The recent referendum in the UK about leaving the EU caused concern around the world, including the countries of South-East Asia. This is not surprising, given the high level of their integration into the world economy, which has stirred up the results of the last vote. This prompted ASEAN countries to evaluate the possible consequences of this event from the point of view of their national interests and regional security, while maintaining caution in predicting the development of the situation.
Indonesian experts are of the opinion that “BRAKCET” will not have a direct impact on the economy in the near future, taking into account the small volume of trade turnover between the countries of 2.35 billion dollars. in 2015, compared to 31 billion dollars. with Japan and 24 billion dollars. with the United States. Indonesian exports to the UK in the same year was not higher than 1% (1.5 billion USD). of the total exports to $ 150 billion. The British investments in the country amounted in the same year 503,2 million us dollars. However, the protracted political crisis in Europe can have a serious impact on Indonesia’s economy, particularly in terms of reducing the export of raw materials to the EU and the inflow of foreign investment. Evaluated and possible risks for the stock market. According to the Minister of foreign Affairs Retno L. P. Marsudi (Retno L. P. Marsudi), much will depend on the outcome of the pending agreement between the UK and the EU, including in terms of a number of agreements relating to Indonesia, such as the Agreement between Indonesia and the European Union on economic cooperation (Comprehensive EconomicPartnership Agreement (CEPA), the action Plan for combating illegal logging (Forest Law Enforcement,Governance and Trade Action Plan). Indonesian economist Winery Zain (Winarno Zain) believes that made in the budget projections of GDP growth, currency exchange rates and oil prices will require adjustments to take account of new political realities in the world.
The Prime Minister of Singapore Lee Hsien Loong (Lee Hsien Loong) called the vote in the UK “turning point” and urged the government to closely monitor the development of the situation, as nobody now can imagine all of the implications of the people of the UK decision. This attention to the “BROKSITA” due to the fact that Singapore to a much greater extent than the other ASEAN countries linked to the UK economy. The exports to this country, which mainly represented the services, gives 2% of GDP. Singapore is the largest trading partner of the UK in Southeast Asia, ranking fifth in the list of countries that are not members of the European Union and the fifth largest market of export services outside the EU.
The impact of “BRECCIA” on the economy of the country can manifest itself in reducing the cost of the local currency, the slowdown in exports to Europe, the loss of profitability of local companies. The UK accounted for three quarters of Singaporean investments into the European Union, mainly in property, infrastructure and regulated assets (regulated assets). However, in General, the loss of Singapore will depend on the damage inflicted on the European market a British exit from the European Union.
Recognizing the importance of economic and trade relations with Singapore, the head of diplomatic mission of great Britain Scott Wightman (Scott Wightman) tried to reassure the local businessmen, assuring them that the country will remain important business partners. According to him, “there is no reason to think that the decision taken by the people of the UK could affect the country’s attractiveness for Singaporean investments, as well as Singapore English”. Today, the market of Singapore work 1000 UK companies.
And yet the attitude of Singapore towards a referendum is ambiguous, as evidenced by the comment of the Prime Minister Lee in Facebook: “We all live in a globalized, interdependent world. The desire to escape, to be less dependent on others to be completely free in their actions is understandable. But in reality, for many countries off from this process, “withdrawal”, in nationalism, most likely, means less security, less prosperity and unpredictable future.”
The position of the Philippines regarding “BRECCIA” was clearly formulated and announced Sergio Ortiz-Luis (SergioOrtiz-Luis, President of the chamber of Commerce: “the Philippines will be affected only in case if affected the United States.”
The Prime Minister of Malaysia Najib Razak made an official statement on the referendum in the UK, calling the decision “historic”, but with “unpredictable consequences,” and assured the business community that relations between the countries will not change. Malaysian economists believe that the national market is able to adapt to changing external economic and political situation, but the long-term consequences of BREXIA” today it is difficult to assess in its entirety, despite the fact that the turnover of Malaysia to the Kingdom accounts for only 1%. According to trade Minister Mustapa Mohamed (Mustapa Mohamed), Malaysia, which is a long time the free trade negotiations with the European Union might use the situation in their own interests and to expedite the signing of the Treaty with great Britain. What I fear most entrepreneurs in Malaysia, so it’s possible split from the European Union and reduction in the rate of economic growth in the case that other European countries will follow the example of the UK. The consequence could be a reduction in Malaysian exports is 10.1%.
In Thailand believe that “BRAKCET” can lead to a reduction in the number of tourists from the UK and whole European country within the next three months in connection with the change in the exchange rate. Last year the country was visited by 5.6 million Europeans, from them 946 thousand were residents of the UK. As for the decline in value of securities and the exchange rate of the baht, according to Virata Santiprabhob (Veerathai Santiprabhob), head of the Bank of Thailand, this process stabiliziruemost in the near future, and the government keeps the situation under full control. Experts do not foresee major changes in the field of foreign trade, as great Britain’s share in the trade turnover of the country is only 2%.
For Vietnam, which is an active trade partner European countries (the second largest export market after the United States), a British exit from the EU could lead to a decrease in its exports. The reason is the change in the exchange rate and reduce the competitiveness of Vietnamese exports, which in the UK could be reduced by 10%, or 460 million USD. (in 2014 it amounted to 4.6 billion dollars). External position of Vietnam may be exacerbated in the case of the deterioration of the situation (under the influence of “BRECCIA”) in the financial market of China, which is strongly tied to the economy of Vietnam. In this case, as noted in the report of Vietcombank (Vietcombank), prepared on the basis of “BRAKCET”, the Central Bank may not have enough funds to maintain the exchange rate of the Dong. As a result, “BRECCIA” can hurt investment and growth.
However, according to some experts in the region, the British exit from the European Union can provide the ASEAN countries a number of advantages in terms of creating favourable conditions for the conclusion with it agreements on free trade and to attract it investments that will strengthen her economic and trade relations. Today most Southeast Asian countries consider the UK as its strategic partner. And nevertheless today it is possible to give only rough estimates of the impact of BRECCIA” on the economy of the Southeast Asian countries, which will be adjusted to reflect the new relationship between the EU and the UK.
