President's Newsletter - May 2019

Alexander C. Feldman
Alexander C. Feldman
President & CEO
US-ASEAN Business Council

Dear Members,​

Since my last newsletter, the international community has felt two great losses. On April 19, we lost H.E. Rodolfo C. Severino Jr., who was the 10th Secretary General of ASEAN and the second Filipino to hold the position. Ambassador Severino saw ASEAN through the new millennium and the peak of the Asian financial crisis (see our press release). On April 28, former U.S. senior Senator Richard Lugar passed. Senator Lugar’s work in nonproliferation leaves a legacy of a safer world, and in ASEAN, his diplomacy has been credited for saving the U.S.-Philippine relationship (see our press release). I extend my deepest condolences on the loss of these accomplished leaders.

In Thailand, it has been a little over two weeks since the May 4-6 coronation ceremony celebrating the country’s first new king in 77 years. In his first official public audience as King, His Majesty Maha Vajiralongkorn, Rama X emphasized the importance of unity and goodwill at a time when Thailand is undergoing political transition following its general election, the first such election in eight years, on March 24. The King’s message will be an important bulwark of stability given the indecisive election results. According to final results released on May 7 and 8, no one party won an absolute majority in the Lower House, but the pro-regime Palang Pracharat was able to cobble together a coalition of 20 parties, giving it a total of 255 seats in the 500-seat Lower House. The anti-military coalition, led by the Pheu Thai Party, won 245 seats. The inaugural session of the Lower House is slated to open on May 24, and, given the slim majority of Palang Pracharat’s coalition along with the 250-seat military-picked Senate, a Prime Minister could be elected soon after, with the current Prime Minister Prayut Chan-o-Cha as the leading contender though a possible compromise candidate, Ampon Kittiampon, has also emerged. Khun Ampon is a technocrat who has worked with seven previous Prime Ministers and is close to the King, having been named to the Privy Council last year as well as more recently to the Crown Properties board. Political developments will continue to move rapidly in Thailand, particularly as parties unaffiliated with either the Pro or Anti-Prayut coalitions, such as the Democrats and the Bhumjaithai Party, decide their alignments in the last critical days before Parliament opens. See our recent Analytical Update here for more information.

Philippine Congressional elections took place on May 13, and they have been widely seen as a referendum on the current administration and controversial plans to shift to a federal system and overhaul the tax system. April opinion polls showed a surge in President Duterte’s popularity, which bolstered Duterte-backed candidates from the new pro-administration party, Hugpong ng Pagbabago, or HNP, led by President Duterte's daughter and mayor of Davao City, Sara Duterte. Seats for local offices, the House of Representatives, and the open half of 24 Senate positions were voted on. As of May 20 EDT, official results tallied 165 of 167 certificates of canvass (COCs) representing 99.13 percent of registered voters. Results show overwhelming support for Duterte administration candidates with none of the 8 opposition bets on the “ocho derecho” ticket winning a single seat. The new Congress is an important focal point for measures shaping the domestic business environment, and how it tackles bills lifting foreign ownership restrictions in existing statutes would ultimately set the tone for liberalizing the Philippine constitution. The Council will continue to keep members updated on developments.

Official results of Indonesia’s historic April 17 election are expected to be announced on May 22. Tallies in 28 out of 34 provinces as of May 19 have placed incumbent President Joko “Jokowi” Widodo and running mate Ma’ruf Amin in the lead with 55 percent of votes. Unofficial quick counts by private pollsters also indicate an incumbent victory. Supporters of President Jokowi’s challenger, retired General Prabowo Subianto, are expected to rally in front of the General Elections Commission (KPU) building when official announcements are made. Prabowo will have the opportunity to officially challenge the election results in constitutional court following the announcement. This week Prabowo’s campaign team has stated that they will not challenge the results despite earlier rhetoric. The presidential inauguration is slated for October 20.

Also in Indonesia, the Council has moved to a new location and welcomed an important addition to our team. Landry Subianto joins as Chief Representative and Head of our Jakarta office as of May 1. Landry brings a wealth of experience from over 20 years in public service in government and academia, proven leadership and extensive relationships to our team in Indonesia. Most recently Landry was the Deputy Director for Policy Support and External Programs at the Office of Foreign Minister. He was also Assistant to the Special Staff of President Susilo Bambang Yudhoyono on International Affairs. We look forward to the chance for many of you to develop a close working relationship with him. Please read his full biography on our website here.

We recently wrapped up our highly successful annual Singapore Business Mission. The Council was among the first business groups to meet members of the Singapore cabinet following the reshuffle announced on April 23. This year’s business mission also celebrates the 15th year of significant two-way trade and investment growth since the U.S.-Singapore Free Trade Agreement first came into force January 1, 2004. Key economic policy and connectivity goals after its 2018 ASEAN Chairmanship, with a focus on Singapore’s Smart Nation initiative, were main topics of discussion. For more information, see our press release here.

