CONFIDENTIAL FOR INTERNAL USE WITHIN CLIENT COMPANY ONLY RAIL DEVELOPMENTS IN ASEAN 1.2.2016
2008-2009: LEARNED THEIR LESSON IN 1997 1999 – 2008: FAST RECOVERY TO STABLE GROWTH 1997-1998: THE ASIAN CRISIS DEVASTATES ASEAN 1960S-1997: TIGERS ARE DRIVING ASEAN OUTSTANDING PERFORMANCE IN DELIVERING STABLE MALAYSIA, THAILAND, SINGAPORE AND INDONESIA GROWTH PERCENTAGE CHANGE IN GROSS DOMESTIC PRODUCT 8 6 4 2 Latin Middle East America and Sub-Saharan 0 ASEAN 6 G7 EU and North the Africa Africa Caribbean -2 -4 -6 -8 1980 1990 2000 2009 2010 2019 2019 1998 2008 2010 SOURCE: INTERNATIONAL MONETARY FUND, BUSINESS SWEDEN ANALYSIS BUSINESS SWEDEN 8 FEBRUARY, 2016 2
ASEAN - PAPER TIGER OR SUCCESSFUL REGIONAL INTEGRATION? ASEAN Opportunities Challenges • • Intra ASEAN tariffs Unification of standards eliminated and procedures are lagging Myanmar • Strong growth in intra Vietnam Laos • ASEAN trade Many trade and investment barriers Philippines Cambodia Thailand • Access to regional remain Cambodja and global supply • chains National agendas over- ride regional Brunei Malaysia Singapore Indonesia BEYOND AEC, ASEAN’S MAJOR ACCOMPLISHMENT IS THAT IT HAS PROVIDED A PLATFORM TO RESOLVE CONFLICTS ENABLING STABILITY AND ECONOMIC GROWTH SOURCE: BUSINESS SWEDEN BUSINESS SWEDEN 8 FEBRUARY, 2016 3
MORE FTA’S WILL FURTHER STRENGTHEN ASEAN POSITION WITHIN REGIONAL/GLOBAL SUPPLY CHAIN TRANS PACIFIC REGIONAL PARTNERSHIP COMPREHENSIVE UNITED STATES ECONOMIC PARTNERSHIP SINGAPORE ASEAN CHINA CANADA JAPAN INDONESIA LAOS BRUNEI S.KOREA CHILE CAMBODIA PHILIPPINES NEW ZEALAND VIETNAM INDIA MEXICO THAILAND MYANMAR AUSTRALIA MALAYSIA PERU RESULTING IN LIBERALIZATION OF TRADE IN GOODS AND SERVICES AS WE LL AS ATTRACTING MORE FDI’S SOURCE: BUSINESS SWEDEN ANALYSIS BUSINESS SWEDEN 8 FEBRUARY, 2016 4
ASEAN 6 KEEPING PACE WITH WORLD’S FASTEST GROWING ECONOMIES GDP GROWTH DEVELOPMENT (2000 – 2014) 16% 14% Average China 12% growth 10% 9,7% India 8% 7,0% 6% ASEAN 6 5,2% 4% 2% 0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 SOURCE: WORLD BANK BUSINESS SWEDEN 8 FEBRUARY, 2016 5
FDI INTO THE ASEAN6 ASEAN6 HAS SURP SURPASSE ASSED D CH CHIN INA A FOR THE PAST TWO YEARS VALUE OF FOREIGN DIRECT INVESTMENT INFLOWS USD BILLION 140 China 120 ASEAN 6 ASEAN 6 100 (excl. Intra-ASEAN) 80 60 40 India 20 0 2007 2008 2009 2010 2011 2012 2013 2014 EUROPEAN UNION AND JAPAN ARE THE BIGGEST INVESTORS IN THE ASEAN6 REGION SOURCE: ASEAN FOREIGN DIRECT INVESTMENT STATISTICS DATABASE, UNCTAD BUSINESS SWEDEN 8 FEBRUARY, 2016 6
SIGNIFICANTLY IMPROVED BUSINESS CLIMATE IN MOST ASEAN COUNTRIES OVER THE LAST DECADE… EASE OF DOING BUSINESS INDEX RANKING 2006 VS. 2015 ASEAN6 Rank 2015 Singapore 1 Malaysia Thailand 40 Vietnam 80 China Philippines Indonesia 120 India 160 -30 -20 -10 0 10 20 30 Rank change Can’t keep pace Improving 2006 - 2015 SOURCE: WORLD BANK – EASE OF DOING BUSINESS BUSINESS SWEDEN 8 FEBRUARY, 2016 7
