The latest financial reports released by banks reported that 2015 saw a total of VND45 trillion (US$2 billion) non-performing loans (NPLs), the National Financial Supervisory Commission said.

Deputy Director of the commission Truong Van Phuoc warned that though the consequences are not clear now, banks face a potential risk in the future when credit continues to rise.

Though banks have so far sold VND111 trillion of the NPLs to the VAMC to meet the central bank’s deadline to bring down the NPL ratio to below 3 per cent last year, most of the debts are still with the VAMC and the company has so far managed to recoup only a small part of the bad loans due to reasons such as incomplete legal framework and limited capital.

It is estimated that banks will also have to fund roughly VND91.37 trillion to provide loans this year, higher than that of the past few years. The provisions in 2015 and 2014 were VND74.8 trillion and VND59.28 trillion, respectively.

According to the current regulations, though banks have sold the bad debts to VAMC, they have to fund yearly provisions amounting to 20 per cent of the value of the sold debts.

Experts, therefore, suggested to lenders that they boost provisions for bad debts, as well as take the initiative to collect the debts themselves, apart from selling it to the VAMC.

National Financial and Monetary Policy Advisory Council member Tran Du Lich said that selling bad debts to the VAMC was a good way for banks to clean up their account balance, but the requirement for provisions would create significant pressure on them.

In an effort to accelerate the handling of bad debts and make it easy for the VAMC to resolve the debts it bought from banks, the central bank last month raised a draft decree about conditions for a debt trading business for public comments.

According to VAMC chairman Nguyen Quoc Hung, the lack of a debt trading market was a bottleneck in the process of handling toxic debts.

His Majesty the King sent a letter yesterday congratulating President Htin Kyaw on assuming office. “I am certain that the existing bonds of friendship and cooperation between our two countries and people will be further strengthened in the years to come,” the letter said.

Suu Kyi, the only woman in the 21-member cabinet, was given four portfolios – Foreign Affairs, the President’s Office, Electric Power and Energy, and Education.

Though her National League for Democracy (NLD) won by a landslide in the November election, the military-sponsored constitution prohibits her from taking the country’s top job as her late husband and sons are foreign citizens.

Holding four portfolios at one time is obviously a tough job, unless Suu Kyi has very reliable deputies in the respective ministries, Phyo Wai Yar Zar, managing director of All Asia Exclusive Travel and chairman of Myanmar Tourism Marketing, said.

NLD spokesman Zaw Myint Maung had said earlier thatSuu Kyi would mainly focus on foreign affairs, as this position gives her a place in a decision-making body like the National Defence and Security Council, along with the president, two vice presidents, the presidents of the upper and lower houses, the ministers of Defence, Home Affairs and Border Affairs, as well as the army chief.

This is a formal forum where Suu Kyi can work and jointly make decisions alongside the country’s most-powerful figure – commander-in-chief Senior General Min Aung Hlaing.

Under the constitution, the army chief can take over in times of crisis.

Holding the position of foreign minister would also make her Myanmar’s representative in the international community, as the country needs a foreign minister of high calibre to deal with an evolving geopolitical situation at the global and regional levels.

Also, it is not surprising that she has taken the Education portfolio as she is interested in the subject, though her other posts indicate that she wants to be in charge of relations with Myanmar’s most powerful neighbour China, veteran journalist Bertil Lintner, who specialises in Myanmar affairs, pointed out. With the key portfolio of Electric Power and Energy, Suu Kyi will be able to oversee Myanmar’s economic development. Power plant projects and natural gas are the country’s key resources, which are now mostly controlled by foreign investors, notably from China.

The previous government under Thein Sein shelved the China-backed Myitsone hydropower dam in 2011 due to the serious social and environmental impact it would have in Kachin state.

China’s Ambassador to Myanmar Hong Liang said on March 4 that China would seek every possible way to resume the project by cooperating with the NLD, though the ruling party said it would take local concerns into account before making any decision on the project.

In many countries, the minister attached to the President’s Office might look after routine work of the president, but in Suu Kyi‘s case, she will be more like the US president’s chief of staff.

Since the electoral victory, Suu Kyi has always said that she intends to run the country from above the president, and her position as President’s Office minister could make this come true.

