Future of South East Asia

FUTURE OF SOUTH EAST ASIA

SUMMARY: Revision 2005

The future of South East Asia remains uncertain.

The big pictures do not bring too much worries: The growth of population is under control (555 million in 2005 and 700 expected in 2030). The economy is prosperous and the GNI accounts for 785 $Billion in 2004. All these countries have known a strong increase between 1987 and 1996 ( The output grew by 7% per year-Asian tigers!). Unfortunately, the financial crisis in 1997 and the high tech crisis in 2001 occurred on a large scale. Today, most of these countries are facing with Chinese competition and cannot expect the same growth rate as in the past. However, the global prospects remain good and the GNI could attain 2465 $Billion in 2030.

On the other hand, South East Asia is not an homogeneous region: Some countries are scattered on many islands and the ethnic and religious disparity not only exists between the main nations. It exists also inside some of them. Until now, this patchwork was not a major problem. Right now, the situation is rapidly changing: Since september 2001, Islamism is on the increase. The islamic tidal wave aims to create a great "Caliphate" including Indonesia, Malaysia and the southern areas of Thailand and Philippines.

Considering this process, risks of religious wars exist in the entire region. In short, many uncertainties!

( Five years ago, I visited Myanmar, Singapore, Indonesia, Cambodia and Thailand. In october 2004, I visited Laos, Vietnam and Malaysia. In May 2005, I made a business trip in Philippines: As usual, this survey is based on actual facts and reports from informative persons)

Warning: Go to Standards of quality about the sources of tables and stats: Economic stats-World Bank: www.worldbank.org/data. Population stats: UN: www.un.org/esa/

1-DIAGNOSIS 2-FROM ASIAN TO ISLAMIC VALUES 3-COUNTRY REVIEW

1-DIAGNOSIS

Let's us examine the region: Geography, population, economy, and political situation.

11-Geography

Clearly, our diagnosis shows a first problem: Some countries are scattered on many islands and can face with problems regarding their unity.

South East Asia represents 4,475,000 square kilometers (USA: 9,269,000; Europe- 25 Countries: 4,150,000) and includes 10 countries: Myanmar (Burma), Lao, Cambodia, Vietnam, Thailand, Brunei, Singapore, Malaysia, Indonesia and the Philippines.

Clearly, it is is not an homogeneous region. We have to distinguish three sub regions: Firstly, Indo-China mainly Buddhist and yet harboring communist regimes in the former French colonies; secondly, Malaysia and Indonesia, made of peninsular and archipelago, mostly inhabited by Muslim Malays; thirdly the Philippines, the largest Christian country in Asia.

Lao and Cambodia are landlocked countries. Vietnam, Thailand and Burma have sea borders. Singapore is a city island. Malaysia, Indonesia and the Philippines are archipelago. Look at the next map ( CIA ):

DRAWING 1

The region is composed of mountainous areas, highlands, jungle and very fertile deltas (Mekong and red river deltas). It's a rain forest region with many wilderness and some places yet unexplored ( Borneo). Active volcano, earthquakes and Tsunami represent a permanent threat.The Last Tsunami killed about 250,000 people notably in Sumatra-Indonesia.

12-Population

We encounter here a second problem: The ethnic and religious disparity not only exists between the main nations. It exists also inside some of them.

By 2005, the population accounts for 555 million (453 in Europe-25; 285 in the US). Only five nations exceed 40 million ( Vietnam: 80, Thailand: 61, Myanmar: 48, Indonesia 222 and the philippines 87). The region is expected to attain 700 million by 2030. The growth rate is under control in many countries: 1.2 in Vietnam, 0.7 in Thailand, 1.2 in Myanmar, 1.3 in Indonesia. However, Malaysia (2.1) and the philippines (2.1) have still a fast growing population.

In Indo-China, People worship mainly Buddhism but there is a muslim minority in Thailand. Compared to Indo-China, Malaysia and Indonesia have a specific identity with a Muslim population. However, Malaysia harbors a large Buddhist and Hindu minority (About 40% of the population is Chinese or Indian). The republic of Philippines has also a specific identity because it is a Christian country despite a small Muslim minority in the Southern islands. What is more, the entire region includes some rain forest people (Orang Asli, Dayaks, Papuans) who are yet living like in the prehistoric times.

