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Essay Subject: Economic, industrial, govt. & political conditions affecting opportunities & risks in Indonesia, Philippines & Vietnam in general & in corrugated board packaging production. Tables.... More...

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Paper Abstract: Economic, industrial, govt. & political conditions affecting opportunities & risks in Indonesia, Philippines & Vietnam in general & in corrugated board packaging production. Tables. Paper Introduction: FOREIGN DIRECT INVESTMENT IN CORRUGATED BOARD PACKAGING PRODUCTION: AN ASSESSMENT OF INDONESIA, THE PHILIPPINES, AND VIETNAM Introduction The purpose of this research is to investigate the potential for foreign direct investment (FDI) in corrugated board packaging production in Indonesia, the Philippines, and Vietnam. Market size, market structure, the competitive environment, target country governmental policies toward FDI, and target country political, economic, social, and industrial environments are reviewed for each of the three countries. Indonesia Factors affecting FDI in Indonesia in corrugated board packaging ar Text of the Paper: The entire text of the paper is shown below. However, the text is somewhat scrambled. We want to give you as much information as we possibly can about our papers and essays, but we cannot give them away for free. In the text below you will find that while disordered, many of the phrases are essentially intact. From this text you will be able to get a solid sense of the writing style, the concepts addressed, and the sources used in the research paper. Tiglao, "Hit and Run," Far Eastern Economic Review 158 (2 April 1995): 21, 24. "Striking Contrasts." New Statesman & Society 7 (2 September 1994): S6-S1 .The World Bank. A 1993 law set the minimum membership fora union at 1 , , making organizing independent unions even moredifficult.[3 ]Country Risk Assessment The overall assessment of country risk for Indonesia is derivedthrough application of a checklist assessment procedure in which eachrelevant factor is assigned a numerical weight.[31] The overallassessment of country risk considers risk in the contexts of macropolitical, macro financial, micro political, and micro financial. [12]Asia, 134. Tariffs on imported paper board have been reduced up to 4 percent.This action has proved especially harmful to domestic producers. Hughes, "Why Have East Asian Countries Led EconomicDevelopment?" Economic Record 71 (March 1995): 89. One corrugated paper board producer located in Germany has a strongpresence in Indonesia.[8] That firm is BHS Corrugated Maschinen undAnlagenbau. The external debt situation in Indonesia remainscritical.Social Environment The life expectancy (at birth) rate in Indonesia 58 years.[24] Theliteracy rate is 77 percent.[25] Indonesia has one of the lower levels ofsocioeconomic well-being for the average person in Asia.[26]Industrial Environment Corrupt interconnections exist between government and industry inIndonesia. There are 32 operating paper board mills in the country. World Development Report, 1995. The overall assessment ofcountry risk for Vietnam is as follows: Risk Factor Factor Country Value Weight Rating _____ Macro political 1 3 3 Macro financial 1 3 3 Micro political 5 2 1 Micro financial 5 3 15 Overall score 85 A comparative overall assessment risk score for the United Stateswould be 245.[72] Thus, Vietnam's overall assessment of country risk scoreof 85 indicates that a significantly higher risk than that expected in theUnited States exists in the country. Madura, International Financial Management, 3rd ed. BibliographyAlbor, T., and Barnathan, J. Paper board productioncapacity is 12 , e tons. [53]The World Bank, 256-274. In addition to the adverse economic conditions,paper board continued to be confronted by the operating constraints of highenergy costs, an unreliable supply of electricity, tight credit and highinterest rates. The ASEAN Report, 1995, Vol. "Asia/Australasia." Pulp & Paper International 34 (July 1992): 77-89.Hughes, H. Hong Kong: Dow Jones Publishing Co., 1995.Asia 1995 Yearbook. [48]S. Paul, Minnesota: West Publishing Company, 1994.Marte, A. "Shaking Manila Out of Its Slumber." Business Week (31 October 1994): 64-65.Allen, T. There are 46 paper board mills in Indonesia.