Alexander C. Feldman
President & CEO
US-ASEAN Business Council
I hope you are staying safe and well, and I hope our Muslim friends and colleagues had a joyful Eid al-Fitr.
As the United States moves closer to fully reopening, COVID-19 has made a troubling resurgence in ASEAN. Against the backdrop of rising cases in the region, the organizers of the World Economic Forum’s Special Annual Meeting and the Shangri-La Dialogue were compelled to cancel or postpone their upcoming conferences in Singapore. Singapore itself continues to grapple with an uptick in locally transmitted cases of COVID-19, and Thailand and Vietnam have reimposed widespread activity restrictions and extended traveler quarantine periods to contend with rising caseloads. Meanwhile, a major third wave of infections has struck Malaysia, and the Malaysian Government implemented a sweeping nationwide movement control order (MCO) on May 12 slated to last through June 7.
Malaysia’s new MCO has banned all interstate and inter-district travel and closed all educational institutions. However, all economic sectors are permitted to remain open, except those outlined on the negative list of the General SOP. Malaysia suspended its reciprocal green lane with Singapore on May 13 (all business travelers must now use the Investment Development Authority’s One Stop Centre lane) and mandated that all travelers from Singapore undergo a full 14-day quarantine upon arrival. Additionally, in response to rising COVID-19 cases in South Asia, Malaysia’s temporary entry ban on Indian nationals was extended to citizens from Bangladesh, Pakistan, Nepal, and Sri Lanka.
Against this backdrop, the United States has ramped up its vaccine diplomacy in the region. The United States and the Quad first announced in March that it aimed to deliver up to a billion doses of vaccine to ASEAN and the Indo-Pacific. Pledging $4 billion, the United States is the largest single donor to COVAX, which has already distributed significant quantities of vaccine to various ASEAN member states. The Philippines inked a deal to procure 40 million doses of the Pfizer-BioNtech vaccine after receiving 190,000 doses through a COVAX shipment. The Council continues to encourage the Biden-Harris Administration to send Southeast Asia a portion of its AstraZeneca vaccine stockpile as well as any additional vaccine doses available.
The Biden-Harris Administration continues to exert pressure on Myanmar’s military. On May 17, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated sanctions against thirteen individuals and one entity for their direct roles in orchestrating Myanmar’s February 1 coup and the subsequent violent crackdown on the civilian population. Three more designations were also made against the adult children of previously sanctioned senior military officials. Additionally, in coordination with the United States, the United Kingdom and Canada also announced new sanctions against individuals and entities affiliated with the Myanmar military. You can read the full U.S. Department of the Treasury announcement here, the U.S. State Department announcement here, the United Kingdom’s statement here, and Canada’s statement here to learn more.
ASEAN also took steps this month to address the crisis in Myanmar. On April 24, the heads of state of Brunei, Cambodia, Indonesia, Malaysia, Singapore, and Vietnam, along with the foreign ministers of Laos, the Philippines, and Thailand, met in Jakarta for an emergency summit primarily focused on addressing the situation in Myanmar. From Myanmar, Senior General Min Aung Hlaing was invited to attend. Throughout the summit, he was referred to as the Commander-in-Chief of the Military, not as the Head of State. The National Unity Government, the parallel government formed by elected civilian members of Parliament, was not invited. Following the meeting — which was the first in-person ASEAN summit since 2019 — the leaders issued a formal Chairman’s statement, which included a “Five-Point Consensus” on the ongoing political conflict, and reiterated their shared commitment to resolving the humanitarian crisis in the Rakhine State and to repatriating displaced members of the Rohingya community. Unfortunately, more than a month after the Summit, ASEAN has yet to appoint a Special Envoy on Myanmar.
The United States and ASEAN continue to engage one another through these tumultuous times. However, a long sought after virtual meeting between U.S. Secretary of State Antony Blinken, Deputy Secretary of State Wendy Sherman, and the ten ASEAN foreign ministers was unfortunately postponed. Both the Secretary and Deputy Secretary were travelling when an in-flight communications glitch occurred during the scheduled meeting time on May 25. Regardless, Deputy Secretary Sherman will be the first high-ranking U.S. official from the Biden-Harris Administration to visit Southeast Asia during a broader trip from May 25 to June 4. Deputy Secretary Sherman’s itinerary includes stops in Indonesia, Cambodia, and Thailand where she will “reaffirm the United States’ commitment to ASEAN centrality and address a range of bilateral and regional issues, including efforts to urge the Burmese military to cease violence, release all those unjustly detained, and restore Burma to the path of democracy” according to the State Department’s press release announcing the trip. This visit comes on the heels of the 34th Annual U.S.-ASEAN Dialogue on May 5-6, during which Principal Deputy Assistant Secretary of East Asian and Pacific Affairs Atul Keshap discussed several key issues with his fellow senior-level diplomats from all ten ASEAN member states. Along with affirming the United States’ support for ASEAN centrality and commitment to strengthening economic ties with ASEAN countries, Ambassador Keshap engaged the bloc on the situation in Myanmar and urged ASEAN to hold Myanmar’s military accountable to the Five-Point Consensus. You can read the State Department’s and the ASEAN Secretariat’s respective press releases on the Dialogue here and here.