The elite and the youth speak English ( In the Philippines, every people speak english and Spanish has quite disappeared ). In former french colonies (Cambodia, Lao, Vietnam) you can meet some very aged people who speak French.

13-Economy

The Region shows good economic prospects: The Regional GNI attains 785 $Billion in 2004 and would reach 2,465 $Billion in 2030.

The next drawing shows the yearly growth rate of the countries over the five last years and the GNI in 2004 ( In $Billion ).

DRAWING 2

Years-------2000---2001---2002---2003---2004---GNI: 2004

Vietnam-------7%----7%-----7%-----7%-----8%-------45
Thailand------ 5%----2%-----5%-----7%--------------158
Singapore----- 9%----2%----3%-----2%-----8%------104
Malaysia-------9%----0%-----4%-----5%-----7%------117
Indonesia----- 5%----4%-----4%-----5%-----5%------248
Philippines-----6%----3%----- 3%-----5%-----6%-------97
Myanmar------------------------------------------------10
Cambodia----- 7%----6%------5%-----5%-----6%------4.4
Lao----------- 6%----6%------6%-----5%-----6%------2.2

Total--------------------------------------------------785

All these countries have known a strong increase between 1987 and 1996 ( The output grew by 7% per year). They were perceived as Asian tigers. Some of them have the highest % of technology in their manufactured exports ( Notably Philippines: 73%, Malaysia and Singapore: 60% ).

Unfortunately, the financial crisis in 1997 occurred on a large scale. Bad investments, the weaknesses of the banking system and corruption resulted in a very large crisis. However, the economy recovered but it soon experienced the high tech crisis in 2001. Then it rebounded in 2002, 2003 and 2004. However, most of these countries are facing with Chinese competition and cannot expect the same growth rate as in the past.

According to our calculations, the global GNI could attain 2,465 $Billion in 2030. Consider the next drawing:

DRAWING 3

Countries-----GNI: 2004 -----Growth rate------GNI:2030

Vietnam---------- 45--------------7%---------------260
Thailand---------158--------------5%---------------560
Singapore------- 104--------------4%---------------290
Malaysia---------117--------------5%---------------410
Indonesia--------248--------------3%---------------530
Philippines-------- 97--------------5%---------------340
Myanmar-Lao----- 15--------------6%---------------- 75
Cambodia
Total------------785-------------------------------2,465

We mainly take in account the high technology and on the contrary the extend of Islamism (Notably in Indonesia). As a result, Thailand will outpace Indonesia.

14-Politics

During World War 2, this region was the theater of fierce struggles opposing US, Aussie, British and Filipinos against the Japanese. After the Japanese defeat, wars raged in Indo-China. With the end of the cold war, the region presently looks like a quite peaceful area. Unfortunately, this situation could rapidly change in the future.

Except Myanmar, Lao, Cambodia and Vietnam, most of the countries are free and people can change their governments. Even in the communist countries, such as Vietnam, some progress are undergoing ( See country review ).

15-Conclusion.

Our diagnosis could seem positive: The economy is prosperous and the growth of population under control. However we have underlined the geographical, ethnic and religious disparity. Until now, this patchwork was not a major problem.

Since september 2001, this situation is rapidly changing because Islamism is on the increase.

1-DIAGNOSIS 2-FROM ASIAN TO ISLAMIC VALUES 3-COUNTRY REVIEW

2-FROM ASIAN TO ISLAMIC VALUES

According to our diagnosis, we may posit that the main threat for the future of the region relies on the surge and the extend of Islamism. In some countries, the Islamic values are outpacing the traditional Asian values. Considering this process, risks of religious wars exist in the entire region. Moreover, growing conflicts may occur between Thailand and Malaysia and between Philippines and Indonesia. On the other hand, Indonesia could disintegrate in the future. In short, many uncertainties!

31-The surge of Islamic values

Traveling in South East Asia, the European are impressed by some features: People are addicted to hard working, saving, order and harmony. Every body is business minded: In Asia, the consumer is always right. Of course, this mood partly explains and facilitates the development of the economy in the fast lane.