Next month is an exciting and special one for us at the Council as we celebrate our 35th Anniversary at our annual Gala. We would love to have you in the room for this wonderful evening. Information on sponsorship tiers is available and questions may be directed to Kathi Lunardi at klunardi@usasean.org.
For those observing, Ramadan Mubarak!

Highlights

Looking Ahead

Advocacy

  • Last month, the Council continued its advocacy efforts with the Government of Vietnam (GOV) regarding agricultural regulations and import policies.  The Council co-signed a letter with the EU-ASEAN Business Council to Minister Dung, Chairman of the Office of the Government requesting the Ministry of Agriculture and Rural Development suspend its decision to impose a ban on glyphosate-based crop protection products in Vietnam and conduct a consultation process with industry and other stakeholders.  The letter noted that such a consultation process would be consistent with Vietnam’s commitments under recent guidelines adopted by the ASEAN Economic Ministers governing imposition of non-tariff measures on goods.  The Council is also participating in a multi-stakeholder teleconference regarding upcoming advocacy steps to address the GOV’s phytosanitary import policies on wheat which have disrupted commercial exports to Vietnam. For more information, please contact Sunita Kapoor at skapoor@usasean.org.
  • The Council recently joined a multi-association letter with the U.S. Chamber of Commerce, AmCham-Indonesia and the American Indonesian Chamber of Commerce to the Government of Indonesia’s Ministry of Law and Human Rights regarding the draft implementing rules and regulations for the Compulsory Licenses regulation, Ministerial Reg. No. 39.  The letter proposed amendments to the regulation because some of the provisions could undermine intellectual property protections in Indonesia.  The recommended changes focused on: (1) mitigating WTO Inconsistencies of the Patent Law and the Implementing Regulation (Reg. No. 39), (2) providing clarity and ensuring due process in the compulsory license process and (3) ensuring administrative efficiency of the process.  For more information or a copy of the letter, please contact Kim Yaeger at kyaeger@usasean.org.
  • The Council is in the process of drafting and transmitting comments on behalf of members advocating to the governments of Singapore and Indonesia on two proposed regulatory frameworks.  In Singapore, we will transmit comments to the Monetary Authority of Singapore on their proposed Payments Services Regulation.  In Indonesia, in collaboration with the Business Software Alliance, we will transmit comments to the National Cyber and Encryption Agency (Badan Siber dan Sandi Negara/ BSSN) on their proposed regulation on Information Security Management Systems, which will act as an implementing regulation of Government Regulation 82 of 2012 on Electronic Systems and Transactions. For more information, please contact Michaela Wong at mwong@usasean.org (Singapore) or Steven Gunawan at sgunawan@usasean.org (Indonesia).

Promotion

As part of the Council's commitment to the UN's Every Woman Every Child (EWEC) initiative, we will be creating a website that highlights the work our members are doing in ASEAN focused on maternal and child health.  In the first phase, we will be collecting submissions from members which can be any past, present or future programs.  We are currently building a submission template and will send a call-for-input to members soon.  Interested members are encouraged to contact Hai Pham at hpham@usasean.org for more information on how to participate.

Membership

In an effort to continually improve our services to members, the Council has started an “Every Member, Every Quarter” initiative.  Our goal is to ensure we have a face-to-face check-in with each of our members, every quarter.  If you are interested in a get-together to update us on your priorities, tell us about an issue you are facing or just to say hello, please email Kathi Lunardi, our Membership Director.