ASEAN was well-represented at U.S. President Joe Biden’s Leaders Summit on Climate in late April. Forty heads of state and government attended the summit, including Singapore’s Prime Minister Lee Hsien Loong, Vietnam’s President Nguyen Xuan Phuc, and Indonesia’s President Joko Widodo. Also present were Indonesia’s Coordinating Minister for Maritime and Investment Affairs Luhut Binsar Pandjaitan, the Philippines’ Secretary of Finance Carlos Dominguez III, and Thailand’s Minister of Natural Resources and Environment Varawut Silpa-archa. While none of the ASEAN member states announced any new climate targets that differed from their nationally determined contributions (NDCs), their participation signified ASEAN’s desire to engage on this critical issue and will open the door for further cooperation with the United States on climate policy.
Indonesian President Joko Widodo reshuffled his cabinet on April 28 after gaining parliamentary approval to reorganize and combine several government agencies. As part of a larger effort to improve Indonesia’s investment climate, President Jokowi created a new Ministry of Investment and installed the current head of the Investment Coordinating Board (BKPM) Mr. Bahlil Lahadalia as the Minister of Investment. This transformation is in line with the Omnibus Law on Job Creation, which mandates all business licensing matters to be streamlined, simplified, and digitalized. Minister Bahlil Lahadalia will retain his title and duties as Chair of BKPM. Merging the Ministry of Research and Technology into the Ministry of Education and Culture, President Jokowi also appointed Minister of Education and Culture Mr. Nadiem Makarim to lead the newly created Ministry of Education, Culture, Research and Technology.
During the Council’s Artificial Intelligence (AI) Policy Retreat from May 3-7, we analyzed AI through global, regional, and technical lenses and began to strategize future advocacy efforts in this emerging policy area. Key industry experts, thought leaders, government stakeholders, and our members discussed some of the essential questions driving global conversations around AI and explored how the private sector can help develop ASEAN’s nascent AI ecosystem. Certain thematic considerations served as through lines in our conversations, including how regulation should balance managing risk with fostering innovation and the impact of cultural norms on conceptions of AI ethics and governance. The Council is forming an AI Working Group to continue to press forward on this important issue area.
As stated above, ASEAN’s battle against COVID-19 is far from over. Our ongoing discussions with key ASEAN government leaders have ensured that our contributions to the region add value amidst the changing COVID-19 landscape. On April 23, the Council’s COVID-19 Economic Recovery Task Force held our second Executive Dialogue Session focused on the theme of Restoring Confidence in the Consumer Economy. In this session, the Task Force engaged Malaysia’s Minister Mustapa Mohamed, Minister in the Prime Minister’s Department (Economy); Indonesia’s Minister Sandiaga Uno, Minister of Tourism and Creative Economy; and Singapore’s Minister Desmond Lee, Minister for National Development and Co-Chair of the Emerging Stronger Task Force in a robust dialogue on supporting Micro, Small, and Medium-sized Enterprises (MSMEs) as well as the Travel, Tourism, and Hospitality industries. The Ministers expressed interest in our ideas to enhance the digital capabilities of MSMEs and to establish common frameworks to facilitate the safe resumption of travel within Southeast Asia. Separately, the Task Force also had a fruitful Leaders Business Dialogue on May 25 with Indonesia’s Coordinating Minister for Economic Affairs Minister Airlangga Hartarto. The Task Force and Minister Airlangga Hartarto exchanged ideas on how the U.S. private sector can further contribute to Indonesia’s recovery efforts through initiatives on vaccine preparedness, vaccine confidence, facilitating the resumption of travel and tourism, and upskilling MSMEs.
From May 17-21, the Council led a delegation of 21 member companies in the 2021 Virtual Philippines Business Mission — the Council’s first country business mission of the year. Our delegation, led by the Co-Chair of our Philippines Committee, IBM, met with key members of the Cabinet and ranking members of the Philippine Senate and House of Representatives. Philippine officials welcomed the regular policy dialogue and expressed confidence in economic recovery efforts through close partnerships with the private sector. Climate change and digital transformation figured strongly into the discussions, with promising updates promoting the ease of doing business, economic liberalization and structural reforms, and infrastructure roll-out. This year’s mission featured a Smart Cities panel of progressive mayors of Cagayan de Oro, Iloilo, and Pasig representing smart cities in Luzon, Visayas, and Mindanao. The mission offered opportunities to position member companies’ priorities ahead of the 2022 national and local elections and reminded Philippine officials of the Council’s commitment to the country as well as the positive outcomes of previous missions.
Thank you as always for your support. I hope you and your families enjoy the beginning of summer.
2021 ASEAN Directors-General of Customs Virtual Business Mission, June 7-30
The Council is now registering members for the 2021 ASEAN Directors-General of Customs Virtual Business Mission. The Mission will include a Plenary Consultation Session between our delegation and the ASEAN Customs Director-Generals (DGs) on June 9 as well as bilateral meetings with priority DGs between June 7 and June 30. During the plenary session, the Council’s delegation will provide a joint presentation to the ASEAN Customs DGs on topics including vaccine distribution, cross-border e-commerce, customs automation, and more. The bilateral meetings will provide opportunities for in-depth discussions on country-specific issues, including but not limited to understanding the priorities of respective ASEAN customs agencies, building relationships with customs authorities, and advancing the private sectors’ priorities. The exact date for each meeting will be confirmed over the coming weeks. Please contact Alberto Coria (email@example.com) and Marcella Suwandhi (firstname.lastname@example.org) for more information.
