Mr Louis Chua, a Member of Parliament ( MP ) for Sengkang GRC, suggested that “ethical lending practices” should be encouraged, apart from raising awareness of the dangers of illicit borrowing. Stringent regulations on all types of financing, perhaps from licensed moneylenders and banks, to avoid “exorbitant attention rates” andContinue Reading
According to former prime minister Abhisit Vejjajiva, the country’s economy has slowed down and cannot be saved by just injecting wealth through initiatives like the government’s 500 billion-baht modern money handout plan, which will likely help boost the economy in just one or two quarters.
Mr. Abhisit also cited the urgency of amending laws in a particular meeting with the Bangkok Post as a solution for the country’s economic stagnation.
According to Mr. Abhisit, who rated Mr. Srettha’s effort to entice more foreign firms into Thailand as unsuccessful as it should have been, these legal difficulties are a significant obstacle to Prime Minister Srettha Thavisin’s efforts to do so.
Mr. Abhisit made reference to Mr. Srettha’s sessions with important businesspeople while traveling abroad.
Purchase problems
Global investors are primarily concerned about Thailand’s lack of laws, rules, and technology, especially now that the government has n’t but demonstrated clearly what fresh business direction Thailand is actually moving in, according to Mr. Abhisit.
Worse still, in wooing purchases from abroad, the Srettha leadership is focusing more on business sectors with little progress, said Mr Abhisit.
This state is attempting to address this key fundamental issue by introducing the online budget handout scheme and raising the minimum everyday wage to 400 baht, according to Mr. Abhisit, along with higher purchasing power only among a select few small groups of Thai consumers and a higher rate of household debt.
He cited Microsoft executives ‘ absence of the precise purchase figures the tech company had in mind when they made the announcement of their investment strategy in Thailand recently as one obvious example.
He claimed that while they have released their purchase plans for Thailand and Indonesia, they have left out their own investment plans.
He claimed that if Microsoft had actually intended to set up a data center in Thailand, it would have made clear what portion of the company’s guaranteed investment’s clean electricity use would need to be met.
According to Mr. Abhisit,” And we still do n’t have the answers to the questions that prospective international investors have raised regarding clean energy policies that will ensure the continuity of business development.”
Every business needs help
According to Mr. Abhisit, Thailand’s economic growth is typically attributed to the rise of large public companies, but in reality only those with concessions from the authorities are expanding, according to Mr. Abhisit.
This plainly shows Thailand’s financial growth happens in just specific firms, not across all business areas as it should be, he said.
He said,” The answer is that we need to start rewriting laws and regulations that have been debated for a while.”
Also Thai businesses find Thai rules difficult due to their complex laws. These regulations are outdated and inconsistent with current businesses, innovative technology and the economic system”, Mr Abhisit said.
According to Mr. Abhisit, yet the government’s plan to raise the minimum daily wage to 400 baht still needs constitutional amendments, adding that any additional delays in passing the laws may probably lead to an even worsening of the economy going into the new year.
” Up until now, we still have n’t seen the government making any real move in implementing those policies it had promised voters]during the election campaign] while pressure is mounting for it to honour its promises”, he said.
According to Mr. Abhisit, the ruling Pheu Thai Party and its precursor, the now-defunct Thai Rak Thai Party, were well known for their propensity to choose a quick repair, such as a signal program to finance an economic system, rather than addressing a root cause.
He predicted that the business will fail once more in one or two quarters once the effects of the short-term monetary stimulus are gone.
According to Mr. Abhisit, the alliance government’s efforts to boost the economy even lack unity.
New financial plans
The ruling party has generally maintained that the nation is experiencing economic slowdown and that the digital wallet freebies are intended to bring the country back from its slumber, according to deputy finance minister Paopoom Rojanasakul’s earlier statement to the Bangkok Post.
Mr. Paopoom attributed the slow economy to three factors: the inaction of the 2024 fiscal budget, ineffective fiscal and monetary measures to stimulate the economy, declining consumer confidence in spending, and a contraction in loans, particularly for small and medium-sized enterprises ( SMEs ).
” In brief, the fiscal business lacks weapons, and while the financial market has it, it refuses to use it. Banks are optimistic about extending money as a result of this. With all these factors, the government’s business is sluggish”, he said.
Mr. Srettha stated on Friday that the government would introduce extra steps to boost the economy.
He claimed he had a Thursday evening meeting with Finance Minister Pichai Chunhavajira about a variety of issues, including property market and economic stimuli.
” A major announcement on quick- term, medium- term and lengthy- term measures may be made on June 24 or 25″, the excellent minister said.
Asked if this would be good news, Mr Srettha said:” Let’s wait and see”.
He also said Mr Pichai will discuss the inflation target with Bank of Thailand ( BoT ) governor Sethaput Suthiwartnarueput.
Prior to this, Mr. Srettha stated that numerous foreigners were interested in funding projects in Thailand, including the” Land Bridge.”
