Erudite Risk

India has terminated a nearly five-year trans-shipment agreement that allowed Bangladeshi export cargo to move to third countries through Indian airports and ports. The decision, effective April 8, 2025, was made amid escalating tensions between India and Bangladesh following controversial remarks by Bangladeshi interim government chief Muhammad Yunus regarding economic opportunities tied to the geographical isolation of India's northeastern states. The Ministry of External Affairs attributed the termination to significant congestion at Indian transport facilities, which adversely affected India's export capabilities and created logistical challenges. The trans-shipment facility, initiated in June 2020, enabled Bangladesh to channel export cargo through Indian customs to destinations in Europe and West Asia. Randhir Jaiswal, spokesperson for the External Affairs Ministry, explained that the removal of the arrangement was necessary to alleviate backlog issues at airports and ports. He clarified that this change would not affect Bangladeshi exports to Nepal and Bhutan, which can still utilize Indian territory under the World Trade Organization's Trade Facilitation Agreement. The diplomatic relationship between the two nations has been deteriorating, particularly since the ousting of former Bangladeshi Prime Minister Sheikh Hasina. India has shown growing concern about the treatment of minorities in Bangladesh, noting violence against them during discussions between Prime Minister Narendra Modi and Yunus at the Bimstec Summit in Thailand. Yunus's remarks in China, suggesting that India’s northeastern region could rely on Bangladesh for maritime access, appeared to exacerbate tensions further, prompting Modi to assert the region's significance in regional connectivity plans. #AsiaRisk #GeopoliticalConflictandDisputes #India https://lnkd.in/giEXWvi2

The government is set to introduce new legislation to regulate online gambling and betting platforms, aiming to combat fraudulent practices and enhance the legal gaming sector, announced Home Minister G Parameshwara. A committee of senior officials and industry stakeholders has been formed to draft the proposed law, with a month allocated for the draft’s completion. The new legislation will mirror regulatory models like that used in Chhattisgarh, which distinguishes between gambling and skill-based gaming. IT and BT Minister Priyank Kharge emphasized that the proposed law aims to prohibit games of chance while fostering innovation in skill-based gaming. The initiative seeks to protect consumers from financial fraud and exploitation, ensuring the growth of the legitimate gaming industry, which, in India, is valued at $4 billion and supports over 150,000 jobs. Karnataka plays a crucial role in the sector, accounting for 25% of the market and generating 1,350 crore in annual taxes. Kharge raised concerns about the increasing prevalence of illegal and offshore betting operations, which pose significant risks, including financial fraud and cybercrime. Despite existing bans on certain online betting platforms, illegal usage continues, with many operators based abroad. He highlighted the need for stronger enforcement of current laws and improved mechanisms to safeguard consumers against these illegal platforms, stressing the importance of banning unlawful activities while working on regulating legal avenues. #AsiaRisk #Regulation #India https://lnkd.in/g7xdst3v

New regulations on health insurance for the military and police from July 1, 2025 The Government has issued Decree No. 74/2025/ND-CP, which revises and supplements certain articles of Decree No. 70/2015/ND-CP regarding health insurance for military personnel and police forces. Effective from July 1, 2025, the decree outlines health insurance participants under the Ministry of National Defense, including active military officers, professional soldiers, non-commissioned officers, and military cadets, as well as certain reserve officer trainees and foreign military cadets receiving allowances. Similar provisions apply for personnel under the Ministry of Public Security, covering a range of officers and cadets. New regulations also include provisions for individuals working in cryptography, such as personnel at the Government Cipher Committee and associated institutions, both for Vietnamese and foreign cadets. The monthly health insurance contribution rate is set at 4.5% of the monthly salary for those specified categories, while other participants will contribute at the same rate based on a prescribed reference level. The Decree will take effect on July 1, 2025, with select provisions commencing earlier on January 1, 2025. #AsiaRisk #Regulation #Vietnam https://lnkd.in/g32bZx5G

Beware of NPL Pressure if Global Interest Rates Remain High Chief Investment Officer for North Asia Bank DBS, Yeang Cheng Ling, has cautioned that persistently high global interest rates could exacerbate the pressure on non-performing loans (NPLs) and the micro, small, and medium enterprise (MSME) sector, particularly in Indonesia. He highlighted the risk associated with uncertain global central bank policies, especially those from the United States. Yeang noted that the ongoing strain could further deteriorate asset quality and the resilience of business actors if these conditions persist. Yeang emphasized that developing countries like Indonesia, which have a significant number of MSMEs heavily reliant on bank financing, are particularly vulnerable to these pressures. He pointed out that low foreign interest in developing country bonds adds another layer of pressure on the market. DBS Bank Senior Investment Strategist Daryl Ho remarked that foreign ownership of Indonesian bonds is notably below historical averages, as global investors currently favor dollar-denominated assets due to global uncertainty and high U.S. bond yields. This situation results in high funding costs for developing nations, further burdening MSMEs reliant on loans. Joanne Goh, another Senior Investment Strategist at DBS Bank, characterized the current environment as posing multiple challenges for countries like Indonesia. She stated that maintaining exchange rate stability, supporting economic growth, and ensuring fiscal health simultaneously is crucial. Goh warned that prolonged high interest rates would likely impact debt performance and increase fiscal pressures on MSMEs and the broader economy. #AsiaOperations #FinancialSystemProblems #Indonesia https://lnkd.in/gzKAX4X4