[7] Per capitaconsumption of paper board is 7.6 kg. The conclusion drawn with respect to market conditions is thatIndonesia, among the three countries investigated, offers the bestopportunities for FDI in a corrugated paper board production facility.Further, the conclusion drawn is that FDI investment in Indonesia is theonly strong opportunity available for a corrugated paper board producer inthese three countries in the mid-199 s. Tiglao, "Make A List," Far Eastern Economic Review 157 (28 July1994): 78-79. "The Philippines in 1993." Asian Survey 34 (February 1994): 139-146.Sender, H. The political environment within Indonesia remains turbulent. The Philippines,thus, intends to maintain a strong governmental presence in nationaleconomic management. Each of the five ASEAN countriesalso has its own industrial policy organization. Lee, C-y. Paul,Minnesota: West Publishing Company, 1994), 194. International Financial Management, 3rd ed. By mid-spring 1994, the Philippine economy was beginning to show signsof strength.[44] Gross national product (GNP) increased 4.8 percent in thefirst-quarter of 1994, while industrial output increased 7.7 percent.[45]By October 1994, price inflation in the Philippines had dropped to anannual rate of 7.8 percent.[46] By the first quarter of 1995, however, the Philippine economy hadbegan to emit mixed signals. Per capita consumption of paper board in Vietnam is 1. [26]The World Bank, 256-274. Tiglao, "That's Better," Far Eastern Economic Review 157 (11August 1994): 6 . Nocorrugated paper board producer has a strong marketing presence or anyproduction presence in The Philippines.Governmental FDI Policy The government of the Philippines welcomes FDI. Per capita consumption of corrugated paper board in the Philippines is9. Vietnam Factors affecting FDI in Vietnam in corrugated board packaging arereviewed in this section. Hirsch, "East Asia's Not-Yet-Emerging Markets," InstitutionalInvestor 27 (May 1993): 72. Agrarian land reform is a part of the distribution process in asociety. Paperboard production capacity in the Philippines is 577, tons. The Statesman's Year-Book, 1995-1996, 132nd ed. [32]Ibid. Albor and J. Paper boardproduction capacity is 12 , e tons. Brown, P.Picornell, H. "Indonesia." International Financial Statistics 48 (June 1996): 234-237.International Monetary Fund. (St. [67]Lee, 66. [37]Ibid. [36]M. For the same period, direct employment inthe industry increased from 8,4 to 33,2 people. [22]Calculated from data obtained from: International Monetary Fund,"Indonesia," International Financial Statistics 48 (June 1996): 234-237. Other developmentalrequirements total an equal amount. 2. Total investment in the P&P industry as a result of expansionincreased from US$148 million in 198 to US$2.3 billion in 199 while theaverage investment cost per annual ton of pulp and paper installed capacityincreased from US$375 to US$815. [31]J. [55]C. "Philippines." International Financial Statistics 48 (June 1995): 344-347.Lee, D. Should a strike break out,employers may call in the army. But they were not demanding more democracy but better livingconditions. [46]A. [27]H. New policies and regulations have also been issued governing tropicalforest use which limit log production and aim to protect the sustained useof the forest without destroying its other environmental functions. [43]T. On23 March, the Far Eastern Economic Review referred to the "surging economy"of the Philippines when touting the Ramos agenda of economic liberalizationand privatization.[49] One week later, the Far Eastern Economic Reviewstated that the numbers of Philippine workers abroad continues to grow astheir homeland's economy stagnates. The country risk for FDI in Indonesia in the mid-199 s is moderate-to-high. Tiglao, "Failure to Meet Need For Change," Far Eastern EconomicReview 151 (13 June 1991): 41-42. "Thai Venture Seeks Nod to Build Philippine Refinery." Journal of Commerce and Commercial 4 3 (27 February 1995): 4B.Riedinger, J. [2]Ibid. "Don't Knock Oz's Moves Toward Asia." Asian Business-Hong Kong (May 1994): 44-46.Gazard, D. With respect to the UnitedStates dollar, Indonesia's currency is permitted to float-within limits. [51]The World Bank, 256. [6 ]Madura, 194. The Ramos government has launched a plan to upgrade existing ports andto construct new ports.[55] This program will be carried out by thegovernment, which means that the government will continue to be deeplyinvolved in the economy of the Philippines. 242). Since 1986, when the Vietnamese Communists beganimplementing their economic restructuring (known as doi moi), Hanoi hasabolished most trade restrictions, decontrolled export and import prices,allowed market forces to play a larger role in determining the foreign-exchange rate, and taken steps toward privatizing production activity."[67]Social Environment Poor people are more interested in being able to purchase reliableproducts in the marketplace than in being able to vote for unreliablepoliticians at the polls.