This one trillion-baht project aims to build a logistics network connecting Chumphon province in the Gulf of Thailand to Ranong province along the Andaman Sea.
Additionally, it has two deep-water ports, a railroad system, and a land-to-air highway connecting the two provinces, with the intention of loading containers onto waiting container ships.
After the release of the federal budget, financial experts predict that the situation will bottom out in the next half of the month. However, the market is currently at one of its worst points.
According to Nonarit Bisonyabut, an economist at the Thailand Development Research Institute ( TDRI), things typically seem to be at their worst just before things start to improve.
Mr. Nonarit attributed a short-term decline in the country’s economy to a number of factors, most notably the slow funding of the federal budget and great domestic and international interest rates, which discourage investment.
Politics a probable move
He claimed, however, that as interest rates drop globally, the position will increase. Interest rates were just lowered by the European Central Bank, and the US is projected to experience another reduction this season.
” I’m calling it the’ 4am business’ because we’ll view a ray of light immediately. We’ve seen lower interest rates, he said, with Thailand likely to follow suit and the US expected to make four cuts next month.
Mr. Nonarit stated that as soon as the details of government jobs are made clear, state spending may start in May and may continue to increase. The trade industry, however, is showing signs of improvement, and so is the global market.
” That means we’ll be entering the sun, and the sector is expected to start growing again”, he said.
But, a nation’s economic growth depends heavily on its ability to meet the needs of the world’s economy and address challenges brought on by an aging society.
Also, the state of politics is also retard the economic treatment, particularly if Prime Minister Srettha Thavisin is removed from office, causing social problems.
In the most recent cabinet reshuffle, Pichit Chuenban was criticized for his controversial appointment as the PM’s Office secretary. 40 lawmakers, who had accused the prime minister and Pichit of breaking government minister morals, started the investigation.
They asked the court if the pair should be removed from office under Section 160 ( 4 ) and ( 5 ) of the constitution, which deals with the ethics of cabinet ministers.
They claimed that Pichit, who had represented Thaksin Shinawatra in a corruption case in 2008 and spent time in jail for contempt of court, was inadequate to hold a cupboard position.
The social climate also affects the business. If the land has to find a new prime minister, state laws will be further delayed”, Mr Nonarit said.
Nonarit: Politics may trick recovery
Digital pocket the main concern
The TDRI researcher asked whether the Pheu Thai-led administration’s policies over the past nine months have had an impact on the economy, noting that the government is focusing more on the digital budget plan than other small-scale monetary measures.
” The state has to save money for the cash handout program, so there are no smaller initiatives to wax the rims”, he said.
There remains a major question mark over foreign assets, he said. Although some major companies claim they intend to travel to Thailand, it is too early to say whether the prime minister’s outside journeys will have any impact.
” There are basic factors that may pull investments, such as human resources and skill set. He claimed that this is the major challenge, and that long-term planning is required to handle this.
According to Mr. Nonarit, the government should take short-term steps and begin addressing economic reforms, particularly building the workforce to support the business, once political uncertainty has vanished and social security has been established.
Weak imports, lower paying
Tanit Sorat, vice- chairman of the Employers ‘ Confederation of Thai Trade and Industry ( EconThai ), said the export sector, which is traditionally Thailand’s driving force, remains weak, so supply chains have been affected.
Due to the low purchasing power of local and international markets, the industrial firm’s production accounts for 60 % of its full potential.
As a result, the services, logistics, employment and transport industries are all suffering from this downturn of financial activity.
The circumstance for companies has become worse as a result of global factors, including the US-China trade war and the Middle East’s tensions, particularly those involving shipping vessels in the Red Sea.
A high level of household debt has caused a negative situation for companies and raised cash concerns for businesses as a result of poor customer spending.
” Only the tourism industry seems to be surviving, but the sector makes up for 8 % of the country’s GDP”, he said.
On international investments, he said businesses make lengthy- term expense plans, which are not likely to be halted only by social issues.
Last year saw investment principles of more than 600 billion rmb, of which 70 % was the result of foreign direct investment.
Government” sitting on its arms”
In the past nine times, Mr. Tanit claimed that the government has hardly done something. The government chose to wait for the electronic wallet system rather than start a signal program to increase profitability and start a bill suspension.
The prime minister should have started working right away because he is a businessman. He is aware that businesses require small incentives and debt payment suspensions to keep up with rising household debt. He thinks like a politician, not a businessman”, he said.
He noted that the car manufacturers ‘ supply chain has experienced a 23 % contraction, and that other struggling industries include sugar, cassava, and rubber.
Half of export clusters have also contracted, and without government intervention, the supply chain will be dragged down, he noted.
The government should develop a plan to increase public spending and increase production while the rollout of the digital wallet is in progress. Operating at 50–60 % of their total capacity, businesses will not be able to retain workers, he said.
” Can the government also suspend debt for a year?” This is a short- term measure. And for the digital wallet, the government should ensure it can be spent anywhere, not just in convenience stores”, he said.
