Governor Muhammad Ibrahim, in his inaugural quarterly economic briefing to the media as central bank chief, says growth for the first half of this year will be lower than the first six months of last year.

“We expect the second-half to start improving and to be able to get to the 4 per cent to 4.5 per cent growth target. Our data shows that we’re on-track and we should be able to get there,” he says.

Muhammad took over from Dr Zeti Akhtar Aziz at the beginning of this month.

However, he warned that Malaysia’s fairly open economy is susceptible to global headwinds. In fact, growth for the first-quarter on a year-on-year comparison has come off pretty significantly despite beating economists’ estimates for a 4.0 per cent expansion. Gross domestic product (GDP) grew 1.0 per cent when compared to the previous quarter’s 1.2 per cent expansion.

The last time GDP had plumbed to such levels on a year-on-year basis was during the global financial crisis of 2008/2009. The central bank noted that the moderation in growth mainly reflected external shocks to the economy and cautious spending by the private sector.

Independent economist Lee Heng Guie tells StarBizWeek that the drop in private investments is worrying.

Private sector consumption and investment has been crucial in supporting economic growth.

“The pullback in private investment reflects the weak business sentiments,” he says, but adds that should private consumption be sustained, then the 4 per cent to 4.5 per cent growth target is achievable.

Meanwhile, Muhammad does not expect Malaysia to go into a recession, pointing out that improving manufacturing activity, better commodity production from diminishing impact of the El Nino weather phenomenon and sustained private consumption will support the economy in the second half of the year.

He adds that reforms carried out in the past two decades to transform the economy has also helped make the economy more resilient and in this respect, the pace and stance of reform will continue. “We’ve been very pro-active in managing the financial system and the economy and going forward, it will remain the same,” Muhammad says.

He says the ringgit will also reflect the economic fundamentals in the long-run, with daily volatility in the currency to be expected. Muhammad did not want to reveal too much of the monetary policy strategy going forward as the monetary policy committee meets next week.

“As far as we’re concerned, our overnight policy rate (at 3.25 per cent) is accommodative and growth-friendly at the moment,” he says, adding that the central bank continuously look at the data to decide on the benchmark rate as well as the statutory reserve requirement (SRR – a requirement that commercial banks have to set aside a certain amount of their cash with their central banks on a mostly interest-free basis).

Muhammad says the move to reduce the SRR by 50 basis points to 3.50 per cent from February has eased the cost of funding on banks with the Kuala Lumpur Interbank Offered Rate, the rate at which banks lend to each other, having declined 12 per cent.

“We’ll look at the data and take the necessary steps,” he says, responding to a question on whether there are more SRR reductions in the pipeline.

Commenting on negative rates to which several central banks including the Bank of Japan has adopted, Muhammad says these rates “are suitable for their own circumstances. If this works out and they’re able to grow demand and consequently their economies, then that’ll be very positive for us”.

In regards to China’s slowdown and debt problems, Muhammad says China’s ongoing transformation will benefit countries like Malaysia, which has close trade linkages with the country. He says there will be issues but that the reforms will ensure China will be on a better economic footing.

On the issue of central bank’s fine on 1Malaysia Development Bhd (1MDB) for failing to comply with rules under the Financial Services Act, Muhammad says the payment of the compound will mark the close of investigations.

“We’ve closed this investigation into 1MDB,” he adds, declining to reveal the amount that 1MDB paid for the fine. 1MDB had issued a statement saying that the sovereign strategic investment firm will pay the fine by May 30.

The vast development taking place in the southern state of Johor, once a popular feeding ground for the mammal, has led to its dwindling numbers.

Back in the 1960s and 1970s, local fishermen would often catch a glimpse of the shy creatures as the area was abundant with spoon seagrass, their main diet.

Fishermen Tang King Tong, 68, recalled an incident in 2004 where a 30kg baby dugong got caught in a fishing net.

“We convinced the fisherman to release the dugong back into the sea as it was still a baby. Its mother was roaming near the shore, as if waiting for her baby,” he said in an interview.

Tang claimed it was a common practice in the old days for the orang asli community (indigenous people) to consume dugong meat, which tastes like beef.

“Orang asli would also carve the bones into a pipe,” he said, attributing this to a belief that smoking it would help reduce body temperature when a person was suffering from high fever.

There was also talk then that the tear drop of a dugong was believed to have magical powers, so bomoh (shaman) would use it to make love potions, he claimed.