As a result, some scholars emphasized these Asian values. Considering the East Asia's relative economic success, the proponents argued that Democracy and Human rights were not necessary for economic growth and not applicable for East Asian nations. In fact they posited a kind of authoritarian collectivism as being superior to Western values. In short, the so-called Asian values emphasized communitarianism rather than individualism

Of course, the concept of Asian values was wrong. Firstly, the region is culturally complex and it is ridiculous to speak of Asian values ( For example, how can we compare Indian and Chinese values? ). Secondly, many so-called Asian values are equally Western values. Thirdly, it is fruitless to speak about Asian or Western values. Nobel Prize-winning philosopher Amartya Sen underlines that Human rights and Democracy are universal values.

In fact, this concept of Asian values was embraced in order to pave the way for Islamic values. It is not surprising that this concept was mainly advocated by the two muslim countries: Malaysia and Indonesia ( Mahatir, the former Prime Minister of Malaysia, was a particularly outspoken advocate of Asian values).

The opportunity to implement these islamic values appeared in the follow up of september 2001 and notably in Malaysia and Indonesia. According to informative persons, few years ago, the hijab was only worn by old women. Today all the Malay women, even very young girls, wear the hijab. What is more, the islamic mob clearly enjoyed the september attack against the World Trade Center. It was perceived as a great victory. When TV reported the hanging and burning of american civilians in Faludja, Malay mothers call their children for attending the show. As an informative person says: How imagine that a civilized person could enjoy a so disgusting vision?

Muslim mobs in the Moluccas have forcibly converted several thousand Christians. What is more, three Christian high school girls were beheaded as a Ramadan "trophy" by Indonesian militants in their village in Indonesia's strife-torn Central Sulawesi province, along with a handwritten note threatening more such attacks.The note read: "Wanted: 100 more Christian heads, teenaged or adult, male or female; blood shall be answered with blood, soul with soul, head with head."

Look at the next picture.

Malaysia in a near future could be ruled by the sharia: Two federal states ( Kelantan and Terengganu ) have already imposed cultural restrictions on Muslims ( In Kelantan, 120 women were fined for not adhering to the state's dress code ). In Indonesia, the Islamic-oriented parties favor imposition of Islamic law.

32-From Islamic values to terrorism and separatism.

In South East Asia just like in other countries, Islamism more and more openly supports terrorism. Two of the september terrorists were residing in Malaysia before..In Indonesia, there are many cells of Islamic terrorists operating in the archipelago and in the neighborhood ( Jemah islamiyah linked to Al quaida ). These terrorists mainly target the buddhist, Hindu, or Christians living in some specific indonesian islands: As a result, the Bali bombing, killed 190 people. Blasts also occurred in Jakarta. Recently, two bombs killed 20 and wounded 40 in Sulawesi on a Christian market in May 2005. Finally a new Bali bombing occurred in October 2005.

Moreover, Islamism tries to destabilize the neighboring countries: The Islamic movement aims to create a great "Caliphate" including Indonesia, Malaysia and the southern areas of Thailand and Philippines. Clearly, this process is underway.

Firstly, in Southern Thailand inhabited by muslims, 6 persons suspected to be separatist were arrested in october 2004. Immediately, a mob of ordinary muslim persons demonstrated against the police station and finally used violence against the security forces: The Thai army reacted and 80 rioters died of suffocation during their transportation to jails. The Thai army does not use guns. The death cause was some hysterical process just like during the Arafat 'mourning! Anyway, soon after this event and despite investigations ordered by the Thai government, a poor Buddhist monk was beheaded by the islamists!

However, in the past, muslim population implemented for long in southern Thailand never embraced violence. Now, since the beginning of the present year, 1000 casualties are reported . Why? In fact these former pacifist populations have been turned into madness by Islamism. As a result, Mahatir (former prime Minister of Islamic Malaysia) said that the best guess should be to provide Southern Thailand with independence!

Secondly, the Philippines case shows that when you cede to the islamist claims you do not get peace but more and more war. Despite the fact that Muslims only make up around 4% of the Philippines’s population, a rebel group, the Moro Islamic Liberation Front (MILF), has been fighting since 1978 for an independent Islamic state in Mindanao. The government and the MILF signed a cease fire in 2001 and an autonomous status was given to the island.

