Alexander C. Feldman
President & CEO
US-ASEAN Business Council
On behalf of the entire Council, I extend my sympathies and prayers to all those personally affected by the most recent wave of the COVID-19 pandemic in Southeast Asia. I always find myself humbled by the resilience of the ASEAN community in the face of adversity. Against the backdrop of this crisis, ASEAN member states have helped each other procure vaccine supplies and pandemic response equipment, undertaken international collaborative efforts to standardize digital COVID-19 passports and frameworks, and begun to reopen certain destinations for travel and tourism. Despite the current challenges, I have full confidence that Southeast Asia will ultimately recover. The Council continues to closely monitor the situation and will assist our friends and colleagues in the region wherever possible.
The current situation in Indonesia is dire, given the rapid increase in infections that has pushed the country’s healthcare infrastructure to the brink leading President Joko Widodo to extend the emergency mobility restriction (PPKM) from July 26 until August 2. Indonesia is reporting a seven-day moving average of over 41,000 daily new cases and over 1,500 deaths a day, which is currently the highest death rate from COVID-19 in the world and 67% higher than India’s during its recent surge. Additionally, informed sources believe that these numbers on Indonesia’s COVID-19 statistics are likely below, possibly significantly below, the actual numbers.
To confront this challenge head-on, the Council has partnered with the U.S. Chamber of Commerce’s Global Task Force on Pandemic Response to mobilize U.S. private sector aid to Indonesia in its time of need. Utilizing the lessons learned from the Chamber’s work in India, we have employed our extensive contacts on the ground in Indonesia as well as in the upper echelons of the Biden-Harris administration to understand Indonesia’s needs in real-time and coordinate an effective response that prioritizes saving lives. On July 29, we convened a meeting of senior U.S. government officials from the White House and State Department, C-Suite level executives from our member companies, and other business associations focused on Indonesia to begin this important work of sourcing and delivering essential goods to Indonesia. Members interested in joining this effort can contact me directly at firstname.lastname@example.org or our Chief Country Representative in Jakarta, Dr. Landry Subianto at email@example.com.
The Council continues to engage the Biden-Harris administration on issues related to Southeast Asia. We were pleased to see President Biden’s nominations of Jonathan Kaplan to serve as the U.S. Ambassador to Singapore, Caryn McClelland to serve as the U.S. Ambassador to Brunei Darussalam, and Amy Searight to serve as the Assistant Administrator for the Bureau for Asia in the U.S. Agency for International Development. Additionally, we congratulate Ely Ratner on his confirmation to serve as Assistant Secretary of Defense for Indo-Pacific Security Affairs. We look forward to working with these qualified candidates and strong friends of the Council to strengthen the relationship between the United States and ASEAN.
U.S. Secretary of State Antony Blinken, ASEAN Foreign Affairs Ministers, and the ASEAN Secretary General attended the first virtual ASEAN-U.S. Foreign Ministerial meeting on July 13. During the meeting, Secretary Blinken reiterated the United States’ commitment to work with the region’s leaders to combat the pandemic and address climate change. He also emphasized the U.S. government’s rejection of China’s “unlawful maritime claims” in the South China Sea and underlined support for ASEAN’s position. Secretary Blinken additionally urged ASEAN countries to take “immediate action” to hold the State Administration Council (SAC) accountable to the five-point consensus.
Myanmar’s appalling political situation has compounded the effects of the pandemic. The country now suffers from one of the world's highest weekly growth rates in COVID-related deaths. To read the Council’s analytical update on the COVID-19 situation in Myanmar, please click here. With limited testing capacities, overcrowded facilities, and resource scarcities, the country’s entire healthcare system is on the brink of collapse. American journalist Danny Fenster is currently held in Insein Prison on incitement charges. He faces up to three years in prison if convicted. He recently told his lawyers that he believes he is infected with COVID-19, citing symptoms like chest congestion and fever, but prison authorities have thus far refused to let him be tested. The coup has also led foreign investment to flee Myanmar, including the notable departure of Norwegian telecommunications operator Telenor. Four more corruption charges have been filed against Daw Aung San Suu Kyi, who now faces ten charges in total and up to 75 years in prison. Tensions persist between Ethnic Armed Organizations (EAOs) and the military, with internal divisions flaring in the Karen National Union (KNU). Meanwhile, the Shan State Liberation Party (SSLP) and the Shan State Federal Front (SSFF) have declared war on the military regime. ASEAN continues to face a deadlock in appointing a special ASEAN envoy to Myanmar as Indonesia, Thailand, and Malaysia insist on their respective candidates being chosen. The current ASEAN chair of Brunei is attempting to bypass the deadlock by requesting that the military junta accept three special envoys. The dispute is the most recent event to cast doubt on ASEAN’s ability to efficiently respond to Myanmar’s crisis.
