for the region.

Of these exports, garments account for about 64 per cent, or $24 billion.

So far, only the EU has assured that it would continue providing the zero-duty benefit until 2027 to allow Bangladesh a period for preparations following its status graduation from an LDC to a developing one.

If the privilege is not extended, then local exports will face 9.5 per cent to 10 per cent duty on shipments to the EU, which may pose a challenge in staying competitive in the EU markets, Razzaque said.

Therefore, Bangladesh needs such an extension to go beyond 2027 even though its economy has been severely affected in the Covid-19 fallouts, he added.

The EU is set to review the existing Generalised System of Preferences (GSP) facility in 2023.

So Bangladesh needs to engage in dialogues with the EU to secure duty-free privileges for the new era past the graduation, said the PRI research director.

Razzaque made these comments while presenting a keynote paper at a virtual discussion on “getting ready for LDC graduation”, organised by Economic Reporters Forum (ERF) in collaboration with the Research and Policy Integration for Development (RAPID) and Asia Foundation.

Bangladesh should engage in lobbying with the EU so that it extends the EBA initiative by more than just a few years so that the country’s exports to the largest trade block continue without facing any interruption, he said.

Bangladesh could also lobby for the duty privileges to be removed in phases, Razzaque added.

For instance, the EU could add a 2 per cent duty in the first phase, 3 per cent in the next and so on so that Bangladesh could enjoy a smooth graduation.

Apart from the EU, Bangladesh should also hold intense negotiations with other developed countries like Australia, Canada, Japan, China, India and other GSP-providing countries.

Here, Bangladesh could engage in lobbying with India so that article 12 of South Asian Free Trade Area (Safta) is followed in case of the country’s graduation.

As per article 12, India has committed to continue its duty privileges for the Maldives even after its graduation to a developing country.

However, signing the proposed comprehensive economic partnership agreement (CEPA) with India will not be a wise decision at this moment, Razzaque said.

Similarly, Bangladesh could launch negotiations with China for the continuation of its duty-free facility for 97 per cent of goods of Bangladeshi origin even after the graduation.

“Also, signing a free trade agreement (FTA) with China could bring cheers for Bangladesh in the post LDC period as China itself is a very big consumer market for Bangladeshi products,” he said.

Once, the duty privilege to Chinese markets is withdrawn, local exporters will have to face a 17 per cent duty on exports to Chinese markets.

However, Razzaque also said it would not be wise to rush into signing FTAs or preferential trade agreements (PTA) under pressure.

“LDC graduation presents a lot of challenges but also has a lot of opportunities for the country and we have to find those opportunities,” he added.

Although signing an FTA entails 90 per cent product coverage under the agreement, Bangladesh would still have to make duty free arrangements with partnering countries.

So, if possible, the country needs to be a partner with any of the mega trade deals, such as Regional Comprehensive Economic Partnership (RCEP).

There is a possibility of signing another mega trade deal like the now defunct Trans-Pacific Partnership (TPP) in the near future.

Last year, Bangladesh gave around $600 million in direct export subsidies. Paying such subsidies on exports after the country’s graduation would be difficult. Besides, World Trade Organization (WTO) has some restrictions regarding such a decision.

So, Bangladesh should find a mechanism that allows the country to continue giving such subsidies even after the graduation, Razzaque said.

Currently, of the total revenue generated by the country each year, 30 per cent comes from import duty, as the country is highly dependent on such taxes given that it has very few FTAs or PTAs.

Bangladesh needs to manage the revenue through other measures as the country is getting ready to sign FTAs and PTAs with a few of its trading partners, according to Razzaque.

Overall, Bangladesh needs to save 10 per cent of its costs for offsetting the losses of the LDC graduation. It is possible by improving productivity, weakening the local currency against the dollar, improving the ease of doing business and technologies and logistics, he said.

Some 14 per cent of the country’s exports might be affected due to the LDC graduation, he added.

Razzaque suggested taking advantage of certain opportunities to offset the losses, such as availing funds from the LDC Fund and the Technology Bank for the LDCs and extending the Trade-Related Aspects of Intellectual Property Rights (TRIPs) up to January 2033.

Commerce Secretary Md Jafar Uddin said $7 billion worth of the country’s trade would be affected by the graduation.

However, Bangladesh has the opportunity to export $10 billion worth of halal goods if an accreditation board was formed.

“So, some $3 billion additional trade would also take place if Bangladesh begins exporting halal foods and we also have many other sectors from where we could gain a lot after graduation,” he said.

“That’s why Bangladesh should not be worried about LDC graduation,” Uddin added.

Currently, Bangladesh has been negotiating with 11 countries to either sign FTAs or PTAs.