Tanit: Export sector remains weak
The ruling party, according to deputy finance minister Paopoom Rojanasakul, has always said that the nation is experiencing economic stagnation and that the digital wallet handouts are intended to lift it from its slumber.
Mr. Paopoom attributed the slow economy to three factors: the inaction of the 2024 fiscal budget, ineffective fiscal and monetary measures to stimulate the economy, declining consumer confidence in spending, and contraction in loans, particularly for small and medium-sized enterprises ( SMEs ).
” In short, the fiscal sector lacks ammunition, and while the monetary sector has it, it refuses to use it. Banks are cautious about extending loans as a result of this. With all these elements, the country’s economy is sluggish”, he said.
State funds begin to flow.
Mr. Paopoom claimed that funds have been injected into the system since the 2024 fiscal budget bill was finally approved after a protracted delay.
Additionally, measures are now in place to accelerate investments in state enterprises which meet 95 % of the government’s target.
More money will be injected into the system as a result of the rollout of the digital wallet scheme, which is scheduled to take effect in October of this year.
The deputy finance minister claimed that due to the slow production and lack of consumption, Thailand has lost its appeal.
He acknowledged that business decision-making depends also on political stability. He expressed confidence in the government’s efforts to solve the country’s economic problems and the introduction of a number of fiscal measures, including soft loans, as well as upcoming loan guarantee measures.
Central bank must play a role
He argued that the Bank of Thailand must cooperate with the government in order to carry out its measures, and he also emphasized the necessity of interest rate reductions.
We have remained unwavering about the necessity of lowering interest rates because they do not conform to the economic conditions. Interest rates appear higher than they should be with the current inflation rate of 0.6 % to 0.7 %, which is below the lower 1 % threshold.
Mr. Paopoom added that much-needed reforms like the Virtual Bank project, credit guarantee upgrades, and the retirement lottery policy are in the works and that the economy is on track to recover, particularly in the second half of this year.
Paopoom: Banks cautious about extending loans
According to a Trump-era US industry standard who was known as the” China hawk,” the Trump administration should tighten its restrictions and export controls against China, which are currently insufficient to prevent Chinese companies from exporting dual-use goods to Russia and using American technology.
Nazak Nikakhtar believes that sanctioned organizations can easily be evaded because they can conceal themselves by starting layers of shell companies or just owning a majority interest in their businesses.
Nikakhtar, who from 2018 to 2021 was assistant secretary for industry and analysis at the US Department of Commerce’s International Trade Administration ( ITA ), spoke with Asia Times in an interview.
She suggested that US President Donald Trump impose” regional restrictions” on those who supported the Ukrainian military.  ,  ,
” Folks can establish document companies to avoid US sanctions,” the statement read. However, if we apply sector-specific sanctions to our SDN List [Specially Designated Nationals and Blocked Persons List], it will become a little challenging, according to Nikakhtar, who is now the head of the fund’s national security process and is a companion in the global business practice at the British law firm Wiley Rein LLP.
She said that targeting financial corporations would have a “broader financial impact.” The banks should be raised by the phrase “if a paper business suddenly deals with tens of millions of dollars of purchases over.”
She claimed that these crimson flags allow the US government to recognize cautious businesses.
The US Treasury Department’s Office of Foreign Assets Control ( OFAC ) released the Sectoral Sanctions Identifications List ( SSI List ) in July of 2014 and added prominent figures from Russia’s financial and energy sectors to it.  ,  ,
Since the Ukrainian War started in February 2022, the SSI List has grown tremendously. Restrictions apply to businesses whose lot bets are owned by those on the SSI List directly or indirectly. Some Russians and Chinese citizens have also discovered ways to evade US restrictions.  ,
According to Nikakhtar, the current US sanctions against Russia and China were very narrow and incremental, giving them the opportunity to create systems that would withstand them.  ,
Given that we do n’t usually punishment many Chinese businesses, the Biden presidency feels like it has made a major shift in this regard,” she said. ” Do these things matter? Symbolically, yes. Do they, however, have any deterrent effects when used in a manner that deters human use? No”.
According to her,” the US government really needs to consider an alternative strategy because current methods are not punishing but ultimately weaken our capacity for sanctions.”
Washington has sanctioned about 1,500 Chinese businesses since a trade war between the US and China in 2018 and accused them of supporting Moscow’s military in Ukraine, violating international human rights, providing products to the People’s Liberation Army with high-tech products, and launching cyberattacks.  ,  ,
These sanctions were imposed following lengthy investigations. After Russia fired 136 suicide drones at Ukrainian troops using Iranian-made Shaheds in August of this year, the Bureau of Industry and Security ( BIS ) of the US Commerce Department identified and sanctioned three Hong Kong businesses that supplied the drone parts.
Treasury Secretary Janet Yellen said that if Chinese financial institutions were involved in shipments that increased Russia’s military might, the US could impose sanctions on them.  ,
Four more Chinese banks recently stopped accepting payments from Russia, according to a report in the Russian newspaper Izvestia on April 12 after three of the world’s largest Chinese banks did the same in February.  ,
A US official told Reuters on April 22 that the country had no immediate plans to impose sanctions on Chinese banks.