Regional Highlights

ASEAN

Major Developments

  • On April 24, during the 7th ASEAN Coordinating Committee on Micro, Small and Medium Enterprises (ACCMSME) Meeting, the Council signed a Memorandum of Understanding (MoU) with the Philippines Department of Trade and Industry and the Philippine Trade Training Centre to formalize collaboration on the ASEAN SME Academy, an online resource platform for ASEAN MSMEs which first launched in 2016.  The ASEAN SME Academy offers interactive training, mentoring, resources and business information for ASEAN SMEs.  Materials on the platform are provided by U.S. companies, including Cisco, Baker & McKenzie, Facebook, Google, Mastercard, Microsoft, PayPal, HP Inc., Procter & Gamble, and FedEx.
  • Some 165 owners and executives of travel and tourism small and medium-sized enterprises (SMEs) from Manila and surrounding cities participated in a full-day workshop on May 3 entitled, “Strengthening a Sustainable Tourism Model for SMEs in Digital Transformation.”  The workshop was a joint initiative of the Council, the Philippine Department of Trade and Industry (DTI) and the Philippine Department of Tourism (DOT) with support from the Philippine Trade Training Centre (PTTC), the Philippine Chamber of Commerce and Industry (PCCI) and the Philippine Exporters Confederation, Inc. (PHILEXPORT).  This was the second capacity-building workshop focused specifically on SMEs in the travel and tourism industry after the first such workshop was held in Bangkok last year.  Council members Cisco, Marriott International, Coca-Cola and Google shared their expertise on promoting greater economic inclusivity and utilization of digital tools to the SME participants at the workshop. 
  • The Council conducted an ASEAN Committee Call on May 6, joined by Jane Bocklage, Charge d’Affaires, ad interim, of the U.S. Mission to ASEAN in Jakarta who gave a briefing about the U.S. Government's Free and Open Indo-Pacific (FOIP) strategy,  economic initiatives, the Digital Economy Series, the U.S. ASEAN Smart Cities Partnership and the U.S.-ASEAN Internship Program.  During the call, the Council also shared the ASEAN Committee 2019 Strategy, Work Plan and ASEAN Committee Main Tasks.  The three main roles for the ASEAN Committee are advocacy, strategic communication and coordination.  
  • On May 14, the Council’s U.S.-ASEAN Internship Program marked its first anniversary through the Internship Fair “Exploring Unlimited Possibilities.”  The event featured a keynote speech from Deputy Secretary General of the ASEAN Economic Community Department H.E. Dr. Aladdin D. Rillo and closing remarks from Chargé d'Affaires ad interim of the U.S. Mission to ASEAN Jane Bocklage.  This event was attended and viewed from Facebook Live by around 300 students from Southeast Asia.  Council members Marriot International, General Electric Indonesia, UPS, Procter & Gamble and Apple Developer Academy offered professional development and career advice at the event.

Looking Ahead

  • May 23, SME Workshop: ​This workshop in Kuala Lumpur will focus on increasing Malaysia SMEs' competitiveness through knowledge-sharing sessions from U.S. companies and local partners on topics such as digital transformation for SMEs.

View the Council's latest ASEAN updates

CPTPP

Major Developments

  • With the CPTPP going into force this year, Vietnam has seen a pronounced positive benefit to its total export growth this year, led by significant increases in exports to CPTPP markets like Japan and Canada in Q1 of 2019 relative to Q1 of 2018.  Within roughly the first quarter of 2019, Vietnam's exports to Japan, its largest export market in CPTPP, reached US $4.62 billion, up 6.68 percent from the same period last year.  Just in the first two months of 2019, Vietnam's exports to Japan increased by 11.2 percent, according to the General Department of Vietnam Customs.  CPTPP is also allowing Vietnam to enter markets with which it currently does not have a bilateral free trade agreement.  Vietnam's exports to Canada in the first two months of the year increased by 36.7 percent, reaching US $506 million.
  • With the administration of Malaysian Prime Minister Dr. Mahathir Mohamad reaching its one-year anniversary, it is possible that new efforts may be undertaken to revitalize the Government of Malaysia’s trade policy agenda.  To date, working with ASEAN to support the successful conclusion of the RCEP negotiations has remained a top priority.  However, debate on CPTPP ratification continues not to be an economic policy priority.  It may be that if the CPTPP begins to have a trade displacement impact for Malaysian exporters in markets like Japan and Vietnam, Malaysia’s business community would likely become more vocal in advocating that the government consider measures to help maintain Malaysia’s trade competitiveness.         

View the Council's latest TPP updates

Industry Highlights

Customs

Major Developments

  • On March 29, Indonesia Minister of Finance Regulation No. 32/PMK.010/2019 entered into effect to expand the types of exported services that are subject to 0 percent Value-Added Tax. The new law stipulates that “Exported Service Activities” are defined as activities in the Indonesian Customs Area that cause a certain goods, facilities, conveniences, or rights to be available for the utilization outside of the Indonesian Customs Area, including toll manufacturing services, repair and maintenance services, and freight forwarding services in relation to exported goods.

Advocacy

  • On April 24, the Council attended the 4th Private Sector Consultation at the 30th Meeting of the Coordinating Committee on Customs in Kuala Lumpur.  The session’s topics included the Joint Business Council’s Proposal on Trade Facilitation, preparation for the Consultation at the 28th Meeting of the ASEAN Directors General of Customs in June, and customs capacity-building activities.  Please contact Shay Wester at swester@usasean.org and Michaela Wong at mwong@usasean.org if you have any questions.

Looking Ahead

  • Mission to the 2019 ASEAN Customs Directors General Meeting, June 11-12:  The first Customs & Trade Facilitation Committee Calls took place on May 15 to kickstart planning for the Mission.  A second planning call will be scheduled for the week of May 27. Please contact Michaela Wong at mwong@usasean.org and Shay Wester at swester@usasean.org if you have any questions.

