Microsoft bets big on Asean; Malaysia calls out casino rumours

This week in Asean: 

• Vietnam: Inflation hits highest level in 15 months
• Thailand: Proposes upping its daily minimum wage
• Indonesia: Seeing steady investment flows, easing inflation

Dear BT reader,

I hope you got a good rest over the Labour Day holiday. South-east Asia is also in need of much respite, not just from a fiery US dollar that’s left regional currencies battered, but also from an extreme heatwave that’s killed 30 in Thailand, shut down Philippine schools and dried up rice fields and rivers in Vietnam. 

Also cranking up the volume in South-east Asia is Microsoft, which this week announced its largest investments in Malaysia and Indonesia in roughly three decades. During his three-nation South-east Asian tour, Microsoft head honcho Satya Nadella revealed plans to invest US$1.7 billion in hyperscale cloud computing and artificial intelligence infrastructure in Indonesia. 

Hot on the heels of that news was the company’s announcement the next day of its plans to open its first data centre in Thailand. Then came Microsoft’s revelation the following day that it would pump US$2.2 billion worth of investments into Malaysia. The Washington-headquartered firm joins the ranks of tech giants that are upping their game in South-east Asia in pursuit of greener pastures to diversify beyond China and to fulfil the growing demand for such services in the region. 

And it’s not just tech giants who are bullish on South-east Asia: Singapore Management University (SMU) has also opened its third overseas centre in Vietnam, becoming the first Singaporean university to do so. It has two other overseas campuses in Jakarta and Bangkok, and intends to launch three more offices across Asia by 2030. Read more in this piece by our Vietnam correspondent Jamille Tran, who spoke with SMU president Lily Kong. 

While a lot has been said about the region’s growth potential, there’s a catch: Asean is plagued by a case of the “baby blues” – as in declining fertility rates that risk dragging down economic growth. BT’s regional team places the spotlight on the demographic dilemmas being faced by the Philippines, Indonesia, Vietnam and Thailand, in this in-depth piece put together by our journalist Zhao Yifan, who also examines what policymakers are doing to bring back the baby fever. 

Meanwhile, Malaysia’s Prime Minister Anwar Ibrahim and Berjaya Corp have dispelled rumours that company founder Vincent Tan – the 29th richest man in Malaysia according to Forbes – has been in talks with the government about opening a casino in Johor Bahru’s Forest City. The rumours have stirred debate on its potential economic benefits, social impact and raised religious concerns, what with the country’s Malay-Muslim majority population, writes our Malaysia correspondent Tan Ai Leng. 

I’m ending off today’s newsletter with a lighter read for you to unwind to – one that car aficionados will find particularly entertaining. Did you know that Malaysia’s king, Sultan Ibrahim Iskandar (who’s also a billionaire), owns more than 300 cars? Read this piece by Ai Leng to learn about some standouts in his collection, including a Hongqi L5, a Bugatti Veyron and a Flintmobile replica.

We’ve got a strong selection of stories from across the region this week, so keep scrolling for more good reads. As always, we appreciate your support for The Business Times. Have a good weekend.

Trending

What I’m watching: Bank Negara Malaysia will be holding its Monetary Policy Committee meeting on Wednesday (May 8) and Thursday (May 9), where it will announce its decision for the nation’s benchmark interest rate. 

Why you should care: The central bank is widely expected to hold its overnight policy rate at 3 per cent for a sixth consecutive meeting, and for as long as the entire 2024. The ringgit is currently trading at around 4.755 to the US dollar as at 7 pm on May 2, after it breached 4.8 in February to chart a record low.

Asean in Brief

• Singapore, Indonesia to deepen cooperation on green economy Exploring opportunities in the green economy – including investing in the sustainable development of Indonesia’s new capital Nusantara – were among the many issues that Singapore’s Prime Minister Lee Hsien Loong and Indonesian President Joko Widodo discussed at their final leaders’ retreat on Apr 29. Read more
• Indonesia to drive the growth of Asean’s green economy: PM Lee Prime Minister Lee Hsien Loong said that Singapore looks forward to Indonesia driving the growth of South-east Asia’s green economy, and he suggested that both countries could expand their cooperation to carbon credits next. Read more
• Laid-back vibe, stunning beaches, rich cuisine and low cost of living lure more expat retirees to Malaysia Malaysia’s popular visa residency programme, Malaysia My Second Home (MM2H), has long been luring expats, but policy flip-flops on its qualifying benchmarks and greedy agents have robbed the programme of some of its shine. Read more
• Vietnam’s inflation advances to 15-month high amid FX, gold pressures Inflation jumped 4.4 per cent to a 15-month high in April, up from 4 per cent in March. Our Vietnam correspondent Jamille Tran explains how elevated rice prices, the dong’s depreciation and gold pressures push consumer prices upwards. Read more
• Vietnam tycoon appeals against US$27 billion fraud death sentence Real estate tycoon Truong My Lan, who was sentenced to death for embezzling funds from Saigon Commercial Bank, is now appealing her conviction. Read more
• Indonesia’s Q1 FDI up 16% at 204.4 trillion rupiah despite political uncertainty Indonesia’s business appeal has held up despite the uncertain political climate, with foreign direct investors committing 204.4 trillion rupiah (S$17.1 billion) of approved projects in the first quarter of this year – up nearly 16 per cent from a year ago. Read more
• Indonesia inflation eases slightly to 3 per cent in April Indonesia’s headline inflation moderated to 3 per cent year on year in April from 3.05 per cent in March, primarily due to lower food prices, particularly rice as harvest season arrived. Read more
• Thailand picks capital markets veteran as finance chief Pichai Chunhavajira’s immediate challenges are to dial down tensions with the Bank of Thailand, and overcome opposition to the government’s plan to hand out 10,000 baht (S$368) to 50 million Thais later this year to stimulate the economy. Read more
• Philippine peso nears critical 58-per-dollar mark amid regional currencies sell-off The peso has tumbled more than 4 per cent this year and was hovering around 57.8 against the US dollar amid still higher-for-longer interest rates and escalating geopolitical tensions. Read more