Digital fraud attack rate in Singapore higher than APAC average: Cybercrime report

By:
On:
In: South-East Asia

The report also said attacks on Singapore-based banks cross borders and are highly interconnected. 

It added that international fraud rings are heavily linked to attacks on organisations based in Singapore, as cyber criminals capitalise on the city-state’s status as a financial hub and its open economy.

“Fraudsters look at the relatively affluent population in Singapore and it’s a natural target, above other countries in the region. Definitely that open, connected financial hub is key to getting the money out potentially in an easy way,” said Dr Stephen Topliss, vice president of Global Fraud and Identity at LexisNexis.

WHY ARE BOT ATTACKS INCREASING?

Cyber criminals use bots to first test if stolen data are valid.

With the number of data security breach incidents on the rise, fraudsters have the personal information of more victims which they can use to attempt to gain access to their accounts.

In the past few years, a number of data leak cases in Singapore affected customers of several high-profile companies, including Marina Bay Sands, Starbucks and ShopBack.

“Cyber criminals now have more data, more credentials, to try and access social networks, banking accounts and apps,” said Mr Ryan Flores, senior manager of APAC Threat Research at cybersecurity firm Trend Micro.

“They use automated tools (bots) to test and once successful, they can have a human in place to do the (money) transfers, the scans and other social engineering attacks.”

Dr Topliss added that the surge in bot attacks also means that cyber criminals are increasingly using phishing scams to trick users into giving up their personal information.

“Phishing attempts are really aimed at getting our login details to access our accounts. That high volume of bot attacks reflects just how much we were all being targeted by phishing sites,” he told CNA’s Singapore Tonight on Tuesday (Dec 12).

PROTECT YOURSELF FROM CYBER ATTACKS

One cybersecurity expert said these bots use stolen personal data, hence the most important thing to do is change passwords frequently.

“Email is a good place to (steal) your personal information. So, protect your passwords and change them regularly. Because once an attacker goes into your email, they have a whole wealth of information about you,” said Professor Steven Wong, who is director of the Singapore Institute of Technology’s Centre for Digital Enablement.

Another way to thwart such attempts is to use different email accounts for different tasks, he added.

For example, one account should be used strictly for critical functions such as banking services, whilst another should be set up for non-important logins such as social media, online shopping or gaming. 

However, Prof Wong said there also is a need to move towards a password-less system.

“The thefts and fraud use stolen credentials, such as passwords. So instead of memorising passwords, we could use other forms of authentication, for example, biometrics, digital tokens, etc,” he said.

PRACTICE GOOD CYBER SECURITY HABITS

All three experts lauded the Singapore government’s efforts to stop scams, such as the ScamShield app, which blocks scam calls and detects scam messages.

They also said banks have been working tirelessly on anti-scam measures such as anti-malware features in mobile apps and the latest initiative that allows customers to lock up their savings.

However, they warned that scam tactics are continually evolving, and consumers need to stay vigilant and practise good cybersecurity habits.

“At the end of the day, while the government and companies can do their part, a lot of times the breach or cybersecurity attacks are aimed towards the consumer. So, it’s really on the consumer’s cybersecurity awareness,” said Prof Wong.

Dr Topliss said: “As and when (scams) happen to us, we should not be embarrassed but we need to report it as quickly as possible to the police and financial institutions, because that will help us understand how the scams evolve and how to resolve them as soon as possible.”

Continue Reading

Belt and Road Initiative enters second decade

By:
On:
In: Asia

China currently faces daunting challenges in its domestic economy. But weakness in the real estate market and consumer spending at home is unlikely to stem its rising influence abroad.

In mid-October 2023, China celebrated the 10-year anniversary of its Belt and Road Initiative. Belt and Road seeks to connect China with countries around the world via land and maritime networks, with the aim of improving regional integration, increasing trade and stimulating economic growth. Through the expansion of Belt and Road, China also sought to extend its global influence, especially in developing regions.

During its first decade, the initiative has faced a barrage of criticism from the West, mainly for saddling countries with debt, inattention to environmental impact, and corruption.

It has also encountered unexpected challenges – notably the COVID-19 pandemic, which led to massive supply chain issues and restrictions on the movement of Chinese workers overseas. Yet, as the initiative heads into its second decade, global economic trends suggest it will continue to play an important role in spreading Chinese influence.

I’m an associate professor of global studies at the Chinese University of Hong Kong, Shenzhen, where I teach about business-government relations in emerging economies. In my new book, China’s Chance to Lead, I discuss which countries have already sought out and are now most likely to seek out and benefit from Chinese spending.