View the Council's latest Customs updates

Defense & Security

Major Developments

During a visit to Malaysia in late April, Assistant Secretary of Defense for Indo-Pacific Security Affairs Randall Schriver said that the Pentagon will unveil a new U.S. Indo-Pacific strategy during Acting Secretary of Defense Patrick Shanahan’s speech at the Shangri La Dialogues, which will take place in Singapore from May 31 – June 2.  Shriver emphasized that the Indo-Pacific remains “the priority theater” in the U.S. National Defense and Security Strategy and that, amidst China’s growing encroachment in the South China Sea, an increase in U.S. presence and resource allocation throughout the region will become evident over time.  The specifics of said increased presence or resources were not discussed by Schriver but in March, Acting Secretary Shanahan, in his testimony to the U.S. Congress, had said that the 2020 Department of Defense budget was shaped by taking national security threats from China into account.

View the Council's latest Defense & Security updates

Energy

Major Developments

  • On April 30, Thailand’s cabinet approved the country’s updated Power Development Plan for 2018-2037 (PDP 2018-2037) after three years of revision.  The new PDP is expected to be enacted within the second quarter of this year.  It calls for an increase in Thailand’s power production capacity by 67 percent, from 46,090 MW in 2017 to more than 77,000 MW by 2037.  The new PDP also places greater focus on renewable energy at the expense of coal.  Under the plan, renewable sources will make up about 37 percent of power production, while coal will account for only 12 percent.  In contrast, the previous PDP (PDP 2015-2036) had coal making up to 25 percent.  The new PDP also includes a larger role for natural gas, up to 53 percent from 40 percent in the last PDP.
  • During an April 5 press conference, the Director of the Electricity Regulatory Authority of Vietnam (ERAV) announced that the Ministry of Trade and Industry (MoIT) is considering allowing companies using large amounts of power to purchase electricity directly from power plants.  ERAV reportedly aims to launch a competitive retail electricity market in 2021.  MoIT previously launched competitive power generation and wholesale power markets in 2012 and early this year, respectively, and plans to gradually increase the number of power corporations participating in the latter.
  • During a trip to Myanmar in April, Eric Jones, Chief of Staff of the Overseas Private Investment Corporation (OPIC), the U.S. Government’s development finance institution, said that OPIC is looking for financing opportunities in the country’s energy and infrastructure sectors.  OPIC is in the process of being reorganized into the U.S. International Development Finance Corporation following the passage of the Build Act last October.

Advocacy

  • On May 9, the Energy Committee held its second Energy Roundtable, featuring a briefing on Asia EDGE by Deputy Assistant Secretary of State for Energy Resources Melissa Simpson.  Asia EDGE (Enhancing Development and Growth through Energy) is the energy-focused pillar of the U.S. Government's Free and Open Indo-Pacific strategy.  It aims to grow sustainable and secure energy markets throughout the Indo-Pacific by strengthening energy security, increasing energy diversification and trade and expanding energy access.  The Energy Roundtable Series is a new initiative to keep member companies well-informed of prevailing and shifting trends in Southeast Asia's vital energy sector.

View the Council's latest Energy updates

Financial Services

Major Developments

  • The Bangko Sentral ng Pilipinas (BSP) is in the process of finalizing implementing rules and regulations of the National Payment System Act, signed into effect by President Duterte in October.  The first set of rules brings good news for financial institutions and non-bank entities, which are expected to experience a more streamlined registration process for approval as electronic payment operators.  The draft circular also provides a transition period that allows for Operators of Payment Systems to register with BSP.
  • On May 7, the Monetary Authority of Singapore announced it is considering whether to allow financial technology firms to operate digital-only banks.  MAS is conducting a study that will review how virtual banks with non-bank parentage would offer value, and how potential risks would be mitigated and contained.

Advocacy

  • The Council prepared its draft industry submission to the “Proposed Payment Services Regulations” consultation paper, released by the Monetary Authority of Singapore on April 10.  The Payment Services Bill was introduced and passed in Parliament on November 19, 2018 and January 14, 2019, respectively.  At the commencement of the Payment Services Act 2019 (“PS Act”), the Payment Systems (Oversight) Act (Cap. 222A) (“PS(O)A”) and the Money-Changing and Remittance Businesses Act (Cap. 187) (“MCRBA”) will be repealed.  Under the PS Act, the MAS will regulate significant Payment systems and the provision of payment services in Singapore.  Please contact Michaela Wong at mwong@usasean.org for more information.