Nikakhtar claimed that China’s current de-dollarization plan has remained stalled due to its own economic issues, making the threat of sanctioning Chinese banks a real risk.
She said,” I would advise any administration to avoid using traditional methods, but instead consider combining multiple methods to achieve the best impact,” noting that the import restrictions and tariffs are two other examples.  ,
She claimed that” the government has a lot of information” about how Russian and Chinese people trade. It has the authority to impose sanctions on both those who may be indirectly involved in the transactions and those who are significant and significant enough to have a significant economic impact on the Chinese economy.
For example, she said, if any Chinese automakers are found to have supported Russia’s war efforts by supplying Moscow with their armored vehicles, they should be sanctioned.  ,
” By rethinking how we use sanctions and other tools, we could still proceed narrowly, but having a bigger and more significant economic impact”, she said. The US government does n’t seem to be comfortable with stepping back, I believe.
In fact, Washington has recently expanded the scope of its sanctions against Chinese businesses.  ,
VPower Finance Security, a Hong Kong-based logistics service provider, was sanctioned by the US Treasury Department on June 12 for allegedly helping to transport Russian-origined gold, which had been sold to some businesses in the UAE and Hong Kong, into fiat money and cryptocurrencies. VPower’s clients include big Chinese banks, retail brands and the Hong Kong government.  ,
In an effort to reduce China’s chip industry, the Biden administration has tightened its export controls over the past few years.  ,
However, according to reports in the media, China can still purchase expensive US chips from smugglers or third countries, and Semiconductor Manufacturing International Corp ( SMIC ) used deep ultraviolet lithography last year to create 7 nanometer chips. In recent years, the nation has also updated its electronic design automation ( EDA ) software.  ,
On March 29, the US revised its export control regulations to make it harder for China to import US-made artificial intelligence chips and chips.
The US government should consider where it is going if 90 % of certain chips ‘ exports were traditionally made in China but now are made there through a third nation without any industry to support that kind of volume, Nikakhtar said.  ,
” Before it provides license authorizations, the US government can start looking at parties involved in the financial transactions, their banks, beneficiaries and account holders”, she said. It can initially license a very small amount of trade before sending it to the end-use-checkers to check the legitimacy of each institution before granting more licenses.”
She noted that the US government can look into a lot of red flag indicators, but regrettably, the Commerce Department’s export control unit is “very much oriented toward export promotion, rather than really regulating controls.”
She suggested that the US government should deregulate its export regulations for allies and establish a roadmap to restructure its chip supply chain at the same time.  ,
” China has the majority of chip’s end users. What should we do while the US government tries to break the supply chain out of China? Can semiconductors be exported to other countries? How long will it take to build out that? What will happen to companies ‘ revenue in the meantime”?
Nikakhtar added that the US government’s evaluation of China’s technological prowess is currently a little superficial, underestimating the abilities of Chinese engineers.  ,
She said,” An overestimate the other side to have a stronger policy is a country’s responsibility,” so that it can always have a stronger policy.  ,
Read: Chinese EV firms can absorb EU tariffs: expert
Read more: Hong Kong exports rebound despite the Sino-US trade war
Follow Jeff Pao on X:  , @jeffpao3
The American company of Hyundai Motor is gearing up for an initial public offering on the Mumbai property sector in order to divert attention from the US and EU taxes on Chinese energy cars and, at the very least, the achievements of Tesla’s Elon Musk.
Maruti Suzuki is the second-most-used company of passenger cars in India after Hyundai. The North Korean manufacturer, which is away of Tata Motors and Mahindra &, Mahindra, has more than 20 % of the market, along with its advertising Kia. Although the ninth-ranked MG is owned by China’s SAIC, it should be noted that not one of India’s top car manufacturers is Taiwanese.
If the Securities and Exchange Board of India approves, Hyundai Motor India will become the first automaker to come open since Maruti Suzuki in 2003. In what appears to be India’s most important Offering, Hyundai Motor reportedly intends to sell up to$ 3 billion of its wholly-owned company. No new stock may be issued. The direct managers are international funding institutions Citigroup, HSBC, JP Morgan, and Morgan Stanley, and India’s Kotak Mahindra.
Resources: Statista data, Asia Times table
Founded in 1996, Hyundai Motor India is also the region’s second largest car company and a leading producer. It has two manufacturing facilities in the Tamil Nadu capital, Chennai, and one more in the area of Talegaon, south of Mumbai, in the state of Maharashtra.
Hyundai announced at the time that it would invest an additional$ 4 billion ($ 5 billion ) in India to increase production to one million units annually (up from the previous$ 5 billion ). Building an electric vehicle organization, including battery pack council and charging channels, is also on the plan.