Tang, who has been living in the village since marrying his orang asli wife in the 1960s, claimed there were about 200 to 300 dugong five decades ago but their number had decreased by more than half.

“Besides dugong, it was common to spot crocodiles, turtles and bottlenose dolphins in the waters of Gelang Patah, especially near Merambong Island which is rich with seagrass.

“The seagrass is a favourite breeding ground for prawns, crabs and seahorses as the marine creatures can camouflage themselves on the seabed or hide from their predators there,” he said.

He believes that the number of sea creatures had dipped due to land reclamation works.

Another fisherman Rolen Oni, 35, said he first saw a dugong, almost 5m long, when he was about 16 years old.

“Three adult dugong had died in the past due to injuries from ship propellers near the port area.

“Some people have even offered financial rewards to fishermen in the village if they manage to catch a dugong alive,” he claimed.

The most recent spotting of a dugong was on May 5 when the carcass of one was found floating in the sea near a village after it had apparently sustained injuries from fishing nets.

By doing so, Beijing is aiming to limit the potential instability these lenders might pose to the country’s wider economy and society.

In some cities, investment firms and online lenders have been ordered to break leases and close their storefronts. In addition, the registration of all new firms with finance-related names was suspended nationwide last month, said media reports, as more of such firms faltered.

The move comes as the number of P2P lenders – mostly websites that connect borrowers to lenders – proliferated over the past few years as small firms, unable to get bank loans, flocked to such platforms for alternative funding.

Investors seeking alternatives to the volatile stock market also made it one of the fastest-growing segments in China’s financial system.

There were 2,600 platforms as of the end of last year, up from 880 at the start of 2014, according to Chinese data firm Wind Information. While some extend credit on reasonable terms to small businesses, others might be loan sharks, charging illegally high interest rates to borrowers desperate for short- term funds.

Lending in the segment hit 982 billion yuan (US$150.86 billion) last year, soaring from 253 billion yuan in 2014, making China’s P2P market the world’s largest.

But the explosive growth in the loosely regulated sector has led to a host of problems.

Almost 1,000 online lenders, for instance, have been shuttered in the past year. In some cases, senior executives have fled as financial problems surfaced at their firms, while others are outright frauds.

P2P lender Ezubao, for instance, collapsed last December after investigations exposed it as a Ponzi scheme – and one of China’s biggest fraud cases.

The online financing platform, which pitched high-yielding returns of up to 15 per cent even as the Chinese economy sputtered, owed more than 50 billion yuan to 900,000 investors, setting off protests in Beijing and several other cities when it imploded.

Experts say a comprehensive set of regulations and enforcement are sorely needed to bring order to China’s Internet finance industry.

Last December, the banking regulator released draft rules that included banning P2P lenders from selling certain high-yielding products and providing guaranteed returns.

Ng Zhi Ying, an analyst with research firm Forrester, said the shutdown of Ezubao – and the arrest of 21 suspects linked to the firm – is significant as it signals Beijing’s resolve.

“Many P2P lenders with unsound business models have operated for years without backlash, violating regulations with impunity… These unstable platforms were simply ticking time bombs,” she noted.

Some experts say the industry is also taking steps to clean up its act in light of the negative publicity.

Zennon Kapron of Shanghai-based financial research firm Kapronasia said China’s larger P2P platforms are now doubling down on internal controls and business practice reviews.

But the P2P lending sector is unlikely to pose wider risks as it remains a relatively minor contributor to overall credit growth in China, experts say. Rather, it is the social fallout that could lead to a bigger impact – and is likely one of Beijing’s main concerns – as more small investors find themselves victims of fraud.

A recent report by Moody’s credit rating firm said: “While (P2P lending) does not pose systemic risks given its small size, it has attracted attention for its high default rates, and because it carries the risk of social tensions, given the large presence of retail investors.”

(US$1 = 6.51 yuan)

And that is what Beryl Tan does when her 10-year-old daughter asks for something sweet. Tan, 43, a manager, says: “My daughter loves sweets, chocolates, biscuits and cakes.”

So when the girl asks for sweet stuff, she says she will consider it. “If she hasn’t had something sweet in two weeks, or if she’s going to a party and can share her sweets with others, I would say yes. Otherwise, I would tell her no.”

Saying “no” straightaway to sweet treats or unhealthy snacks will only make children desire them more, says dietitian Jaclyn Reutens from Aptima Nutrition & Sports Consultants.