Despite this peace agreement, a new rebellion ( The Abu Sayyaf guerrillas) soon occurred, in the southern Mindanao. The Abu Sayyaf movement is a terrorist branch of Bin Laden’s al-Qaeda terrorism network. As a result, the entire country endures high security checking ( Especially in hostels, airports and so on). Fortunately, President Gloria Arroyo called the U.S. troops to equip and train Filipino soldiers battling Muslim rebels in the southern jungles. This filipino story shows that it is absolutely fruitless to negotiate with the Islamic plague!

1-DIAGNOSIS 2-FROM ASIAN TO ISLAMIC VALUES 3-COUNTRY REVIEW

3-COUNTRY REVIEW

31-Indo-China

311-Myanmar

Introduction: This former British colony is a large country (677,000 square kilometers and 48 million inhabitants). For a tourist, Myanmar appears like a country out of the time. Infrastructures and countryside remain just like they were during the British. Traveling in Myanmar means returning in the past!

Politics: Since the independence, the country is ruled by a military junta. It was isolated during a long time according to "The Burmese Way to Socialism". Despite elections in 1990 that resulted in a victory of the main opposition party, the ruling junta refused to hand over power. The leader of the opposition ( Nobel Peace Prize recipient) was arrested in May 2003 and is currently under house arrest. In short, Myanmar is a rogue state and you can see very young children enslaved to work on the maintenance of the roads

Economy: There are no stats about this strange country. However, we may estimate that the GNI is between 5 and 10 $Billion. The country belongs to ASEAN. Recently, an openness occurred for tourists (Wonderful Temples! ) and some foreign investments. Modern hostels were built up in Rangoon with japanese holders. The Irradaway delta provides with paddy rice and fish. The main export resources remain raw materials and notably teak timber and gas exploited by a French oil firm. Myanmar is also the world's second largest producer of opium and a major source of methamphetamine and heroin. Human trafficking is reported (Organs, prostitution and so on).

Our small investor rating is **. Only very large companies can take advantage of the cheap natural resources through agreements (based on corruption) with the junta.

Business tourism: The capital Rangoon offers many tourist opportunities and notably very beautiful pagodas.

312-Lao

Introduction: Lao is a little country (5 million inhabitants). In the past it was a dependency of Siam (Today Thailand). With the French colonization, it was a border state between the British Burma (Myanmar) and the French Vietnam.

Politics: With the second war of Vietnam, communists took over the country and all the elite fled to the West. There is no political freedom but it does not seem to matter too much. However, constant conflicts are reported with the hmongs ethnic minority living in the mountains.

Economy: In 1986, the country just like Vietnam and Cambodia began to open to the world. It joined ASEAN. Despite this high growth rate, Laos remains a country with a primitive infrastructure. Subsistence agriculture accounts for half of GDP and provides 80% of total employment. As a result stats show that it's a very poor country: In 2003, the GNI per capita is $320 (Rank: 179 out of 208 countries). Taking in account the purchasing power parity method, the GNI per Capita reaches $1,730 (Rank: 170 out of 208).

In fact, Lao just like Myanmar is not poor or undeveloped. It is just a country out of the time. People are constantly smiling. There are no beggars. Consequently, it's a very attractive country for tourists (Notably Luang Prabang in the Highlands) and for backpackers since the cost of a living is very low: You get a full lunch for one dollar.

As in other communist countries, the bureaucracy enjoys a good life thank to grand corruption. In Vientiane ( Only 800,000 ), I attended an Halloween party: All the present lao own four wheels cars representing one salary life of ordinary people.

Our small investor guide is*-. I think that I too much indulge for this country due to its friendly population! With business eyes, it just merits a benign neglect.

Business tourism: Not too much things to visit in the capital Vientiane. Luang Prabang is the best local area but you need 3 days.

313-Cambodia

Introduction: Just like Laos, Cambodia was a French colony considered as a border state with the British Empire. It's mostly a jungle country with a fierce and primitive population (12 million inhabitants) poorly educated. It may explain the next story.

