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Asian Economy: Overview, Growth & Development

Indonesia’s Jokowi promises to make new labour and investment rules

Indonesian President Joko Widodo said he will introduce sweeping changes to labour rules by the end of the year and open up more sectors of the economy to foreign investment, delivering on some of the major reforms investors have been demanding. Mr Joko, more popularly known as Jokowi, said planned changes to the labour law will apply to new employees, proposals he will discuss with labour unions before taking them to parliament. By restricting the rules to new jobs only, Mr Joko can attract businesses wanting to set up shop in Indonesia or looking to expand, while defusing opposition from labour groups. Speaking from his home town of Solo in Central Java on Wednesday (Oct 2), Mr Joko told Bloomberg’s editor-in-chief John Micklethwait that it’s his “first priority” to reform the labour rules. Businesses have long complained that generous severance packages, a complex minimum wage system and restrictions on hiring and firing workers make it difficult for them to expand operations.

Asia

Malaysia proposes $28 mn fine on grab for abusive practices

Malaysia’s competition regulator on Thursday (Oct 3) proposed a fine of RM86 million (S$28.4 million) on ride-hailing firm Grab for violating the country’s competition law by imposing restrictive clauses on its drivers. The Malaysia Competition Commission (MyCC) ruled that Grab, which has major backing from Japan’s Softbank Group, had abused its dominant position in the local market by preventing its drivers from promoting and providing advertising services for its competitors. “MyCC further notes that the restrictive clauses had the effect of distorting competition in the relevant market that is premised on multi-sided platforms by creating barriers to entry and expansion for Grab

’s existing and future competitors,” MyCC chairman Iskandar Ismail told a news conference. MyCC also imposed a daily penalty of RM15,000 beginning on Thursday for as long as Grab fails “to take remedial actions as directed by the commission in addressing the competition concerns”. Mr Iskandar said Grab have 30 working days to make their representations to the commission before a final decision will be made. “We have just completed investigations.

China’s spenders are saving, and that’s a problem

Forty years after China began its near-miraculous run as the world’s most powerful economic growth engine, its people are experiencing something new and unsettling: A feeling that the best times may be behind them. The Chinese economy is slowing, and the cost of living is rising. The trade war with the United States shows no sign of ending. Wage growth is sluggish. More young people are chasing fewer job prospects. Chinese consumers, who have become more cautious over the past year, are now staging a broad retreat. They are buying fewer cars, smartphones and appliances. They are going to the movies less and taking fewer trips abroad. They would rather stick their money in the bank. For China’s young people, who have never experienced a prolonged slump in their lives, the shift is especially stark. China has seen slowdowns before, but its consumers kept spending through most of those downturns. Now young people have more reasons to be worried. Job prospects for recent college graduates have worsened over the past year, according to data from job search website Zhaopin.com, and graduates seeking jobs outnumber openings. Many of those openings are low-paying service-sector jobs.

 

Gwadar to be used as transit facility for China and Afghanistan

Government of Pakistan has decided to improve regional trade with neighboring countries, mainly China and Afghanistan. For this purpose, the teams of Maritime, Federal Board of Revenue and Ports and Shipping have completed a road map, which suggests that Cargo handling for Afghanistan would be routed through Gwadar. The relevant authorities have stated that Gwadar shall be used as a Transit facility for both China and Afghanistan, since it has enough storage facility for transit trade. Moreover, handling through Gwadar port will also reduce handling charges by a considerable margin.

Govt to facilitate business and investment in Nepal

The government is committed to facilitate business and investment in Nepal, according to Baikuntha Aryal, secretary at the Ministry of Industry, Commerce and Supplies. Addressing the first Nepal German Business Forum in Kathmandu on Wednesday, he said that several laws supporting business and investment were either underway or being amended as per the need.

“We are developing the procedure, and will come up with the best mechanism to implement these laws in full-fledged manner,” he said. “The government of Nepal is now stable, so is the institutional mechanism. We are working to reduce the cost of doing business in Nepal.” Speaking on the occasion, Roland Schafer, German ambassador to Nepal, asked all those who are already in South Asia or trying to do business in this region to consider Nepal as a good destination for investment. “Nepal is changing, it has become stable and reliable,” Schafer said.

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