In a research note published Monday, Hozefa Topiwalla, managing director of research at Morgan Stanley, said the country's political equity risk premiums will remain high. He expects slower growth for a while longer.
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Vietnam, another regional base for global supply chain operations, saw the worst outbreak of civil unrest in several decades in May. Protestors set fire to foreign factories and engaged in widespread riots in retaliation against Beijing's decision to station an oil rig in the disputed South China Sea waters.
Taiwanese, South Korean, Japanese and Chinese plants were affected, which saw large suppliers like Foxconn suspend operations for several days.
The July election between presidential candidates Prabowo Subianto and Joko Widodo is in focus. Taiwan's Foxconn Technology Group, for instance, is awaiting the results before it decides whether to proceed with a $1 billion manufacturing project.
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Wiranto notes that while neither candidate has made manufacturing a main priority, both emphasized the need for increased infrastructure spending, which should encourage foreign investors.