Editor’s Picks: 12 September 2017

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  • UN unanimously backs new sanctions on North Korea
  • ECERDC Confident Of Surpassing RM110 bln Investment Target By 2020
  • Strong Fiscal Position Strengthens Nation’s Economic Resilience
  • IKEA Malaysia To Introduce Online Store Next Year
  • China consumers’ confidence highest in two decades

UN unanimously backs new sanctions on North Korea
The United Nations Security Council has voted 15-0 to back the US-drafted sanctions resolution on North Korea, just one month after banning exports of coal, lead and seafood in response to Pyongyang’s launch of an intercontinental ballistic missile (ICBM). The Council unanimously imposed new sanctions on North Korea, banning textile exports and restricting shipments of oil products to punish Pyongyang for its sixth and largest nuclear test. The resolution, passed after Washington toned down its original proposals to secure backing from China and Russia. During tough negotiations, the United States dropped initial demands for a full oil embargo and a freeze on the foreign assets of North Korean leader Kim Jong-Un. The resolution instead bans trade in textiles, cuts off natural gas shipments to North Korea, places a ceiling on deliveries of refined oil products and caps crude oil shipments at current levels. It bars countries from issuing new work permits to North Korean labourers sent abroad – there are some 93,000, providing Kim’s regime with a source of revenue to develop its missile and nuclear programmes, according to a US official familiar with the negotiations. It was the eighth series of sanctions imposed on North Korea since it first tested a nuclear device in 2006.

ECERDC Confident Of Surpassing RM110 bln Investment Target By 2020
The East Coast Economic Development Council (ECERDC) is confident of surpassing the RM110 billion investment target by 2020. Its Chief Executive Officer, Datuk Seri Jebasingam Issace John, said this was based on current market sentiment which reflected the tendency for investors to choose the East Coast as the investment gateway to the Asia-Pacific. Currently, the cost of doing business or investing in the East Coast was competitive as it was faster and cheaper to deliver goods to countries like China, South Korea and Japan through Kuantan Port compared to Port Klang. “The implementation of the East Coast Rail Link (ECRL) is another factor which would contribute to the ECERDC surpassing its target,” he said to reporters at the launch of the Mersing Harbour Centre. Datuk Seri Jebasingam said as at July 2017, the total investment in the region amounted to RM109 billion, of which 52 per cent was domestic investment and the rest came from countries like China, Japan, South Korea, including several European countries.

Strong Fiscal Position Strengthens Nation’s Economic Resilience
A strong fiscal position can strengthen the nation’s economic resilience, while providing the space and flexibility to implement counter cyclical measures to support the economy in times of crisis. Deputy Finance Minister Datuk Othman Aziz said the national fiscal policy supported and maintained the momentum of the country’s economic growth and increase its competitiveness, while ensuring the people’s well-being. “In addition, the national fiscal policy continues to emphasise on consolidation measures towards achieving a near-balanced budget by 2020,” he said at the launch of the 12th Malaysia National Economic Conference. Datuk Othman said the commitment to reduce the deficit and debt levels was important to ensure the country’s long-term fiscal sustainability.

IKEA Malaysia To Introduce Online Store Next Year
Swedish furniture giant, IKEA, plans to introduce an online store in Malaysia next year to meet increasing demand for its products. IKEA Southeast Asia Managing Director, Christian Rojkjaer said the e-commerce website would make it easier for customers to access and purchase the company’s range of products. “We are planning to launch the e-commerce service in Singapore in the next two weeks, and introduce it in Malaysia next year,” he said. He was speaking to reporters after the groundbreaking ceremony for the IKEA Penang store. Slated to open in the first quarter of 2019, IKEA Penang would be the fourth IKEA store in Malaysia, following Damansara and Cheras in Selangor, and Tebrau in Johor Bahru.

China consumers’ confidence highest in two decades
Sentiment among China’s consumers and households recorded the highest level in more than two decades. The consumer confidence index climbed to 114.6 in July. That’s up from last May, when it dipped below 100, the line separating optimism and pessimism. “The strong job market and the associated robust income growth have supported consumer confidence,” said Robin Xing, the chief China economist at Morgan Stanley in Hong Kong. “Consumer confidence is further driven by the unleashed consumption potential in lower-tier cities,” he said, citing their faster income growth, supportive government policies, infrastructure investment, and more affordable housing markets that make residents more willing to spend. The strength of the world’s second-largest economy has surprised forecasters, with GDP growth accelerating to 6.9% in the first 2 quarters this year. Per capita disposable income rose 7.3% on year in the first half, statistics bureau data show. Meanwhile, a private consumer confidence index, compiled by Nielsen Holdings Plc, climbed to 112 in the second quarter, the best reading since at least 2009. A component tracking willingness to spend also climbed to a fresh high, while readings for job prospects and personal finances also increased.

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