ASEAN-U.S. Digital Policy Consultative Forum - Data Governance, June 14
The Council is organizing the first session of the 2021 ASEAN-U.S. Digital Policy Consultative Forum (DPCF) on Data Governance. This session on Monday, June 14 will convene members and ASEAN working and mid-level officials to discuss data governance, specifically cloud technologies and implications for data governance as well as the necessity of cross-border data flows for the digital economy. Looking ahead, the Council plans to organize another DPCF session later in the year to focus either 5G or digital workforce issues. Please contact Minh Vu (email@example.com) and Heidi Mah (firstname.lastname@example.org) for more information.
2021 Virtual Singapore Business Mission, July 26-30
The Council invites members to join the 2021 Virtual Singapore Business Mission on July 26-30, 2021. Our bilateral meetings with cabinet ministers and other senior leaders of the Singaporean Government will focus on supporting Singapore’s COVID-19 response and recovery, leveraging Singaporean innovation to achieve a sustainable and resilient Future Economy, and keeping trade free and open. The mission will serve as an opportune platform for members to engage with key political officials following Prime Minister Lee’s April Cabinet Reshuffle. Please contact Lilibeth Almonte-Arbez (email@example.com) and Heidi Mah (firstname.lastname@example.org) for more information.
In The Press
US-ABC Applauds President Biden for Signing COVID-19 Hate Crimes Bill into Law
On May 20, the Council’s Chairman, President & CEO Alexander Feldman commended President Biden for signing the COVID-19 Hate Crimes Act, sponsored by Senator Mazie Hirono of Hawaii and Representative Grace Meng of New York, into law. “How we treat hate within our own borders impacts our relationships abroad. As an organization committed to fostering understanding, goodwill and meaningful relations between the United States and Southeast Asia, we applaud President Biden for taking this necessary step to stand up for Asian-Americans at home and rebuild trust with our friends and partners across Asia,” Feldman stated. Click here to read the full press release.
US-ABC Calls for Biden-Harris Administration to Appoint Special Envoy for Myanmar
On May 6, the Council released a statement calling on the Biden-Harris Administration to appoint a special envoy for Myanmar. “Bold, decisive U.S. leadership can make a real difference in the face of this crisis… a dedicated U.S. Special Envoy can coordinate a strategic approach involving smart, targeted sanctions and create room for effective dialogue in tandem with like-minded friends and allies, including members of the Quad and the Association of Southeast Asian Nations (ASEAN),” the statement read. Click here to read the full statement.
As of late May, Brunei has marked over 380 days without an instance of local COVID-19 transmission and currently has only six active cases. This brings the country’s total number of cases to 236. While continuing limited service to Hong Kong, Jakarta, Kuala Lumpur, London, Manila, Melbourne, and Singapore, Brunei has imposed a travel ban to and from India, Nepal, Sri Lanka, Pakistan and Bangladesh until June 13 following the recent outbreak in India. The country has administered almost 35,000 doses of vaccines and has fully vaccinated roughly four percent of its population. It aims to vaccinate 70 percent of its population by the end of this year. At its current rate of 1,380 doses per day, it will take 63 days for Brunei to fully vaccinate another 10 percent of its population. The country is currently using the AstraZeneca, Sinopharm, and Pfizer-BioNTech vaccines.
As Cambodia recovers from its April surge in infections, an average of 529 new cases have been reported each day in May. This is 71 percent of the new number of cases reported on May 3, the peak of Cambodia’s latest surge. In total, there have been over 25,000 infections and 179 coronavirus-related deaths reported in the country since the pandemic began. The Cambodian Government implemented strict lockdowns in Phnom Penh and Takhmao City and a ban on inter-provincial travel in mid-April. These coincided with the country’s new year celebrations, during which hundreds of citizens were caught violating the travel ban and placed in mandatory quarantine. The Government is also now using a ‘three-color system’ to determine districts with the highest risk of COVID-19 infection. In early May, restrictions across Phnom Penh were eased, and curfew hours were shortened to last between 8PM and 3AM. However, curfews in Siem Reap and Serey Sophorn City were extended until May 21. As of late May, Cambodia has administered 3.8 million vaccine doses, and roughly 10 percent of the population has been fully vaccinated.
With over 1.75 million confirmed cases of COVID-19 as of late May, Indonesia continues to be the hardest-hit country in ASEAN by the coronavirus pandemic. On May 15, the country halted the rollout of one of its batches of AstraZeneca vaccines, following the deaths of three recipients. However, not all AstraZeneca vaccines have been suspended; only the batch CTMAV547 consisting of 450,000 doses was halted pending a sterility and toxicity test by the Food and Drug Agency (BPOM). Meanwhile, public activity restrictions remain in place throughout much of the country. Indonesia also imposed a ban on Eid travel (mudik) throughout May to avoid further COVID-19 outbreaks. The country still has its borders closed to most foreign travelers, except those with business invitations, diplomatic and APEC permits, valid residency permits, or those with using the Bilateral Travel Corridor Arrangement (from China, United Arab Emirates, Korea, and Singapore).