To stem record-high caseloads, countries across the region are seeking to boost their vaccination drives, with much of maritime Southeast Asia turning from Chinese to Western vaccines. Indonesia, Malaysia, and the Philippines — all of which have been relying heavily on China’s Sinovac vaccine — are expecting deliveries of tens of millions of Pfizer vaccine doses in the coming months, which will form a major part of the countries’ future inoculation campaigns. The influx of Western vaccines will serve to counter China’s assertive vaccine diplomacy, which has seen the donation or sale of roughly 120 million Chinese vaccine doses to the region — nearly five times what COVAX has provided to Southeast Asia. Meanwhile, Thailand has announced plans to mix vaccine doses, administering the AstraZeneca shot as a second dose to follow the Sinovac shot, while Vietnam similarly intends to provide the Pfizer vaccine as a second dose to follow the AstraZeneca vaccine. Although half of its population is fully vaccinated, Singapore has reimplemented strict public health measures to counter a surge in new cases, suspending restaurant dining and prohibiting social gatherings of more than two people until August 18.
The Council has already hosted several productive dialogues between senior officials in the Singaporean Government and American business leaders during its 2021 Virtual Singapore Business Mission. Our delegation of 31 U.S. firms continues to discuss priorities in the immediate term such as supporting Singapore’s COVID-19 response, accelerating digital transformation, and safely reopening travel and tourism as well as long-term strategic goals of supply chain resilience, workforce development, and sustainability. During our conversations, members of the Singaporean cabinet have signaled their desire to forge stronger partnerships with the United States, especially in the realms of pandemic response, digital trade, and sustainability.
After the State Bank of Vietnam (SBV) and the U.S. Treasury Department reached an accord on currency practices, the Office of the United States Trade Representative (USTR) issued a formal determination that no action should be taken under the Section 301 Investigation into Vietnam’s currency manipulation. Under the accord, the SBV will enable more flexibility in its currency exchange-rate, allowing the value of the Vietnamese Dong to adjust according to economic fundamentals and in line with the development of the Vietnamese market. Treasury and SBV’s accord aims to ease trade tensions between the U.S. and Vietnam after USTR initiated its Section 301 Investigation in October of 2020. USTR’s formal determination effectively concludes the investigation and the potential imposition of new tariffs on Vietnamese exports to the United States.
In partnership with the East-West Center and the ISEAS Yusof Ishak Institute, the Council officially launched the fifth edition of its flagship publication “ASEAN Matters for America/America Matters for ASEAN” on July 21. A joint project of these three organizations, ASEAN Matters showcases the strong and longstanding ties between the United States and ASEAN. The publication features a wealth of graphics, data, and analysis regarding the U.S.-ASEAN relationship, including information on strategic partnerships, trade, investment, jobs, travel and tourism, educational exchanges, people-to-people ties, and sister city partnerships. The fifth edition also includes sector-specific data on health, renewable energy, and green finance. This significant undertaking would not have been possible without the generous support of Google, MSD, Viatris, AIG, Chevron, Coca-Cola, 3M, Citi, HP, Marriott, Oracle, UL, Visa, and VMware. Following a morning program that featured remarks from prominent U.S. and ASEAN government officials as well as private sector leaders, we were proud to host nearly 100 friends and colleagues for an evening in-person reception in Washington, DC. I thank the many of you who have supported ASEAN Matters and participated in our launch programs.
Together with the U.S. Chamber of Commerce and the Business Council for International Understanding (BCIU), the Council’s COVID-19 Economic Recovery Task Force shared a productive virtual business dialogue with Vietnam’s Deputy Prime Minister Pham Binh Minh and his government on June 30. Participants shared their expertise in the areas of vaccine delivery, vaccine confidence, and the reopening of travel and tourism sectors. The Council looks forward to continuing our Leaders Business Dialogue series with Thailand’s Deputy Prime Minister Supattanapong Punmeechaow on August 2.
On the first day of Indonesia’s Trade and Investment Ministers’ visit to Washington DC, Marc Mealy and I had the honor of hosting a private lunch meeting with Indonesian Minister of Trade Muhammad Lutfi on July 12. The Council also enjoyed a meeting with Director of Multilateral Negotiation at the Ministry of Trade Dandy Iswara, who is slated to be nominated as the upcoming Indonesian ambassador to the World Trade Organization (WTO). On July 13, several of the Council’s member companies attended the Indonesia-U.S. Trade and Investment Dialogue at the Indonesian Embassy, organized in part by the Council. Minister Lutfi and Deputy Minister of Investment Promotion Ikmal Lukman briefed those present on Indonesia’s commitment to the Information Technology Agreement (ITA) and local content requirements, among other topics. Indonesia Investment Authority CEO Ridha Wirakusumah was also in attendance.