[68] "Vietnamese young people seem to paysurprisingly little attention to politics. B. Conclusions and Recommendations The Indonesian government promotes pulp and paper industrydevelopment. Martin's Press, 1995.International Monetary Fund. One corrugated paper board producer located in Germany has a strongpresence in Indonesia. The government is aiming for three million hectares of pulpwoodplantations by the year 2 , "with an expected yield of 3 [m.sup.3]/ha/yrand 7-8-yr rotation cycle for hardwood, and 15 [m.sup.3]/ha/yr with a 15-18-yr rotation for pine."[3] Economic development in the Asia/Pacific region is expected to remainhigh compared to other regions in the 199 s.[4] Paper consumption andtrade including corrugated board packaging is expected to grow rapidly andIndonesia is expected to gain a bigger share in those export marketstraditionally dominated by suppliers from North America and Scandinavia. In the ensuingyears, Ramos also relaxed trade and business regulation. (Ed.). No corrugated paper board producer has a strongmarketing presence or any production presence in Vietnam. In addition to the ASEAN Secretariat and the national industrialpolicy organizations, the Economic Council of the ASEAN Secretariat hasformed what are called industry clubs.[18] These industry clubs areassociations of industry participants in the various industries in theASEAN countries. Paper board operating rate is 72 percent. K., and Musa, Z. 2 percent in both Singapore and Malaysia.[48] One Asianeconomic journal managed both positive and negative assessments of economicperformance in the Philippines over a seven-day period in March 1995. The network of trade regulations appear to critics to be intended topromote the economic interests of a highly selective segment of theIndonesian population, as opposed to the promotion of the economicinterests of all Indonesians.Political Environment A threat to the country risk of Indonesia is the long simmeringdispute involving East Timor. Incentives formultinational countries to invest in the Philippines include only minorrestrictions on the remission of profits, and a commercial law governingdisputes that is based on the American model.Political Environment One of the many governmental initiatives proposed by the AquinoGovernment in the Philippines was one dealing with agrarian landreform.[36] The land-owning and land-controlling structure in thePhilippines was feudal in character. Paper consumption and tradeincluding corrugated board packaging is expected to grow rapidly andIndonesia is expected to gain a bigger share in those export marketstraditionally dominated by suppliers from North America and Scandinavia. Per capita consumption in Indonesia increased from 3.5 kg in 198 to7. [4 ]R. Theoverall assessment of country risk for the Philippines is as follows: Risk Factor Factor Country Value Weight Rating _____ Macro political 1 4 4 Macro financial 1 3 3 Micro political 5 4 2 Micro financial 5 4 2 Overall score 11 A comparative overall assessment risk score for the United Stateswould be 245.[61] Thus, the Philippines' overall assessment of countryrisk score of 11 indicates that a significantly higher risk than thatexpected in the United States exists in the country. [61]Ibid. Thus,any multinational firm contemplating FDI in the country must be prepared todeal with varying levels of political uncertainty if not instability.Although Indonesia seek FDI, the country's government exerts strongcontrols to preserve a strong Indonesian presence in both the managementand control of any enterprise operating within the country. [66]R. [19]S. [33]"1992: Mixed Fortunes For Pulp and Paper," Pulp & PaperInternational, 34 (February 1992):24. A. [2 ]D. [17]United Nations International Development Organization, RegionalIndustrial Co-operation (New York: United Nations, 1994), 1 . Thegovernment is supporting the development of industrial forest plantationson open grass-land and logged-over forest areas. Ching, "Asia's 'Sick Man' Recovering," Far Eastern EconomicReview 158 (23 March 1995): 38. Market, economic, political, and other factorsare addressed.Market and Competitive Factors The Indonesian government promotes pulp and paper industrydevelopment.[1] The pulp and paper (P&P) industry is one of the mostpromising sectors in the Indonesian economy, with a projected growth rateof 2 percent per year through 1996. In this respect,policies have been formulated to speed up the growth and development ofthis sector. Market, economic, political, and other factorsare addressed.Market and Competitive Factors Per capita consumption of paper board in Vietnam is 1. e kg.