Politics: With the second war of Vietnam, the country became the theater of a dreadful genocide performed by the communist red Khmer's (Nearly two million people slaughtered in atrocious conditions). In 1978, a Vietnamese invasion defeated the red Khmer's and the 1991 Paris Peace Agreements mandated democratic elections and a cease fire. However, Some jungle spots of red khmer's insurgents subsisted until 1998.

Today, many people pay lip service and condemn genocide but we have to underline the following facts. Firstly, most of the Communist red khmer's leaders had been educated in France. Secondly, when they took the power, all the leftist and communist parties in Europe backed up the "Democratic Kampuchea": A famous French newspaper 'journalist was quite enthusiastic! Do not worry, this guy is now appointed in Washington! Thirdly, right now, the Communist red khmer's leaders have not been sentenced for their crimes. And surprisingly, nobody matters about that (Nor the UN, nor our intellectuals and human rights watchers): For example, the UN said that a Cambodian tribunal did not include sufficient safeguards to ensure independent trials. With the present delays, be sure that all the criminals will die in their bed!

Five years ago, visiting Cambodia, I saw many people mutilated and so on. Today, people say me that things are going better. Ok! I will only change my mind when communists red Khmer's leaders will be sentenced!

Economy: Economic growth has been largely helped by expansion in the clothing sector and tourism (Angkor temple). The population lacks education and productive skills, particularly in the countryside. Basic infrastructures are poor. Political instability and grand corruption discourage foreign investments. In 2003, the GNI per capita is $310 (Rank: 183 out of 208 countries). Taking in account the purchasing power parity method, the GNI per Capita reaches $2,060 (Rank: 159 out of 208). It's one of the lowest in the world.

Of course, I do not recommend this country for any investment. Clearly, our small investor rating is**

Business tourism: Angkor temple is a must but you need at least 3 days from the capital (Phnom penh).

314-Vietnam

Introduction: With 80 millions inhabitants, Vietnam is the most populated country in Indo-China. After the war, the communist rule extended to the South and it was the gulag and boat people era. The Communist government proved unable to feed people and Vietnam had to import rice. By 1986, the communists realized that they were going nowhere and began to open the country and to free the farmers from collective bureaucracy

Politics: The government maintains its commitment to economic liberalization. However, leaders are divided over the pace of privatization and market reforms. Moreover, privatization of large companies would rise the unemployment. As a result, only 79 of the firms slated for privatization were sold off by the first half of 2002.

Of course, Vietnam is not a free country but the communist grip on the day to day life of ordinary people is certainly weaker than by the past. Clearly, ordinary people seem very motivated and are constantly smiling.

Economy: As a result, the economy is now growing with a 6 to 7 growth rate, may be the higher in Asia after China. In 2003, the GNI per capita is $480 (Rank: 164 out of 208 countries). Taking in account the purchasing power parity method, the GNI per Capita reaches $2,490 (Rank: 149 out of 208). Today, a clerk earns $200 per month and a laborer about $100. Once again, you have to take notice that food is ten times cheaper than in Europe.

It is currently said that Vietnam is the next Asian tiger. The gross capital formation accounts for 35% of GNI. Despite the fact that it started from a very low level, with the current growth rate, it could reach 260 $Billion by 2030. Right now, Vietnam is a big rice and Shrimps exporter. Coal is extensively used for electric power. There are some oil in the Paracel islands ( Litigations with China). Garments factories are developed. Surprisingly, you do not observe decaying infrastructures like in Eastern Europe. The main factories inherited from the past are yet in function. Just like in other countries of the region, the economy more and more suffers of the Chinese competition.

Tourism is also on the increase. Hanoi (3 millions inhabitants) is a typical town with many old houses: Only the suburbs had been bombed during the war. The center is yet just as it was during the French period. Despite the leftist propaganda, Hanoi cannot be compared with the german towns completely destroyed during World War 2. ( On the other hand, the orange toxic used to defoliate the forests has still some ugly effects with many kids suffering from genetic handicaps). Hostels ruled by private sector have good standards.

Vietnam belongs to ASEAN. Many joint venture with big foreign firms contribute to the development. Due to bureaucracy and grand corruption among the communist ruling class, this country is not convenient for small firms. However Vietnam benefits of some sustainable assets: People work very hard (both clerks, laborers, and farmers). Right now 8 jobs out of 10 are in the private sector.