…HOWEVER CORRUPTION STILL REMAINS A MAJOR HURDLE IN THE OVER “Southeast Asia is home to some of CORRUPTION PERCEPTION INDEX RANKING 2006 VS. 2014 the richest, fastest-growing Rank 2014 ASEAN6 economies, as well as some of the 1 planet’s poorest people. Battling Singapore corruption is an integral part to sustainable growth and reducing 40 income inequality ” Malaysia Natalia Soebagjo, Chair of Transparency International Indonesia.all regional 80 Philippines Thailand Implications for Swedish Companies India • China Government bureaucracy red tape 120 (applying for permits, import licenses Indonesia Vietnam etc.) • Custom services have traditionally Rank change been a challenge in majority of the 2006 - 2014 160 markets -40 -20 0 20 40 • Local content requirements in some Can’t keep pace Improving product categories • Local partners required by law in certain countries/segments SOURCE: WORLD BANK – TRANSPARENCY INDEX BUSINESS SWEDEN 8 FEBRUARY, 2016 8
SWEDEN IS LOSING GROUND IN EXPORT TO ASEAN IN er COMPARISON TO OTHER MAJOR EUROPEAN ECONOMIES 8 SWEDEN VS MAJOR EUROPEAN ECONOMIES EXPORT TO ASEAN 2004-2014 BILLION USD 4 40 GROWTH 5 35 98% 9 30 Germany 10 25 20 133% France 20 8 15 10 173% 5 Sweden 30% Austria 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 SWEDEN HAS EXPERIENCED SLOW GROWTH OVER THE PAST DECADE SOURCE: INTERNATIONAL TRADE CENTRE 2015 BUSINESS SWEDEN 2016-02-08 9
INFRASTRUCTURE STOCK IS STILL FAR BEHIND GLOBAL BENCHMARK FOR DEVELOPED COUNTRIES… % OF GDP IN INFRASTRUCTURE STOCK 2012 Investment needed to reach 70% by 2030 Trillion USD Water Telecom Power Transport 3,4 72% 71% 0,6 13 17 51% 51% 0,6 47% 13 10 43% 9 13 14 18 1 12 13 20 10 28% 7 7 10 9 12 4 11 31 4 1,2 25 19 19 18 6 13 6 ASEAN Singapore Malaysia Thailand Vietnam PhilippinesIndonesia Benchmark TRANSPORT AND ENERGY IN OF 2,2 TRILLION USD INVESTMENTS IN THE NEXT 15 YEARS SOURCE: INTERNATIONAL TRANSPORT FORUM; GLOBAL BUSINESS SWEDEN 8 FEBRUARY, 2016 10
…THE INVESTMENT OF USD 3,4 TRILLION UNTIL 2030 IS NEEDED INVESTED NEED UP TO 2030 USD TRILLION 1,35 0,45 0,4 0,35 0,35 0,3 0,25 Indonesia Philippines Thailand Malaysia Vietnam Singapore Rest of ASEAN* MAJORITY OF INVESTMENTS WILL BE CONCENTRATED TO INDONESIA SOURCE: INTERNATIONAL TRANSPORT FORUM; GLOBAL *LAOS, BRUNEI, CAMBODIA AND MYANMAR BUSINESS SWEDEN 8 FEBRUARY, 2016 11
EXTENSIVE INVESTMENTS IN RAIL INCLUDING HIGH SPEED RAIL Kunming Rail will connect China, Singapore and all the Kunming countries of mainland Southeast Asia Nanning Mandalay Hanoi Chiangmai Yangon 900 km Integrated La Union Luzon Railway has Ubon Ratchathani been proposed Plans to dual-track the Aranyaprathet Legazpi country’s railways; Bangkok Manila Phnom Penh electrical train to connect Kanchanaburi to Bangkok and MRT2 is now at tendering Ho Chi Minh stage and is expected to be Aranyaprathet Kuala Lumpur – Singapore high operational in 2022 speed rail approved and in planning stage now Kuala Lumpur MRT is under construction in Jakarta, operational