Autumn 2019 Update

A busy schedule of political events in Southeast Asia in early-2019 has occupied the minds of observers, however the elections are unlikely to alter business conditions in the near to medium term.

 

Elections in Thailand and Indonesia will likely see the re-elections of a pro-business candidate (Jokowi) and pro-military candidate (Prayut) with economic conditions continuing largely within the current status quo. Where the changes will affect Australian exporters largely falls within policy decisions of the respective bureaucracies, including reforms of the Halal Certification policy in Indonesia and ongoing Industry 4.0 strategy in Thailand.

Indonesian Halal Certification Policy

Halal certification of an expanded range of products will become mandatory from October 2019 covering products with any biological matter, including all chemical, biological and genetically engineered products in addition to traditional consumer goods such as food and beverage. While this is believed to ultimately streamline the certification process, it also poses significant issues for exporters to comply with the regulations prior to October.

Thai Industry 4.0 Strategy

The Industry 4.0 strategy from the Thai Government aims to modernize the digital economy and connectivity of Thailand through a range of initiatives including widening Thailand’s WIFI hotspot network, cultivating start-up and innovative communities and raising the technological capability of its workforce through STEM education. As 2019’s ASEAN Chair, Thailand has chosen Industry 4.0 as its key focus with the proposition of a Regional Industrial 4.0 Development Plan which in turn will help to shape digital related non-tariff barriers across the region.

While economic growth is steady across the region, nationalist economic policy has been a focus of recent election campaigns in Indonesia and Thailand and it has also been prevalent in Malaysia and the Philippines, where politicians have sought to combat negative export growth with economic policies targeting the growth of domestic manufacturers. This has not negatively affected Victorian exports to the region overall but will continue to be closely watched by Global Victoria for future policy changes.

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