Understanding this helps explain why China and the Belt and Road Initiative are poised to benefit greatly from the global economy over the next several decades.

Malaysia’s unlikely prominence

In October 2013, China President Xi Jinping announced the launch of the maritime portion of the Belt and Road during a speech in Jakarta. At the time, Indonesia appeared to be an ideal candidate for Chinese infrastructure spending, yet it was Malaysia – surprisingly – that emerged as a far more avid participant.

In comparison with Malaysia, Indonesia’s economy was three times larger and its population nearly nine times bigger, yet its gross domestic product per capita was only one-third as high. Indonesia also had enormous potential to increase its already substantial natural resources exports to China. Taken together, these factors point to Indonesia’s far greater demand for infrastructure that would aid its economic development.

Furthermore, Indonesia’s democratic institutions were more conducive to attracting foreign investment. Its checks and balances enhanced policy stability and reduced political risk. By contrast, Malaysia’s government, which was dominated by a single ruling party coalition, lacked comparable checks and balances.

Despite Indonesia’s numerous advantages, Malaysia attracted a far larger volume of BRI spending during its first several years. Data provided by the China Global Investment Tracker indicates the value of newly announced infrastructure projects in Malaysia surged from US$3.5 billion in 2012 to over $8.6 billion in 2016. Spending in Indonesia, meanwhile, rose modestly from $3.75 billion to $3.77 billion over the same period.

Malaysia also enthusiastically participated in the Digital Silk Road, or DSR, launched in 2015. The DSR is the technological dimension of the Belt and Road that aims to improve digital connectivity in participant countries. Malaysia’s then-Prime Minister Najib Razak engaged Jack Ma, the co-founder of Chinese tech giant Alibaba, as an adviser to develop e-commerce in 2016. This led to the creation in 2017 of a Digital Free Trade Zone, an international e-commerce logistics hub next to the Kuala Lumpur International Airport.

Jack Ma. Photo: Wikimedia Commons

With this foundation in place, Malaysia’s capital went on to become the first city outside China to adopt Alibaba’s City Brain smart city solution in January 2018. City Brain uses the wealth of urban data to effectively allocate public resources, improve social governance and promote sustainable urban development. Dubai and other cities in the Middle East followed.

Digital Silk Road projects in Indonesia during that period were far fewer, slower and less ambitious. They primarily involved the expansion of Chinese smartphone and e-commerce firms in Indonesia.

What accounts for these contrasting responses? The short answer: their political regimes. And understanding that could be key to the global spread of Chinese influence in the coming years.

State-owned business and clientelism

In the lead-up to the May 2018 election, Malaysia’s ruling party and its allies worried they could lose power after six decades of rule. Desperate to bolster support, Najib quickly identified numerous infrastructure megaprojects in which Chinese state-owned businesses could partner with Malaysian counterparts.

Indonesia, by contrast, placed far greater emphasis on projects led by private business. For example, the Indonesia Morowali Industrial Park, “the world’s epicenter for nickel production,” is one of the largest Chinese investments in Indonesia and a joint venture between private Chinese and Indonesian companies.

As I discuss in my book, when rulers in autocracies with semi-competitive elections, like Malaysia’s, have a weak hold on power, their desire for Chinese spending is amplified. This relates to clientelism, or the delivery of goods and services in exchange for political support.

A higher level of state control in autocracies grants political leaders greater influence over the allocation of clientelist benefits, which aids leaders’ reelection efforts.

Even if China’s future growth is lower than the pre-pandemic period, these four features of the global economy are poised to benefit China and the Belt and Road Initiative over the next several decades.

1. Global rise of autocracies

Over 60% of developing countries are autocratic, according to data provided by the Varieties of Democracy Project. This represented 72% of the global population in 2022, up from 46% in 2012.

For decades, the World Bank and affiliated regional development banks were the only game in town for development financing to low- and middle-income countries. Consequently, these global lenders could demand liberalizing reforms that were sometimes contrary to the interests of incumbent rulers, especially autocrats.

China’s rise has created an attractive alternative for autocratic regimes, especially since it does not impose the same kinds of conditions that often require loosening state controls on the corporate sector and reducing clientelism. Between 2014 and 2019, I find that 77% of total BRI spending on construction projects went to autocracies, and primarily to those with semi-competitive elections.

2. Demand for Chinese infrastructure spending

The economies of developing countries have grown more than twice as quickly as advanced economies since 2000 and are projected to outpace advanced economies in the decades ahead. On the eve of the Soviet Union’s dissolution in 1991, developing economies accounted for 37% of global GDP; by 2030, the International Monetary Fund projects they will account for around 63%.

