Malaysia’s economic growth predicted to slow down in 2023
The Asian Development Bank (ADB) has projected Malaysia’s economy to grow at 4.7 percent in 2023, and 4.9 percent in 2024. The ADB said in its latest Asian Development Outlook report released on April 4 that Malaysia’s growth exceeded expectations in 2022, buoyed by strong domestic consumption and a rebound in services, as borders reopened and economic activity normalised.
The bank said inflation remained broadly muted, dampened by government subsidies and price controls, adding that a less accommodative monetary stance was adopted in response to higher global interest rates.
Growth is expected to moderate, and inflation to decelerate in 2023 and 2024, mainly tracking changes in the global environment, it noted, saying that Malaysia should promote gender-inclusive policies to boost women’s participation in the labour market.
According to the ADB, Malaysia’s economic performance in 2023 will depend on the external environment, including spillovers from the reopening of China, government policy support, and developments in the electronics industry.
In a less promising forecast, S&P Global Ratings on April 5 said Malaysia’s economic growth is expected to ease to 3.2 percent this year, following the strong growth of 8.7 percent in 2022.
China is turning its anti-corruption fire on banks
China’s banks and insurers have become the latest focus of a sweeping anti-corruption crackdown that is ensnaring top officials and risks rattling the already fragile nerves of investors and entrepreneurs.
The Communist Party’s top anti-graft agency, the Central Commission for Discipline Inspection (CCDI), has investigated more than a dozen senior executives at the country’s most important financial institutions so far this year, according to a CNN analysis of statements posted on the CCDI’s website.
Three big names at the very top of China’s financial system have been probed or charged, according to the CCDI, including Li Xiaopeng, the former chairman of China Everbright Group — one of the country’s oldest and largest state-owned financial conglomerates.
Li is suspected of “serious violations of law and discipline” and is under investigation, the commission said Wednesday in a brief statement.
Everbright said in a statement that it “fully supports” the party’s decision and will “fully cooperate” with the investigation into Li, who chaired the bank for four years until he resigned in March 2022.
Bangladesh in hot seat over Adani’s power deal
In mid-March, Bangladesh started testing the transmission of electricity from a massive 1,600 MW coal-fired plant in neighbouring India that has stirred major controversy in both countries.
While the supply of electricity for commercial use from this plant is likely to begin next month, confusion and secrecy around the terms of the agreement and how much Bangladesh could be forced to pay have intensified discontent in the country.
Built by Adani Power Ltd – India’s largest private power company founded by Gautam Adani – the $1.7bn Godda plant in India’s Jharkhand state has drawn flak in Dhaka for the “lopsided nature” of the power purchase agreement (PPA) that a number of experts say has favoured the Indian multibillionaire on several fronts. Al Jazeera has reviewed a copy of the agreement.
Under the agreement, Dhaka will pay significantly higher prices – in comparison to what it pays for its other coal-based power – for lower-grade coal. That coal will be supplied from an Adani-owned mine in Australia to an Adani-owned port in India from where it will get shipped to the Godda plant, which is in a coal-mining state.
Apart from that, experts also point out that Bangladesh is not getting the benefit of the tax exemption which Adani Power Ltd got when its Godda plant was declared a Special Economic Zone (SEZ) – the exemption should have been passed on to Bangladesh.
In New Delhi, critics have questioned the whole point of the Modi government going the extra mile to ensure “multiple tax benefits” for a private coal plant that will supply electricity to another country at the cost of its own environment and people.
Japan wants G7 agreement to accelerate decarbonisation efforts
Japan wants to push for the Group of Seven (G7) economic powers to agree on accelerating decarbonisation efforts through collaboration at the ministers’ meeting on climate, energy and environment later this month, its industry minister said.
As the chair of the G7 this year, Japan will hold the ministerial meeting in Sapporo on April 15-16, ahead of the G7 summit in Hiroshima on May 19-21, to promote what it calls realistic energy transition.
“The G7 ministers share the same recognition that we must accelerate decarbonisation,” Yasutoshi Nishimura, Japanese minister of economy, trade and industry, told Reuters in an interview. He added that the G7 rich nations need to secure energy security and economic growth at the same time.
“We want to lead discussions on concrete paths and what should be done in cooperation,” he said, noting that each country has its own economic and energy circumstances to consider.
Energy security risks in resource-poor Japan have risen since Russia’s invasion of Ukraine heightened the threat of supply disruptions.
Japan and other countries recognise the importance of liquefied natural gas (LNG) and natural gas as energy sources for the transition period, Nishimura said, adding that a certain amount of upstream investment and financing is necessary.
But there are differences on the length of time required for the energy transition period, he said.
A barcode unlocks Indonesia’s billion-dollar informal economy
From food carts lining Jakarta’s raucous streets to wet markets in Indonesia’s most remote villages, one type of barcode is becoming ubiquitous.