[62]There are 3 operating paper board mills in the country. [9]T. [14]Ibid. Hsu, P. Thus, amultinational firm that is unwilling to abide by the regulations imposed iswell advised to find another country in which to invest. The country's external debtis the equivalent of 45.3 percent of gross national product and 5 .6percent of gross domestic product. "Manila Rival Cebu Becoming Economic Powerhouse." Journal of Commerce and Commercial 4 2 (22 December 1994): 1A-2A.Quiambao, C. [7 ]M. Production has been further affectedby a reduction in import tariffs on many grades of paper and corrugatedpaper board. In addition to the adverse economic conditions, paper boardcontinued to be confronted by the operating constraints of high energycosts, an unreliable supply of electricity, tight credit and high interestrates. [49]F. [68]Lee, 64. Allen, (Ed.). Pilger, "A Class Act to Follow," New Statesman & Society 8 (3 June 1995): 22. [29]Ibid. The ASEAN member states as a group constitute a major market inAsia.[19] The removal of tariffs for interregional manufactured productswithin the ASEAN free trade area became effective in 1994.[2 ] Indonesia has a total external debt approximating US$38 billion.[21](International Monetary fund, 1995, p. "Asia's 'Sick Man' Recovering." Far Eastern Economic Review 158 (23 March 1995): 38.Feria, M. "You Ain't Seen Nothin' Yet." Asian Business-Hong Kong 31 (January 1995): 42-46.Niblett, R. Regional Industrial Co-operation. J. Other observers held, however, that fundamentalchanges in the country's economy had occurred that would lead to continuedeconomic growth.[47] Yet, the economic growth posted by the Philippines-15.1 percent GNP increase for all of 1994-paled by comparison with otherdeveloping economies in Asia-11.4 percent in the People's Republic ofChina, and 1 . Wang, "The Philippines," Beijing Review 36 (1 May 1993): 12. "Hit and Run." Far Eastern Economic Review 158 (2 April 1995): 21, 24.Tiglao, R. "The Philippines." Beijing Review 36 (1 May 1993): 12.Webb, B. Marcos' land reformefforts also included providing for himself and his family. [5]Ibid. [8]"At BHS, Corrugated Is What We Live For," Paperboard Packaging, 8 (April 1995): 76. Passow, "Political Freedom Spurs Strong Growth," InstitutionalInvestor 29 (March 1995): 4-7. The most significant of the monopolies remaining are inbanking and finance, steel, plastics, oil trading, insurance, foodstuffs,tourism, and telecommunications.[13] The monopoly creating regulations in Indonesia are called network oftrade regulation.[14] Critics of the monopoly regulation contend that itis stifling economic growth, causing increases in inflation andunemployment, and jeopardizing the country's massive foreign debt position. W. To reduce the country's dependence on oilexports, the Indonesian government is determined to promote the P&Pindustry as one of the major foreign exchange earners. The proposal for investment must demonstrate that theinvestment will lead to increased employment for Indonesian citizens. Martin's Press, 1995), 768. No corrugated paper board producerhas a strong marketing presence or any production presence in Vietnam.Governmental FDI Policy With respect to petroleum resources, Vietnam has extensiverequirements for the participation of foreign-based companies in itseconomic redevelopment (Asia/Pacific, 1995, pp. 1. Economic development in the Asia/Pacific region is expected to remainhigh compared to other regions in the 199 s. Misra, C.Phalajivin, A. Per capita consumptionof paper board is 7.6 kg. kg in 199 and is expected to be 12 kg by the year 2 . In addition to these developmentalrequirements, Vietnam is also desirous of developing its natural resourcebase. e kg. In the contemporary world, Philippine agriculture requires rapidmodernization if it is to remain competitive in the regional and worldeconomies.[37] The creation of competitive land holdings through agrarianland reform could be an effective means of dismantling the existing feudalland holding structure in the country. [59]C. [52]Hunter, 1 31. [16]Allen, 163. B., Hsu, C-y., Haugen, P., Misra, N. New policies and regulations have also been issued governing tropicalforest use which limit log production and aim to protect the sustained useof the forest without destroying its other environmental functions.[2] Thegovernment is supporting the development of industrial forest plantationson open grass-land and logged-over forest areas. This levelremains well below the average of neighboring developing countries. W. "Why Have East Asian Countries Led Economic Development?" Economic Record 71 (March 1995): 88-1 4.Hunter, B. K. [65]H. Vietnam's economy has a long way to go before it is a full-fledged private-enterprise system, but the movement toward the market isunmistakable. "Indonesian Bankers Have Made A Mess of Things." Far Eastern Economic Review 157 (1 September 1994): 72-73.Tiglao, R. [44]R. [28]B. Siddique, and Z. D., Phalajivin, C., Marcus, A., Mustecaplioglu, I., Ben-Torah, Y., Brown, C., Picornell, P., Siddique, H. Market, economic, political, and otherfactors are addressed.Market and Competitive Factors The general economic and political situation in the Philippines hashad an adverse effect on P&B demand.