The Council conducted a Virtual ASEAN Workshop on July 15 in preparation for the United Nations Food Systems Summit (FSS) in September. The workshop provided ASEAN FSS country conveners with a platform to share innovative solutions raised in National Food Systems Dialogues while emphasizing the private sector’s role in building more sustainable and equitable food systems to achieve the 2030 Sustainable Development Goals (SDGs). The workshop began with opening remarks from Deputy Secretary-General for the ASEAN Economic Community Satvinder Singh, followed by keynote addresses from Acting Administrator of the U.S. Foreign Agricultural Service Daniel Whitley and Former USDA Undersecretary for Trade and Foreign Agricultural Affairs Ted McKinney. Mr. Pushpanathan Sundram, Senior Advisor for Public Policy and Government Affairs for Elanco Animal Health and Chairman of the Council’s Food & Agriculture Committee, also provided remarks highlighting member contributions and activities that enhance ASEAN’s food safety, security, and sustainability. Participating member companies included Bayer, Bower Group Asia, Cargill, Corteva Agrisciences, Elanco Animal Health, Herbalife Nutrition, and Nestle Purina Petcare. Officials from the ASEAN Secretariat Food, Agriculture and Forestry Division; U.S. Foreign Agriculture Service; Council of Agriculture and Rural Development, Cambodia; Ministry of National Development, Indonesia (Bappenas); Ministry of Agriculture and Forestry, Lao PDR; Ministry of Agriculture and Food Industries, Malaysia; Singapore Food Agency; Ministry of Agriculture and Cooperatives, Thailand; and the National Institute of Nutrition, Vietnam were also in attendance.
On June 24, the Council held the second event in its virtual Fireside Chat series on Women in Leadership in the Philippines. The discussion featured the Honorable Leni Robredo, Vice President of the Republic of the Philippines, who enjoyed a candid conversation with 3M Philippines Country Leader Reggie Pulumbarit. The Vice President discussed her priorities for the coming months, which include disaster and crisis management, sustainable livelihood programs, and digital tools to help businesses cope with the effects of the pandemic. She also provided updates on national projects such as Vaccine Express, Bayanihan e-konsulta, and Swab Cab, and shared insights into the country’s preparations for future pandemics and crises. American firms celebrated the Philippines’ remarkable achievement in ranking high on the 2020 Global Gender Gap Index — second only to New Zealand in the Asia Pacific — with Vice President Robredo discussing opportunities to collaborate on such sustainable development goals as gender equality and women’s empowerment. Following the moderated conversation, members had the opportunity to raise questions and offer comments. The Council additionally offered condolences during the opening of the Fireside Chat for the loss of former President Benigno S. Aquino III, whose passing was confirmed minutes before the event commenced. Vice President Robredo is the current leader of the Liberal Party, which the late President “Noynoy” Aquino also led. The Council subsequently issued a statement mourning the former president.
In partnership with SME Corp. Malaysia, the Council conducted a webinar for Small and Medium Enterprises (SMEs) on July 15. The virtual event, which ran for nearly three hours and covered four sessions, focused on enabling the digital capabilities of Malaysian SMEs during the pandemic, with over 200 Malaysian SME owners and executives in attendance. In the first session, Mr. Amrul Nazri Abdullah, Director of International Cooperation Division at SME Corp. Malaysia, introduced the new “MatchMe” initiative under the MyAssist MSME. This was followed by a session in which Mr. Jason Phua, Head of Business Development at Visa Malaysia, and Ms. Ng Say Ling, Head of SMEs at Visa Asia Pacific, highlighted the advantages of digital payments for small businesses. Visa then invited its SME Champion, Mr. Lance Cheang, Managing Director of VLAN Asia, to discuss his own digital transformation experience. In the third session, Ambassador Michael W. Michalak enjoyed a fireside chat session with Ms. Surina Shukri, CEO of Malaysia Digital Economy Corporation, with both speakers emphasizing the importance of the contemporary digital marketplace to SMEs. Finally, Mr. Justin Murugaya, Acting Malaysia Country Director for Facebook, discussed how Southeast Asian Mega-Sales Days (MSDs) have evolved from discount-driven events to “cultural moments” that present new brand-building opportunities. The webinar marked the Council’s fourth SME capacity building activity this year, conducted as part of a broader series on SME responses to the challenges of the pandemic.
On June 29, the Council hosted a virtual briefing on Malaysia’s Digital Economy Blueprint with MyDigital CEO Fabian Bigar, which provided an opportunity for members to discuss the future of Malaysia’s digital economy. The blueprint will be implemented in three phases with overarching aims to strengthen the country’s digital platforms, accelerate digital transformation and inclusion, and ultimately consolidate Malaysia’s role as a regional digital producer and supplier. Each phase will oversee steps taken towards boosting digital economy intelligence, fostering equitable access to digital opportunities, and bolstering cybersecurity. As the Malaysian government continues to implement digitization policies, socioeconomic issues will remain a topic of concern. The path to digitization will additionally require comprehensive regulations that align with existing policy frameworks, spearheaded by a private sector-led working group that actively engages with MyDigital to discuss regulation amendments.
Thank you as always for your support in this characteristically busy month and throughout my tenure at the Council. With only two full weeks left as the Council’s President and CEO, this is my final President’s Newsletter. I am incredibly proud of the work that we have accomplished together over the last 12 plus years. The work of the Council is not the work of one person alone. We have an incredibly dedicated and resourceful staff who will continue to build the Council after my departure. It has been an honor to work with them and to support your organizations’ growth in the most dynamic region of the world. I will miss our day-to-day working relationships but look forward to joining you on the membership side of the table. The Council will continue to collaborate with you, our members and partners, to ensure that, even amidst the evolving challenges of the global pandemic, we will continue to embrace the wealth of opportunities that ASEAN presents to us every day.
ASEAN Matters for America, and America Matters for ASEAN.