in phases by Singapore 2019 – 2027. High speed rail Multiple MRT lines under proposed from Jakarta to construction. Network will Surabaya. In Jan 2016, MRT Line double in length by 2030 construction has commenced on the US5.5 billion link between Existing Line Jakarta Jakarta and Bandung Proposed Line Bandung Surabaya SOURCE: PHILSTARGLOBAL, PEOPLE'S DAILY, ADB, SPAD, JOC.COM, MRT CORP, THE STAR MALAYSIA BUSINESS SWEDEN 8 FEBRUARY, 2016 12
URBAN RAILWAY GROWTH WILL DRIVE SINGAPORE’S INFRASTRUCTURE INDUSTRY Singapore’s Infrastructure Masterplan Singapore’s infrastructure masterplan Strategic government ambitions 2013 Open Downtown Line Stage 1, Marina-Coastal Expressway 2014 Open North-South Line 1km-extension to the Marina Singapore South Pier 2016 Open Downtown Line Stage 2, Tuas West Extension 2017 Open Downtown Line Stage 3 The government’s strategic direction is to improve 2019 Open Thomson Line 1 the country as a services and transport hub 2020 Open Thomson Line 2, Complete North-South There is a plan to double the city- state’s metro Expressway system as a part of improving urban rail connectivity for the populace 2021 Open Thomson Line 3 An investment of SGD 900 million between 2012 – 2021 - 2025 Open Eastern Region Line, Jurong Region Line, Circle 2019 in phases to improve the quality of rail Line Stage 6, Downtown Line Extension, Complete services offered by SMRT seven new Integrated Transport Hubs Between 2011 to 2020, the investment in the metro system amounts to SGD 60 billion 2025 - 2030 Open Cross Island Line, North East Line Extension DESPITE MATURITY, SINGAPORE IS INVESTING HEAVILY IN INFRASTRUCTURE TO INCREASE URBAN CONNECTIVITY SOURCE : LTA, SMRT CORPORATION, BUSINESS MONITOR INTERNATIONAL BUSINESS SWEDEN 8 FEBRUARY, 2016 13
INFRASTRUCTURE DEVELOPMENTS TO CATCH UP WITH STRONG URBANIZATION TRENDS IN THE CITY Immense growth potential Malaysia has railways stretching a total of 1,849km with most of Malaysia's urban railway network is located in the Klang Valley, a region that includes the capital city, Kuala Lumpur, and adjoining cities and towns located in the state of Selangor. Malaysia's railway industry is expected to provide significant opportunities over the next few years A strong urbanization trend to the Greater Kuala Lumpur/ Klang Valley region prompts investment through the 2014 Economic Transformation plan in addition to the country’s goal to attain a developed nation status by 2020 Malaysia rail infrastructure projects Malaysia rail infrastructure projects LRT3 Linking Bandar Utama, Shah Alam and Klang RM 9.0 billion 45 km Second MRT Line from Selayang to Putrajaya RM 23.0 billion Upgrade of East Coast Railway RM150.0 million GOVERNMENT INVESTS THROUGH ECONOMIC TRANSFORMATION PLAN TO DEVELOP THE COUNTRY SOURCE : LTA, SMRT CORPORATION, BUSINESS MONITOR INTERNATIONAL BUSINESS SWEDEN 8 FEBRUARY, 2016 14
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