Speaking at a public discussion held by the Indonesian Economists Association (ISEI), Jokowi said that in the midst of global competition and a rapidly changing world economy, the government needs to be quicker and more flexible in making decisions.

“Our focus ahead is deregulation and infrastructure development. Even though I know industrialization is also important, the development of human resources is very important in order to be prepared, but we will proceed with deregulation and infrastructure first,” Jokowi said.

Thus, the 11 economic policy packages that have been released by government since September last year have focused on simplifying and accelerating the process of licensing and fair competition.

“Our orientation should be results-oriented, but speed is also required in competition,” he said.

One of the concrete efforts undertaken was to instruct the Home Affairs Minister to remove 3,000 problematic local government regulations. In total there are 42,000 regulations in the country, according to Bappenas data.

“They ensnare and limit our flexibility and speed of action. This is what we want to remove. I ordered the home minister to remove the 3,000 problematic regulations. There is no need for them to be examined again,” he said.

ISEI chairman Muliaman Hadad said that what is needed to support competitive economic growth is macroeconomic stability through price stability. “In particular, the price of food and the healthy management of the state budget,” he said.

The government needs to introduce special policies to revitalize the manufacturing industry and the acceleration of competitive and export-oriented manufacturing. “Increased productivity is also a key,” Muliaman added.

To increase productivity, Muliaman continued, infrastructure needs investments, especially in transportation and logistics, focusing on ports and shipping, railways, roads and internet networks.

“Structural transformation is also needed to sustain growth and the reallocation of labour to added-value and higher productivity sectors,” he added.

JPKE said that gross domestic product (GDP) at constant prices continued to decline by 0.6 per cent after falling by 2.3 per cent in the previous year. This was due to a decrease of 1.6 per cent in the services sector.

For the fourth quarter alone, the sultanate’s economy fell by 17.3 per cent year-on-year (y-o-y) owing to decreases recorded in the oil and gas sector.

The department said Brunei’s GDP at current prices fell to BN$4.3 billion (US$3.17 billion) from BN$5.2 billion in the fourth quarter of 2014.

The oil and gas industry was valued at BN$2.3 billion, accounting for 53 per cent of total GDP while services made up 42 per cent.

The department said the 1.2 per cent decline in oil and gas mining weighed in on the growth of the oil and gas sector.

The non-oil and gas industrial sector decreased by 4.8 per cent due to declines in construction by 7.4 per cent and other manufacturing by 12.6 per cent.

The services sector declined by 0.4 per cent in Q4 2015 as the slowdown in banking activities pushed down the financial services sector by 12.3 per cent.

Government services fell by 2.1 per cent, which contributed to the decrease in the services sector, JPKE said.

The agriculture, forestry and fishery sector grew by 2.5 per cent, thanks to a 15.5 per cent increase in fishery production.

At constant prices, GDP growth recorded a decline of 0.5 per cent in the fourth quarter.

The decline was attributed to decreases in the non-oil and gas sector, services sector and the oil and gas industrial sector by 4.8 per cent, 0.4 per cent and 0.2 per cent respectively.

The department said GDP by expenditure approach posted a 4.2 per cent rise in household consumption, exports of goods and services rose by 1.2 per cent.

Gross capital formation declined by 21.3 per cent along with government spending which fell by 5.8 per cent and imports of goods and services by 21.5 per cent.

GDP is a measure of the total value of goods and services produced in a particular period.

In its Asian Development Outlook 2016, ADB forecasts Myanmar’s economic growth to recover to 8.4 per cent in fiscal year 2016 (ending March 31, 2017). The country’s economic growth eased to an estimated 7.2 per cent last fiscal year due to widespread flooding and landslides.

“Though economic reforms implemented since 2011 have had positive outcomes, Myanmar’s new government will face the challenges of advancing economic reform, addressing infrastructure and labour shortages, and making progress towards peace and social cohesion,” said Winfried Wicklein, ADB Country Director in Myanmar. “Moreover, intensified efforts are needed to connect and develop rural areas to improve access to markets and services, and to generate opportunities and jobs.”

Foreign direct investment is expected to get a lift from the successful political transition following national elections in November 2015, with investment flowing into newly established special economic zones and rapidly expanding transport, telecommunications, and energy sectors.

Risks to Myanmar’s economic outlook include thin external and fiscal buffers, the capacity of the government to maintain reform momentum, ethnic and sectarian tensions, and vulnerability to bad weather.