2021 Virtual Indonesia Business Mission (August 23-27)
The Council is registering senior-level executives for the 2021 Indonesia Virtual Business Mission. With an overarching theme of “Enhancing support to the Government of Indonesia for Post-COVID-19 Economic Recovery,” the Mission will consist of virtual meetings with senior officials of the Indonesian government, ranging from President Joko Widodo to members of the Cabinet, in addition to Directors General and the heads of regulatory institutions. Members will receive the unique opportunity to discuss trade and investment issues, address and design solutions to the challenges of a pandemic and post-pandemic era and introduce their company's latest developments in Indonesia. Members can register for the mission until August 6. Please reach out to Angga Antagia (firstname.lastname@example.org) or Mega Valentina (email@example.com) for more information.
2021 ASEAN Economic Ministers’ Virtual Business Mission (September 13-24)
The Council will be registering members for the 2021 ASEAN Economic Ministers’ (AEM) Virtual Business Mission, which will focus on ASEAN’s comprehensive post-pandemic recovery. The Mission will run between September 13 and September 24 and will include a consultation session with the AEM and the United States Trade Representative, meetings with the ASEAN Business Advisory Council and ASEAN Secretary-General, and bilateral meetings with priority Economic Ministers. The bilateral meetings will also provide opportunities for in-depth discussions on country-specific issues regarding trade, investment, supply chains, and digital economy ecosystem development. Please contact Marcella Suwandhi (firstname.lastname@example.org) and Nugraheni Utami (email@example.com) for more information.
2021 Vietnam Business Mission (October 4-8)
Due to the worsening COVID-19 outbreak in Vietnam, coupled with tighter measures from the Vietnamese government for businesses, the Council will postpone its annual Vietnam Business Mission until the week of October 4. The Council still plans to organize this mission under a hybrid format and will continue to track the situation on the ground while updating members with more mission details as they are available. In the meantime, please contact Hai Pham (firstname.lastname@example.org) and Vu Tu Thanh (email@example.com) if you have any questions or to indicate interest in joining the mission.
In The Press
Alexander Feldman Featured in Panel Discussion on United States-Thailand Alliance in the Indo-Pacific
On July 27, the Council’s President & CEO Alexander Feldman participated in a panel discussion titled “New Opportunities for the United States-Kingdom of Thailand Alliance in the Indo-Pacific,” hosted by the East-West Center and the Royal Thai Embassy. Thai Ambassador to the United States H.E. Manasvi Srisodapol, Vice Minister for Foreign Affairs of Thailand H.E. Dr. Vijavat Isarabhakdi, and U.S. Senator Tammy Duckworth delivered opening remarks at the virtual event. Click here to view a recording of the discussion.
Alexander Feldman and Ambassador Michael Michalak Launch the Fifth Edition of “ASEAN Matters for America/America Matters for ASEAN”
On July 21, the Council’s President & CEO Alexander Feldman and Senior Vice President and Regional Managing Director Ambassador Michael Michalak participated in the launch of the fifth edition of “ASEAN Matters for America/America Matters for ASEAN,” hosted in collaboration with the East-West Center and the ISEAS-Yusof Ishak Institute. Speakers included government officials from both the United States and ASEAN as well as private sector leaders. Click here to view a recording of the event.
Brunei has not reported any locally transmitted infections for nearly 450 days. Earlier this month, Brunei completed the first two phases of its vaccination drive, which included frontline workers, senior citizens, students travelling abroad, teachers, childcare staff, and adults with chronic diseases. Brunei has now initiated the third phase of its vaccination drive, which aims to vaccinate all citizens and residents over 18 years old, including foreign nationals. The country will be administering the Pfizer, Moderna, AstraZeneca, Sinopharm, and Johnson & Johnson vaccines for no cost. Around five percent of the country has been fully vaccinated.
On July 16, Cambodian Prime Minister Hun Sen announced that adolescents aged 12 to 17 would soon be eligible to receive COVID-19 vaccinations in a bid to accelerate the reopening of economic activities and schools. As of late July, around 60 percent of the targeted adult population of 10 million have received their first vaccine dose. Despite the country’s vaccination progress, the number of daily cases continues to raise concerns. Authorities continues to report hundreds of daily infections, with the death toll recently surpassing 1,000. As a response, the Cambodian government has suspended cross-border travel between Cambodia and Vietnam until August 18, restricting the movement of skilled workers, technicians, and employees of Vietnamese companies. To sustain economic activity, the two countries will cooperate in facilitating continued imports and exports while ensuring adherence to necessary health measures. Continued trade cooperation between the two countries will ensure sustained economic activity while adhering to necessary health regulations.