Investors have been favorable with the proposed Offering, Hyundai Motor’s overall performance, and its proposed IPO. Its share price increased by nearly 6 % since the IPO’s announcement on June 15 and is now up nearly 40 % year-to-date. According to Asian stock industry analysts, the listing of Hyundai Motor India will increase the parent company’s valuation, which is now only 6.2 times the price/earnings various in Google Finance’s calculations, compared to 8.4 times for Toyota and 24x for BYD.
India accounts for almost twice as much of Hyundai’s financial unit sales as China, and it represents a proper growth market for the automaker. Hyundai Motor India offers more than a few models, from reduced- priced compacts to all- energy SUVs, through almost 1, 400 sales outlets and with about 1, 550 support points across the country.
Resources: Hyundai Motor product sales data, Asia Times table
India accounts for about 6 % of international passenger car sales that year, surpassing Japan in the original class in 2023. It is the third-largest national market for motor vehicles and fourth-largest for passenger vehicles globally. China is the nation’s largest national auto industry, followed by the US. The local EU market is 2.5 times as large as India’s industry.
Solutions: Data from Western Automobile Manufacturer’s Association and F&, I Tools USA, Asia Times table
Hyundai values India for 2.5 times more units sold than the global auto industry, according to system sales. Additionally, it appears that the gap will probably grow as Hyundai Motor India expands and modernizes its facilities, aiming for a more diverse product mixture in the private sector while also serving as a somewhat low-cost export base.
Hyundai affiliate Kia, on the other hand, plans to turn China into an export base for electric vehicles, starting with its EV5 compact SUV. The Middle East will be the next destination after the Middle East exports of the previously only model made in China to Thailand and Australia began in May. In Georgia, Kia plays both sides in the US-China trade dispute by producing electric SUVs.
In South Korea, Hyundai, Kia and their smaller domestic rival KG Mobility ( Ssangyong Motors ) had more than 80 % of the market in 2023, leaving the rest to BMW and Mercedes, the local operations of GM and Renault and more than 20 other imported models. This year, BYD plans to enter the Korean market, but it’s likely to find it difficult to do so.
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Discussed: 20 Jun 2024 at 18: 54
For the ominous occasion of His Majesty the King’s 72nd birthday on July 28th, the Bank of Thailand ( BoT ) will issue 10 million commemorative banknotes.
The central bank government, Sethaput Suthiwartnarueput, announced on Thursday that the coin would be printed in portrait format and on polymer material to ensure durability and stop counterfeiting.
Beginning on July 23rd, the banknote will be accessible at the BoT Knowledge Center and business and state-owned banks for a value of 100 baht.
The central banks will even display two million booklets, at 10 ringgit each, in which collectors can preserve the coins. All proceed may become presented to His Majesty the King, said Mr Sethaput.
( Photo: Bank of Thailand )
The banking industry also poses the greatest threat of money laundering, according to the organizations, because banks are more susceptible to being abused because they facilitate large volumes of financial transactions.
Additionally, they offer services to clients who are more likely to dirty money, particularly those who come from countries with greater risk.
Business services companies, which are not in the financial sector, are more vulnerable because they could be used to commit crimes like the inclusion of shell businesses with complex ownership structures to conceal the personalities of the criminals.
The real estate, licensed believe companies, games and precious stones and metals businesses also pose a higher risk of money trafficking, said the authorities.
Within the financial sectors, digital payment token ( DPT ) services providers are also at a higher risk, along with cross- border money transfer service providers, such as remittance agents, and external asset managers.
According to the organizations, there has been an increase in reported situations involving DPTs and the way in which they can be used.
Local officials are also closely monitoring the market, despite the fact that local authorities in Singapore only have a small share of global activities.
” We do observe that many sectors have actually improved their controls as well as risk awareness over the years since the last ( assessment ),” said Ms. Thong Leng Yeng, executive director of the Anti-Money Laundering Department at MAS.
” Nonetheless, the global risks, as well as risk culture, have actually even increased in difficulty. So, it is crucial for companies, as well as other sectors of the economy, to ensure that they read and understand this ML NRA to make sure that their risk assessment is accurate and accurate, as well as to make sure that their mitigating measures are effective and sufficient to address these challenges.
The construction had to be brought up to code at the same time. For instance, the existing wall rooms did not meet existing top regulations, to avoid this, railings were added. ” We needed to make sure that we did n’t compromise on safety standards, while ensuring that the new building retained its charm, flavour and taste”.
Spend NOT, WANT NOT
Tan’s concerns about conservation come from first-hand experience of wastage. Around 30 % of all global waste is produced is produced from construction and demolition waste ( CDW), but Singapore’s construction sector recycles 97 % of CDW. With cost reduction then a top concern for Tan and ESG then a top priority for some corporations, he set himself the challenge of initiating a change of perspective within the organization.
Tan and the rest of the senior management made the decision to fit the areas with discarded building supplies and equipment when the company moved to its current eight-story, S$ 30 million office in Sungei Kadut in 2015, where this discussion and photoshoot took position. On a trip of the grounds, Tan pointed out roof, wall and floor runs that once adorned businesses and shopping malls. Staff members frequently receive surplus furniture while presents as favors. To make product mock-ups for clients, Mr technology and 3D models are used, reducing time and money.