Instead, it is better to allow kids some junk food within limits – tell them how often it can be eaten and how much is allowed.

She says: “Give them a choice when they ask for it – ask them if they would like to have it now or later. If they insist on it there and then, tell them that the next round will have to be the next day or the day after, depending on whatever rules you have set for them.”

Overconsumption of unhealthy food – especially those high in fat, refined sugar and carbohydrates – can lead to obesity. Obesity is a major contributing factor in Type 2 diabetes, which has seen a rise in recent years, even among children.

So it makes sense to start the battle against diabetes from young.

Reutens says there are ways to reduce children’s desire for sweets and unhealthy food. Give them three main meals and three nourishing snacks a day. Make sure they eat their breakfast so they do not end up snacking throughout the day. Also, keep them wellhydrated as dehydration can increase cravings for sweet food. And avoid bribing them with treats or desserts as it will make them value such snacks more than nutritious food.

Before giving in to children’s tantrums for sugary food, Reutens suggests that parents offer them naturally sweet alternatives such as raisins, sweet mangoes or strawberries.

Parents can also create a home environment where children are encouraged to embrace healthy food.

Lynette Goh, 38, a mother of two children aged seven and four, stocks her kitchen with fresh food, vegetables and fruit so that there is less chance of her children eating something unhealthy.

While she has some chocolates and biscuits at home, these are available in bite-size portions to prevent her kids from consuming too much. She also lets them have a say in what they want to eat.

The senior dietitian at National Healthcare Group Polyclinics says: “If they have more practice in making healthy food choices, they are more likely to continue this habit when they grow older and start eating away from home.”

To prevent them from overeating, she gets them to have balanced meals at regular timings.

She also reads them books and talks to them about the healthy plate, a visual tool which shows what a balanced meal looks like.

She avoids calling any food item “bad” as that could indirectly make it more desirable. Instead, she teaches her kids about “everyday food”, which the body needs daily to make it strong, and “sometimes food”, which are high in fat, refined sugar and carbohydrates and should be eaten only occasionally.

Her family eats at home on weekdays and “sometimes food” is reserved for special occasions and weekends, when they eat out.

Despite her efforts, she faced a minor setback when her daughter entered primary school last year. Excited at having pocket money and the freedom to buy food in school, her daughter opted for items such as fries, jelly and sweet drinks.

But she tried not to make a fuss about it as it might “cause my daughter to associate healthy food refusal with getting lots of attention”.

“Instead, I politely asked her to avoid having it too often and I set a limit, such as letting her eat those types of food once a week.”

Noticing that her daughter likes putting her leftover money in her coin bank, she encourages her to save her pocket money, instead of spending it on junk food.

She also got her to take healthy snacks and drinks to school, such as low-fat UHT milk and soya milk.

Part-time tutor Denise Philip, 40, also takes pains to ensure her four children do not overindulge in food high in fat, refined sugar and carbohydrates. Both her husband and father have diabetes.

She says: “At home, we alternate brown rice and wholemeal bread with white rice and bread.”

Although her four children, aged four to 12, love sweets and ice cream, she and her husband allow them the treats only on weekends, when they are around to monitor how much their children eat.

She says: “We would let them have one snack after lunch and another after dinner.”

It appears to work. She says her children do not ask for these snacks, which are kept in the fridge or in containers on an open shelf, on weekdays.

Eating out was more challenging as the children are exposed to more choices, including unhealthy ones. They eat out for lunch and dinner on weekends, usually at foodcourts, hawker centres or coffee shops.

Philip says: “I usually let them choose rice or noodles, provided it comes with vegetables. Our meals are usually followed by cut fruit or fruit juice.”

As soon as her children were old enough to understand, she and her husband explained to them the ill effects of eating food high in fat or sugar.

She says: “We told them that eating high-fat food can lead to obesity and showed them photos on the Internet about what sweets can do to our teeth.”

Meanwhile, Shu Mei Winstanley, 28, and her husband believe in setting a good example by being mindful of what they eat in the presence of their 19-month-old daughter. While they enjoy cakes and pastries, they try not to eat them in front of her.

Winstanley, co-founder of parenting organisation Chapter Zero Singapore, says: “When she sees us eating healthily, she is more likely to learn healthy eating habits.”