Japan's annual diplomatic report, the Diplomatic Bluebook 2025, highlights the growing security threat posed by the People's Republic of China (PRC) and emphasizes the critical importance of peace and stability in the Taiwan Strait. Presented by Minister of Foreign Affairs Iwaya Takeshi, the report underscores the challenging international situation, particularly the heightened security concerns in East Asia stemming from China's military activities near Japan. The report expresses serious concerns regarding China's attempts to unilaterally alter the status quo in the East China Sea, especially around the Japan-controlled Senkaku Islands, and includes alarming instances of military cooperation between China and Russia. Notably, military aircraft from both nations have entered Japanese airspace over the past year, raising tensions in the region. Additionally, the PRC's coercive maneuvers in the South China Sea and military exercises around Taiwan are highlighted as major threats to regional stability. The importance of peace and stability in the Taiwan Strait is portrayed not only as vital for Japan’s security but also as a cornerstone for international stability. The report references G7 foreign ministers' meetings since 2021, which have reaffirmed the need for peaceful resolution of cross-strait issues. It also includes a joint statement from a meeting between US President Donald Trump and Japanese Prime Minister Shigeru Ishiba, emphasizing mutual interests in maintaining peace and opposing unilateral attempts to change the status quo. The 2025 edition notably integrates key events from early this year to address ongoing developments in international relations. #AsiaRisk #GeopoliticalConflictandDisputes #Taiwan https://lnkd.in/gdZ87twJ

U.S. President Donald Trump informed South Korea's acting president Han Duck-soo on April 8, 2025, of his plan to bundle negotiations concerning trade, tariffs, and defense cost-sharing into a single comprehensive agreement, referred to as "ONE STOP SHOPPING." This new approach raises questions about the viability of the Special Measures Agreement (SMA), which was recently finalized in October 2024, outlining South Korea's financial contributions for hosting U.S. troops through 2030. Trump's recent tariff decisions have already strained the U.S.-Korea Free Trade Agreement (KORUS FTA), prompting concerns that the SMA might also be compromised. Analysts have advised South Korea to adopt a broad and strategic negotiating stance, balancing concessions with the need to secure meaningful benefits. With Trump keen on early diplomatic victories, a cohesive deal might take precedence over detailed negotiations. Key figures, such as former deputy foreign minister Yoon Kang-hyun, suggest that a comprehensive package deal would be more effective under Trump compared to a fragmented approach, urging trade officials to prioritize the preservation of the KORUS FTA during discussions. In Seoul, there is growing consideration to integrate defense cost-sharing discussions with broader trade and tariff negotiations. Suggestions include potentially covering the full costs of U.S. forces in South Korea in exchange for stronger U.S. security guarantees. This could serve as a strategic model for Trump to influence NATO allies regarding defense spending. Former foreign minister Yu Myung-hwan indicated that significant concessions, such as covering 100% of troop costs, could lead to advantages in U.S. commitments and regional policy, including the revision of the bilateral nuclear agreement that would grant South Korea greater autonomy over uranium enrichment. Choi Kang, president of the Asan Institute for Policy Studies, emphasized that negotiations should focus on the strategic purpose of the U.S. presence in South Korea amid rising tensions with China. He cautioned against concentrating solely on financial aspects, as this could overshadow the fundamental purpose of reinforcing the U.S.-Korea alliance. U.S. Treasury Secretary Scott Bessent revealed that Trump intends to personally oversee the negotiations on tariffs and trade, while White House spokesperson Karoline Leavitt noted that troop deployments could also be linked to trade discussions. Under the current SMA, South Korea is set to increase its contribution for hosting U.S. troops by 8.3% to approximately 1.13 billion USD by 2026. #AsiaRisk #NorthKorea #SouthKorea https://lnkd.in/gVyMJZ8z