Tan’s parents, Tan Teng Huat, established Sunray in 1987. The business began doing little carpentry and woodwork work from its foundation in Ang Mo Kio Industrial Park II and afterwards in Bukit Batok. The Bukit Batok shop burned to ashes in a big fire in December 1999, but the business was fortunate to recover.
” With my kids ‘ era, it was all family and friends helping in the business. We made the decision to continue working because we did n’t want them to lose their jobs and that was not a good time to do so. We did n’t have much insurance, so we had to mortgage everything we had. With the help of the institution, we were able to swing back”, explains Tan.
” Through every second crisis, we got stronger, we grew bigger”, he adds. ” From the Asian Financial Crisis to the flames, to the Global Financial Crisis, to COVID- 19, we were able to sea through. That, in my opinion, reflects who we are as a business.
Shortly after the start of the Israel-Hamas War and the start of the massive loss of Gaza in October 2023, McDonald’s managers in Chicago discovered themselves unintentionally implicated in the fight.
Local masters of McDonald’s franchises are given considerable autonomy over earnings and procedures, and franchisees had begun taking edges. McDonald’s in Israel made headlines for providing free meals to Israeli troops in social media, leading to millions of dollars being pledged to Palestinians in Gaza by McDonald’s companies across the Middle East.
McDonald’s has since made an effort to cut down on criticism of the franchisees and sort its way out of the discussion. In April 2024, McDonald’s Corporation announced it would get up 225 of its cafes from Alonyal Limited, the Israeli company that manages McDonald’s in the country, for an undisclosed amount.
The deal, which will be finalized over the coming months, may keep McDonald’s active as the business attempts to recover the company’s lost regional sales and stock prices.
The event demonstrates how multinational corporations with distributed operations and international footprints can quickly become embroiled in conflict. Although McDonald’s top executives did not intend to support either Israel or Palestine, profit incentives have often prompted businesses to support various sides in conflicts, generally in more significant ways.
Western weapons companies directly and indirectly supplied both edges with arms during the Iran-Iraq War between 1980 and 1988, profiting from the shifting help of the American government for Iraq and Iran throughout the conflict.
But, as foreign corporations have expanded their global operations in response to the growing globalization and strains on the US-led global order, they are now faced with maintaining business relationships with both US and nations that conflict with American interests.
Additionally, these companies are becoming more entangled in fueling opposing attributes of civil wars within various countries, directly and indirectly, in ways that can enhance or rise violence.
The conflict in Ukraine has shown how foreign companies have fallen short of the demands of any one authorities, including the US, when it problems with their financial objectives.
Despite Russia’s annexation of Crimea and incitement of a proxy war in Ukraine’s Donbas region in 2014, many Western companies continued operating in both countries, providing the Soviet government with tax revenue, technical skills, products, and staff knowledge, easing the Soviet government’s efforts to support its war efforts.
However, some Western businesses had to choose between cooperating with restrictions by leaving Russia and maintaining access to lucrative government contracts and a 145-million-person client industry following Russia’s full-scale invasion of Ukraine in 2022.
However, other businesses remained in the country, citing expensive exit costs, while the majority of them departed due to public pressure and sanctions. Others who formally or delegated their intention to operate in Russia have proven to be essential to the Kremlin’s ability to lessen the impact of sanctions.
Meanwhile, even China, Russia’s most important partner, had its largest commercial drone company, DJI, emerge as the largest drone provider for both Russia and Ukraine, showing the powerful allure of profits and how international markets allow the flow of products to war zones regardless of geopolitical alliances.
Western businesses have been subject to increasing pressure to sever ties as the tensions between the West and China have also increased in recent years. US tech giants like Google, IBM, and Cisco have come under fire for aiding the development of China’s security capabilities, albeit ostensibly for domestic use.
In 2019, NBA officials ‘ remarks regarding China’s response to pro-democracy protests in Hong Kong drew severe financial consequences for the organization’s operations there, and the White House criticized businesses that had “kowtowed to the lure of China’s money and markets.”
Beijing continues to try to prevent conflict by requiring foreign companies to separate their domestic governments from their national governments on divisive issues or at least ensure neutrality. Many US businesses already have higher domestic revenues in China than domestically, and they are not willing to ignore the second-largest economy and consumer market in the world.
Despite the fact that many multinational corporations have historically relied on the US to govern their operations during the last few decades of neoliberal globalization, many have since rethought their positions.
Some multinational corporations appear to have been encouraged by this dynamic, in addition to globalized supply chains and markets, believing that they can support multiple sides in geopolitical conflict with relative impunity while their goods and services will likely find their way to desired destinations and partners regardless of government orders.
Companies appear more willing to try to maintain ties with the US while also maintaining and fostering ties with nations that are hostile, than to march in lockstep with it.