View the Council's latest Financial Services updates

Food & Agriculture

Major Developments

  • In April, the Council continued its advocacy efforts with the Government of Vietnam (GOV) regarding agricultural regulations and import policies.  The Council co-signed a letter with the EU-ASEAN Business Council to Minister Dung, Chairman of the Office of the Government, requesting the Ministry of Agriculture and Rural Development suspend its decision to impose a ban on glyphosate-based crop protection products in Vietnam and conduct a consultation process with industry and other stakeholders.  The letter noted that such a consultation process would be consistent with Vietnam’s commitments under recent guidelines adopted by the ASEAN Economic Ministers governing imposition of non-tariff measures on goods.  The Council is also participating in a multi-stakeholder teleconference regarding upcoming advocacy steps to address the GOV’s phytosanitary import policies on wheat which have disrupted commercial exports to Vietnam.
  • Last month at the 34th Meeting of the ASEAN Committee on Disaster Management in Mandalay, the United Nations Economic and Social Commission for Asia and the Pacific and ASEAN launched a joint study entitled “Ready for the Dry Years:  Building Resilience to Drought in South-East Asia,” bringing attention to future scenarios of drought in parts of Southeast Asia and calling for intervention.  Ongoing drought conditions have negatively affected climates in Cambodia, the Philippines, Thailand and Vietnam.  The impacts are agricultural, environmental and socio-economic, and are particularly felt in lowered agricultural productivity, worsening economic inequalities and environmental detriment.  As ASEAN economies develop agricultural modernization strategies, high-tech agriculture and innovation in this sector can play a key role in addressing many challenges, and the private sector can be an important resource for policy-makers.   

Advocacy

  • The Fall Armyworm has caused significant damage to crops in Africa and South Asia and was found in 24 provinces in Thailand.  The Food and Agriculture Organization of the United Nations has warned of a strong threat of spread to the rest of Southeast Asia, given the region’s conducive tropical and subtropical climate.  To address this and help farmers protect against this threat, the Council, in cooperation with Kasetsart University, will be conducting a two-day program in Bangkok and Lopburi May 22-23. As part of this program, the Council has invited ASEAN agricultural officials from several countries in ASEAN to participate in a roundtable discussion in Bangkok and a field visit. For more information, please contact Sunita Kapoor at skapoor@usasean.org.

Looking Ahead

  • 2019 Food & Agriculture Industry Mission to Vietnam, June 26-28:  The Council is registering members for its Food & Agriculture Industry Mission to Vietnam, including an ASEAN Safe, Nutritious Food PPP Initiative Workshop on June 26.  This sector-focused mission will offer members an opportunity to engage key public and private sector stakeholders who make up Vietnam's domestic agriculture ecosystem.  The deadline for registration is Friday, June 7.  If you have any questions, please contact Sunita Kapoor at skapoor@usasean.org and Hai Pham at hpham@usasean.org.

View the Council's latest Food & Agriculture updates

Health & Life Sciences

Major Developments

Earlier this month, Malaysian Minister of Health Dzulkefly Ahmad said the Cabinet has approved the regulation of drug prices and noted that the Health Ministry will work with the Ministry of Domestic Trade and Consumer Affairs (KPDNHEP) on such regulations under the Price Control and Anti-Profiteering Act.  The Ministry wants to open another round of consultations with the pharmaceutical industry to discuss specifics.  The Council will continue to track the development of this regulation and will keep members updated on opportunities to provide comments.

Looking Ahead

As part of the Council's commitment to the UN's Every Woman Every Child (EWEC) initiative, we will be creating a website that highlights the work our members are doing in ASEAN focused on maternal and child health.  In the first phase, we will collect submissions from members, which can be any past, present or future programs.  We are currently building a submission template and will send a call-for-input to members soon.  Interested members are encouraged to contact Hai Pham at hpham@usasean.org for more information on how to participate.