“We need to continue negotiations with the EU to retain our trade privileges as long as possible as it is our biggest export destination,” said Planning Minister MA Mannan.

Similarly, negotiations with the UK should also be started as this is also a very important export destination, he added.

Mohammad Sirazul Islam, executive chairman of Bangladesh Investment Development Authority, urged for minimising the gap between tax and GDP as the existing 9 per cent ratio was too low even in the context of the country’s South Asian peers.

M Abu Eusuf, a professor of the department of development studies at the University of Dhaka; Kazi Faisal Bin Siraj, country representative of Asia Foundation; Sharmeen Rinvy, president of the ERF, and M Rashidul Islam, the ERF general secretary, also spoke at the event. 

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How are HCM City locals celebrating the holiday this year? (nationthailand.com)

How are HCM City locals celebrating the holiday this year?

Dec 21. 2020Hop on – hop off bus service has been very much embraced by the public this year. — VNS Photo An Phương 

By Vietnam News, An Phương

Restriction on social contacts might have changed how HCM City locals are approaching this year’s festive season, but the “holiday spirit” has remained about the same.

Dazzling decorations can be seen at every corner in the city centre, especially at shopping malls, shops and cafes. Since safety is being prioritised, locals are advised to always carry face masks and hand sanitisers. 

The COVID-19 pandemic has changed many locals’ shopping preferences. — VNS Photo An Phương

Holiday photos 

Taking photos outside holiday setups at department stores and cafe shops has long been a “tradition” among many locals especially young people in HCM City.

“Diamond Plaza on Lê Duẩn Street and Takashimaya on Lê Lợi Street, without a doubt, have the best displays this year,” Như Phan, 24, told Việt Nam News, adding that she recently took her friends and parents to take photos for social media content.

“The number of locals visiting these places has decreased compared to years ago. I don’t exactly enjoy this atmosphere, but I’m glad to be able to take photos without fear of being pushed by other people. Not to mention, since HCM City is relatively hot, it’s cooling and convenient to take photos and shop for presents at the malls during the weekends,” she said.

Nguyễn Huệ Pedestrian Street, an affordable entertainment venue, attracts many visitors during the holiday season. — VNS Photo An Phương

The COVID-19 pandemic has affected business at these malls and many brands have been constantly offering promotions at shocking prices.

A shop owner at Takashimaya said the drop in the number of mall visitors, together with locals’ saving habits during the pandemic, had encouraged brands to think of new ways to clear their stock.

“The 11.11, Black Friday and 12.12 events were perfect occasions to host deep sales without affecting the brand’s image,” he said, adding that he felt lucky to run his business in HCM City where the pandemic has been controlled effectively.

The number of visitors to shopping malls has fallen this year because of the pandemic. — VNS Photo An Phương

In addition to clothing, popular items sold during the holiday season include home accessories and kitchen tools, particularly air fryers, coffee making machines and cold pressed juicers.

These purchases shed some light on how life changed after the lockdown this year. With a significant amount of time by themselves and their family, many locals have started to take better care of their eating habits and lifestyle in general.

Indoor gatherings

Since shopping malls and cafes are going to be very busy later this month, many young locals plan to celebrate the holiday at home.

“Dining in has its own charm, especially when it is not entirely safe heading out to crowded spots at the moment,” said Ngọc Ánh, 27, adding that her closest friends have agreed to bring their own dishes over along with some wine, card games and board games.

“Or we can easily order food from popular restaurants and have it delivered to us. Orders should be made in advance so those restaurants can save us a slot on the big day,” she said.

The Diamond Plaza retail complex on Lê Duẩn Street in District 1 in HCM City has one of the prettiest holiday displays this year. — VNS Photo An Phương

Similar to Ánh, many young working adults have been getting used to staying in since the first outbreak of COVID-19 earlier this year.

“The setting for the indoor gathering will indeed be very intimate and memorable. We have also prepared some gifts for a Secret Santa session after dinner. We hope everyone is going to have a great time,” Duy Anh, 28, said.

Watching Netflix or holding Animal Crossing parties where groups of friends gather for a movie marathon or virtual games are also very “in” this season, he added.

Affordable outings

Locals have been constantly advised to ensure social distancing, wear face masks and carry hand sanitisers in public places.

On one of the busiest streets at night, Nguyễn Huệ Pedestrian Street in District 1, people can hear instructions from loudspeakers installed along the street to follow epidemic prevention guidelines.

Later this month, the Quang Trung Pedestrian Street in District 10 will open, and is expected to attract a lot of visitors.

“The latest pedestrian street reminds me of night markets in Thailand. The layout of the street is very neat, especially the food hall area,” said Thảo Tâm, 25, who was able to experience the market during its trial phase.