Clearly, I am confident and our small investor rating *- is expected to rise in a near future.

Business tourism: Close to Hanoi, the Halong bay is a beautiful area

315-Thailand

Introduction: Known as Siam until 1939, Thailand is the only Southeast Asian nation never colonized by an European country. With 63 million inhabitants, mainly Buddhists (Muslims only 3% of the population but big troubles running!) and a GNI reaching 158 $ Billion, Thailand is the main economic power in Indo-china.

Politics: Clearly, Thailand is a free country. The present Prime Minister is a President Bush's school fellow! Thailand is like a NATO country. The Thai army is trained by US special forces. Unfortunately, Thailand is currently facing armed violence in its five Muslim-majority southern provinces ( See above).

Economy: Each time I visit Bangkok, I am astonished by the constant modernization of the town (6 million inhabitants). New towers and Highways are constantly emerging. People work day and night!

Thailand has a free-enterprise economy and welcomes foreign investments. Textiles, fishery products, rice, rubber, jewelry, automobiles, computers and electrical appliances are the main exports. The high technology in percentage of manufactured exports attains 30 to 33% over the five late years .Thailand has recovered from the 1997-98 Asian Financial Crisis and the high tech crisis in 2001. Increased consumption and investment spending pushed GDP growth up to 7% in 2003.

A laborer earns $200 per month and an engineer about $600 per month. In 2003, the GNI per capita is $2,190 (Rank: 104 out of 208 countries). Taking in account the purchasing power parity method, the GNI per Capita reaches $7,450 (Rank: 87 out of 208). Food is about six times cheaper than in Europe. You get a full meal for 2 dollars! On the other hand, there is no pension for retired people and health care is provided by private insurances. Night workers on the building sites are paid on a day to day basis. Unemployment does not hit 5%. Since social revenues do not exist, most unemployed get a living in the informal sector.

The government has just taken a new measure: Every four years, civil servants are evaluated and can be fired due to a lack of competencies! In short, Thailand is a paradise for free entrepreneurship. Our small investor rating is ***

Business tourism: A world destination.

32-Singapore-Malaysia-Indonesia

321-Singapore

Introduction: Former British colony located on an island, Singapore became fully independent in 1965. With 4 million population (Chinese 80%, Indians 10%, Malays 10%). Singapore is a city state. Under a wise administration, the city became a technological hub and a world financial center competing with Hong Kong.

Politics: Singapore is a parliamentary regime. The main party constantly wins the elections. In our opinion, Singapore is a free country but many individual behaviors are firmly monitored. Decency is the rule. Laws against defamation may restrict the press and political rights (but it is more and more the same in a country like France!). Due to the neighborhood of Malaysia and Indonesia, the government remains committed to fight terrorism and notably al-Qaeda sympathizers.

Economy: Singapore looks like the Switzerland of Asia. The high technology in percentage of manufactured exports attains 60% over the five late years. As other economies, Singapore has endured an economic recession in 1997-98 and in 2001.

In 2003, the GNI per capita is $21,230 (Rank:29 out of 208 countries). Taking in account the purchasing power parity method, the GNI per Capita reaches $24,180 (Rank: 30 out of 208).

Our small investor rating is ****-

Business tourism: Only Business and shopping.

322-Malaysia

Introduction: Malaysia was founded in 1963 through a merger of the former British colony of Malaysia with the British colonies of Sarawak, Sabah, and Singapore (Singapore withdrew in 1965). The population (24 million with a growth rate of 2.1) is composed with malays (60%) and Chinese and Indians (40%). There are some indigenous population (100,000) in Sarawak (Borneo) and peninsular malaysia (Orang Asli).

Islam is Malaysia's official religion, but Buddhists, Christians, Hindus, Sikhs, and other religious minorities exist. The country was secular until now but Islamism is to day on a sharp increase.

Politics: Since 1957, a conservative Malay-based party (UMNO) was ruling the country. Since 1981, Mahatir was prime minister. Of course, he promoted the Muslim Malay interests but globally Malaysia was considered as a secular, and tolerant society.

