Over the past year, the varied region shared one common theme–relative
political and economic stability, as Southeast Asia continues to establish
itself as one of the brightest spots for investment and growth amid turbulent
economic times.
Southeast Asia has experienced a
record year for deals, with Malaysia emerging as one of the world’s most robust
IPO markets, while the Philippines–once considered one of the riskiest economies
in Asia–has experienced its strongest currency and real-estate market in years.
Political and security issues, especially rising tensions in the South China
Sea, continue to mar the region’s potential as a cohesive bloc, but with
Indonesia’s continued rise and high expectations for Myanmar’s reforms, 2012
suggests that Southeast Asia may remain firmly on the global investment map for
some time yet. Here is our roundup of the top stories in the region this year:
Resurgence of South China Sea
Tensions
Competing claims over territory
in the South China Sea marred the Association of Southeast Asian Nations’ steps
toward regional cooperation this year, even preventing the bloc from settling
on a joint communiqué at the end of an Asean summit in July–the first time in
its 45-year history. The US and China have made it clear that the countries and
waterways in the region are growing in importance, which analysts say may risk
polarizing Southeast Asia in years to come.
Sea Tensions Deepen With China’s Rise
US Missile Shield Plan Seen Stoking China Fears
Asean War of Words Over South China Sea Continues
Southeast Asia’s Deal Boom
2012 will be remembered as the
year Southeast Asia stole the limelight from China in the financial arena,
playing host to some of Asia’s biggest and most contested mergers and
acquisitions. M&A activity involving companies in Southeast Asia–primarily
in Singapore and Thailand–stands at its highest level since the financial
crisis in 2008, with deals worth more than $105.4 billion either completed or
pending completion this year. The region has also become a hotbed for IPOs, and
more of Southeast Asia’s companies are taking their ambitions further,
aggressively expanding overseas and becoming formidable players on the
international stage.
Continued Reforms in Myanmar
After decades of harsh military
rule and stubborn defiance, Myanmar continued blazing through political and
economic reform. Aung San Suu Kyi moved from prisoner to
parliamentarian this year in a historic by-election that saw her party
represented in the country’s civilian government, moving the U.S. and EU to
lift long-standing sanctions on the country. President Obama, fresh off his
re-election, became the first US President to visit the country, and companies
such as and are taking bold steps toward entry into the
once-banned market.
Suu Kyi’s Party Claims Myanmar Win
U.S. Clears Investment in Myanmar
Final Frontier: Firms Flock to Newly Opened Myanmar
Obama Makes First Visit to Myanmar
Elsewhere in Southeast Asia
Indonesia: While Indonesia’s economy continued to shine in
2012 as it attracted a record amount of foreign direct investment and witnessed
another year of higher than 6% GDP growth, some observers would say it was the
year the country started to slip, with the government increasingly aggressive
in applying new policies that many observers see as protectionist and
nationalist. The country’s highest-profile international venture, the
London-listed Bumi PLC has been hammered by a muddy battle between board
members and investors that pushed the to pull out.
The race to replace Susilo
Bambang Yudhoyono as president in 2014 heated up, with familiar names that have
been around since the Suharto era announcing their plans to run. Meanwhile a
new political star–small-town mayor Joko Widodo–grabbed the country’s attention
by beating a powerful incumbent to become the governor of the Jakarta capital
region.
Indonesia’s Boom Starts to Stall
Indonesians Turn Gaze to Suharto-Era General
Bumi Ownership Ties Fray
Election Winner’s Next Challenge: Fixing Jakarta
Thailand: After securing a landslide election win, Prime
Minister Yingluck Shinawatra focused on rewarding voters with populist measures
such as a multibillion-dollar rice subsidy. But it is a policy that may come
back to haunt her, as does the question of how to help her brother, Thaksin
Shinawatra, return to Thailand a free man. Simmering political tensions
continue to spook investors who worry that coups and deadly political violence
will return to the kingdom.
Singapore: The rich city-state established itself this year
as a destination for the world’s richest, as billionaires and millionaires rush
to call Singapore home, reaping benefits from its low taxes and stellar
infrastructure. But unusual political dissent–and rising anti-foreigner
sentiment–continues to rock the tiny nation, as the ruling People’s Action
Party continues to see its popularity chipped away since holding on to power
with the lowest vote share in the 2011 general elections.
Asia’s Lighter Taxes Provide a Lure
Singapore Soars in Private Banking
Singapore Ferrari Crash Foments Ire at Foreigners
Malaysia: With opposition leader Anwar Ibrahim declared a
free man this year, cleared of sodomy charges against him, Malaysia gears up
for its most robust election fight in decades. The country has also emerged as
one of the region’s hottest IPO markets, with Malaysian palm-oil firm Felda
raising the third-biggest IPO listing in the world this year.
The Philippines: President Benigno Aquino III continued with his
drive to clean up and reinvigorate the Philippines. He scored a series of
notable successes: Including removing the Supreme Court chief justice, driving
up growth rates and pushing Congress to pass a new bill enabling poorer
families to get access to contraceptives and birth-control advice. Boxer Manny
Pacquiao, meanwhile, began looking to life after boxing–and perhaps just as
well as after his recent defeat to Juan Manuel Marquez.
Philippine Senate Ousts Supreme Court Chief
Philippine President Sees Further Growth
Next Round for Manny Pacquiao Is Part Oprah, Part ‘Idol’
Vietnam: The country was once one of the region’s
brightest economic spots, but policy-makers are struggling to arrest a
worsening bad-debt problem, while authorities this year moved to crackdown
heavily on the Internet and a widening dissident movement. Both caused
investors to fret about the socialist nation’s potential.
Laos: Laos attracted more attention as a serious
economic player this year, hosting the Asia-Europe summit and finally being
accepted into the World Trade Organization. The country has become a
surprisingly fast-growing economy, with corporate players such as Coca-Cola
taking bets on the region’s smallest economy.
Shibani Mahtani
http://blogs.wsj.com
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