This approach runs the risk of aggravated geopolitical tensions and undermines the coherence of the US-led global order because multinational corporations ‘ profit motives diverge from their foreign policy goals.
Importantly, as globalization has advanced, multinational corporations have become increasingly involved in civil conflicts and regions with fragile governance. By supporting rebel groups and governments, they have in some cases actively heightened tensions.
One of the biggest agricultural companies in the world, Chiquita Brands International S. à. l., acknowledged paying money to both the FARC rebel group and right-wing paramilitary groups in Colombia in the 1990s and 2000s to ensure the safety of operations.
This pattern of businesses supporting multiple sides in conflicts is especially perceptible in Africa, frequently to gain access to resources. Shell and Chevron have paid insurgent groups in Nigeria to protect their oil and gas interests while also providing the country with tax and development funds.
Similar to this, mining companies like Afrimex ( UK) Ltd. and Trademet SA, both of which have contracts with the DRC government.
Chinese miners are alleged to have paid Nigerian militant groups to access the country’s mineral reserves while also operating with the government.
In Myanmar, various Chinese and Thai companies have engaged in covert negotiations with ethnic armed groups that control areas rich in natural resources.
Mining, logging, and agricultural companies also paid “revolutionary taxes” to the New People’s Army ( NPA ) and other insurgent groups in the Philippines, including companies like Lepanto Consolidated Mining Company and Philex Mining Corporation, prompting public disapproval by Filipino officials.
While serving contracts for the US military, the Louis Berger Group, an engineering consultancy, paid the Taliban and other groups in Afghanistan to guard supply convoys and construction projects.
Indirectly, banks and payment processing networks are assisting or obstructing the funding of alleged terrorist and criminal organizations. The FinCEN Files, which were released in 2020, also revealed how banks like Standard Chartered PLC handled millions of dollars for Arab Bank customers despite Arab Bank being held accountable in 2014 for knowingly giving money to Hamas.
Private military and security companies ( PMSCs ) are also playing a significant role in the expanding direct and indirect roles of corporations in conflict zones, particularly in those areas with weak state enforcement. Other private actors frequently work with these companies to protect investments and personnel, but they have a natural propensity to manage and prolong conflicts rather than resolve them.
Across Africa in particular, PMSCs are present to serve private interests as well as governments. Concerned about the ability of multinational corporations to quickly shift their support between opposing sides as their strategic interests change, possibly playing a much bigger part in fostering and prolonging conflicts, has become a result of PMSC usage.
Governments, of course, regularly support rival actors in conflicts. Competing political factions, shifting interests, political expediency, economic motives, desperation, and a desire to promote instability.
Syrian rebels supported by the Pentagon engaged in combat during the Syrian Civil War. In addition, the Syrian government was funding other rebel groups to fight IS while also paying the Islamic State ( IS ) to return its own stolen oil and natural gas.
However, the risk of corporations actively supporting more than one side in conflict zones and staking up their own spheres of influence is concerning, much like the Dutch East India Company, which established its own military and trade monopolies.
There are still waning hopes that multinational corporations will choose more skilled sides in interstate disputes, but there is little that can prevent them from stoking the pressure on non-state actors to fuel and prolong intrastate disputes as long as it serves their financial goals.
As their ability to shape conflicts appears to be expanding, urgent action is required to strengthen the regulation and accountability of PMSCs and multinational corporations operating in conflict zones.
John P. Ruehl, an Australian-American journalist who lives in Washington, DC, writes for the Independent Media Institute about world affairs. He contributes to several other foreign affairs publications as well as contributing to Strategic Policy. His book,” Budget Superpower: How Russia Challenges the West With an Economy Smaller Than Texas”, was published in December 2022.
Independent Media Institute authorized republishing this article.
The electronics sector is a positive force for Southeast Asia’s economy, according to a report from Oxford Economics that was commissioned by the Institute of Chartered Accountants in England and Wales ( ICAEW). The region is projected to grow by 4.0 % in 2024 and 2025. Nevertheless, this is below the pre-pandemic average of 5 % in the previous five years, mostly as a result of anticipated difficulties in private use as interest rates rise more.
The report argues that Southeast Asian electronics-focused exporters gained a better grip in Q1 2024, in large part as a result of the technology sector’s bottoming out. It said the treatment in global silicon sales, which saw a 15.3 % year- on- yr increase in Q1 2024, has mainly benefited Vietnam, where export growth soared to an estimated 16.8 % year- on- year. Singapore also experienced a rise in non-oil home exports in April with an estimated 9.4 % month-on-month growth, which is a good turn after two consecutive weeks of collapse, intermittently adjusted.
Given its position farther down the electrical value chain, Malaysia is anticipated to benefit from the gadgets healing in the second half of the season. However, Southeast Asia’s electronics industry’s enhance is still less encouraging than those of Taiwan and South Korea, two other major Asian silicon players.