[33] Production has been furtheraffected by a reduction in import tariffs on many grades of paper andcorrugated paper board. (Hong Kong: DowJones Publishing Co., 1995), 95. Tiglao, "A Long Way To Go," Far Eastern Economic Review 157 (12May 1994): 28-29. Ben-Torah, C. Thus, while the economy of thePhilippines does seem to be performing better than in the recent past, thenagging worries exhibited for foreign investors does not appear to beparanoid. J. [57]R. [64]Ibid., 65. St. [45]R. "Political Freedom Spurs Strong Growth." Institutional Investor 29 (March 1995): 4-7.Pilger, J. A failure to implementeffective agrarian land reform is a major barrier to economic development.Prior land reform efforts in the Philippines have been high profilegovernmental efforts, but they have been short in substance, and high inrhetoric. [42]J. "Make A List." Far Eastern Economic Review 157 (28 July 1994): 78-79.Tiglao, R. R. [1 ]Asia 1995 Yearbook (Hong Kong: Far Eastern Economic Review, 1995),114. [35]Ibid. Thereare 3 operating paper board mills in the country. Vietnam's premier natural resource is its undeveloped petroleumreserve which lies under the country's offshore waters. "ASEAN Common Tariffs." Journal of Commerce (29 April 1994): 5A.Hirsch, M. e kg. These reserves arethought to be both extensive and rich. Mustecaplioglu, Y. East Timor is not the first time in which the Suharto governmenthas resorted to mass extermination. "Demand Outpaces Supply." Institutional Investor 29 (March 1995): 16-17.Passow, S. [11]Allen, 57. The general economic and political situation in the Philippines hashad an adverse effect on P&B demand. [34]Hoshino, et al., 84. [24]Ibid., 256. BHS, however, does not have production facilities locatedwithin Indonesia.Governmental FDI Policy The emphasis in development in Indonesia is toward state participationin enterprise.[9] Indonesia also maintains a requirement for domesticparticipation in any enterprise involving foreign investment.Specifically, a 51 percent indigenous equity position is required in anyenterprise involving foreign investment, and Indonesian nationals must beaccorded meaningful managerial responsibilities in the operation of theenterprise.[1 ] Other requirements for direct foreign investment inIndonesia include the following: 1. Paper board operating rate is 72 percent. In the mid-198 s, there were well over2 such government protected monopolies. BHS, however, does not have production facilities locatedwithin Indonesia. [38]R. In anticipation of Aquino's land reform proposal,plantation owners actively attempted to place their properties in the handsof American multinational companies in the hope that Philippine dependenceupon the United States government, and multinational company pressure onthe American government would effectively kill agrarian land reform. Barnathan, "Shaking Manila Out of Its Slumber,"Business Week (31 October 1994): 64-65. Marte, "You Ain't Seen Nothin' Yet," Asian Business-HongKong 31 (January 1995): 42-46. [56]R. Riedinger, "The Philippines in 1993," Asian Survey 34 (February1994): 139-146. [15]J. In this respect,policies have been formulated to speed up the growth and development ofthis sector. New York: Oxford University Press, 1995.----------------------- [1]S. 5 -53). [3]Ibid. The 165monopolies being terminated, however, account for less than two-percent ofthe countries total imports, while those permitted to remain account for63.3 percent. The industrial policy organization for the ASEAN nations as a group isthe Economic Bureau of the ASEAN Secretariat.[17] The Economic Bureaufunctions through five separate committees, each of which exercisesassociation industrial policy development responsibilities in a separatearea. Withthe country's huge domestic market of 18 million people, an increase inper capita consumption of one kg/yr will support a 18 , -ton/yr papermill. Market size, market structure,the competitive environment, target country governmental policies towardFDI, and target country political, economic, social, and industrialenvironments are reviewed for each of the three countries. To reduce the country's dependence onoil exports, the Indonesian government is determined to promote the P&Pindustry as one of the major foreign exchange earners. FOREIGN DIRECT INVESTMENT IN CORRUGATED BOARD PACKAGING PRODUCTION: AN ASSESSMENT OF INDONESIA, THE PHILIPPINES, AND VIETNAM Introduction The purpose of this research is to investigate the potential forforeign direct investment (FDI) in corrugated board packaging production inIndonesia, the Philippines, and Vietnam. e kg.