With the highly-contagious Delta variant estimated to account for 60 percent of its recent infections, Indonesia has surpassed India and Brazil. Since the onset of the pandemic, Indonesia has reported over three million cases and an estimated 76,000 deaths. As of late July, an estimated 15 percent of the population has received at least one dose of the COVID-19 vaccine. Finance Minister Sri Mulyani Indrawati has announced an increase of $13.39 billion in COVID-19 relief spending. In addition, the United States shipped more than three million doses of the Moderna vaccine to Indonesia on July 11. The Japanese government has also airlifted roughly two million vaccine doses to Indonesia, while Singapore has launched the Oxygen Shuttle Program, which will make regular shipments of emergency oxygen to Indonesia. President Joko “Jokowi” Widodo has additionally announced level 4 emergency mobility and activity restrictions (PPKM) on July 3, which were recently extended for the second time until August 2. In areas where PPKM is applied, non-essential businesses and schools must implement remote operations, while malls, places of worship, dine-in eating, and public leisure facilities have been shut down. Essential sectors like the finance industry may operate at 50 percent, while critical sectors such as the health, security, and energy industries can maintain full capacity operations.
Laos is experiencing a surge in COVID-19 cases, with all-time high daily infection rates recorded throughout July. To quell the surge, the Lao government has extended its national lockdown that came into effect on July 4, with a gradual loosening of restrictions scheduled for August 3. The country has so far reported six virus-related deaths. In late June, the Lao government announced plans to vaccinate 80 percent of Vientiane residents by the end of the year alongside the goal to inoculate 50 percent of the entire country during the same period. Health authorities have approved the use of the Pfizer, AstraZeneca, and Sinopharm vaccines. The country’s mass rollout of Pfizer doses began on June 16. Around 1.8 million individual vaccine doses have been administered as of late July, resulting in the full vaccination of an estimated 12 percent of the country’s population of 7.2 million. Furthermore, to ensure an equitable distribution of vaccines, the Lao government has prohibited privately-owned entities from purchasing vaccine doses for commercial purposes. The Ministry of Health has additionally discounted the idea of a “vaccine passport” to reduce or eliminate the 14-day quarantine requirement for fully vaccinated international travelers, citing the World Health Organization’s lack of recommendations regarding such an initiative.
Following a period of stabilized case rates and increased efforts for a national vaccine rollout, Malaysia has seen a resurgence in new infections, with daily cases often exceeding 10,000. However, Deputy Prime Minister Datuk Seri Ismail Sabri Yaakob has announced that Malaysia will still transition to Phase 2 of the National Recovery Plan in August, indicating the government’s confidence in combating the spread of the virus. New Standard Operating Procedures (SOPs) have already been introduced for Phase 1 of the National Recovery Plan, permitting government service counters to open for appointments, quarry and mining services to operate at 60 percent capacity, and supermarkets to operate for limited hours. The Enhanced Movement Control Order (EMCO) placed on eight of Selangor’s districts has also concluded. Approximately 18 percent of Malaysia has been fully vaccinated and conditional approval has been granted by the Malaysian Medical Device Authority for the import and distribution of self-test kits.
The pandemic has worsened drastically in Myanmar, with authorities reporting thousands of new cases every day. Last month, the SAC-controlled Ministry of Health and Sports (MOHS) announced that the Delta variant has been detected in Myanmar. Although cases are being recorded daily, infections are more widespread than currently known due to limited testing and underreporting.Oxygen has become nearly impossible to source for COVID-19 patients, while the prices of medical supplies has drastically increased. Supplies in scarcity include medical oxygen, oxygen concentrators, ventilators, surgical masks, personal protective equipment (PPE), home testing kits, and antigen testing kits. In Yangon, 22 townships have been placed under stay-at-home orders, while the junta instituted a nine-day public holiday from July 17 to July 25 to quell the spread of the virus.
The Philippines continues to log an average of over 6,000 new daily cases. In response, President Duterte has extended and tightened movement restrictions on businesses in Manila and nearby provinces until July 31 at least, confirming the onset of a new wave fueled by the Delta variant. Restrictions include the closure of gyms, salons, tourist attractions, and meeting venues, while banning social gatherings in homes and restricting dining out and churchgoing. The government also extended its travel ban to include Malaysia and Thailand on July 23; the ban already encompasses Indonesia and the majority of South Asia. More information on updated travel restrictions can be found here. Metro Manila mayors are urging the NTF Against COVID-19 to rescind a recently-issued order that allows children to leave their homes, while the Philippine National Police are preparing to enforce stricter quarantine measures if instructed by President Duterte.
Despite initial signs of recovery, recent virus clusters in Singapore have led to authorities reporting an average of 153 new daily infections. The Ministry of Health recently confirmed 42 new infections linked to a cluster associated with a karaoke lounge (KTV); community spread linked to the KTV cluster is growing from the Jurong Fishery Port, while clusters from wet markets and hawker centers are also raising concerns. While Singapore was initially slated to advance to Phase Three of reopening measures on July 12, the government announced a return to Phase Two (Heightened Alert) measures from July 22 to August 18, superseding the previous plan. Under Phase Two, the size of social gatherings has been reduced from five to two individuals, dining-in is suspended, and teleworking remains the default. Additionally, live performances, meeting, incentive, convention, and exhibition (MICE) events, spectator and participatory sports events, congregational and worship services, and cinemas are permitted to host up to 100 individuals with Pre-Event Testing (PET) or up to 50 individuals without PET. Separately, Singapore’s COVID-19 Multi-Ministry Task Force Ministers announced the development of a roadmap to highlight how Singapore can live with COVID-19 through high vaccination rates, strengthened testing and surveillance, improved treatments, and an emphasis on social responsibility. To ramp up its vaccination program, Singapore aims to fully vaccinate two-thirds of the population by National Day, August 9. As of late July, Singapore has fully vaccinated 54 percent of the population with 77% having received at least one shot.