Laos is now experiencing a surge in COVID-19 cases following the New Year Holiday celebrations in mid-April. The confirmed total caseload in Laos is roughly 1,800 infections. Two people have died from COVID-19-related causes in Laos, both in this month. Over 700,000 vaccine doses have thus far been administered, and roughly 1.75 percent of the population has been fully vaccinated. The Government recently extended many of its existing lockdown measures through June 4 and added new restrictions on May 22. New restrictions include the mandatory closure of beauty salons, barber shops, tourist attractions, food gardens, and casinos. However, the Government is now permitting travel between provinces without any known COVID-19 cases. Visas to Laos are currently not being issued to foreign nationals, barring certain exceptions with proof of a recent negative COVID-19 test.
Malaysia is experiencing a post-Ramadan COVID-19 surge. As of late May, the country is averaging more than 5,900 new infections per day — the highest rate since the pandemic began. The country currently has over 500,000 cases of COVID-19 and 2,250 related deaths. This third wave of COVID-19 has triggered a renewed nationwide movement control order (MCO) that started on May 12, and subsequently implementation of tighter restrictions on May 25. In general, the SOPs allow for economic activity in permitted economic sectors, for consumers to purchase and obtain essential goods and services, for citizens and residents to receive healthcare and medicine, and for officials to conduct authorized government initiatives. The SOPs do not authorize inter-district movement in MCO areas or inter-state movement without the permission from the Royal Malaysia Police. As a result, the state booked 2.5 million new doses of coronavirus vaccines to be delivered as soon as possible. As for national vaccination rates, the Government still intends to have 80 percent of the population vaccinated by December 2021. Over 2.5 million doses of COVID-19 vaccines have been administered throughout the country thus far, and approximate 4 percent of the country’s population is fully vaccinated. Fortunately, the daily rate of vaccination is increasing. Between May 5 and 11, Malaysia averaged 46,684 daily doses, a significant increase from the April 28 through May 4 rate of 28,551 daily doses.
Myanmar currently has over 143,000 confirmed cases of COVID-19 along with roughly 3,200 coronavirus-related deaths (the accuracy of these statistics may be impacted by the continuing civil disobedience movement in Myanmar, as well as the inability of the Ministry of Health and Sports to operate at its full capacity). On May 5, the UN issued a statement on Myanmar asserting the targeted attacks on medical personnel will impede the nation’s COVID-19 response. The UN notes that there have been at least 158 attacks on medical personnel and facilities, and of these attacks, over 60 people have been seriously injured or killed. In addition, over 139 doctors have been arrested and charged since the military coup. Some armed ethnic organizations, such as the Kachin Independence Organization and the Karen National Union, have stepped in and established their own testing and vaccination sites in the areas of the country they govern, while the military government’s response to the COVID-19 crisis has foundered. Approximately 3 million vaccine doses have been administered in the country — enough to fully vaccinate roughly 2.8 percent of the nation’s population.
The rate of new COVID-19 infections in the Philippines has continued to decline in May after peaking on April 14. The country is currently averaging 5,100 new cases per day, or 47 percent of last month’s peak. As of late May, the country has recorded 1.18 million cases of the virus and nearly 20,000 related deaths. On May 10, the U.S. Embassy in Manila welcomed the initial delivery of 193,050 doses of the Pfizer-BioNTech COVID-19 vaccine. This came shortly after the arrival of 2.03 million AstraZeneca doses through the COVAX program on May 8. Although the Government still intends to vaccinate 70 percent of the country’s population by the end of 2021, there were indications earlier this month that this target may be revised downward due to delays in vaccine shipments. Roughly 4.1 million doses of COVID-19 vaccines have been administered thus far — enough to fully vaccinate approximately 1.9 percent of the nation’s population. The Department of Health (DOH) has also detected several cases of COVID-19 variants in the country, leading the Government to implement stricter border control measures. However, President Rodrigo Duterte recently eased the coronavirus lockdown in Manila that had been extended last month. Other cities, such as Santiago and Zamboanga, as well as Ifugao and Quirino Provinces, have been directed to continue implementing the modified enhanced community quarantine (MECQ) through May 31, under which many industries can work on-site with full capacity, while others, like real estate and the manufacturing of non-essential goods, can operate with half their workforce. Several businesses, like tourism sites and entertainment venues, have been instructed to suspend their operations, and non-essential mass gatherings continue to be banned.
Singapore has enacted stricter measures labelled as Phase II (Heightened Alert), which took effect May 16 and will last through June 13. This is in response to the rise in unlinked cases and new community clusters, such as the Changi Airport Terminal 3 cluster, Learning Point cluster, Wok Hey (White Sand) cluster, and Marina Bay Sands Casino Dealer cluster. As part of Phase II (Heightened Alert), dining-in at food and beverage establishments will not be allowed, and limits on gatherings will be reduced from five to two people. In addition, work-from-home will be the default, and schools have shifted to home-based learning. In response to the recent spike in cases, the Ministry of Health has announced that it will extend the period between vaccine doses from 3-4 weeks to 6-8 weeks. This is intended to enable more residents to receive at least one dose of the immunization and will not “materially impact the efficacy of the vaccine.” In lieu of the current outlook, the launch of the Singapore-Hong Kong air travel bubble, originally planned for May 26, will be deferred for the second time. The World Economic Forum, scheduled to take place in August in Singapore, has also been cancelled because of global uncertainty, differing speeds of vaccination across countries, and concern over new variants. The 19th Shangri-La Dialogue, scheduled to take place in June, has also been cancelled because of rising community cases in Singapore. As of late May, Singapore has recorded over 61,000 cases of COVID-19, along with 32 deaths. It has thus far administered over 3.4 million doses of vaccines — enough to fully vaccinate roughly 30 percent of the nation’s population.