[35] There are 32 operating paper board mills in the country.Paper board production capacity in the Philippines is 577, tons. There are 46 paper board mills in Indonesia. Fitzgerald, "Don't Knock Oz's Moves Toward Asia," AsianBusiness-Hong Kong (May 1994): 44-46. Niblett, "The Balance of Trade," Management Today (December1995): 75. Hunter, (Ed.), The Statesman's Year-Book, 1995-1996, 132nd ed.(New York: St. Infrastructurerequirements alone total more than $2 billion. An important aspect of financial regulation in Indonesia involves thepermission of monopolistic enterprise.[12] Monopolies are permitted(created) by government regulation in Indonesia in a wide variety ofindustries and economic activities. [58]C. Students in several colleges inHo Chi Minh City and Hanoi have organized some small protests in recentyears. Musa, "Asia/Australasia," Pulp & PaperInternational 34 (July 1992): 81. [62]Hoshino, et al., 82. The industry clubs provide input to the industrial policyorganizations-both regional and national. New York: United Nations, 1994.Wang, C. kg in 199 and is expected to be 12 kg by the year 2 .[6] This levelremains well below the average of neighboring developing countries. [4]Ibid. Per capita consumption of corrugated paper board in the Philippines is9. [54]The World Bank, 24 . Quiambao, "Manila Rival Cebu Becoming Economic Powerhouse,"Journal of Commerce and Commercial 4 2 (22 December 1994): 1A-2A. [39]C. Tiglao, "That's Better," Far Eastern Economic Review 157 (11August 1994): 6 . Theoverall assessment of country risk for Indonesia is as follows: Risk Factor Factor Country Value Weight Rating _____ Macro political 1 3 3 Macro financial 1 3 3 Micro political 5 3 15 Micro financial 5 4 2 Overall score 95 A comparative overall assessment risk score for the United Stateswould be 245.[32] Thus, Indonesia's overall assessment of country riskscore of 95 indicates that a significantly higher risk than that expectedin the United States exists in the country. Paper board production capacity is 2,374, tons. "That's Better." Far Eastern Economic Review 157 (11 August 1994): 6 .United Nations International Development Organization. A distribution crisis occurs when there is a rapid increase inthe popular demand for material benefits, together with a wide acceptanceof the notion that governments are responsible for a country's standard ofliving. [13]Ibid. [63]D. Sender, "Indonesian Bankers Have Made A Mess of Things," FarEastern Economic Review 157 (1 September 1994): 72-73. Paper board production capacity is2,374, tons. [69]Ibid. Through these stateprograms, large areas of non-productive land will be converted intoproductive forest which in the future will contribute significantly to thesupply of raw materials to the industry. The pulp and paper industry is one of the most promisingsectors in the Indonesian economy, with a projected growth rate of 2 percent per year through 1996. [6]Ibid. The Indonesian Investment Coordination Board has approved 36 newprojects for expansion and new investments in pulp and paper.[5] If allthe projects currently under construction or in an advanced planning stagego ahead, paper capacity will increase from 1.7 million tons in 199 to 5.1million tons by the year 2 , and pulp capacity will rise from one milliontons to 3.8 million over the same period. These five areas are industry, minerals, and energy, food,agriculture, and forestry, finance and banking, transportation andcommunications, and trade and tourism. Aquino's predecessor, Ferdinand Marcos publicly pushed for landreform; however, his initiatives were primarily aimed at preserving thestatus of the Philippine wealthy, and the rewarding of his own associates,and his supporters in the country's military forces. [41]Hunter, 1 91. [25]B. Preferential economic and financial rewards for the family ofPresident Suharto and the president's associates characterize theserelationships.[27] In Indonesia, "exceptionalism" has been codified as pancasila, asystem meant to promote industrial peace and economic success.[28] TheManpower Ministry sets wage levels based on "minimum physical needs."[29]Strikes are prohibited, and all unions must affiliate to the government-controlled All Indonesian Workers' Union. Profit repatriation is permitted on foreign investments inIndonesia.[11] With the 51 percent indigenous equity requirement, however,a maximum of 49 percent only of profits is permitted to be repatriated.Profits are permitted to be repatriated at the prevailing internationalcurrency exchange rate which is applicable. The failure of successivePhilippine governments to implement effective agrarian land reform hasprovided a strong basis of support among the country's rural population forthe communist insurgents.[38] The Ramos government has largely ignoredland reform, however, while concentrating on industrial policy.