At the same time, the global infrastructure financing gap – that is, the money needed to build and upgrade existing infrastructure – is estimated to be around $15 trillion by 2040. To fill this gap, the world must spend just under $1 trillion more than the previous year up through 2040, with most of this spending directed toward low-income economies.

Because many of these fast-growing, low-income countries are predominantly semicompetitive autocracies, China is well-positioned to expand its global influence via the Belt and Road Initiative.

3. Emerging tech

The advent of what is known as Industry 4.0 technologies, such as artificial intelligence, big data analytics and blockchain, could enable developing countries to leapfrog stages of development.

By creating new technical standards to be used in these emerging digital technologies, China aims to lock in Chinese digital products and services and lock out non-Chinese competitors wherever its standards are adopted.

Chinese President Xi Jinping holds a ceremony to welcome visiting Tanzanian President Samia Suluhu Hassan prior to their talks at the Great Hall of the People in Beijing, November 3, 2022. Photo: Xinhua

In Tanzania, for example, the Chinese company contracted to deploy the national ICT broadband network constructed it to be compatible only with routers made by Chinese firm Huawei.

Incorporating digital technologies into hard infrastructure projects – digital traffic sensors on roads, for example – presents more opportunities for China to use the Belt and Road Initiative to promote adoption of its technologies and standards globally.

4. Urbanization

Finally, the developing world’s urban population is expected to rise from 35% in 1990 to 65% by 2050. The biggest increases will likely occur in the semi-competitive autocracies of Africa. A desire for sustainable urbanization will increase the demand for infrastructure that incorporates digital technologies – once again amplifying the opportunity for China and the BRI.

Understanding what drives the demand for the Belt and Road Initiative, and the trends that will propel it into the future, is vital for the West to devise an effective strategy that counters China’s rising global influence.

Richard Carney, Associate professor of global studies, Chinese University of Hong Kong, Shenzhen

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Continue Reading

Foreseeing world economy chokepoints in 2024

By:
On:
In: Asia

The year that is about to end has been difficult in the West as major central banks tightened monetary policy much more than previously expected in the light of rampant and quite stubborn inflation.

Interestingly, though, the impact of such tight monetary policy on growth has been muted, with both the US and the eurozone avoiding recession, especially the former.

In Asia, China underperformed, growth-wise, compared with the very bright expectations stemming from an exit from the Covid-19 pandemic. Many Asian economies, though, overperformed, such as India but even Japan.

Beyond the short-term developments, 2023 has been a very important year in terms of increased fragmentation in the global economy. The US has drastically reduced its imports from China and foreign direct investment into China has decelerated, even sharply shrinking in October.

Another interesting divergence in the global economy regards inflation. While the West suffered from very high inflation in 2023, Asia’s inflation has remained much more in control. The extreme case is China, which is ending the year with deflation on consumer and, much more so, wholesale prices.

This, together with capital controls, has allowed the People’s Bank of China to follow its own needs in terms of its monetary-policy cycle, with interest-rate small cuts rather than increases as in the rest of the world.

The very different inflation environment could also push fragmentation, as China is gaining competitiveness both in terms of prices but also a weak exchange rate.

In 2024 the scenario is likely to be very different, as disinflation forces in the West have been in place for a few months and are bound to continue so that both the US and the eurozone should reach their inflation objectives by the end of 2023.

This means that the US Federal Reserve and the European Central Bank should have the necessary room to cut interest rates quite rapidly, possibly 150 basis points for the first quarter and 125 basis points for the second.

The reduction in funding costs should help avoid a hard landing but also the restoration of purchasing power by households, which should see their real disposable income rise as inflation falls.

At the same time, the Chinese economy will continue to decelerate from about 5.2% growth in 2003 to 4.5%, on the back or limited fiscal and monetary support. India, on the other hand, will continue to shine with 7% growth in 2024, an important election year for the country. This means that the reshuffling of the supply chain away from China and toward other high-growth countries, especially India, is bound to continue.

Still, China’s regained competitiveness through deflation and a depreciated renminbi, along with industrial policy and innovation, should be positive in terms of moving up the ladder and becoming a very strong industrial power. This in itself might create additional waves of trade fragmentation as countries react to an influx of Chinese products, very likely through protectionism. 

All in all, 2024 will be a year when central-bank key policy rates will start to subside thanks to lower inflation. Gains in real income, among other factors, should lead to a soft landing in the US and the eurozone, while China continues to decelerate, though still contributing relevantly to global growth.