As the third COVID-19 wave rages on in Thailand, the Thai Government continues to struggle to contain the outbreak with infection rates this month hitting record highs after a year of relative success at stemming new cases since the start of the pandemic. The third wave began at the start of April, and initially led to suspensions of at-risk businesses, such as pubs, nightclubs, and other entertainment venues in Bangkok and 40 other provinces. Additionally, nine villages in the south of Thailand were sealed off and locked down in late May after the more contagious South African variant was detected in the region. Yet despite infection rates remaining high across the country, the Government announced an easing of restrictions in mid-May, allowing dine-in services to resume in the highest-risk provinces. Many of the new infection clusters this month are in overcrowded prisons and detention facilities across the country — as of late May, prison-related infections account for nearly half of Thailand’s daily cases. Meanwhile, the Government began mass testing the country’s prison population, and Minister of Justice Somsak Thepsuthin has said that an investigation will be launched to determine how COVID-19 managed to spread through the prison system. He added that officials also hope to urgently prioritize vaccinating more inmates and jail staff by securing doses from the Ministry of Health. To further curb prison outbreaks, the Government has announced considerations to prematurely release 50,000 inmates — 16 percent of Thailand’s prison population — as an emergency preventative measure. More broadly, Thailand has been slow to roll out its mass vaccination program, and currently plans to do so beginning on June 7. As of late May, approximately 3 million doses of COVID-19 vaccines have been administered — enough to fully vaccinate roughly 2.2 percent of the nation’s population. Most recipients of the vaccine have thus far been frontline health workers or those in high-risk groups. Earlier this month, Prime Minister Prayut Chan-o-cha said the aim was to vaccinate 50 million people by the end of 2021. However, vaccine hesitancy is steeply rising among the general public: public willingness to be inoculated has dropped from 83 percent to 63 percent between January and May. Overall, many fear that this ongoing outbreak will slow the reopening of the country, and the Government has proposed further measures to counter the outbreak, provide additional relief, and revive the economy.
Vietnam has begun to tighten its public health safety measures in an effort to prevent further COVID-19 outbreaks in the country, following the detection of locally transmitted cases on April 27 in Ha Nam province and Ho Chi Minh City. The locally transmitted cases originated from incoming travelers who tested positive after clearing quarantine. On May 5, the Ministry of Health (MOH) extended the quarantine period for anyone arriving in the country to three weeks, up from two weeks. There have been two new COVID-19 deaths and nearly 1,500 local transmission cases during this latest outbreak — more than twice the number of cases during the January outbreak. The Da Nang Municipal People’s Committee announced that starting May 4, Da Nang will suspend all activities related to gyms, festivals, and sporting events, which tend to attract large crowds. In addition, businesses that are not considered essential will also be shut down, including beauty parlors, bars, clubs, karaoke bars, massage parlors, gaming cafes, pedestrian streets, and night markets. Only restaurants and food service businesses can remain open, as they are considered essential services. Relevant Government bodies will continue to monitor for COVID-19 violations, and people and businesses who do not adhere to these rules will be punished. In Hanoi, it was announced on May 3 that all schools will conduct online learning due to the surge in cases. Over 979,000 people in Vietnam have thus far been partially or fully vaccinated against COVID-19. On May 14, the MOH announced the goal of securing 110 million doses of COVID-19 vaccines, to include 31 million doses of Pfizer-BioNTech, 38.9 million doses of AstraZeneca through COVAX, and 30 million doses of AstraZeneca purchased by Vietnam Vaccine JSC, among other sources.
Country, Industry and Advocacy Updates
Indonesia 2021 Cabinet Reshuffle
After gaining parliamentary approval to reorganize and combine several government agencies, President Joko Widodo reshuffled his cabinet on April 28. President Jokowi also created a new Ministry of Investment and installed the current head of the Investment Coordinating Board (BKPM) Mr. Bahlil Lahadalia as the Minister of Investment. Minister Lahadalia will retain his title and duties as Chair of BKPM. This transformation is in line with the Omnibus Law on Job Creation, which mandates all business licensing matters to be streamlined, simplified, and digitalized. Merging the Ministry of Research and Technology into the Ministry of Education and Culture, President Jokowi appointed Minister of Education and Culture Mr. Nadiem Makarim to lead the newly created Ministry of Education, Culture, Research and Technology.
Malaysia’s National Investment Aspirations
The Ministry of International Trade and Industry (MITI) has unveiled the National Investment Aspirations (NIA), as a forward-looking economic growth strategy. The policies will begin by being reflected in all future Malaysian investment regulations, including the Fourth Industrial Revolution masterplan and 12th Malaysia Plan. The NIA is also influenced by the Shared Prosperity Vision (SPV) 2030, a long-term plan for inclusive economic growth, and the Environmental, Social and Governance (ESG) goals. MITI identified 5 core parameters that the NIA will focus on in order to further promote Malaysia as an international investment hub:
Develop sophisticated goods and services to increase economic diversity and complexity via high levels of local research and development and innovation.