Thailand has continued to experience a dramatic surge in cases as the country continues to see over 10,000 new cases a day. In addition to a national ban on public gatherings and the closure of malls and businesses in high risk areas, the Thai government has been considering additional measures to stem the surge, despite the recent reopening of a number of islands to foreign tourists. The islands, which include Phuket and Ko Samui, have been the primary target of the Thai government’s vaccination campaign; nearly 90 percent of Phuket’s population has been partially vaccinated, and all front-line workers in hospitality sectors are fully vaccinated. To prevent outbreaks on the island, 23 medical teams are on hand to investigate possible infection routes and enforce disease control measures. These high inoculation rates stand in stark contrast to the national full vaccination rate, which currently hovers around five percent. In a bid to boost general protection, the Thai government has announced plans to supplement China’s Sinovac vaccine with a second dose of the AstraZeneca vaccine, while health workers fully vaccinated with Sinovac can expect to receive a third booster dose of another vaccine.
Given the record surge in COVID-19 cases across the country since April, particularly in southern localities, the Vietnamese government has reimposed strict social distancing measures and movement restrictions in major cities and provinces, including Hanoi, Ho Chi Minh City, Dong Nai, Binh Duong, and Khanh Hoa. Through Directive 10, Directive 15, and Directive 16, authorities are quickly enforcing city- and locality-specific measures. Separately, Deputy Prime Minister Vu Duc Dam and the Ministry of Health have agreed on a nationwide home quarantine program for COVID-19 patients (F0 cases) and their close contacts (F1 cases). Although F1 cases have previously been isolated at centralized quarantine centers, the new program aims to prevent overloading at medical facilities and reduce the risk of cross-infection. Meanwhile, the Vietnamese government is encouraging localities, businesses, and organizations to help secure COVID-19 vaccine supplies for Vietnam. To facilitate this process, the Ministry of Health has published a list of 36 entities authorized to procure, import, and store the COVID-19 vaccine.
Country, Industry and Advocacy Updates
Vietnam Issues Nationwide Code of Conduct for Social Media
On June 17, Vietnam’s Ministry of Information and Communications (MIC) issued a nationwide code of conduct for social media behaviors (copy in Vietnamese here). The new code requires social media providers in Vietnam to “deal with users in accordance with Vietnamese internet & cyber security related laws” when requested by authorities to remove content from their platforms. Social media service providers must also respect users’ rights to privacy, publicize their methods for finding content deemed illicit (including violations of copyright laws), and cooperate with authorities in removing such content. The MIC has also proposed changes to Decree 72/2013/ND-CP on the management, supply, and usage of internet services and information online, aiming to tighten the government’s control over live-streaming activities on social media like Facebook and YouTube (copy in Vietnamese here). The current draft maintains that only authorized social media platforms can offer live-streaming or monetizable services. Operators of accounts with 10,000 or more followers/subscribers in Vietnam are required to provide contact information and register with the ministry, according to the draft decree. Furthermore, social media platforms will be asked to block or flag content within 24 hours upon being issued “justified” requests by Vietnamese individuals and organizations affected by such content.
Phuket Sandbox Attracts Influx of Foreign Tourists
On July 1, the Royal Thai Government launched the Phuket sandbox tourism scheme, allowing fully vaccinated tourists to visit the island of Phuket while being exempt from the country’s usual quarantine requirements. Travelers are required to present proof of vaccination, a negative COVID-19 test, and insurance that covers COVID-19 treatment, and they must take three COVID-19 tests in Phuket at their own expense if staying for 14 days. The government has prioritized vaccinations for the island in preparation for the program’s launch, with 85 percent of the island’s population partially vaccinated and all front-line workers in hospitality sectors fully vaccinated. To prevent outbreaks, 23 medical teams are on hand to investigate possible infection routes and enforce disease control measures. Owing to the sandbox program, hundreds of foreign travelers are arriving in Phuket every day, with nearly 5,000 tourist arrivals in the program’s first 11 days. An estimated 20,000 jobs have been created to support the sandbox program, with 50 percent of hotels slated to reopen by October. On July 15, the Phuket sandbox model came into effect in the popular island destinations of Ko Samui, Ko Pha-ngan, and Ko Tao, dubbed the ‘Samui Plus’ program. Additionally, on July 14, the government announced that the seaside resort town of Hua Hin — located on the Thai mainland — would similarly open to foreign tourists on October 1. As the tourism sector is a crucial driver of the Thai economy, these steady steps forward will support the government’s planned formal reopening of the country by October 15.