[39]Economic Environment The failure of the Philippine economy to provide intensive growth inthe 198 s was widely attributed to a failure by the government of the dayto meet the need for change.[4 ] The national economic development planfor the 1987-1992 period called for an average annual growth rate of 6.8percent; an objective that was not attained.[41] A revised developmentplan was introduced by President Ramos in 1993.[42] The focus of this planwas on the privatization of public sector industries, and the developmentof a solution to the country's energy supply problem. [47]S. ... These phenomena have been described as the revolution of risingexpectations, and the extreme optimism of these attitudinal revolutionarieshas been increasingly demonstrated in recent years. Although the country had paid off (or hadforgiven) a great deal of the external debt that had been crushing attemptsat economic growth, foreign investors began to fret that the Philippineswould be the next Mexico. For this reason, the surest means to democracy inVietnam, oddly enough, seems to be the Communist Party."[69]Industrial Environment Vietnam already "has clamped down on the Wild West atmosphere thatreigned in the first years of doi moi, or renovation .... "Aquino's New Economic Agenda." South, (March 1989): 54-56.Fitzgerald, S. Thisreform is the only path to prosperity for the Vietnamese people, andprobably the quickest path to a Vietnamese government that is democratic athome and forthright in its dealings with the rest of the world."[64]Economic Environment Vietnam is only now beginning to emerge from a central planningstraight jacket.[65] Annual per capita income in Vietnam is onlyUS$22 .[66] Communist leaders in Vietnam have elevated economic growth totop priority. "Expecting Big Growth in Trade." Journal of Commerce and Commercial 4 1 (16 August 1994): 7B.Quiambao, C. Quiambao, "Expecting Big Growth in Trade," Journal of Commerceand Commercial 4 1 (16 August 1994): 7B. "A Class Act to Follow." New Statesman & Society 8 (3 June 1995): 22-23.Quiambao, C. Further, the external debt of Indonesiais the equivalent of 192.7 percent of the country's exports and 43 .1percent of Indonesia's net exports.[22] Of Indonesia's total external debt, 85 percent represents either loansto the Indonesian government entities, or is debt that is guaranteed by thegovernment.[23] The remaining 15 percent of the country's externalrepresents loans to private sector entities that is not guaranteed by theIndonesian government. [3 ]Ibid., S1 . 1. "The Balance of Trade." Management Today (December 1995): 74- 77."1992: Mixed Fortunes For Pulp and Paper." Pulp & Paper International, 34 (February 1992):22-27.Passow, S. Under pressure from The WorldBank, the government agreed to end 165 of these monopolies. [21]International Monetary Fund, "Indonesia," International FinancialStatistics 48 (June 1996): 235. Vietnam's country risk assessmentrating, therefore, is high. "Failure to Meet Need For Change." Far Eastern Economic Review 151 (13 June 1991): 41-42.Tiglao, R. R. Gazard, "ASEAN Common Tariffs," Journal of Commerce (29 April1994): 5A. Per capita consumption in Indonesia increased from 3.5 kg in 198 to7. Quiambao, "Thai Venture Seeks Nod to Build PhilippineRefinery," Journal of Commerce and Commercial 4 3 (27 February 1995): 4B. "Private-Enterprise Communism." Society 32 (January-February 1995): 64-68.Madura, J. 3. The Philippines Factors affecting FDI in the Philippines in corrugated board packagingare reviewed in this section. The proposal for investment must demonstrate that a transferof technology will occur. [23]The World Bank, World Development Report, 1995 (New York: OxfordUniversity Press, 1995), 247. Passow, "Demand Outpaces Supply," Institutional Investor 29(March 1995): 16-17. The proposal for investment must demonstrate that productsand services required for the functioning of the proposed venture will beacquired from Indonesian sources to the extent that such products andservices are available in Indonesia. Hoshino, C. Through these stateprograms, large areas of non-productive land will be converted intoproductive forest which in the future will contribute significantly to thesupply of raw materials to the industry. [18]Ibid. Indonesia Factors affecting FDI in Indonesia in corrugated board packaging arereviewed in this section. "A Long Way To Go." Far Eastern Economic Review 157 (12 May 1994): 28-29.Tiglao, R. Feria, "Aquino's New Economic Agenda," South, (March 1989): 54-56. Marcus, I. Nocorrugated paper board producer has a strong marketing presence or anyproduction presence in The Philippines. Haugen, N. Hong Kong: Far Eastern Economic Review, 1995."Asia/Pacific Ethylene Capacity to More Than Double By 2 ." Oil and Gas Journal 93 (8 May 1995): 5 -53."At BHS, Corrugated Is What We Live For." Paperboard Packaging, 8 (April 1995): 76.Ching, F. Tariffs on imported paper board have been reduced up to 4 percent.