The quick-response code, or QR, lets customers make payments by scanning it with their mobile phones. It’s fast, easy and cheap for merchants — applying for your own QR code costs less than $2 — helping it find widespread adoption among satay stalls and roadside sellers known as warung. Cash is making less of an appearance, and some shops won’t accept it at all.
Finance minister responds to world bank forecast on Maldives economy
Finance Minister Ibrahim Ameer has responded strongly to a World Bank report on the Maldives’ economic situation.
In its latest report, the World Bank updated its forecasts on the Maldives’ economic growth to 6.6 percent from the previous forecast of 8.2 percent. The report said the Maldives is facing challenges due to its high borrowing and fragile economic state. The report further said inflation is expected to rise to 5.7 percent.
Noting that the Maldives will have its presidential election this year, the World Bank said that the increase in expenditure due to the election and the increase in the amount of money allocated to government companies to implement development projects would also negatively affect the economy.
Minister Ameer tweeted several times in response to the World Bank’s professional forecasts. The tweets, posted in the local language Dhivehi, said the number of tourists visiting the Maldives thus far this year increased by 21.5 percent compared to last year.
“It is expected that a record number of tourists will visit the Maldives this year. Therefore, the economic growth will be higher than current estimates,” he said.
The minister said the World Bank’s estimate that the Maldives’ economic pace would be slower than before was due to the base effect that comes in the calculation as GDP growth in 2021 was higher than the World Bank’s previous forecast.
The minister also noted that although commodity prices are rising in the world market at the moment, the impact on the Maldives is small compared to many neighboring countries. He said one of the reasons for the slowdown in inflation is the government’s provision of subsidies to reduce the prices of oil, electricity, and staple foods.
First person: ‘Nepal is ready for its next chapter’
“In the 1970s, when Nepal was first included in the UN list of Least Developed Countries (LDCs), my parents worked as porters carrying food and other items 68 kilometres from the country’s only highway to their district of Arghakhanchi.
Fifty years later, the situation in the country is very different. In 2021, Nepal qualified to graduate from the category of “Least Developed Country” having, for the third time, met the threshold levels on two out of three indicators: the Human Asset Index and the Economic Vulnerability Index, which assess the country’s health, education, and economy’s exposure to natural shocks such as drought, natural disaster, and instability in agricultural production.
China’s rich flee crackdowns for ‘Asia’s Switzerland’ Singapore
Before he vanished in mid-February, Bao Fan, one of China’s best-known investment bankers, had reportedly been looking for a safe place to park his wealth.
Bao, the founder of China Renaissance, was in the process of establishing a private wealth management company in Singapore to transfer money out of China and Hong Kong, the Financial Times reported last month, citing four people familiar with the plans.
Bao, who has joined a long list of influential businessmen to suddenly disappear in China, is just one of a growing number of wealthy Chinese businesspeople who have looked to Singapore — dubbed the “Switzerland of Asia” — to escape Beijing’s crackdowns on private industry and corruption.
“Wealth has flooded into Singapore from China and Hong Kong in recent years,” a wealth manager at a Singaporean bank with a large number of Chinese clientele, who spoke on condition of anonymity, told Al Jazeera.
“In confidential conversations, many of them have named the disappearances of Chinese business people along with uncertain economic times as primary reasons for moving money out of China,” the wealth manager said.
Singapore, named the world’s best place to do business by the Economist Intelligence Unit, has for years been building a reputation as a haven for high-worth Chinese, particularly since the rise of Xi Jinping, China’s most powerful leader in decades, who has led his country in an increasingly authoritarian and nationalistic direction.
During the first five years of an anticorruption drive led by Xi, more than 100 high-ranking officials within the Chinese Communist Party and tens of thousands of lower-level officials and business people were prosecuted for white-collar crimes.
More recently, a regulatory crackdown on private industry that has touched on sectors from tech to education and real estate has sent money fleeing out of China.
Sri Lanka economy to shrink by 4.3pc in 2023: World Bank
The World Bank on Tuesday announced that Sri Lankan economy is projected to contract by 4.3 percent in 2023 as demand continues to be subdued, job and income losses intensify.
The World Bank in its twice-a-year update said Sri Lanka’s heightened fiscal, external, and financial imbalances and its fluid political situation pose significant uncertainty for the country’s economic outlook.
It added that these factors underscore the need to address the root causes of the country’s economic crisis and build a strong and resilient economy to prevent future crises.
Faris H. Hadad-Zervos, World Bank country director for Maldives, Nepal, and Sri Lanka said “the economic crisis in Sri Lanka has had deep impacts with over half a million jobs lost and 2.7 million additional people falling into poverty between 2021 and 2022.
“The prolonged recovery from the scarring effects of this crisis in addition to a slow debt restructuring process, limited external financing support, and an uncertain global environment pose significant risks to the country’s economic growth,” the country director said.