U.S. Treasury Announces New Round of Sanctions Against Burmese Individuals
On July 2, the U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC) imposed a new round of sanctions against 22 individuals associated with Myanmar’s military junta. Targeted individuals include three members of Myanmar’s State Administration Council (SAC), four SAC-appointed Union Ministers (Chit Naing, Minister of Information; Aung Naing Oo, Minister of Investment and Foreign Economic Relations; Myint Kyaing, Minister of Labor, Immigration, and Population; and Thet Thet Khine, Minister of Social Welfare, Relief and Resettlement), and 15 family members of SAC officials, all of whom were added to the Specially Designated Nationals And Blocked Persons (SDN) List. In addition, the U.S. Department of Commerce's Bureau of Industry and Security (BIS) added four companies that possess business affiliations and/or revenue-sharing agreements with the Myanmar Economic Holdings Limited (MEHL) to its flagged Entity List.
United Kingdom and Singapore Begin Negotiations for Digital Economy Agreement
On June 29, Singapore and the United Kingdom announced the launch of negotiations for a UK-Singapore Digital Economy Agreement (DEA). The DEA will serve as a model for global digital trade rules, allowing for new opportunities in the digital economy while protecting businesses and consumers. The DEA aims to establish forward-looking rules for trusted cross-border data flows, disallow unjustified data localization, uphold high standards of personal data protection, and strengthen cybersecurity cooperation between the United Kingdom and Singapore. In addition, the agreement will connect and encourage interoperability between the countries’ digital systems. The deal will also play a role in promoting emerging and innovative technologies and expanding collaboration for financial services. The DEA is the first digital trade agreement made between a European and an Asian country. Singapore has already signed digital trade agreements with Chile, New Zealand, and Australia. The city-state has also begun negotiations with South Korea.
Philippine President Rodrigo Duterte’s Final State of the Nation Address
On July 25, Philippine President Rodrigo Duterte delivered his sixth and final State of the Nation Address (SONA). President Duterte emphasized government efforts to boost COVID-19 testing and deliver infrastructure projects to voter-rich Metro Manila and Bicol province. He declared that the Philippines “cannot afford more lockdowns” and that the country has invested enormous amounts of resources to build the capacity to tackle the pandemic. President Duterte also urged lawmakers to pass the proposed amendments to the Retail Trade Liberalization Act (RTLA), Public Service Act (PSA), and the Foreign Investments Act (FIA). These bills are subject to further hearings and readings before they can be presented to the president for his signature. The RTLA amendment would lower the paid-up capital for foreign retail enterprises from the current 120 million pesos ($2.5 million) to 50 million pesos ($993,000). The FIA amendment would ease rules on foreign businesses, while the PSA amendments propose that public utilities be described and distinguished from public services. Separately, President Duterte claimed that previous contracts allowed water concessionaires to pay their corporate taxes through fees paid by consumers. In June 2020, he ordered new contracts to be made with the firms; the contracts include the removal of government non-interference clauses and the adjustment of provisions that compromise medium- and long-term government liabilities. He intends to sign these contracts once they have been thoroughly reviewed.
Laos Issues New Guidelines on Obtaining Investment Promotion Incentives
To continue fostering a business-friendly environment, the Lao government has recently issued new guidelines clarifying aspects of the Law on Investment Promotion No. 14/NA (LIP), regulations that were initially made effective in 2017. The original law outlined the list of sectors in which investors could receive certain incentives — such as exemption from state land rental or profit tax holidays — while creating an ‘incentive certificate’ to be issued when an investment project qualifies for these incentives. In the new guidelines, requirements for eligibility to receive investment incentives have been rendered more explicit and detailed. In non-sector specific terms, all legal entities seeking incentives must invest at least $127,000 in any of the approved sectors. This requirement can also be met by employing at least 30 Lao technical staff or at least 50 Lao workers whose employment contracts last at least one year. Additionally, all entities applying for incentives must fulfil their tax obligations, comply with all relevant local laws and regulations, and pay up registered capital. More specific requirements and regulations for each sector are outlined in the guidelines; approved fields for incentive eligibility include the healthcare, infrastructure, technology, tourism, agriculture, and finance sectors, among others. The updated guidelines serve to bolster the transparency and consistency of Laos’ business environment, paving the way for a more foreign investment-friendly future.
Bank Indonesia Digital Currency Launch
Bank Indonesia (BI) Governor Perry Warjiyo has announced plans to launch a Central Bank Digital Currency (CBDCs), a regulated virtual representation of the Indonesian Rupiah. Although no timeline has been released, BI aims to issue wholesale CBDC to financial institutions for business-to-business transactions and retail CBDC for business-to-consumer transactions. In addition to supplementing state revenue through increased taxation, CBDC will also permit data traceability. Such traceability will allow the government to implement data-driven regulations, manage the amount of money in circulation to prevent inflation, and project economic growth.
Indonesian Bill on the General Tax Procedure (RUU KUP)
Indonesia is formulating a draft amendment to Law No. 6 of 1983 on General Tax Procedure that will introduce increases in Value-Added Tax (VAT) and personal income tax for high-net-worth individuals, in addition to proposing a new carbon tax and second tax amnesty. The bill will enable the Finance Ministry to impose multiple VAT rates of 5-25 percent, while adding a fifth income bracket in which a 35 percent tax will be imposed upon earners whose personal income is at least $348,000 per annum. The tax reform aims to finance the government’s budget deficit, which has been exacerbated by the pandemic. Law No. 2 of 2020 on Financial Policy and System for Handling COVID-19 Pandemic mandates the government to return the budget deficit to below three percent of the country’s national GDP by 2023, after allowing up to a five percent deficit for COVID-19 relief.