The ADO 2016 emphasises that Myanmar’s transport infrastructure, after decades of under-investment, provides poor access to markets and services, perpetuates poverty and regional inequality, and hampers business development. ADB estimates that US$60 billion is needed through 2030 to upgrade transport systems to a standard seen in other countries at a similar stage of development.

“This means increasing transport sector investments to the equivalent of 3-4 per cent of gross domestic product from little more than 1per cent in recent years,” said Peter Brimble, ADB deputy country director in Myanmar. “Private sector resources will need to be mobilised given the immense funding requirements.”

Inflation will moderate as agricultural recovery from the floods brings down food prices. But it is estimated to remain high at 9.5 per cent in the fiscal year 2016, before declining to 8.5 per cent in the next fiscal year.

Deputy minister of industry and trade Tran Tuan Anh said this at the Ministry of Industry and Trade (MoIT)’s monthly meeting held in Hanoi yesterday.

At the meeting, the MoIT’s Planning Department reported that the index of industrial production (IIP) in March had a month-on-month increase of 23.8 per cent and a year-on-year surge of 6.2 per cent.

The IIP, in the first quarter, gained a year-on-year growth rate of 6.3 per cent, the department said.

Vu Ba Phu, head of the Planning Department, said that in the first quarter, some industries achieved high growth rate in the IIP, which included metal production with a rate of 23.1 per cent, paper production at 14.8 per cent and textile at 12 per cent.

The industries also saw high consumption in the first quarter against the same period of last year such as beverage, textile, metal production and medicine production, Phu said. But some other industrial products such as garment, paper and transport vehicles saw reduction in consumption.

However, Phu said the growth rate at 6.3 per cent in the IIP for the first quarter was low against an increase of 9.1 per cent in the first quarter of 2015 mainly due to reduction in crude oil exploitation and low growth rate in production from groups of electronic products, computer and electric products.

Low electricity supply volume in the industrial and construction fields affected the economy.

Phu said that in the next few months, the world crude oil price was expected to stay at low so that was a good chance for industrial entrepreneurs to restructure their production and business, cut production costs and improve quality of products before crude oil prices recover.

In addition, prices of some services for production such as warehouses and transport would decrease against the same period to create favourable conditions for production and business of the enterprises, he said.

Especially, enterprises should strengthen their traditional markets, expand potential markets, actively look for human and financial resources, and have investment in technologies for developing material suppliers, he said.

Deputy minister of industry and trade Tran Tuan Anh said that the enterprises under the ministry should follow global and local markets and consult state offices to solve difficulties in production and business of local firms, and promote exports in the future.

They should also improve competitiveness, reform technology and promote restructuring, Anh said, while the state would develop policies to attract foreign investment, improve domestic production skills and increase exports.

Price index

The price index of industrial production fell during the first quarter of this year by 0.73 per cent quarter-on-quarter, and 1.01 per cent year-on-year, according to the General Statistics Office (GSO).

The reduction of the price index in the first quarter was partly due to lower prices of all three major industrial products, including mining products, which dropped 3.9 per cent against the previous quarter, processing and manufacturing products, which fell 0.13 per cent, and electricity and electric distribution, which was down 1.35 per cent.

The office said that another reason for the decrease in the IIP was price reduction in crude oil and iron ore on the world markets.

However, the price index for the group making up clean water, waste water, and waste water and rubbish treatment, increased by 0.41 per cent quarter-on-quarter, the office said.

Finance Minister Heng Sweet Keat revealed this on Monday (March 28) on the sidelines of a visit to precision engineering company Feinmetall in Marsiling.

The move aims to align the efforts of different parties – government agencies, trade associations, business chambers and companies – in order to better implement the Industry Transformation Programme that was unveiled in the budget last Thursday, he said.

“We will systematically go through sector by sector all the different plans. We need to bring everyone together. We have elements for all those plans already because we’ve had different efforts on organising the training of staff, we have technology plans, we have plans on raising productivity,” Heng said.

“What we need to do is to integrate this plan into a coherent one where the different parts can work together and what we need to do is to bring industry associations as well as companies whether big or small together. And then we’ll have a much better alignment of effort.”

The teams comprise officers from agencies such as the Singapore Economic Development Board, Spring Singapore, International Enterprise Singapore and the Workforce Development Agency.