View the Council's latest Health & Life Sciences updates

ICT

Major Developments

  • On May 8, Singapore passed its controversial “Protection from Online Falsehoods and Manipulation Bill,” also known as “fake news” legislation, after two days of contentious debate in Parliament.  This Bill gives Ministers across the Cabinet the right to identify falsehoods and have them removed.  The Government promises that action to enforce this bill would be handled fairly and evenly.  For more information, see our recent ICT Update here.
  • On May 6, Thailand’s Digital Economy and Promotion Agency announced plans to open and operate three research and development centers in the Eastern Economic Corridor (EEC) Digital Park.  This follows confirmed commitments from the Governments of Japan and China to support the EEC’s smart city development initiatives. For more information, see our recent ICT Update here.
  • On April 10, the Secretary General of the National Broadcasting and Telecommunications Commission, Takorn Tantasith, announced that Thailand will not impose a surcharge on over-the-top service providers.  For more information, see our recent ICT Update here.
  • Vietnam Cybersecurity Law Implementation Decree: Last week, the Council learned that the Vietnam Ministry of Public Security (MPS) has submitted the consolidated draft of the cybersecurity decree to the Government of Vietnam (GOV). The government will now review this draft and direct MPS to conduct another round of industry consultations and comments if deemed necessary. The draft will first be circulated to relevant departments within the Office of the Government for initial comments, and then sent out to all government agencies for their comments. Following this step, a cabinet meeting will be called to vote on the decree. This process could take place within the next month, and the government will not be rushing this process. Following this update, the Council will be engaging with the Government of Vietnam to advocate for another round of industry comments to the decree. If you have any questions, please contact Vu Tu Thanh at tvu@usasean.org and Ella Duangkaew at eduangkaew@usasean.org.
  • Vietnam Decree 06/2016 (OTT Regulation): The Council's advocacy efforts on Vietnam's Decree 06/2016 (OTT Regulation) with the Government of Vietnam has stalled the drafting process, and a new draft requested by the Minister of Information and Communication (MIC) has not been completed by the drafting team. There is currently no indication of when this draft will be completed and submitted to the government for approval. If you have any questions, please contact Vu Tu Thanh at tvu@usasean.org and Ella Duangkaew at eduangkaew@usasean.org.

Advocacy

  • On May 16, the Council transmitted its final industry submission on Indonesia’s National Cyber and Encryption Agency (BSSN) Draft Regulation on Information Security Management Systems.  For more information or a copy of the submission, please contact Steven Gunawan at sgunawan@usasean.org.

Looking Ahead

  • June 7, ICT Committee Meeting:  The Council to invite members to our monthly in-person ICT Committee Meeting, location TBC. The meeting will look to follow up on what was presented and discussed in the May 3  in-person ICT Committee Meeting, and focus on strategy and next steps for select items that are part of the Committee's 2019 plans and priorities. In-person participation is encouraged, but a dial-in option will be provided. Please contact Jamie Lim (jlim@usasean.org) or Ella Duangkaew (eduangkaew@usasean.org) with any questions.
  • May 29, Meeting of the Singapore Joint Cyber Security Working Group: In order to increase cooperation on cybersecurity, the U.S. Embassy Singapore proposed a Joint Cyber Security Working Group (JCSWG) to Singapore’s Cyber Security Agency and the U.S. private sector. Please contact Jamie Lim at jlim@usasean.org for more information.

View the Council's latest ICT updates

Infrastructure

Major Developments

  • The Council has reached out to the ASEAN Secretariat to join an existing working group on transport safety.  In line with the ASEAN Transport Strategic Plan 2016-2025 / Kuala Lumpur Transport Strategic Plan (KLTSP), a working group has been formed for transport safety, land, maritime and air transport.  For land transport, the ASEAN Multi-sectoral Road Safety Working Group (MRSSWG) handles road safety.  To date, no private sector or business council has met with MRSSWG.  However, depending on the focus and topics of discussion, the ASEAN Secretariat will check with the Chair of the MRSSWG on the possibility of our participation, if member companies are interested in such engagement.  To express interest, please contact Sunita Kapoor at skapoor@usasean.org.
  • Singapore’s Infrastructure Asia recently launched and set up under Enterprise Singapore and the Monetary Authority of Singapore, reached out to the Council for a meeting to explore possible areas of collaboration in the infrastructure development arena.  They have an exciting agenda to work with local and international partners, both government agencies and private entities, in developing bankable infrastructure projects in the region.  Members interested in offering ideas for collaboration can contact Sunita Kapoor at skapoor@usasean.org.

View the Council's latest Infrastructure updates

Manufacturing

Major Developments

The Council’s Manufacturing Committee recently held its first in a series of briefings with ASEAN embassy officials in Washington, D.C. on how American companies assess the commercial business case for investing in 21st Century advanced or connected manufacturing activities.  Dow Chemical, Rockwell Automation and Mattel Inc. attended the briefing, with the former two serving as presenters.  Representatives from the ASEAN embassies attended, including Brunei, Indonesia, Malaysia, the Philippines and Vietnam.  The committee will also use the series as part of a process to develop a set of advocacy messages and recommendation to be included in the Council’s agenda for our annual mission to the ASEAN Economic Ministers meetings in Bangkok in early September.     

Advocacy

The Manufacturing Committee is also planning to work with interested members on two advocacy efforts:  (1) Supporting the ASEAN Regulatory Cooperation Project for Chemical Industry, an ongoing regional initiative led by a group of national chemical regulatory authorities in ASEAN, which if endorsed by the ASEAN Economic Ministers (AEM), could provide an additional building block for strengthening advanced manufacturing in ASEAN as part of the development of the ASEAN Economic Community; and (2) in partnership with the ASEAN Business Advisory Council, developing and submitting a set of recommendations to the AEM Senior Officials on the ASEAN Human Empowerment and Development, which focuses on the challenges and opportunities in re-skilling and up-skilling ASEAN's workforce for the industrial jobs of tomorrow in advanced manufacturing.