[34] This action has proved especially harmful to domesticproducers. Over the years, the Indonesiangovernment under Suharto has exterminated approximately one millionIndonesians.[15]Economic Environment One of the more significant historic events influencing country riskin Indonesia was the creation of the Association of Southeastern AsianNations (ASEAN) of which Indonesia was a charter member and is a currentmember.[16] ASEAN is a regional economic development organization that iscomposed of five members: Indonesia, Malaysia, the Philippines, Singapore,and Thailand. (Ed.). Webb, "Striking Contrasts." New Statesman & Society 7 (2September 1994): S9. D. Other regions also have benefited from thepolicy.[59]Country Risk Assessment The overall assessment of country risk for the Philippines is derivedthrough application of a checklist assessment procedure in which eachrelevant factor is assigned a numerical weight.[6 ] The overallassessment of country risk considers risk in the contexts of macropolitical, macro financial, micro political, and micro financial. That firm is BHS Corrugated Maschinen undAnlagenbau. The government introduced avalue-added tax to support infrastructure development.[56] The Ramosgovernment also has launched the "Flagship Program" of 32 venture and 82separate projects as a part of an industrial policy.[57] The total cost ofthis program is estimated at US$13.6 billion, of which US$8 billion isslated to be funded by the private sector, with the remaining US$5.6billion funded by the government of the Philippines. "East Asia's Not-Yet-Emerging Markets." Institutional Investor, 27(5)(May 1993): 71-76.Hoshino, S., Lee, C. The government of the Philippines offered tax incentives to foreigncorporation that invested in the island of Cebu.[58] The policy hasproduced economic growth in Cebu that has surpassed the rate of growth forthe national economy. In countries like Vietnam, political democracy may be a luxurythat takes root far more securely in a prosperous economy than in animpoverished one. External debt, however, has been reduced from a high ofapproximately US$28 billion to less than US$8 billion.[5 ]Social Environment The life expectancy (at birth) rate in the Philippines 65 years.[51]The literacy rate is 89 percent.[52] The Philippines has one of the lowerlevels of socioeconomic well-being for the average person in Asia.[53]Industrial Environment Almost one-half of all workers in the Philippines continue to beemployed in agriculture.[54] Agriculture continues to account for almostone-quarter of the country's GNP. It's becomingvery tightly regulated and overbureaucratized."[7 ]Country Risk Assessment The overall assessment of country risk for Vietnam is derived throughapplication of a checklist assessment procedure in which each relevantfactor is assigned a numerical weight.[71] The overall assessment ofcountry risk considers risk in the contexts of macro political, macrofinancial, micro political, and micro financial. A failure to resolve this dispute and afailure by the Indonesian government to cease its violent politicalrepression in the East Timor area could compromise Indonesia's economicfuture. New York: St. [71]Madura, 194. The ASEAN Report, 1995, Vol. Lee, "Private-Enterprise Communism," Society 32 (January-February 1995): 64. Indonesia's country riskassessment rating, therefore, is moderate-to-high. A. The Philippines'country risk assessment rating, therefore, is moderate-to-high. [7]Ibid. Withthe country's huge domestic market of 18 million people, an increase inper capita consumption of one kg/yr will support a 18 , -ton/yr papermill. [5 ]International Monetary Fund, "Philippines," InternationalFinancial Statistics 48 (June 1995): 344-347. Leases for development in Vietnam'soffshore oil reserves have already been signed with 1 non American oilcompanies-including companies from Japan.Political Environment Vietnam's political regime remains closed, undemocratic, andinsensitive to Western concern over basic human rights.[63] "TheVietnamese Communists are intent on promoting free-market reform. [72]Ibid. Foreigncorporations, as an example, are now permitted to own up to 1 percent ofthe equity in Philippine companies.[43] The Ramos government in the mid-199 s is moving toward diversifying the country's economy. Huge plantations continued to exist,and most attempts at meaningful land reform were met by resistance from theland owners, often with the armed assistance of members of the country'smilitary forces. If this paper is not what you are looking for, you can search again: Search for: or Click here to request an essay written just for you.