Thailand planned to sell the amount of rice in a government stockpile in May and June to generate US$2.8 billion, at an average price of US$245 per tonne, in what could be the biggest rice sale clearance ever of the world’s second largest rice exporter after India.

According to Le Van Banh, director of the Department of Agro-Fisheries Processing and Salt Production, the biggest stockpiled rice sell-off from Thailand would certainly have an impact on the global rice market following the law on supply and demand, as well as on Vietnam’s rice market.

However, the impact on Vietnam’s rice exports would not be significant, at least in the short term, Banh said.

Banh also said that Thailand’s plan to sell 11.4 million tonnes of rice within just two months was not feasible.

He said that Thailand exported on an average 400,000 tonnes to 500,000 tonnes of rice per month. “To sell 11.4 million tonnes in just two months sounds unrealistic,” Banh said as quoted by vietnamplus.vn.

The Vietnam Food Association said that the impact on rice exports would not be huge in the second and third quarters as most contracts had been signed in the last quarter of 2015, and there were estimated to be 1.4 million tonnes of rice remaining to be shipped abroad following existing signed contracts.

According to Banh, the stockpiled rice for this clearance would mainly be “sub-standard” quality that the government had purchased following the 2012-2013 rice mortgage programme and Thailand would target the not too demanding markets such as in Africa.

Since May 2014, Thailand has auctioned off 5.05 million tonnes of rice worth $1.5 billion. The Thai government had previously said it aimed to clear the stockpile by the end of 2017.

Meanwhile, major import markets of Vietnamese rice were China, the Philippines and Indonesia which had standards for rice quality and preferred newly-harvested Vietnamese rice, he said. “Rice exports from Vietnam would not be significantly affected by Thailand’s sell-off in the coming months,” he said.

According to Ma Quang Trung, director of the plantation department under the Ministry of Agriculture and Rural Development, Vietnam’s rice exports in the first four months of this year reached 2.06 million tonnes, worth $916 million, rising by 11.8 per cent in volume and 13.8 per cent in value over the same period last year. Average rice export price was $438 per tonne, increasing by 0.32 per cent over the same period last year. China was the largest importer of Vietnamese rice, accounting for more than 30 per cent of the Vietnam’s total rice exports.

Last year, Vietnam was the third largest rice exporter in the world with an export volume of 6.4 million tonnes.

Close watch

According to Banh, the Ministry of Agriculture and Rural Development has asked the Vietnam Food Association, rice companies and farmers to closely track movements in the global rice market, especially from Thailand’s clearance sale, for timely measures.

Nguyen Van Don, director of food trading company Viet Hung in southern Tien Giang Province, said the sale of Vietnam’s sub-standard rice would be affected the most by Thailand’s move, as Thailand accelerated the stockpiled rice sale in the months coinciding with the rice harvest crop of Vietnam

The Ministry of Industry and Trade said at the end of April, days after Thailand’s announcement, that the global rice market was seeing unpredictable developments, which would influence Vietnam’s rice exports in 2016.

Besides export prices, which no longer was of Vietnamese rice competitiveness, quality and brand were also matter of concerns in exports.

The ministry said that it was important to hasten the restructuring of the agricultural sector and rice production towards building up a value chain, enhancing quality and developing a Vietnamese brand.

Quality would help Vietnam to compete and maintain markets amid the flurry of low-priced rice, an expert said.

The industry and trade ministry also said that it would enhance trade promotion to take advantage of the new-generation free trade agreements to expand rice export markets.

In addition, the ministry proposed to Prime Minister Nguyen Xuan Phuc to provide preferential loans to rice traders for investments in warehouses and for buying rice from farmers in an effort to accelerate exports this year.

Building a national brand

Prime Minister Nguyen Xuan Phuc approved the agriculture ministry’s proposal of a Vietnamese rice brand development and management master project from combining five separate projects.

These projects were previously raised in the Prime Minister Decision 706/QD-TTg about developing rice brand issued in May 2015.

The master project aimed to enhance the recognition of Vietnamese rice in the global market to boost competitiveness, improved rice added value and expand markets.

The project would focus on developing a national rice brand name, brands for major rice products of Cuu Long (Mekong) Delta, the country’s biggest rice production area, rice brand protection, trade promotion and expanding exports.

Vietnam aimed to become the world’s leading rice brand by quality and food safety by 2030, under the approved project.