View the Council's latest Manufacturing updates

Travel & Tourism

Major Developments

  • More than 200 owners and executives of travel and tourism small and medium-sized enterprises (SMEs) from Manila and surrounding cities participated in a full-day workshop on May 3 entitled “Strengthening a Sustainable Tourism Model for SMEs in Digital Transformation.”  The workshop was a joint initiative of the Council, the Philippine Department of Trade and Industry (DTI) and the Philippine Department of Tourism (DOT) with support from the Philippine Trade Training Centre (PTTC), the Philippine Chamber of Commerce and Industry (PCCI) and the Philippine Exporters Confederation, Inc. (PHILEXPORT).  This was the second capacity-building workshop focused specifically on SMEs in the travel and tourism industry after the first such workshop was held in Bangkok last year.  Council members Cisco, Marriott International, Coca-Cola and Google shared their expertise on promoting greater economic inclusivity and utilization of digital tools to the SME participants at the workshop. 

View the Council's latest Travel & Tourism updates

Country Highlights

Brunei

Major Developments

Brunei

  • The Council has regularly monitored developments in Brunei since the 2013 announcement that a sharia penal code framework would be implemented in a multi-year, three-phase process. Since then, the Council has sought clarity and noted concerns of members regarding the process and how it could impact employees of U.S. companies with investments in Brunei. On April 3, the Government of Brunei announced that capital punishment would be added to the sharia penal code framework. The death penalty already exists under Brunei’s criminal legal code, but the government has not sentenced any individual convicted of a capital crime to death since 1957. After a period of growing international backlash, the Sultan of Brunei announced in early May that the government would extend a moratorium on adding the capital punishment to the sharia penal code and that the UN convention against torture would be ratified. The Council will continue to monitor this issue area closely as it threatens to become a reputational risk concern for international companies.
  • On the sidelines of China’s recent Belt and Road Initiative forum in Beijing, the Government of China announced its interest in better aligning BRI-related infrastructure projects with the Government of Brunei’s Wawasan 2035 Strategy for promoting greater diversity of Brunei’s economy. Brunei has long sought but continues to struggle to develop new domestic engines of economic growth beyond the energy and public sectors, such as tourism, Halal products, Islamic finance and ICT. One BRI project, the Brunei-Guangxi Economic Corridor, was highlighted as a potential new model for better aligning China’s engagement with ASEAN’s sub-regional integration and cooperation priorities (such as the Cambodia, Laos, Myanmar and Vietnam grouping, the Brunei Darussalam-Indonesia-Malaysia-Philippines East ASEAN Growth Area and the Indonesia-Malaysia-Thailand Growth Triangle). While Brunei’s economy is expected to grow by nearly 5 percent in 2019, sluggish energy prices are likely to remain an economic headwind which Brunei will have to navigate.

View the Council's latest Brunei updates

Cambodia

Major Developments

On May 9, the Cambodian Ministry of Commerce released the new version of the Cambodia Trade Integration Strategy to bolster trade, increase exports and diversify the economy.  According to Commerce Minister Pan Sorasak, the new strategy focuses on “strengthening the country’s competitiveness to support its transition into a developed economy and to benefit from new sources of growth, particular the Fourth Industrial Revolution.”  This is considered part of the government’s rectangular strategy Phase 4.  To learn more about Cambodia’s rectangular strategy, please click here.

View the Council's latest Cambodia updates

Indonesia

Major Developments

  • Official results of Indonesia’s historic April 17 election are expected to be announced on May 22.  Tallies in 28 out of 34 provinces as of May 19 have placed incumbent President Joko “Jokowi” Widodo and running mate Ma’ruf Amin in the lead with 55 percent of votes.  Unofficial quick counts by private pollsters also indicate an incumbent victory.  Supporters of President Jokowi’s challenger, retired General Prabowo Subianto, are expected to rally in front of the General Elections Commission (KPU) building on the day official announcements are made.  Prabowo will have the opportunity to officially challenge the election results in constitutional court following the announcement.  This week Prabowo’s campaign team has stated that they will not challenge the results despite earlier rhetoric.  The presidential inauguration is slated for October 20.
  • In Indonesia, the Council has moved to a new location and welcomed an important addition to our team.  Landry Subianto joins as Chief Representative and Head of our Jakarta office as of May 1.  Landry brings a wealth of experience from over 20 years in public service in government and academia, proven leadership and extensive relationships to our team in Indonesia.  We look forward to the chance for many of you to develop a close working relationship with him.   Please see his biography on our website here.