Beyond such general macro developments, other important trends are taking place, pushing toward fragmentation of trade and investment. Geopolitics is behind this trend, but it is not the only factor. The reality is that supply-chain reshuffling is happening, even if for different reasons and at different speeds. 

Finally, this rather positive scenario is subject to several risks, starting from geopolitics. Good examples are elections in the US as well as Taiwan but also complications in the ongoing wars in Ukraine and Gaza.

Alicia Garcia Herrero is chief economist for Asia-Pacific at Natixis and senior research fellow at Bruegel.

Continue Reading

Debt relief proposed for 10.3m people

By:
On:
In: South-East Asia

PM outlines measures including lower interest rates, debt suspension and consolidation

Debt relief proposed for 10.3m people
Prime Minister Srettha Thavisin announces measures to tackle debt problems of 10.3 million people during a press conference at Government House on Tuesday. (Photo: Chanat Katanyu)

Prime Minister Srettha Thavisin has announced relief measures, including debt suspension and reduced interest rates, to help resolve debt problems faced by 10.3 million people.

The government hopes the measures will help to pare down household debt totalling 16 trillion baht, or 90% of gross domestic product, which has become an major drag on the economy.

At a news conference on Tuesday, Mr Srettha divided the debtors into four groups: those who were affected by the Covid-19 pandemic, those who have regular income but huge debts, those who had unstable incomes that affected repayment ability, and those who have had bad debts for a long period of time.

All groups had one problem in common, he said: an inability to make instalment payments consistently. The more problematic their debt became, the higher their interest charges became, and they became trapped in a vicious circle of being unable to repay the debt. This resulted in many of them being added to the National Credit Bureau blacklist, said Mr Srettha, who is also the finance minister.

The government’s relief measures are based on the causes of each group’s problems, he said.

The first group of debtors normally had good repayment records, but the pandemic affected their cash flow, resulting in poor liquidity. This affected their ability to write off loans, which became bad debts. Debt suspensions were needed for this group, said the prime minister.

The government has instructed the Government Savings Bank and the Bank for Agriculture and Agricultural Cooperatives to help small debtors with bad debts. The state-run banks were told to collect debts based on appropriateness. About 1.1 million small debtors are expected to receive help.

About 100,000 small and medium-sized enterprise (SME) debtors, meanwhile, would be asked to undergo debt restructuring and their debts would be suspended.

The second group of debtors with permanent incomes but  huge debts mostly comprises teachers, police and soldiers. They will get help in three ways: reduced interest rates, debt consolidation, and appropriate salary deduction levels so that they can service debts and still have money left for daily living. About 900,000 teachers face debt problems that could be resolved in this way.

The group of debtors with uncertain incomes comprises farmers and many debtors of the Student Loan Fund.

Debt restructuring, interest rate reductions and the scrapping of loan guarantors would be introduced to help debtors of the Student Loan Fund. Farmers would be offered a three-year debt suspension, said Mr Srettha.

The fourth group — those who have had bad debts with state financial institutions for a long period — would have their debts transferred to joint-venture asset management firms for restructuring. This measure would help about 3 million people, he said.

“Debtors will be able to enter debt clinics … and we will reduce risk across the financial system going forward,” Mr Srettha said at the press conference.

There will be additional measures to improve financial management and savings programmes, he added.

“In the long run we will improve credit and risk assessment of institutions … and financial management skills of the public,” he said.

Continue Reading

Sikkim: Satellite images show devastating Himalayan floods

By:
On:
In: Asia
RANGPO, SIKKIM, INDIA - 2023/10/09: Construction vehicles are seen covered in debris caused by flash floods after a lake burst in Rangpo along the Teesta River. After a glacial lake in northeast India burst through a dam shortly after midnight, washing away homes and bridges and forcing thousands to flee, rescue workers continued to dig through muddy debris. (Photo by Biplov Bhuyan/SOPA Images/LightRocket via Getty Images)Getty Images
By Cherylann Mollan
BBC News, Mumbai

New satellite images show the extent of the damage caused by deadly flash floods that hit a village in India’s north-eastern state of Sikkim in October.

The photos show how the Teesta river broke its banks and submerged a huge portion of a nearby village.

The devastating floods killed more than 30 people and destroyed the livelihoods of thousands.

Dozens of people are still missing after being swept away.

The flash flood was triggered by a cloudburst, which caused the South Lhonak glacial lake to burst its banks. The excess water flowed into the Teesta river downstream, causing its water level to rise.

The situation worsened after more water was released into the river from a nearby dam. The gushing water from the river wreaked havoc on the Chungthang village, which adjoins its banks.

Earth observation experts at the University of Leicester in the UK have now released photos that show the devastating impact of the floods.

Of the two satellite photos, one shows the village before the floods and one captures it after.

In the photo taken before the floods, the Chungthang village, located close to the banks of the Teesta river, as well as the Teesta III dam – which is a short distance away from the village – is intact.

Sikkim floods

Image © 2023 Planet Labs PBC

Presentational white space

But on 4 October, the Teesta III dam collapsed due to the bursting of the South Lhonak glacial lake.

In the photo taken 10 days after the flood, one can see the collapsed dam as well as clusters of houses submerged in debris left behind by floodwaters.

Although the image doesn’t capture the flood, it depicts the areas that were submerged, revealing the extent of destruction experienced by Chungthang village.

Sikkim floods

Image © 2023 Planet Labs PBC

Presentational white space

Matthew Payne from the School of Geography, Geology and the Environment at the University of Leicester says that the images could be useful in “tackling climate change”.

“This catastrophe is a stark reminder of the escalating challenges faced by the verdant Himalayan regions and the increasing magnitude of flooding events necessitates resilient infrastructure capable of tolerating climate-induced excessive rainfall,” he says.

Mr Payne adds in a statement that satellite imagery can help track the onset, duration and retreat of floodwaters, providing crucial insights for relief and recovery efforts.

Experts say global warming is causing glaciers to melt faster and this has led to an increase in the water levels of several Himalayan lakes.

They also say that this has led to an urgent need for authorities to install early warning systems in these glacial lakes.

Prior to the floods in Sikkim, several studies had warned that there was a high possibility of South Lhonak lake flooding, the BBC’s environment correspondent, Navin Singh Khadka wrote earlier.

The lake’s area had expanded more than 2.5 times in the past three decades because of a rapidly melting glacier that feeds it, but authorities had not installed an early warning system.

People working at the Teesta III dam told local media that when they received orders to open the dam’s floodgates it was too late as water had already started hitting the infrastructure, causing its eventual collapse.

Sikkim alone has more than 700 small and large glacial lakes and experts say around 20 are at risk of bursting.

BBC News India is now on YouTube. Click here to subscribe and watch our documentaries, explainers and features.

Presentational grey line

Read more India stories from the BBC:

Presentational grey line

Related Topics

More on this story

Continue Reading

CNA Explains: Why the price of gold has surged and where it could go from here

By:
On:
In: South-East Asia

Will prices remain elevated?

Since the high of Dec 4, the price of gold has gradually declined. As of Monday, it was trading at just under US$2,000 per ounce.

So where could prices go from here?

Mr Chwee said that even though markets expect the Fed to begin cutting interest rates in March 2024, OCBC does not expect this to happen until June 2024.

“This will support gold prices, though there could be some weakness if the Fed doesn’t cut rates in March 2024 as markets currently expect,” he said.

“We expect gold prices to remain elevated for the next six months,” he added.

Mr Heng Koon How, head of market strategy at UOB, said he forecasts gold prices to rise further to US$2,200 per ounce by the fourth quarter of 2024. 

“This is based on our core view that the US Fed will start cutting rates gradually across (the second half of 2024) and the US dollar will be softer as well,” he said. 

Going into 2024, the US presidential election and ongoing geopolitical tensions are likely to see more people turn towards precious metals, Mr Gregersen said.

“About a quarter of central banks also indicated their intention to increase their gold reserves further in 2024,” he added.

Mr Goh said: “Whether or not gold continues to rally will depend on the trajectory rates. If inflation continues to moderate and the Fed implements rate cuts next year, then gold will likely trend higher from here.”

“However, if there is a resurgence in inflation and the Fed is forced to hike rates further, we expect gold to retrace some of its recent gains,” the DBS analyst added. 

Should retail investors consider investing in gold?

Describing gold as a “good portfolio diversifier of risk”, Mr Heng said: “It is good from a long-term diversification point of view to allocate some gold into the portfolio.”

Silver Bullion’s Mr Gregersen said that it is a good time to buy metals, sharing that Silver Bullion saw a 300 per cent increase in sales volume last week.

“Physical gold mitigates counterparty jurisdictional and currency risks while reliably appreciating over the long term,” he said.

“It is a great choice in uncertain times.”

Mr Goh and Mr Chwee, meanwhile, highlighted several things which retail investors should take into consideration when investing in precious metals.

Mr Goh said that “counterparty risk and liquidity risk are important points to consider when investing (in precious metals) through mutual funds or (exchange-traded funds)”.

Mr Chwee also brought up liquidity as something to consider, as precious metals are subject to market fluctuations and may not be immediately convertible to cash. He added that, unlike cash, gold bears no interest. 

He also said that buyers must consider storage when buying physical gold, as it could incur additional costs, although he noted that investors can purchase precious metals digitally through banks including OCBC.

“Consumers should also consider … their risk profile and appetite, and speak with a financial adviser before making a decision to invest in gold,” he said.

Continue Reading

how to bring ‘slave master’ lenders to heel

By:
On:
In: South-East Asia
how to bring 'slave master' lenders to heel
Julapun: ‘Plan covers multiple sectors’

The scale of Thailand’s informal debt has captured the government’s attention, prompting it to declare the matter a national agenda issue and roll out a nationwide programme for debtors to register for help.

In the first week of registration for the scheme, more than 75,000 debtors enrolled — with their accumulated debt exceeding 3.8 billion baht owed to a diverse group of 47,000 creditors.

The government’s estimate of informal debt stands at some 50 billion baht but the problem may be bigger.

Labelling unregulated lending as “modern-day slavery”, Prime Minister Srettha Thavisin is set to unveil measures to help debtors on Tuesday. Also expected is a strategy to take on formal debt.

Deputy Finance Minister Julapun Amornvivat said the government has put together a plan to address not just informal debt, but the issue of debt across multiple sectors — from SMEs to state employees such as police and teachers — and non-bank debts like leasing.

He said the government has set an overall goal for how much debt it aims to clear, but it is still in the process of collecting the figures.

The specifics will be revealed on Tuesday by the prime minister and the details should give the public a clear understanding of how the debt relief plan will be implemented, he said.

Debt relief plans announced by the Government Savings Bank (GSB) and the Bank for Agriculture and Agricultural Cooperatives (BAAC) are only part of the mechanism, he said.

“We use normal financial tools in tackling debt, with no state budget used. Let’s wait for the details,” he said.

The debt dilemma

A source in the Pheu Thai Party said the previous governments led by the now-defunct Thai Rak Thai Party and Pheu Thai did not prioritise the debt problem and focused on job creation instead.

However, the severity of current debt problems is alarming due to various factors, including economic fallout from the Covid-19 pandemic and global economic conditions.

As a result, a committee overseeing individual debt issues, chaired by the prime minister’s chief adviser, Kittirat Na Ranong, has designated it as a national priority and decided both formal and informal debt must be addressed simultaneously to tackle the problem.

The panel’s idea involves revising laws beneficial to debtors, with the aim of providing relief and support to individuals struggling with debt.

First is removing a requirement for guarantors for those seeking loans from the Student Loan Fund (SLF) to make it easier for students to access financial support while eliminating the debt burden for guarantors in case the borrowers fail to repay.

Next is the debt owed by state officials, namely teachers and police.

The government will make sure they have at least 30% of their salary left after debt payment. Also, pay increases and splitting the monthly salary payment for civil servants into two instalments are also in the pipeline to help them better manage their finances.

Credit card debt is also a pressing concern. While it is not backed by collateral, borrowers who default on credit card payments face legal action and asset seizures. The issue including the statute of limitations will be studied further.

Even as the government is taking steps to address formal debt, that’s not the end of the problem for those who have turned to unregulated lenders. In this case, the government will focus on mediating between debtors and lenders.

“Here what’s we have in mind: if borrowers have paid more than the principal of the loan plus 15% annual interest, the debt is considered fully repaid.

“If the borrowers think they have paid much more than they owed originally and want a return, they will have to prove it. If the lenders feel they are not paid what they are owed, they must also prove their point. If they can’t prove it, the debt is considered resolved,” said the source.

Holistic approach

The source said there are three steps involved in addressing informal debt: mediating between debtors and creditors; restructuring debt; and providing financial resources for debt repayment.

In the mediation process, local administrators and police will be involved while specialists from the Finance Ministry will help with debt structuring. The GSB has soft loan programmes for informal debt and career support while the BACC has a debt relief package for farmers.

“The government is confident that more than 60% of debt will be solved with no spending from the state’s coffers. We mobilise resources and enforce the laws. The debt must be repaid, no matter what, but the interest must be fair. With job creation and the promotion of financial discipline, it should be a sustainable approach,” said the source.

Suttipong Juljarern, permanent secretary of the Interior Ministry, said the ministry’s job is to register debtors and amounts of debt and invite both parties to talk.

He said the previous administration took on informal debt but it was not fully solved due to strict requirements such as income and collateral for obtaining loans to repay informal debt.

“The Srettha government must have seen the limitation and urged state-run banks to come up with more relaxed conditions. But those who join the scheme and intentionally fail to repay will face action,” he said.

On Friday Mr Srettha, who doubles as the finance minister, outlined the government’s policy and measures to deal with informal debt as he chaired a meeting of senior officials from the Interior Ministry and police.

He admitted that tackling informal debt is a challenge especially in the mediation stage, adding the authorities might consider a “harsh approach” to step up pressure on creditors to enter the process.

“Unregulated lending is a complex problem that no single state agency can solve comprehensively. I’m urging all of you to work together — be it police, local administrators, or the Finance Ministry. Exercise your power properly to better people’s lives,” he said.

Pol Maj Gen Theeradej Thamsuthee, commander of the Metropolitan Police Bureau’s Investigation Division, said a crackdown on illegal lending is a challenge because both parties willingly entered into the agreements.

“The issue here is that borrowers can’t get access to traditional financial resources, so they turn to unregulated lending. Police are brought in after threats. But there are cases where debtors have no intention to repay and are ready to use legal threats to bargain,” he said.

Special fund mooted

Asst Prof Nada Chunsom, an academic from the School of Development Economics, NIDA, welcomed the government’s efforts in tackling informal debt but emphasised that authorities should also give help to those unable to make any payments at all.

She suggested a special fund for debtors should be considered for those who cannot get access to financial sources. Solving informal debt should not be about suspension of payments, but the focus should be on transferring unregulated debt with high interest rates into the system.

By using this approach, debtors will pay lower interest rates, allowing them to retain funds for potential investment or spending after fully repaying the debt, she said. According to her estimate, informal debt may amount to 100 billion baht. But she said the government can implement the proposed fund in a pilot phase, initially targeting debt in the range of 10-20 billion baht.

She said the method allows for checks on how it is going before implementing it more broadly to address a larger share of the informal debt. The government, she said, must also ensure borrowers have “financial literacy” to prevent them from taking on informal debt.

“And legal action must be taken against illegal lenders who charge extremely high interest rates, threaten or assault their borrowers. Lending apps should also be looked into, so the DES ministry, not only local administrators and police, should be roped in,” she said.

Some 36% of household debt is for consumption, which indicates an insufficient income. She said the government should explore ways to reduce the cost of living and so individuals’ needs to obtain loans.

Continue Reading

Commentary: Amid ever-rising premiums, let’s make it easier for no-claim individuals to switch private health insurers

By:
On:
In: South-East Asia

PORTABILITY FOR NO-CLAIM INDIVIDUALS

What can be done?

Part of the answer, as always, is government supervision and action.

In fact, the insurance business is regulated and there are rules governing what they can do and to make sure they are financially sustainable.

Recently, the authorities named the four largest insurers here – AIA Singapore, Income Insurance, Prudential Assurance and Great Eastern Life – as companies that are too big to fail and would hence be subjected to more rigorous standards of supervision.

Like large banks, these insurers present a systemic risk to the economy if any of them were to collapse.

This is a good move that should help ensure these companies are sound and financially secure, now that big brother is watching them more closely.

The safeguards are mainly to protect the health of these companies, but who is there to look after the interests of customers?

Caveat emptor or let the buyer beware?

This cannot be applied to health insurance for one important reason: MediSave funds are allowed to be used to pay for premiums of MediShield Life and Integrated Shield Plans.  

As these are Government-mandated funds, the authorities have a responsibility to make sure they are used in a way that protects the public interest.

It means closer oversight of the premiums charged and what they cover.

The inability of customers to switch their plans to another company is a major issue. It penalises those stuck in companies that are not efficient or competitive leaving them with no recourse even if they are fit and healthy and have never made any claims.

What would happen if switching is allowed without losing coverage of pre-existing conditions?

This would be a godsend for customers but might be too much of a bitter pill for companies to swallow if they are suddenly deluged with high-risk cases.

It would be unfair to expect these companies to accept them without raising their premiums.

A better solution would be to allow portability for those who have not made any claims for a certain number of years.

This will lessen the risk for companies and encourage more people to stay healthy.

It is a more realistic and workable approach than the suggestion that has often been made to charge lower premiums for people who have not made any claims, as in the case of motor vehicle insurance.

The problem with this idea is that it will result in much higher premiums for those with medical problems.

Someone has to pay for the shortfall if premiums are lowered for the healthy and the burden will fall increasingly on the sick.

It is not right to inflict this penalty on people requiring medical treatment and those who suggest this should be careful what they wish for – you never know when you might require costly treatment.

Continue Reading

China train cements Widodo’s infrastructure legacy

By:
On:
In: Asia

Indonesia welcomed its first high-speed railway in October 2023, the first of its kind in Southeast Asia and a significant leap for Indonesia’s infrastructural development. 

The US$7.3 billion Jakarta-Bandung line, financed by Chinese banks and built with Chinese technology, reflects President Joko “Jokowi” Widodo’s modernization efforts as well as Beijing’s strategy to tighten relations with Belt and Road (BRI) recipient countries.

PT Kereta Cepat Indonesia China (Indonesia-China High-Speed Railways Limited), a joint venture between four Indonesian and five Chinese state-owned enterprises, built the high-speed line that connects Jakarta to Indonesia’s third-largest city, Bandung, in just 30 minutes. 

Its opening comes after a four-year delay and a 44% increase in its initial $5.5-billion price tag due to Covid-19, military opposition and complications in land acquisition.

Indonesia is the biggest economy and the most populous country in Southeast Asia. Jakarta’s decision to apply the “China Standard” in a piece of critical infrastructure and engineering systems reflects well on the BRI. It demonstrates to others in Southeast Asia the alternative development paradigm China can offer and the sort of knowledge transfer available to the Global South.

China describes the BRI as an infrastructure investment initiative that aims to build railways, highways, airports and more to connect Asia, Europe and Africa. But scholars argue there may be more to it. The BRI likely reflects Chinese attempts to integrate neighbors into a hub-and-spoke type physical infrastructure framework. 

It also attracted criticisms due to a mix of manufactured delays, fiscal pressure, opacity and disregard for the environment. Nonetheless, the BRI offers many developing countries an alternative for development without much conditionality.

Jokowi has pragmatically capitalized on BRI investment to achieve his ambitions and win support from his electorate. The Jakarta-Bandung high-speed line is no exception and cements his legacy as a leader committed to major infrastructure projects. His job approval rating surpassed 80% in May 2023 according to a poll conducted by Saiful Mujani Research and Consulting.

Indonesian President Joko Widodo (C), accompanied by officials, switches on a tunnel boring machine for the Mass Rapid Transport system under construction in the capital city during a launch ceremony on September 21, 2015. Jakarta's first mass rapid transport system is expected to be finished in 2018. Photo: AFP/Romeo Gacad
Indonesian President Joko Widodo (C), accompanied by officials, switches on a tunnel boring machine for the Mass Rapid Transport system under construction in the capital city during a launch ceremony on September 21, 2015. Jakarta’s first mass rapid transport system is expected to be finished in 2018. Photo: Asia Times Files / AFP / Romeo Gacad

The Indonesian president has shown unwavering affection towards infrastructure since first coming to power in 2014. He pushed through budgetary and bureaucratic constraints through presidential decree and by expanding the role of state-owned enterprises to make high-speed rail and other projects a reality.

But Jokowi may leave much on the table for his successor next year. It remains unclear whether Indonesia’s new president in 2024 will continue unfinished infrastructure projects such as the extended railway to Surabaya.

Indonesia awarded this project to China over Japan in 2015 even though the latter had already conducted a year-long feasibility study. There were a few reasons behind the decision. 

China did not require any Indonesian government financing or a government guarantee and a business-to-business scheme was expected to reduce the financial pressure for the state government.

China also promised a superior transfer of technology, skills and operational know-how over Japan and proposed the completion of the railway by 2019 which ostensibly helped Jokowi win re-election in 2019. Beijing even cut the interest rate from 3.4% to 2% and signaled the project’s salience by sending high-level officials to negotiate.

Jokowi was one of the 23 heads of state or government who attended the Third Belt and Road Forum in Beijing in October 2023. Chinese President Xi Jinping told Jokowi that his country is keen to expand cooperation with Indonesia. 

China wants to build more trains like the one in Indonesia in Southeast Asia. Image: Twitter

Others in the region like Laos, Thailand and Vietnam may further compete for good quality BRI investment after Indonesia’s successful application of the scheme to its railways. To many Southeast Asian leaders, the BRI remains an easy tool to build legitimacy and economic development despite security concerns.

How much welfare Indonesia’s first high-speed rail line brings to local communities and overall economic development remains to be seen. But this railway proved that the BRI remains relevant for many developing countries. Southeast Asia will continue vying for BRI investment if China offers good deals.

The project marks another win for Jokowi’s legacy and will almost certainly make Indonesia’s next leader more receptive to BRI investment during their presidency, even if they would prefer to hedge economic opportunities against China.

Menghu Xia is a PhD candidate at the University of New South Wales, Canberra.

This article was originally published by East Asia Forum and is republished under a Creative Commons license.

Continue Reading