“Different from Nguyễn Huệ Street, the new pedestrian street offers a variety of experiences such as dining, shopping and entertainment,” Tâm added.

Due to the impact of COVID-19, many locals nowadays prefer affordable entertainment or just wandering around casual places such as pedestrian or book streets.

“I’m not celebrating Christmas and New Year this year, as I want to make up for several months of lockdown and concentrate on work. That being said, the festive atmosphere is in the air, so it is encouraging me to do something to celebrate it. A pedestrian street has now become an easy option for those like me!” Anh Khánh, 28, said.

He also said he would try out the hop on-hop off bus service that has been very much embraced by the public this year. A 45-minute bus tour, passing by multiple attractions in the HCM City centre, costs VNĐ150,000 per person.

“HCM City is very beautiful this time around, so it is best to have a general look,” Khánh said. – VNS

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Reform linked borrowing permissions are facilitating Ease of Doing Business reforms (nationthailand.com)

Reform linked borrowing permissions are facilitating Ease of Doing Business reforms

Dec 21. 2020

By The Statesman

Linking the grant of additional borrowing permissions by the Government of India to the States to reforms in various citizen-centric sectors has motivated the States to undertake reforms to promote Ease of Doing Business.

5 States have so far completed the stipulated reforms in the Ease of Doing Business. These States have been granted permission to mobilize additional financial resources to the tune of Rs 16,728 crore through open market borrowings.

These states are Andhra Pradesh, Karnataka, Madhya Pradesh, Tamil Nadu and Telangana.

State-wise amount of additional borrowing permissions granted is as under:

State                     Amount (Rs in crore)

Andhra Pradesh             2,525

Karnataka                      4,509

Madhya Pradesh            2,373

Tamil Nadu                    4,813

Telangana                      2,508

The Ease of Doing Business is an important indicator of the investment-friendly business climate in the country. Improvements in the ease of doing business will enable faster future growth of the state economy. Therefore, the government of India had in May 2020, decided to link grant of additional borrowing permissions to States who undertake the reforms to facilitate ease of doing business.

The reforms stipulated in this category are:

(i) Completion of first assessment of ‘District Level Business Reform Action Plan’

(ii) Elimination of the requirements of renewal of registration certificates/approvals/licences obtained by businesses for various activities at least under the following Acts: –

• The Shops & Establishment Act
• The Contracts Labour (Regulation and Abolition) Act, 1970
• The Factories Act, 1948
• The Legal Metrology Act
• The Inter State Migrant Workmen (RE&CS) Act, 1979
• Drug Manufacturing/ Selling/ Storage License
• Trade License issued by the Municipal Corporations.

(iii)    Implementation of computerized central random inspection system under the Acts wherein allocation of inspectors is done centrally, the same inspector is not assigned to the same unit in subsequent years, prior inspection notice is provided to the business owner, and inspection report is uploaded within 48 hours of inspection. This includes the inspection under:

1. The Equal Remuneration Act, 1976
2. The Minimum Wages Act, 1948
3. The Shops and Establishments Act
4. The Payment of Bonus Act, 1965
5. The Payment of Wages Act, 1936
6. The Payment of Gratuity Act, 1972
7. The Contract Labour (Regulation and Abolition) Act, 1970
8. The Factories Act, 1948
9. The Boilers Act, 1923
10. The Water (Prevention and Control of Pollution) Act, 1974
11. The Air (Prevention and Control of Pollution) Act, 1981
12. The Legal Metrology Act, 2009 and Rules

In view of the resource requirement to meet the challenges posed by the COVID-19 pandemic, the Government of India had on 17th May 2020 enhanced the borrowing limit of the States by 2 percent of their GSDP.

Half of this special dispensation was linked to undertaking citizen-centric reforms by the States. The four citizen-centric areas for reforms identified were (a) Implementation of One Nation One Ration Card System, (b) Ease of doing business reform, (c) Urban Local body/ utility reforms and (d) Power Sector reforms.

So far 10 States have implemented the One Nation One Ration Card System, 5 States have done Ease of Doing Business reforms, and 2 States have done local body reforms.

Besides additional borrowing permissions, the States completing three out of the four reforms are entitled to get additional financial assistance under the “Scheme for Financial Assistance to States for Capital Expenditure”. Under the Scheme, an amount of Rs.2,000 crore is earmarked for this purpose.

To facilitate more States to undertake the reforms and avail additional borrowings, The Department of Expenditure, Ministry of Finance had recently extended the deadline for the States to complete citizen-centric reforms in various sectors.

Now, if the recommendation from the nodal Ministry concerned regarding the implementation of the reform is received by 15th February 2021, the State will be eligible for reform linked benefits.