This meeting began after the visiting Singaporean delegates paid a courtesy call to Minister of Home Affairs Yang Berhormat Pehin Orang Kaya Seri Kerna Dato Seri Setia (Dr) Hj Awang Abu Bakar Hj Apong at the ministry’s building in the capital.

This showed a mutual understanding and close relations between the two neighbouring countries and was an opportunity to exchange views and information on matters of common interest, said a statement provided at the event.

Leading the Singaporean delegates was Leo Yip, permanent secretary at Singapore’s Ministry of Home Affairs.

Yip is also the permanent secretary in the Prime Minister’s Office and permanent secretary for National Security and Intelligence Coordination.

The bilateral meeting was co-chaired by Yip and Acting Permanent Secretary at Brunei’s Ministry of Home Affairs Hj Idris Hj Md Ali.

In his remarks, Hj Idris hoped that the meeting would open up more opportunities, especially in regular engagement by senior officers of both ministries.

He said yesterday’s meeting hoped to set up a platform for continuous development of good relations between the officials of both nations.

“I would like to encourage our senior officials here to work closely together in exploring exchange programmes or short work placements for our officials, particularly in ensuring safety and security,” said Hj Idris.

He said that senior officials of both ministries have done various programmes and projects under the technical cooperation.

He gave the example of how the National Disaster Management Centre (NDMC) under Brunei’s Ministry of Home Affairs recently held the first Exercise Planning Team (EPT) meeting for AseanDisaster Emergency Response Simulation Exercise (ARDEX) from May 3-4, which Singapore participated in and contributed towards the exercise’s success.

He added that Brunei’s Fire and Rescue Department has also made improvements in terms of the Urban Search and Rescue (USAR) training that they attended in Singapore over the years.

When the programme started, there were only 20 personnel Special Squad Unit. Today, the number has increased to 40 personnel and they are being involved in and exposed to a number of tests and exercises, he said.

He said Brunei’s Prisons Department have also learned from the experiences of Singapore Prison Services, particularly in the areas of inmate rehabilitation programme and the role of non-government organisations (NGO) in the after-care of inmates.

In the areas of border security, both relevant agencies – namely the Department of Immigration and National Registration of Brunei and Immigration and Checkpoints Authority of Singapore – had bilateral meetings starting from 2014.

Meanwhile, the visiting Singaporean permanent secretary expressed hope that yesterday’s meeting would identify new areas of cooperation while deepening and strengthening the relationship of both countries.

“Brunei and Singapore share a special relationship that was established by the former leaders of the two countries – Al-Marhum Sultan Hj Omar ‘Ali Saifuddien Sa’adul Khairi Waddien and the late Lee Kuan Yew – about 50 years ago,” he said.

“As we go through the agenda items, I hope we can identify existing areas to build on and maybe new areas as well. We want to extend this collaboration,” Yip said.

Following the bilateral meeting, the delegates also visited some strategic places in the country.

Trade Minister Thomas Trikasih Lembong said the CEPA would be beneficial in increasing non-oil and gas exports. Indonesia started working on the CEPA four years ago under then trade minister Mari Elka Pangestu, but it was shelved.

“Australia is one of our neighboring countries, but ironically we have limited trade with it. As for the CEPA, President Joko Widodo gave me two years [to finish it], and we are intensively working on it,” he told thejakartapost.com on Thursday in Jakarta.

Lembong acknowledged that Indonesia lagged behind Vietnam and Philippines in market access. While enjoying a commodity boom, Indonesia neglected the downstream industry while the other countries worked hard to attract investors and create free trade access.

“Seven to eight years ago, they put out the red carpet for all investments, even small ones. Now, their non-oil and gas exports reach $160 billion while ours is only $150 billion,” he said.

By entering into a CEPA and the Trans-Pacific Partnership ( TPP ), Vietnam has comparative advantages of a 15 to 17 percent tariff barrier over Indonesian products to the European and North American markets.

“We can no longer rely too much on the oil and gas trade. We must look to service goods and lifestyle products,” Lembong said.

The ministry plans to improve the appeal of lifestyle products such as attire, furniture and jewelry by offering a joint program between polytechnic schools and designers.

“Last year, the value of Indonesian jewelry exports reached $5 billion. We are aiming to increase the contribution of lifestyle products, but we need to make them more appealing,” he said.

This clarification was issued by a representative of the Ministry of Industry and Trade following a claim by the Vietnam Association of Seafood Exporters and Producers (VASEP) that several giant supermarkets asked for unreasonably high discounts to place on their shelves products provided by seafood suppliers.