Work to create a larger domestic market for high-skill jobs.
Connect and integrate domestic linages into the global supply chain by improving their resiliency.
Create high productivity sector clusters and develop existing ones.
Continue improving economic inclusivity for the socio-economic developmental agenda.
Senior Minister and Minister of International Trade and Industry Dato’ Seri Mohamed Azmin Ali stated that “in order to enable further diversification and ventures into more complex industries, emphasis should also be accorded towards fostering a robust and dynamic tax and incentives regime, building our talent pool in close collaboration with relevant industries, improving our licensing and regulatory frameworks and augmenting the facilitation elements such as customs procedures.” The NIA is seen as a methodology for Malaysia to curb investment flows out of the country. The full press release for the NIA may be found here.
ASEAN Leaders' Summit on Myanmar
On April 24, the heads of state of Brunei, Cambodia, Indonesia, Malaysia, Singapore, and Vietnam, along with the foreign ministers of Laos, Philippines, and Thailand, attended an ASEAN emergency summit on the coup in Myanmar, which took place in Jakarta, Indonesia. On the Myanmar side, Senior General Min Aung Hlaing was invited to attend but was referred to throughout the Summit as Commander-in-Chief of the Military, not as the Head of State. The National Unity Government (NUG), the parallel government formed by elected civilian members of Parliament, did not receive an invitation to the summit. Following the summit, the leaders issued a formal Chairman’s statement that included a “Five-Point Consensus.” The leaders also renewed their commitment to resolving the humanitarian crisis in Rakhine state and to repatriating displaced members of the Rohingya community. The five points agreed to are as follows:
There shall be an immediate cessation of violence in Myanmar and all parties shall exercise utmost restraint.
Constructive dialogue among all parties concerned shall commence to seek a peaceful solution in the interests of the people.
A special envoy of the ASEAN Chair shall facilitate mediation of the dialogue process, with the assistance of the Secretary General of ASEAN.
ASEAN shall provide humanitarian assistance through the ASEAN Coordinating Center for Humanitarian Assistance (AHA Center).
The special envoy and delegation shall visit Myanmar to meet with all parties concerned.
On April 26, the press release by the State Administration Council (SAC) indicated that it would give “careful consideration” to receiving an ASEAN Special Envoy-led delegation, depending on the stability of the country, and would take the five-point consensus into positive consideration if it “facilitate[s] the implementation of the [SAC’s] five-step roadmap.” With protests on the ground not looking to subside anytime soon, this response can be viewed as a move by the military to stall the visit for as long as possible. Several armed conflicts are also continuing to escalate between the military and the Ethnic Armed Organizations in the Chin and Karen states near the Thailand border.
Mid-Term Review of the ASEAN Economic Community Blueprint 2025
ASEAN released the report of the Mid-Term Review (MTR) of the ASEAN Economic Community Blueprint 2025 on April 28. The report was developed by the ASEAN Secretariat, with funding and capacity building support from the ASEAN Regional Integration Support by the EU (ARISE) Plus Program. The MTR provides assessment on the progress of implementation of the overall AEC Blueprint 2025 and the 23 sectoral work plans under the AEC pillar for the period of 2016 to 2020. The Blueprint has five key characteristics which define the goals and objectives of the AEC 2025:
Government of Malaysia Implements Tighter MCO 3.0
The Government of Malaysia has unveiled stricter Standard Operating Procedures (SOPs) to be implemented under the MCO 3.0, to be in effect from May 25 to June 7. In general, the SOPs allow for economic activity in permitted economic sectors, for consumers to purchase and obtain essential goods and services, for citizens and residents to receive healthcare and medicine, and for officials to conduct authorized government initiatives. The SOPs do not authorize inter-district movement in MCO areas or inter-state movement without the permission from the Royal Malaysia Police, and a variety of activities which are further detailed by the general SOP.
RCEP Ratification Update: Malaysia
Malaysia signed onto RCEP with the rest of the participating nations in November of 2020. The Government has stated that it plans to ratify the agreement sometime during Q1 of 2022. While the Federation of Malaysian Manufacturers (FMM) commends the Government on setting this target date for ratification, it would prefer a quicker timeline to kickstart Malaysia’s post-pandemic economic recovery. “FMM firmly believes that these regional trade agreements [RCEP and CPTPP] will greatly contribute to manufacturers’ post-pandemic recovery and in creating resilient supply chains,” said FMM President Tan Sri Soh Thian Lai. “The manufacturing sector has been hit hard … therefore, the post-COVID-19 trade recovery for Malaysian companies is going to be more about re-establishing critical supply chains and establishing new global value chains to boost economic growth.”
Philippines Aiming to Develop a Military Hub on Contested South China Sea Island
General Cirilito Sobejana, Chairman of the Joint Chiefs of Armed Forces of the Philippines, is planning to ask President Duterte to fund a logistics hub on Pag-asa Island (Thitu Island) in the Spratly Islands to boost the nation’s military capacity in the South China Sea. The general’s plan also involves installing high-resolution, night-capable cameras to monitor activities around islands claimed by the Philippines. During an interview, General Sobejana stated “our objective is to drive away Chinese maritime militia and other Chinese vessels from our exclusive economic zone.” This move comes amid increased China-Philippines tension in the South China Sea, highlighted by the Philippine Foreign Secretary’s use of plain, yet colorful, language to dictate his thoughts on Chinese fishing boats sailing into the Philippines’ exclusive economic zone (EEZ). Additionally, the Philippine Government has urged local fishermen to ignore China’s annual ban on summer fishing in the Sea, expanded military patrols near the disputed Julian Felipe Reef (Whitsun Reef), and rejected the Chinese Government’s opposition to ongoing Philippine naval exercises. All of this activity suggests that geopolitical competition is intensifying in the South China Sea, and that while China may possess a larger navy, the Philippines refuses to capitulate to Beijing’s demands.
Thailand’s Personal Data Protection Delayed Until May 2022
Initially slated for June 2021, the implementation of Thailand’s Personal Data Protection Act (PDPA) has been delayed once again to May 2022. The PDPA was originally introduced in 2019 with a one-year grace period for adjustment but delayed in May 2020 due to pandemic-related financial and legislative stress on private companies and the Government. The appointment of the 16-member Personal Data Protection Committee by the Ministry of Digital Economy and Society (MDES) has also been delayed due to complaints that some nominated members lack technical expertise or experience. The committee has a broad range of powers, including “drafting the master plan on personal data protection, issuing notifications or rules for the execution of the act, and advising the cabinet on the enactment or revision of the existing laws so as to protect personal data.” While this delay has granted businesses more time to understand the provisions and bring their operations into compliance, further delays may not be so forthcoming in future.
Singapore Will have to Rely on Foreigners to Fill the Shortage of Tech Workers
On May 4, Managing Director of the Monetary Authority of Singapore (MAS), Ravi Menon, said that the country will have to rely on foreigners to fill the shortage of tech workers. A boom in technology jobs across all sectors is projected as Singapore emerges as a regional tech hub. Up to 500 new tech vacancies are posted each week on job sites, according to NodeFlair, which is helping hire for Bytedance and Sea Group’s e-commerce business Shopee. There were nearly 10,000 tech-related job postings on a government-run careers portal in mid-September, and another 6,800 jobs and traineeships would be created by June 2021 through industry partnerships. The financial sector will see 6,500 new jobs created this year, with technology leading the hiring, based on a MAS and Institute of Banking and Finance (IBF) survey conducted late last year of financial institutions' projected hiring from January to December 2021. The financial sector alone added 2,200 net jobs in 2020, a year when the Singapore economy as a whole lost 180,000 net jobs. While Singaporeans took up 75 percent of the total net jobs, they accounted for only 35 percent of the tech jobs. The jobs exist but the local skills are not present in sufficient quantities. Many firms moving to Singapore look for data scientists and coders at a pace in which the current graduate and skills pipeline cannot fill. Recruiters say this is partly because of Government policies to tighten foreign hiring to offset falling Singaporean employment amid the coronavirus pandemic. According to Mr. Menon, if Singapore tightens this inflow excessively, it will impair not just the competitiveness of being a financial center but dampen the prospects for creating good jobs in the future, especially for Singaporeans.
Ecological Sustainability & Green Economy Will be the Philippines’ Post-Pandemic Recovery Focus
The COVID-19 pandemic has highlighted the need for a greater focus on sustainable recovery by Philippine policymakers to pursue ways of "greening" post-COVID-19 economic recovery strategies. They are putting together a green stimulus plan which prioritizes the creation of a carbon-neutral society for all Filipinos. The green economy stimulus package could provide an alternative to low-paid work bound up in carbon-intensive supply chains like those at fast-food chains and shopping centers, which are currently the major employment opportunities for many Filipinos in large urban centers. The Philippines also recently took part in the in the GloLitter Partnerships Project, a major United Nations-backed initiative to tackle marine litter scourge, to clean up the oceans, and to decrease the use of plastics in industries. The project will assist 30 developing countries, including the Philippines, in preventing and reducing marine litter from the maritime transport and fisheries sector. The project, which was funded by the Norwegian Agency for Development Cooperation launched on April 8.
U.S. and Philippine Forces Conclude 36th Balikatan Exercise
The challenges that COVID-19 brought did not stop the United States and the Philippines from conducting a successful two-week joint military exercise amid recent developments in the disputed South China Sea. On April 23, service members from the Armed Forces of the Philippines (AFP) and the United States Armed Forces concluded the 36th iteration of ‘Balikatan’ (Shoulder-to-Shoulder) Exercise, with a small ceremony held at the General Headquarters at Camp Aguinaldo in Quezon City. The exercise focused on testing the readiness of the AFP in response to threats, such as natural disasters and militant extremism. However, the magnitude of Balikatan 2021 had to be scaled down in the number of events and participants due to the pandemic. Activities included close airport support training to increase interoperability across the joint forces; a virtual Global Health Engagement; and Civic and Humanitarian Assistance, all of which respected strict COVID-19 safety protocols.