Kim Yo Jong, sister of North Korean leader Kim Jong Un, has ridiculed the United States and its regional allies for their aspirations to denuclearize North Korea, labeling it a "daydream." She firmly stated that North Korea will not abandon its nuclear weapons program, emphasizing that such discussions are hostile acts that undermine the country's sovereignty. Her remarks followed a recent meeting of U.S., South Korean, and Japanese diplomats reaffirming their commitment to North Korea's denuclearization. She stated that North Korea's nuclear goals are constitutionally enshrined and cannot be reversed by external pressures. The situation has heightened tensions in the region as Kim's government showcases its military capabilities and strengthens ties with Russia amid the Ukraine conflict. Ignoring calls for denuclearization talks from Seoul and Washington, North Korea's strategy now appears focused on its relationship with Russia, potentially receiving military support in exchange for arms supplies. Kim's sister's comments were made shortly after a border incident where South Korea fired warning shots at North Korean soldiers who crossed the military demarcation line but retreated when warned. In related diplomatic matters, U.S. President Donald Trump indicated his willingness to re-engage with Kim to revive stalled talks, though North Korea has not since responded. Past negotiations between the two leaders collapsed over disputes regarding sanctions and nuclear program reductions. Meanwhile, concerns persist in South Korea regarding potential demands from Trump for increased financial contributions for the U.S. military presence in the country. #AsiaRisk #NorthKorea #SouthKorea https://lnkd.in/gQtnXDt9

Japan has reported a significant increase in whooping cough cases, with 4,771 instances documented in the first three months of 2025, already surpassing the total of 4,054 from the entire year of 2024. The Japan Institute for Health Security highlights the urgency of caution, especially for infants who are at a heightened risk for serious complications. The regions most affected include Osaka, Niigata, Tokyo, Okinawa, Hyogo, Fukuoka, and Miyazaki. Whooping cough, or pertussis, is caused by the Bordetella pertussis bacterium and spreads through droplets from coughs and sneezes. Initial symptoms resemble a common cold, but can escalate to severe coughing fits lasting weeks. Most patients eventually recover, though the total number of cases had previously dropped significantly following the COVID-19 pandemic, which enforced greater hygiene practices. Infants are particularly vulnerable to whooping cough, facing increased risks of severe complications such as pneumonia and neurological disorders. Their symptoms may not always include coughing; instead, they can experience life-threatening apnea and seizures. Vaccination, which is recommended in four doses starting at 2 months of age, remains the most effective preventive strategy, although waning immunity is a concern, as vaccinated individuals can still contract milder forms of the illness. Experts warn that reduced immunity in the general population, stemming from a lack of recent outbreaks, may lead to further spread, especially among vulnerable infants. Preventive measures such as regular handwashing, wearing masks, and vaccinating children on schedule are emphasized. Parents are urged to seek medical assistance if their child develops a significant or persistent cough to mitigate the risk of severe disease. #AsiaRisk #EpidemicsandPandemics #Japan https://lnkd.in/g2PCB9YU

Trump Sets High Tariffs, Industry Players Can't Immediately Stop Exports to US The reciprocal import tariff imposed by US President Donald Trump on several countries, including Indonesia, went into effect on April 9, 2025. Indonesia faces a tariff of 32 percent, which poses a significant challenge as the US is the primary export destination for industrial players in Central Java. In 2024, Central Java's non-oil and gas exports reached 10.76 billion US dollars, with 4.47 billion US dollars coming from exports to the US. Key sectors affected include footwear and garments. Despite the high tariffs, export-oriented businesses in Central Java are unable to cease marketing their products to the US immediately due to pre-existing contracts with American buyers. Sakina Rosellasari, Acting Head of the Central Java Industry and Trade Service, emphasized that while the impact of the tariffs is not yet fully realized, there is a need for industry players to diversify their markets beyond the US to mitigate potential adverse effects. Sakina expressed the hope that by expanding to other markets, industrial activities in Central Java could remain robust despite tariff challenges. She noted that continued investment in the region is essential, as it had increased by about 14 percent in 2024. This sustained investment can contribute to job creation, helping to prevent layoffs as a consequence of the new tariffs. #AsiaRisk #Regulation #Indonesia https://lnkd.in/gVxGnyr3

Kim Yo-jong, the deputy director of the propaganda department of the Workers Party of Korea and sister of North Korean leader Kim Jong-un, dismissed the concept of denuclearization as a "dead concept" in a recent statement. She argued that attempts by South Korea, the United States, and Japan to revive the idea amount to a denial of North Korea's sovereignty and a threat to its constitutional framework. Her comments followed a joint statement from the three nations reaffirming their commitment to North Korea's complete denuclearization in line with UN Security Council resolutions. Kim Yo-jong's statement reflects North Korea's longstanding rejection of denuclearization efforts, indicating a hardline stance amid renewed calls for disarmament, particularly in the context of Donald Trump’s second presidency. Experts interpret her involvement in the response as a strategic move by Pyongyang to assert its position more forcefully, especially as the region faces intensified diplomatic pressures. Analysts highlight that North Korea's nuclear status is closely linked to national sovereignty and stability, ultimately framing any denuclearization attempts as hostile. In reaction to Kim's remarks, the South Korean Ministry of Foreign Affairs reiterated its commitment to achieving North Korea’s denuclearization, emphasizing that this goal is a shared objective of the international community supported by multiple UN Security Council resolutions. The ministry called on North Korea to halt its nuclear and missile development activities, which it viewed as threats to peace and security in the region, urging a return to a path of dialogue and negotiation. #AsiaRisk #NorthKorea #SouthKorea https://lnkd.in/gnZBW6dy