Vo Van Quyen, director of the Ministry of Industry and Trades Domestic Market Department, said that the purchasing of retailers was market-based and the government did not intervene, unless there was evidence to prove discrimination in the purchase.

VASEP said that BigC, which was recently reported to be acquired by Thailands Centre Group in a deal worth US$1.05 billion, asked for the highest rises in discount rates of between 4.2 per cent and 5.5 per cent, pushing the discount rates provided to the giant supermarket chain up from 17 per cent to 25 per cent.

“The rates are too high and seafood suppliers will certainly suffer losses,” VASEP said in its document sent to BigC.

VASEP proposed in the document to BigC that it not increase discount rates for new supply contracts this year while cutting the average discount rate to below 15 per cent – a rate that could ensure the reinvestment ability of seafood companies.

In response, Ho Quoc Nguyen, communication manager of BigC was quoted by the governments e-portal as saying that the supermarket did not create pressure on any supplier with the purchases based on agreements between the two sides.

Currently, more than 90 per cent of products of shelves of BigC were Vietnamese products, Nguyen said, denying the accusation that the supermarket intended to replace Vietnamese products on the shelves with Thai products.

BigC also said that it had not received VASEPs document.

BigC has been in Vietnam for more than 18 years and developed into a chain of 32 supermarkets throughout the country.

The supermarket was under scrutiny by the tax watchdog with regard to its compliance with the inspection expected to finish this month.

Joko came to power in October 2014 pledging to kick-start the economy. He has made it a priority to lure foreign investment to South-east Asia’s biggest economy, launching at least 12 policy packages since last September, including an announcement last month to cut corporate income tax rate by a fifth.

Daniel Tumiwa, president of the Indonesia E-commerce Association (Idea), said Joko had greatly increased the pace of reform.

Tumiwa, who is Idea’s president for four years and chief executive of global classifieds site OLX – said that prior to Joko’s administration, “nothing was moving, and no one was interested in speaking to us”.

“But overnight, the new Cabinet invited us to meet and join in the conversation about what could be done to help Indonesia move faster in e-commerce,” he said.

Valued at US$18 billion last year, Indonesia’s e-commerce sector has been the darling of both foreign and domestic investors, and is expected to hit US$130 billion in 2020. It was included as a proposed sector open for full foreign investment on the revised negative investment list. Other proposed sectors on the list include tourism, film and raw pharmaceutical materials.

As a result of the proposed policies, Ricky Kusmayadi, director of Indonesia’s Investment Coordinating Board (BKPM) office in Singapore, cited a 30 to 50 per cent jump in visitors to BKPM Singapore inquiring about investment.

BKPM Singapore facilitates investment in Indonesia and helps investors apply for the principal licence online, the first step in the investment process. The online service was launched last year .

Another initiative, launched in January, is the three-hour licence service, which allows companies with a minimum investment of 100 billion rupiah (US$7.5 million) and/or employing 1,000 local workers to obtain nine crucial licences in three hours. Fourteen Singaporean companies have used the service.

Despite these efforts, Indonesia on Wednesday recorded a disappointing 4.92 per cent growth in the first quarter compared with the same period last year, down from 5.04 per cent in the fourth quarter of last year. In the first quarter, realised foreign direct investment (FDI) rose 17.1 per cent to 96.1 trillion rupiah year-on-year. FDI was 365.9 trillion rupiah last year, up 19.2 per cent.

But some economists say it is also important to look at the balance of payments data, which records actual transactions crossing a country’s borders. Going by the data, DBS economist Gundy Cahyadi noted that only US$18 billion of FDI was realised last year, down from US$25.2 billion in 2014.

Trinh Nguyen, senior economist at global asset manager Nataxis, said: “There’s not been much which is concrete except the negative investment list. But the sectors liberalised, like raw materials for pharmaceuticals, will not have a significant impact. Indonesia will need to liberalise significantly and roll back the protectionist measures which it took in the 2006-2007 period.”

Alvin Yap, a Singaporean who has done business in Indonesia for five years and now owns an online business which sells certified used phones, said that while he could see much better business sentiment on the ground, he had not seen changes in improved business efficiency.

“Regulations were a concern previously, which is why we worked with local partners. We are keeping a close eye on regulatory policies but the government has not made them concrete yet.”