They will develop “Industry Transformation Maps” for each of the sectors, which together cover 80 per cent of Singapore’s economy.

These officers, known as “cluster champions”, will map out how companies in each sector can raise productivity, harness training and technology and venture abroad to grow and transform.

Heng declined to say when the road maps will be revealed but added: “The (discussions) that are on a far more advanced stage are the logistics and precision engineering. I mentioned the food sector the other day. At the same time let me emphasise that this industry transformation plan covers many different sectors not just in manufacturing but also services and in services we would include tourism, retail, food and beverage and so on.”

The measure is listed in the 11th economic stimulus package, which was released on Tuesday, to provide business certainty and efficiency as well as to lower the cost of exporting and importing. All permits for imports would be issued by a single office.

“Until the end of 2015, Indonesia’s dwelling time was 4.7 days. The single risk management will be mandatory starting August 2016. We expect the dwelling time to be reduced from 4.7 days to 3.7 days or less,” Darmin said at the State Palace in Jakarta on Tuesday.

Dwelling time indicates the average length of time that a container spends in a seaport terminal. A short dwelling time means more efficient shipping procedures and low logistical costs.

Previously, Darmin said, each ministry and agency had its own standard for risk management of exporting and importing. They differentiated the imported goods into a green line (free of physical inspections) and a red line (must undergo physical inspections).

As a result, it takes more time to clear customs. Through the ISRM, the government hopes to speed up import and export services by integrating the custom clearance risk management systems of 18 ministries and agencies through the Indonesia National Single Window (INSW).

In its initial phase, the government would launch a single risk management model in a single platform for the Food and Drug Monitory Agency and the Customs Office to decrease the dwelling time of pharmaceutical raw materials, food and beverage products.

The implementation would then be extended to other ministries and agencies, with the aim of decreasing dwelling time to 3.7 days by the end of 2016 and to less than three days by the end of 2017.

The United States said yesterday an arbitration tribunal would make a ruling in the coming months on the Philippines’ maritime dispute with China, which would be binding for both parties and shed light on diplomatic opportunities to solve regional conflicts.

“The case itself does not actually involve the question who actually has sovereignty over the land features in the South China Sea, but [it] will make [an] important decision about maritime space, the right of claimants, regardless what the tribunal rules,” said Colin Willett, the US Department of State’s deputy assistant secretary of East Asian and Pacific affairs.

The Philippines and many other Asean members including Vietnam, Indonesia and Malaysia have been at loggerheads for years with their giant neighbour China over territorial disputes in the South China Sea. China claims a huge area of the sea, including archipelagos of islands, shoals, reefs and atolls.

While Asean members deal with Beijing on the disputes in different ways, Manila filed its case with the UN Permanent Court of Arbitration at The Hague in 2013. The tribunal ruled at the end of last October that the case was “properly constituted” under the United Nations Convention on the Law of the Sea (Unclos). The final judgment is expected soon.

The ruling will not only be binding for China and the Philippines but also narrow the scope of maritime spaces that are under dispute, Willet said in a telephone press conference from Washington with Asean journalists.

“Whatever the ruling is – our conversation [with] China is – [that the ruling is] not a threat but an opportunity for a real diplomatic solution,” she said.

Asked what would happen if China refused to accept the ruling, as it has repeatedly said it would do, Willet said Washington had made it clear to Beijing that it was in its interest to obey the ruling and to uphold international law that benefited not only the region but also China.

“If China ignored the ruling, it would set itself [up] for further confrontation with neighbours,” she said.

During the press conference, the senior US diplomat reaffirmed Washington’s stance on freedom of navigation and respect of international law, notably including Unclos. She voiced grave concerns over Chinese moves to claim land, build military facilities station military personnel on South China Sea outposts.

China’s argument that newly developed facilities were intended for civilian use did not make any sense, she said, adding that the facilities were designed for strategic purposes, not to facilitate cargo transport for humanitarian assistance or disaster relief.

Regarding Asean’s role in the conflict, Willet cited the Sunnylands Declaration issued after the US-Asean summit in California in February, which called on all concerned parties to adhere to peaceful solutions and a commitment to international law including the freedom of navigation.

“Asean understands more than anyone [what] the consequences for small and medium-sized countries [are] if the rule-based order is undermined,” she said.