Thailand to Sign First Mini-FTA
The Royal Thai Government has scheduled to sign a Memorandum of Understanding (MoU) to establish a trade partnership with the Japanese city of Kofu in what has been termed Thailand’s first Mini-Free Trade Agreement (Mini-FTA). Thai Minister of Commerce Jurin Laksanawisit has underlined the trade area’s potential to boost trade, investment, and economic cooperation between Kofu and Thailand and indicated that future mini-FTAs with other states are a key priority for the Ministry. He underlined how more focused bilateral partnerships at the city or state level offer deeper opportunities for strengthening trade and investment in specifically targeted industries; Kofu, for instance, is a gems and jewelry production hub both in Japan and globally and will also provide Thailand with manufacturing, joint marketing, and technology transfer opportunities. Future partners for mini-FTAs with Thailand include Hainan Province in China, Gyeonggi Province in South Korea, and Telangana state in India. The mini-FTA with Telangana was initially slated for signing in January this year as Thailand’s first such partnership but has been delayed until August, by which time the Hainan mini-FTA will also have been signed. The new trade concept for Thailand will bring a host of opportunities for deeper private and public sector engagement with a number of states in the region.
Philippines Elections Race Begins
The deadline for candidate registration in the upcoming Philippine national elections is approaching, with COVID-19 mitigation and the West Philippine Sea key election issues across all parties. Philippine Senator Emmanual “Manny” Pacquiao was recently voted out as leader of PDP-Laban, the country’s ruling party, weeks after challenging President Rodrigo Duterte over his position on a Chinese alliance. A faction of the ruling party led by Energy Secretary Alfonso Cusi called the vote at a National Assembly meeting on July 17, with Cusi subsequently elected the new party president.
Draft Amendment to Vietnam Decree 72 on the Management of Internet Services
The Vietnam Ministry of Information and Communication (MIC) recently released a new draft amendment to Decree No. 72/2013/ND-CP on the Management, Provision, and Use of Internet Services and Online Information. The amended decree will institute a variety of reforms including enhanced regulations on live streaming services, obligations for child protection on social media platforms, and stricter provisions for the removal of illegal content. The decree will also impose new requirements for data centers, cloud services, and offshore social network providers. The MIC is receiving feedback for the proposed amendments to Decree 72 until September 5. The Council is collecting inputs from members to submit to the MIC. Please send your comments to Heidi Mah (firstname.lastname@example.org), Minh Vu (email@example.com), and Ryan DelGaudio (firstname.lastname@example.org) by COB August 4.
Philippines Tax Provisions
This month, the Council’s Philippines team initiated two new advocacy development efforts related to a proposed VAT policy and the Implementing Rules and Regulations (IRRs) related to tax incentives under the recently passed CREATE Law. The former involves a Philippine government-imposed 12 percent VAT applied on the sale of goods and services to registered businesses located in Economic Zones, many of which include Council members. Under the TRAIN law, locally produced goods and services purchased by businesses in Economic Zones were previously taxed at zero percent under the condition that a 12 percent VAT would be adopted when a VAT refund mechanism would be established. The Philippines BIR, through RR 9-2021, claimed that the refund system had been established and that the 12 percent VAT would therefore be imposed. The latter involves a proposed provision in the IRRs of the CREATE law, which states that any “project or activity performed or conducted outside the geographical boundaries of the zone or freeport by a PEZA registered business shall not be entitled to the incentives provided in the CREATE law.” This provision poses an issue for any member company that is PEZA-registered and eligible for tax incentives but would be denied such incentives if its employees are working remotely (outside the geographic boundary of an economic zone) owing to COVID-19 restrictions. In addition to calling for member input to develop advocacy messages for the Philippine government, Council staff participated in an industry dialogue with officials from the Philippines BIR on the proposed 12 percent VAT on July 15. On July 20, the BIR informed the Council that the proposed 12 percent VAT would be deferred. For more information on either issue, members can contact Ms. Margarita Lim at email@example.com.
U.S. Private Sector Support for Inclusive and Sustainable Recovery from COVID-19 in Indonesia
The Council invites our members to submit information on their socio-economic initiatives in Indonesia. The Council will compile members’ inputs in a brief yet comprehensive report that highlights members’ support of COVID-19 relief in Indonesia, which will be prepared for the 2021 Indonesia Virtual Business Mission. The report aims to highlight the positive impact our members have made/are making for the people of Indonesia and to strengthen the positioning of U.S. companies as key partners, resources, and stakeholders of the Indonesian government. We invite all members of US-ABC to provide their information, regardless of their participation in the Mission. The Council will share this report with President Joko Widodo and 27 other Ministries/Institutions with whom we hope to meet during the Mission. Please submit your inputs before COB August 6, Jakarta time. If you have any questions, please contact Mega Valentina at firstname.lastname@example.org.
Country and Industry Updates
See our most recent Updates and Analysis for more detail: