The Southeast Asian bloc ASEAN met in Laos on Wednesday as it seeks to advance a stalled bid to resolve a crisis in Myanmar and cool tensions in the South China Sea, days ahead of a gathering of top diplomats from the world's biggest powers.

The meeting of the foreign ministers from the Association of Southeast Asian Nations will be followed by two summits in Laos on Saturday set to address key global issues that will be attended by officials from the United States, European Union, Japan, China, Russia and more.

ASEAN's foreign ministers will discuss so far fruitless efforts to end a crippling conflict that has morphed into a civil war in military-run Myanmar that the United Nations says has displaced 2.6 million people.

ASEAN's biggest members, including Thailand, Indonesia, Singapore and Malaysia, are frustrated by the junta's unwillingness to honour its commitment to dialogue, which has tested the bloc's credibility and the viability of a peace plan agreed months after a 2021 coup.

It is unclear what progress, if any, Laos has made as chair of the bloc in furthering previous chair Indonesia's outreach to Myanmar's generals and its armed opposition.

A troika of Indonesia, Laos and next year's ASEAN chair Malaysia discussed on Wednesday ways to implement the bloc's five-point peace plan, but it was unclear if any new approach was agreed.

Malaysia's foreign ministry said views were exchanged on moving it forward, without elaborating, while Indonesian diplomat Ngurah Swajaya, who attended the meeting, told Reuters the troika agreed to ensure the continuity of the plan, particularly on delivering humanitarian aid and "pushing for inclusive national dialogue".

The Indonesian official said, however, the three countries would not object if other nations pursued initiatives on the Myanmar crisis in support of the ASEAN effort.

TENSIONS AT SEA

ASEAN is expected to push for the finalisation of a protracted code of conduct with Beijing on the South China Sea, an idea hatched in 2002 and in motion since 2017, with years spent agreeing on conditions for negotiating its contents.

There is renewed urgency amid persistent confrontations between Beijing and the U.S.-backed Philippines around disputed reefs inside Manila's exclusive economic zone, with Manila and Washington accusing China's coastguard of hostile actions.

China has insisted Philippine vessels are encroaching on its sovereign territory and has accused Manila of deliberate provocations. Beijing claims almost the entire South China Seas, including parts claimed by ASEAN members the Philippines, Vietnam, Indonesia, Malaysia and Brunei.

The Philippines will in Laos propose the creation of an ASEAN Coast Guard Forum between its members to enable dialogue and law enforcement, according to its senior diplomat Theresa Lazaro, a plan likely to rile China.

Indonesia is hopeful a code can be concluded by 2026. Some security analysts doubt a binding or enforceable text can be achieved, however, with some ASEAN states insisting it be based on the United Nations Convention on the Law of the Sea (UNCLOS).

China says it backs a code, but does not recognise a 2016 arbitral ruling that said its claim to most of the South China Sea had no basis under UNCLOS, to which Beijing is a signatory.

U.S. Secretary of State Antony Blinken will, according to a statement, press for international law to be adhered to in the South China Sea, a conduit for $3 trillion in annual trade, during summits at the weekend that will include Chinese Foreign Minister Wang Yi.

They will be joined by counterparts from Japan, South Korea, India, Australia and Russia, among others, at Saturday's East Asia Summit and the security-focused ASEAN Regional Forum.

The summits are expected to discuss issues such as the war in Gaza, the conflict in Ukraine, food security, climate change, trade protectionism and North Korea's nuclear ambitions.

AfriPrime App link:  FREE to download...

https://www.amazon.com/Africircle-AfriPrime/dp/B0D2M3F2JT

Minimum wage rises squeeze Southeast Asia sourcing

Minimum Wage Rises and Their Impact on Sourcing in Southeast Asia

Changes in minimum wage rates are likely to be of significant concern to apparel brands and retailers sourcing from Southeast Asia in 2019, with pay in many countries continuing on an upward trajectory.

For some governments in the Association of Southeast Asian Nations (ASEAN) region, raising the minimum wage serves as a populist measure – for instance by Thailand's military government, whose supporters will face an election this year. While for others, an annual review is a statutory requirement, for example, in the Philippines.

So while minimum wages are expected to gradually rise across the region, the quantum of increase – and consequently the impact on garment makers – varies from country to country.

In Laos, minimum wage earners have seen their monthly salaries rise in eight rounds by a total of 76.7% to LAK1.1m (US$129) between 2013 and the latest rise in May 2018. But there will be no changes in 2019.

The Association of Lao Garment Industry had argued for a milder wage raise to the equivalent of only US$121 per month in 2018, warning that it would otherwise cause some factories decide to close down. But the government decided otherwise, with low wages continuing to accelerate the exodus of Lao workers across the Mekong River to better off Thailand, leading to a shortage of labour – and a reduction in garment exports.

According to the association, a statement broadcast in December by the US-based Radio Free Asia said that because of labour shortages, a lack of raw materials within the country and higher transportation costs inflated by the fact that landlocked Laos has no direct sea routes, the number of garment factories has fallen from 92 in 2015 to 78 currently.

Upward cost of living upward pressures on Laos' minimum wages are moderate, with an average inflation of 2.5% year-on-year in the whole of 2018, according to the Asian Development Bank (ADB).

Myanmar
Similarly in Myanmar, which saw minimum wages more than double between 2013 and the latest rise in May 2018 to MMK144,000 (US$91), there will be no changes this year.

Unlike Laos, Myanmar is under strong pressure to raise wages, amid year-on-year inflation averaging 6.2% in 2018, according to the ADB.

Since last May, Myanmar workers have been entitled to overtime pay in addition to the minimum wage, and employers have been required to pay at least 75% of the minimum wage during a probation period of three months. However, this applies only to businesses with ten or more employees, irrespective of the location or type of work.

Notably, a report by the International Labour Organization (ILO) published last May found that for women in Myanmar, while the wage gap between intermediate and basic level education holders is 48.6%, moving one step higher to advanced level does not significantly boost wages – unlike for men.

Philippines
Some ASEAN countries have differing minimum wage rates – for instance, the Philippines has two different minimum wages for its regions.

Between 2013 and the latest rise in October 2018, Philippines wages (for all sectors) grew by a rate of between 9.9% and 20.8% to between PHP7,840 and PHP14,336 (US$145 and US$266), according to data researched by Cambodia-based AEC News – a south-east Asian news wire.

Although consumer price inflation has been fast in the Philippines, averaging 5.2% in the whole of 2018, only the capital region, namely Metro Manila, has seen a minimum wage raise this year, to the equivalent of US$280, representing a rise of 5.3%.

This, however, has not alarmed export-oriented entrepreneurs. "The wage increase is just commensurate to the inflation rate vis-à-vis garment FOB prices," said Robert Young, president of the Foreign Buyers Association of the Philippines (FOBAP), speaking to just-style.

Thailand
Thailand, too, has different minimum wages for its regions. Between 2013 and the latest rise in April 2018, wages grew in two rounds by 28.5% and 37.6% to THB9,240 and THB9,900 (US$264 and US$304) respectively, with no changes in store for 2019.

Inflationary upward pressures on minimum wages are mild at 1.1% in the whole of 2018, but the country's military government is under pressure to raise wages amid persistent income disparity.

Indonesia
And Indonesia – with its 922 inhabited islands – also, unsurprisingly, has provincial minimum wages. These are also under review, with Indonesia's manpower ministry in October announcing plans to raise provincial minimum wages by 8.03% in 2019. The country's 34 provincial governments responded with increase announcements, with most hikes coming into force on 1 January.

For example, Jakarta's monthly minimum wage rise from IDR3.9m (US$274), up from IDR3.6m (US$253). Indicating how Indonesian rates vary significantly, the monthly minimum wage for East Kalimantan rose on 1 January to IDR2.7m (US$190) from IDR2.5m (US$175).

The increases clearly have not satisfied all workers, with demonstrations being staged in November in Jakarta calling for better pay. A statement from Indonesia's trade union confederation – Konfederasi Serikat Buruh Sejahtera Indonesia (KSBSI) – said: "With an increase of 8.03%, workers have not received the right to proper wages and are not in accordance with the survey of decent living needs," although it noted business leaders were happy.

Vietnam
Vietnam, however, operates a different system. It has two different minimum wages, one each for its developed and remote regions.

Between 2013 and August 2018, wages grew by between 66.2% and 69.3% to VND2,780,000 (US$118) and VND3,980,000 (US$171) respectively.

For 2019 wages were raised to VND2,920,000 (US$125) and VND4,180,000 (US$180) respectively, amid strong inflationary upward pressures on minimum wages, with year-on-year inflation averaging 4% in the whole of 2018.

From the garment manufacturers' perspective, the fact that as a "low-end" sector it offers one of the least competitive wages among all manufacturing sectors in Vietnam, is a real problem – raise pay and lose competitiveness internationally, or keep pay down and lose quality staff.

A recent study from the ILO shows that garment workers in Vietnam only earn around US$248 per month, much lower than US$583 per month of the national average.

"The dilemma facing the Vietnamese garment factories is that not increasing the wage makes it harder to attract and retain workers," said Dr Sheng Lu, an associate professor at the Department of Fashion and Apparel Studies, at the University of Delaware in the US.

"On the other hand, a wage hike would also make Vietnam's apparel exports less price-competitive in the already intensely competitive market," he added.

According to Saponti Baroowa, associate director of business intelligence at Dezan Shira & Associates, in Vietnam's Ho Chi Minh City, in the countries where wages are the lowest in the region, such as Laos and Myanmar, any further increases in the coming years are unlikely to impact investor decisions or force garment makers to relocate elsewhere.

By contrast, minimum wage increases in countries such as Thailand and the Philippines might prompt some manufacturers to shift production lines to neighbouring Cambodia or Vietnam.

"Vietnam recently had the lowest average increase in its monthly minimum wage in ten years at 5.3%," Baroowa said. "The country, despite its annual statutory minimum wage hikes, is likely to retain its competitive advantage as a garment manufacturing powerhouse, especially in the light of its free trade agreement with the EU."

Cambodia
This dichotomy – trading off the risks of increasing or not increasing minimum wages – is also all too apparent in Cambodia, another key clothing manufacturing hub.

Cambodia's new minimum monthly wage of US$182 took effect on 1 January this year, but garment and textile sector unions remain unhappy, saying this is well below their goal of US$200 per month.

"The increase does not reflect the current cost of living in the country," Ath Thorn, president of the Cambodian Apparel Workers' Democratic Union, told just-style. The latest amount is a 7% increase from the earlier wage of US$170 that came into effect in January 2018.

The union is determined to continue its demand that this rises to US$200 in the coming 12 months. In Cambodia, the minimum wage is set by a tripartite committee representing employers, unions and the government and the latest limit was decided in October 2018.

Malaysia
Meanwhile in Malaysia, a National Wage Consultative Council comprising the government, employers and trade unions authorised a new minimum wage at MYR1,100 (US$267) per month starting January 2019, up from the earlier amount of MYR1000 (US$242).

However, Malaysia Trade Union Congress (MTUC) secretary general, J Solomon, told just-style that his organisation still wants a much larger rise to MYR1,800 (US$437).

Since Dr Mahathir Mohamad became the country's Prime Minister in May 2018, in Malaysia's first ever transfer of power between party blocs following an election, unions are hopeful of better working conditions, according to Solomon.

The new Pakatan Harapan (PH) government has announced plans to amend the Employment Act 1955. Amendments are still under discussion but are due to be tabled in Parliament in March, he said.

Meanwhile, representatives from global union IndustriAll, ILO, MTUC and others met in January to suggest amendments that would further strengthen the legal position of trade unions.

Malaysia's minimum wage is reviewed every two years, with the next review due in January 2021 – so change in 2019 is unlikely.

David Welsh, country director for Malaysia at US-based global workers' rights group The Solidarity Centre, told just-style that all parties involved in setting wages need to work towards a "living wage rather than a minimum wage."

After all, it's the "same international supply chain that reaps millions on the back of these people" whether it is Malaysia, Indonesia or any other country.

AfriPrime App link:  FREE to download...

https://www.amazon.com/Africircle-AfriPrime/dp/B0D2M3F2JT

Chinese officials warn of risks from higher US tariffs, urge US business leaders to help mend ties

Chinese officials warned a delegation of top U.S. executives visiting Beijing this week that higher tariffs on imports from China will harm their businesses inside the country.

The delegation of influential business people belonging to the U.S. China Business Council, including the CEOs of FedEx and Micron, followed a top-level meeting last week where ruling Communist Party leaders endorsed a blueprint for policies that included numerous pledges to improve the business environment for foreign investors. But they also vowed greater vigilance in protecting state secrets, a potential minefield for foreign businesses that face intense scrutiny of their China operations by authorities.

Both the U.S. and China have cited national security concerns in imposing restrictions on trade and investment, and American businesses have at times been caught in the middle. Beijing has objected strenuously to Washington's moves to hike tariffs on Chinese-made products and limit Chinese access to advanced technologies, including leading-edge computer chips used for artificial intelligence.

The administration of President Joe Biden has sought to improve ties with China, including several meetings between Biden and Chinese President Xi Jinping, but has largely left in place sanctions ordered by former President Donald Trump, who imposed punitive tariffs on Beijing.

The Treasury Department also has proposed a rule that would restrict and monitor U.S. investments in China for artificial intelligence, computer chips and quantum computing.

In his meeting with the group, Chinese Commerce Minister Wang Wentao emphasized that U.S. investment restrictions on China will “seriously affect the investments and operations of American companies in China,” the ministry said in a statement. It provided no details.

The U.S. China Business Council is a private, nonpartisan group of more than 270 American companies that do business in China. It said the visit to Beijing, just days after the Communist Party's four-day planning meeting, was intended to advance economic and policy priorities and support dialogue between U.S. and Chinese government and business leaders.

“We appreciate the opportunity to engage with Chinese leaders to promote commercial relations and advocate our priorities for the benefit of our companies and employees,” the council's chairman and FedEx CEO Raj Subramaniam said in a statement.

Among others attending the meeting were Craig Allen, president of the council; Brendan Nelson, president of Boeing Global, Amit Sevak, president and CEO of Educational Testing Service, and Roberta Lipson, CEO of healthcare company Chindex International, which operates private hospitals in China and Mongolia.

Allen said the group hoped to build on past opportunities to “realize a more stable, fair and predictable business environment in China, address longstanding and new barriers to China’s market” and to improve the relationship between the two largest economies.

Foreign Minister Wang Yi told the group he hoped they would use their influence and connections to provide an “accurate” picture of China and provide objective and positive voices to advocate for a “correct understanding of China,” the official Xinhua News Agency said.

As the first U.S. business group to visit after the party's planning meetings, “you can feel the new atmosphere of China's further deepening reform in an all-round way,” the agency cited Wang as saying.

At the Communist Party meetings last week, officials endorsed more than 300 reform measures in line with leader Xi Jinping's vision for strengthening China's role as an economic power and leader in advanced technologies.

That included broad pledges to foster a “first-rate business environment,” remove market restrictions and promote trade. But the leaders also vowed to expand the party's role in business and to strengthen safeguards for national security.

A decree was approved Monday that provides regulations to implement a revised state secrets law that takes effect on Sept. 1. Among other things, it toughens screening of people working with state secrets and bans them from traveling outside the country without approval in advance, even after they leave their jobs, state media reported.

The Chinese government has said such laws only target a small number of people who endanger national security. But foreign business groups have expressed unease over raids by authorities on foreign businesses in China and tightening restrictions on the handling of data.

Various new regulations have generated uncertainty and concern among businesses that need to know where the “red lines” are, Sean Stein of the American Chamber of Commerce in China told reporters in a recent briefing.

“Companies don’t want to endanger China’s national security, but they need to know if they’re making an investment, who they’re investing with,” Stein said. So “without the ability to collect that information, not knowing if it’s not going to run afoul of China’s state secrets laws is a real problem.”

AfriPrime App link:  FREE to download...

https://www.amazon.com/Africircle-AfriPrime/dp/B0D2M3F2JT