Recently, Islamism began to grow amid the Malay population. As a result Mahathir declared Malaysia an "Islamic state" in 2000 to offset the progress of the islamic party (PAS). In 2002, the PAS attempted to introduce strict Sharia (Islamic law) and clearly disagree over the US-led war on terrorism. On the other hand, the government introduced an Internal Security Act (ISA) in order to control Islamic militants and members of the Malaysian Mujahideen Group (KMM). However, confronted with the islamic progress, Mahatir delivered hateful comments against the jews in october 2003. This scandalous fact attracted world attention over the real situation in Malaysia.

On the other hand, a policy of active discrimination gives many advantages to Malays (in fact to muslims) through quotas. Chinese and Indians have not the same access as Malays in many areas such as property ownership, higher education, civil service jobs. Chinese and Indians complain that they are considered as "second class" citizens. The problem is : How long, Chinese and Indians (40% of the population) will accept to be treated like dhimmis.

Economy: Malaysia is a big producer of raw materials: Tin, rubber, palm oil, petrol and so on. Between Kuala Lumpur (3,000,000) and Malacca, the highway goes on through an amazing green forest composed with palm oil and rubber trees. The density of trees per kilometer is certainly higher than in the previous rain forest. Environmentalists have not to worry about it!

From 1971, Malaysia transformed itself into an high tech economy (Notably electronics). The economy experienced the Asian financial crisis (1997-98) and then the high tech crisis in 2001. Today, Economy is recovering with a growth rate of 7% in 2004. The high technology in percentage of manufactured exports attains 60% over the five late years. However, the economy remains vulnerable to the competition of products made in China.

In 2003, the GNI per capita is $3,880 (Rank: 84 out of 208 countries). Taking in account the purchasing power parity method, the GNI per Capita reaches $8,940 ( Rank: 81 out of 208). A laborer earns $350 per month. The living is cheaper in Malaysia than in Thailand. For example, you can acquire a three rooms bungalow for only $15,000!

Despite active discrimination, Malays remain poorer than Chinese and Indians: Globally, Chinese are in business, Indians occupy professional jobs, and Malays are mainly present in civil services, low paid job and the military and police forces. Obviously this situation is not safe.

According to this diagnosis and despite the good economic results, our small investor rating is only *

Business tourism: From the capital Kuala Lumpur, you can easily visit Malacca and the cameron Highlands.

323-Indonesia

Introduction: Indonesia was a Dutch colony. It is the world's largest archipelago state and muslim country with 222 million inhabitants. Malays compose the main ethnic but there are also indigenous in Borneo, Sulawesi and Iranjaya. Despite the prevalence of Islam, Bali is a buddhist and Hindu island while East Timor was mostly Christian. East Timor finally got its independence.

Politics: After independence, indonesia was ruled by Sukarno and became the center of the no alignment movement with the Bandoung conference. Amid economic stagnation, the General Suharto, took the power in 1965 and waged a war against the communist party (500,000 people killed). After the Asian financial crisis, Suharto was replaced by a more democratic regime. Indonesia is today ruled by Megawati, the daughter of the republic's first president Sukarno.

Due to the religious and ethnic diversity, many separatist movements are active: In Aceh, an oil-rich province in northern Sumatra, in Kalimantan (Borneo), in Sulawesi (Celebes), and the Moluccas. Violence between christians and muslims, or between Chinese's and Malays occur frequently. The most worrying fact is the increase of Islamism (See above).

Freedom house ranks Indonesia as partly free. We have some reservations about this rating.

Economy: Indonesia has many raw materials and a cheap labor force. As other Southeast Asian countries, the economy registered a strong increase and the output grew by 7% per year between 1987 and 1996. Indonesia was perceived as a new "Asian Tiger" . Unfortunately, the financial crisis in 1997 occurred on a large scale. Due to bad investment, the weaknesses of the banking system and endemic corruption the crisis was very deep. Today economy has recovered but many political uncertainties (And notably, Islamism) maintain a poor climate for foreign investments. The gross capital formation only attains 16% in 2003 and the high technology in percentage of manufactured exports is one of the lowest in the region: On an average of 14% over the five late years.

In 2003, the GNI per capita attains $810 (Rank: 146 out of 208 countries). Taking in account the purchasing power parity method, the GNI per Capita reaches $3,210 (Rank: 141 out of 208). There is a large unequal development according islands end ethnics. Ethnic Chinese represent 3 % of the nation's population and hold about 70% of private wealth.

Due to the huge internal market and the cost of main power, our small investor's rating is *-. It could be downgraded in connection with new Islamic progress.

Business tourism: Bali, Lombok and the Sulawesi are far from Jakarta. For a short trip, favor Bali.

33-Philippines

Introduction: The Philippine archipelago is made up of 7,107 islands. It was discovered by Magellan and became a Spanish colony until 1898. Then, the Philippines were ceded to the US and only got independence in 1946. It is one of the world's largest Christian country with 87 million inhabitants (Roman Catholic 84%, Protestant 10%, Muslim 4%, Buddhist and other 2%).

In Manila, (17 million inhabitants) many people are from Spanish or American descent. It is not only a westernized country. Regarding habits and culture, it is a western country. For example, people use to dance the Rigodon and some other traditional European dances. The country has kept very strong links with the US. Mac Arthur is still a national hero. Many families have parents in Hawaii or California. Every people speak English. Spanish is not practiced anymore.

Politics: After the Ferdinand Marcos’s 14-year dictatorship, the country engaged a democratic process. The president is a woman Gloria Arroyo ( US-trained economist, and school fellow of President Clinton). Clearly, the philippines are today a free country. Filipinos enjoy most basic rights and can change their government through elections. Unfortunately, the inequalities are high. Moreover, just like in South America (Spanish inheritance?) corruption and tax evasion plague the economy.

The Philippine Government faces Muslim separatists in the South (See above). Thanks to Arroyo policy, the government called the US special forces, implemented tough law-and-order measures and set up a special police unit targeting kidnapping gangs.

Economy: Despite a high growth rate (An average of 4% per year and 6% in 2004) the income per capita does not increase to much because of the growth of population (2.1%). In 2003, the GNI

per capita attains $1,080 (Rank: 132 out of 208 countries). Taking in account the purchasing power parity method, the GNI per Capita reaches $4,070 (Rank: 125 out of 208).

The Republic of Philippines has a large agricultural sector (Sugarcane, coconuts, rice, corn, bananas, pineapples, fish, mangoes, pork, eggs, beef) and a good industry (electronics assembly, garments, footwear, pharmaceuticals, chemicals, wood products, food processing, petroleum refining). The high technology in percentage of manufactured exports attains 72 to 75% over the five late years. It is the highest score in South East Asia. However, the industry is handicapped by unprofitable public enterprises( Notably in the energy sector).

The main growing sector is the services with many private schools and universities and a large Real Estate sector targeting the retiree market. More and more foreigners are choosing to spend their retirement in this country (Friendly people, sun and sea, many festivals, good quality of life for people with money, low costs and so on: You can buy a 350 square meters villa for $40,000). Clearly, the Republic of Philippines offers many opportunities.

Unfortunately, there are many poor infrastructures and pollution is a plague especially in the Manila area. The Philippines' budget deficit prevents the government to invest in infrastructures ( Many jam traffic: 10 hours to make 350 km due to heavy traffic of colorful jeepneys and other slow vehicles)

Due to the internal market and the cost of main power, our small investor's rating is **+. You can get maximum business opportunities with minimum investment to do business and to earn!

Business tourism: Don't expect to visit many pagodas or to enjoy fine food like in Asia. The Republic of Philippines has an american way of life (Many fast food and Drive-in). In the capital, the Manila hostel ( The headquarter of Mac Arthur) remains the best. From Manila, you can easily visit a volcano region in a day trip. The rice terraces ( Listed by UNESCO as a marvel of the world) need 2 days trip. You can also join Boracay, a fascinating small island with its white beaches. Of course, prohibit any trip in the Mindanao due to islamic unrest, piracy and kidnapping habits.

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1-DIAGNOSIS 2-FROM ASIAN TO ISLAMIC VALUES 3-COUNTRY REVIEW

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www.cia.gov: Go to the "Worldfactbook"

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