World’s First Sustainability Sukuk Introduced in Malaysia
A U.S. dollar Sukuk, a Sharia law compliant debt instrument backed by identifiable assets similar to a traditional bond product, has been issued in Malaysia to encourage sustainable investments. Malaysia is the world’s first country to offer such a sustainability-linked Sukuk. Malaysia issued US$800 million worth of the 10-year Islamic finance notes and US$500 million for the 30-year track version of the Sukuk. Once issued, the sustainability Sukuk were oversubscribed by 6.4 times within a few days of their release, indicating significant international demand for these green investment opportunities. This caused the Government of Malaysia to upsize the initial target investment size of US$1 billion to US$1.3 billion. Prime Minister Muhyiddin Yassin took the opportunity to announce this as a strong indicator of Malaysia’s future GDP growth rates, with the Government of Malaysia stating that this reflected the international community’s faith in the country’s planned economic recovery. The proceeds from the Sukuk are intended to help Malaysia meet its commitments under the United Nations Sustainable Development Goals and to finance green projects in Malaysia. These efforts are also in line with the Government’s Shared Prosperity Vision 2030. Additionally, the Government has referenced plans to use the sustainability-linked Sukuk to further widen the investor base, as demand in the country for ESG related bonds is only continuing to grow.
U.S. and Vietnam to Boost Cooperation in the Aviation Industry
The United States and Vietnam are striving for more cooperation in the aviation industry, following a virtual conference in which both the U.S. and Vietnamese governments and private sectors gathered to discuss cooperative opportunities. During the session, U.S. companies, including Council members Autodesk, Boeing, and Honeywell, among others, shared their expertise in airport development, while U.S. government agencies, including the U.S. Federal Aviation Administration, U.S. Department of Commerce, USTDA, and TSA, looked to work closely with their Vietnamese counterparts to develop a safe and effective air transportation system. Direct flights between the U.S. and Vietnam have been a goal for the two countries for a number of years, and according to experts, while the sector market potential between the two countries are 700,000 passengers per year, only 30,000 to 60,000 passengers per year are needed to open direct flights.
The Philippines Leverages Smart Farming Programs to Educate Farmers on Modern Agricultural Practices
To increase productivity in the agriculture, fishery, and forestry sector, the Philippine Government is implementing smart-farming programs to educate farmers on modern agricultural practices. One such program was announced by the Technical Education and Skills Development Authority of the Philippines: the Agricultural Drone Operation. This program aims to equip farmers with competencies in utilizing agricultural drone safety standards, applying air law principles to agricultural drone operations, and educating farmers on the use of autonomous and manually piloted drones. The Philippines Technical Education and Skills Development Authority has recognized the importance of leveraging agricultural drones to meet human resource shortages in rural communities to strengthen food security in the Philippines. Drones can bring various benefits to the agriculture sector and have many potential applications, such as analyzing soil conditions, fighting infections and pests, agriculture spraying, crop surveillance, and livestock monitoring. Technology implementations, such as smart-farming and drones, can also attract younger generations of farmers, which is beneficial for the long-term growth of the Philippine agriculture sector. Another Government effort established by the Department of Agriculture is the Unified School-on-the-Air Program on Smart Rice Agriculture (SOA-SRA). Created in collaboration with the Agricultural Training Institute and Philippine Rice Research Institute, the program utilizes radio-based distance learning to raise farmers' understanding of climate-smart agriculture technologies and modern rice farming. SOA-SRA aims to reach 3,000 farmers in the Caraga region and targets farmers with an average yield of fewer than four tons per hectare. Using local radio as a medium is a practical solution that aims to lift the limitations of conventional in-person training programs and workshops during the COVID-19 pandemic. SOA-SRA will be airing from May to August 2021 on local radio stations, and farmers may coordinate with their respective Local Government Units to enroll in the program.
Vietnam Prime Minister’s Directive on Regulations which Hinder Business and Investment
Following the recent 11th Session of the 14th National Assembly of Vietnam, the new Prime Minister of Vietnam sent a directive to his Ministers, heads of agencies, and provincial leaders asking for an urgent review of regulations (Laws, Decrees, Circulars) with contradictory, inconsistent, and unfeasible provisions/measures that are causing challenges for business and hindering investment in Vietnam. The Ministers, heads of agencies and provincial leaders are to identify specific problem measures, recommend specific amendments and recommendations, and propose a plan forward to ultimately improve the legal system (with more transparency, consistency and feasibility) and remove barriers to business and investment. Thank you to members who have provided inputs. The Council has consolidated and submitted comments to the Prime Minister by the May 15 deadline. To see a copy of the submission or for any questions you may have, please contact Vu Tu Thanh (email@example.com) and Minh Vu (firstname.lastname@example.org).
Ministerial Regulation No. 5. of 2020 on Private Electronic System Operators
The Indonesian Ministry of Communication and Information Technology (KOMINFO) issued Regulation No. 5 of 2020 on the Private Electronic System Operators (ESOs) as the implementing regulation of Government Regulation No. 71 of 2019 (GR71). Following the inputs that we have submitted to KOMINFO in January, as well as the virtual public consultation session in February, the Council reiterated members' concerns regarding KOMINFO Regulation No. 5 of 2020 in a follow-up letter sent on April 30. The Council highlighted several important recommendations regarding the clarification of scope and procedure for data access, as well as the possibility of a registration deadline extension for private electronic systems. The Online Single Submission (OSS) system will be launched on June 2, and KOMINFO is already planning for an upgraded version of the system. Moreover, the registration deadline, which was due in May 2021, will be extended until December 2021. The Council is closely following up with KOMINFO to ensure foreign companies can use the OSS system and/or the upgraded version when it is available. For any questions, please contact Mega Valentina (email@example.com), Angga Antagia (firstname.lastname@example.org), or Heidi Mah (email@example.com).
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