International tight monetary policies are likely to measure down additional need for the region’s exports, making recovery reasonable, the report stated, adding that the global growth forecast of 2.6 % for 2024, lower than pre- pandemic levels, did likewise lessen local export growth.
On the positive side, Southeast Asia’s tourism sector has experienced steady visitor growth since November 2023, partially as a result of various visa-free travel arrangements with China. This has resulted in more frequent intraregional travel within Southeast Asia. However, supply- side constraints, such as limited flight capacity and a shortage of hotel rooms, could hinder the region’s ability to fully meet resurgent tourist demand. As a result, the recent rapid growth in tourist arrivals is likely to decelerate.
Domestic consumption faces near- term challenges
In the report, domestic consumption in Southeast Asia was stronger than anticipated in Q1 2024. However, it is unlikely to spur economic growth in the upcoming quarter because regional tight monetary policy is anticipated to restrain consumer spending.
Southeast Asian central banks ‘ options for easing monetary policy are likely limited by the persistent weakness of local currencies in relation to the US dollar. The strong US dollar, driven by the Federal Reserve’s high interest rates, prevents local central banks from cutting rates without risking further currency depreciation. In Q1 2024, Bank Indonesia was even forced to raise rates to arrest the rupiah’s decline.
Due to the tight monetary policy in place, debt servicing and borrowing costs will continue to be high, likely limiting private consumption. Additionally, the research found that many consumers and businesses are continuing to consolidate as they are recovering from the pandemic and are likely to concentrate on quickly rebuilding their savings or refining their balance sheets.
Governments are coordinating at the same time to reduce spending and raise taxes in order to offset pandemic-related fiscal payouts. Indonesia is planning to raise taxes in 2025 after Singapore and Thailand both raised taxes this year. Malaysia intends to change the second half of the year’s RON95 subsidies from a blanket policy to a more judiciously targeted approach.
With the US Federal Reserve’s forecast for rate reductions in Q3 2024, there is still a glimmer of hope. This could lessen regional currency pressure, allowing Southeast Asian central banks to ease their monetary policies.
Malaysia: Q1 2024 economic growth buoyed by electronics exports but cautious outlook remains
In Q1 2024, Malaysia experienced a notable economic upturn, with GDP expanding from a revised 2.9 % year- on- year in Q4 2023 to a robust 4.2 %, coupled with a remarkable 1.4 % quarter- on- quarter growth in seasonally adjusted terms, effectively reversing the 1.0 % contraction observed in the previous quarter. This positive momentum, however, faces challenges in sustainability.
The remarkable rise of 9.7 % quarter over quarter in exports, primarily fueled by the resurgence of Chinese tourists during the Chinese New Year holiday in February, was a significant driver of growth. This resurgence can be attributed, in part, to the bilateral visa- free arrangement initiated in December 2023. Nonetheless, there are doubts regarding the longevity of this surge, as initial boosts tend to fade over time.
Retail sales volumes also experienced a notable recovery, rising 4.4 % month over month in February after four consecutive months of decline. However, this resurgence appeared to lose steam in March, with retail sales growing only by 0.7 %. Despite a strong labor market and historically low unemployment rates, there are beginning signs of softness, as evidenced by stuttering new job growth and slowing wage growth, which could point to a potential future moderation in consumer spending.
According to the research, domestic demand is anticipated to remain flat or even decline, as demonstrated by recent budget plans that intended nominal spending reductions. In addition, fuel subsidies are being reduced to reduce the deficit in order to increase the public debt-to-GDP ratio. Investment, particularly within the industrial sector, is likely to face constraints amid the prevailing uncertain external environment.  ,
Exports are expected to grow modestly in the external sector in 2024, despite a subdued global demand. Malaysian exports are anticipated to benefit from the anticipated bottoming out of the electronics cycle, but this impact may not be fully realized until the second half of the year as a result of the country’s position within global supply chains.
The significant discount of the Bank Negara Malaysia’s ( BNM) policy rate in relation to the US Federal Funds rate was a major contributor to the Malaysian ringgit’s struggles in Q1 2024. The currency’s weakness hinders BNM’s ability to ease policy, which has been hovering below 2 % for the past six months and showing little sign of significant increase. This issue persists until the US Federal Reserve starts making rate cuts, which are anticipated to occur in Q3, easing the ringgit’s pressure and potentially allowing policy rate adjustments.  ,
While Malaysia’s Q1 2024 GDP growth showcased resilience, primarily supported by robust electronics exports, the economic outlook remains cautious due to challenges in both domestic consumption and external demand. Although there are still questions about global economic conditions and domestic policy responses, Bank Negara Malaysia is confident that there are upside risks from greater spillover from the tech upcycle, more robust tourism activities, and faster implementation of existing and new investment projects. However, the Malaysian economy is expected to experience modest growth throughout 2024.
In summary
 , Other findings from the Economic Update Q2 2024 include:
Singapore: Trade- weighted economy will remain subdued
Indonesia: Shift in monetary policy likely to be delayed
Vietnam: A soft 2024, but a bright medium- term outlook