Update Country Report Maldives 04 Feb 2022

Politics and policy

Amid signs of declining coronavirus infection in parts of Asia, governments have begun to ease travel restrictions: Thailand (read more) and Indonesia have reopened to vaccinated tourists; Hong Kong (read more) is shortening its quarantine period from 21 to 14 days for travellers from high-risk countries from February 5th; and New Zealand has announced a phased reopening of its borders from the end of February.

Malaysia's election commission will set the date for the Johor state election on February 9th, as the country prepares for a decisive political year. EIU expects a general election in the second half of the year, at which a coalition combining the United Malays National Organisation and the Parti Pribumi Bersatu Malaysia may emerge and confirm ethnic-Malay dominance. Read more.

Geopolitics and strategy

The foreign minister of cash-strapped Sri Lanka, GL Peiris, will visit India on February 6th-8th. India has offered comprehensive financial assistance to Sri Lanka in the last year or so, including currency swaps, loan deferments and emergency lines of credit. Officials from both countries are likely to focus on Sri Lanka's request for an additional US$1bn in assistance. Read more.

Economics and markets

GDP data in Malaysia and Indonesia are expected to show a rebound in the fourth quarter of 2021, aided by the easing of pandemic-induced restrictions.

Monetary policy meetings in India, Indonesia and Thailand are expected to yield no changes to their respective benchmark policy rates. In India and Indonesia, however, we are expecting rate increases in the second quarter to offset depreciatory pressure on the local currencies; we expect the Reserve Bank of India (that country's central bank) to raise the reverse repo rate (the floor of the interest-rate corridor) by 20-40 basis points next week.

Highlights from last week:

Cryptocurrency regulation diverges across Asia: Governments will consider regulations in their attempt to minimise speculative and compliance risk, bringing in new tax rules or opting for a central bank digital currency. Read more.

Indonesia's policy priorities in 2022: A looming national election in 2024 will make it harder to pass business-friendly reforms. Priority will be given to amending the Omnibus Law on Job Creation and developing infrastructure under the Capital Relocation Law. Read more.

Vietnam's new road infrastructure plan: The ten-year plan prioritises the construction of an expressway network and the improvement of inter-regional links, but implementation will be challenged by site clearance delays, raw material shortages and muted private-sector interest. Read more.

Decoding the Maldives' tourism rebound in five charts: Wide vaccination coverage, the "one island, one resort" set-up for safe holidaying and lenient visa procedures (with no mandatory quarantine) have made the Maldives a preferred tourist destination. Read more.