Advocacy

  • On May 16, the Council transmitted its final industry submission on Indonesia’s National Cyber and Encryption Agency Draft Regulation on Information Security Management Systems.  For more information or a copy of the submission, please contact Steven Gunawan at sgunawan@usasean.org.
  • The Council recently joined a multi-association letter with the U.S. Chamber of Commerce, AmCham-Indonesia and the American Indonesian Chamber of Commerce to the Government of Indonesia’s Ministry of Law and Human Rights regarding the draft implementing rules and regulations for the Compulsory Licenses regulation, Ministerial Reg. No. 39.  The letter proposed amendments to the regulation because some of the provisions could undermine intellectual property protections in Indonesia.  The recommended changes focused on: (1) mitigating WTO Inconsistencies of the Patent Law and the Implementing Regulation (Reg. No. 39), (2) providing clarity and ensuring due process in the compulsory license process and (3) ensuring administrative efficiency of the process.  For more information, contact Kim Yaeger at kyaeger@usasean.org.

View the Council's latest Indonesia updates

Laos

Major Developments

  • On the sidelines of the recent Belt and Road Initiative Forum, Lao Minister of Transportation H.E. Bounchanh Sinthavong signed an agreement with Thailand Minister of Transportation H.E. Arkhom Termpittayapaisith and the Vice Chairman of China’s National Development and Reform Commission outlining a framework for how the three nations will develop a new “higher speed” rail network between southern China and Thailand.  For more information, see our recent Laos Update here.
  • Laos’ Ministry of Post and Telecommunications is urging the Government of Laos to elevate the development of the domestic digital ecosystem as a priority element in its national development agenda.  For more information, see our recent Laos Update here.
  • On April 8, Lao Ambassador to the U.S. Khamphan Anlavan officially presented his credentials to U.S. President Donald Trump.  The presentation of his credentials followed the successful completion of the 9th annual U.S.-Laos Comprehensive Dialogue and the ASEAN-U.S. Dialogue meetings.  Laos served as the co-chair of the March 28 Dialogue in its capacity as the U.S. Country Coordinator within ASEAN. See here for more information about the credential presentation.
  • On March 27, Laos and the United States met for the 9th annual U.S.-Laos Comprehensive Dialogue.  The Lao delegation was co-led by H.E. Vice Minister Thongphane Savanphet from the Ministry of Foreign Affairs and Lao Ambassador to the U.S. Khamphan Anlavan, and the U.S. delegation was led by Principal Deputy Assistant Secretary for East Asian and Pacific Affairs W. Patrick Murphy and U.S. Ambassador to Laos Rena Bitter.  The dialogue discussed regional issues, such as countering transnational organized crime, and bilateral issues, including continuing the 2016 Joint Declaration on the Comprehensive Partnership between the United States and Laos.  For more information, see here.

View the Council's latest Laos updates

Malaysia

Major Developments

  • Earlier this month, Malaysian Minister of Health Dzulkefly Ahmad said the Cabinet has approved the regulation of drug prices and noted that the Health Ministry will work with the Ministry of Domestic Trade and Consumer Affairs (KPDNHEP) on such regulations under the Price Control and Anti-Profiteering Act.  The Ministry wants to open another round of consultations to discuss specifics.  The Council will continue to track the development of this regulation and will keep members updated on opportunities to provide comments.
  • With the administration of Malaysian Prime Minister Dr. Mahathir Mohamad reaching its one-year anniversary, it is possible that new efforts may be undertaken to revitalize the Government of Malaysia’s trade policy agenda.  To date, working with ASEAN to support the successful conclusion of the RCEP negotiations has remained a top priority.  However, debate on CPTPP ratification continues not to be an economic policy priority.  It may be that if the CPTPP begins to have a trade displacement impact for Malaysian exporters in markets like Japan and Vietnam, Malaysia’s business community would likely become more vocal in advocating that the government consider measures to help maintain Malaysia’s trade competitiveness.         

Looking Ahead

  • May 23, SME Workshop:  ​This workshop in Kuala Lumpur will focus on increasing Malaysia SMEs' competitiveness through knowledge-sharing sessions from U.S. companies and local partners on topics such as digital transformation for SMEs.

View the Council's latest Malaysia updates

Myanmar

Major Developments

  • State Counsellor Daw Aung San Suu Kyi and her team of cabinet ministers and senior officials attended the second Belt and Road Forum for International Cooperation in Beijing, meeting with China's top leadership, including Chinese President Xi Jin Ping and Prime Minister Li Keqiang.  During the visit, the Myanmar Government signed two Memoranda of Understanding and one agreement letter with the Chinese Government to further collaboration on a variety of industry sectors and promote trade and technological exchange.  Given growing political pressure toward Myanmar from the West and the influential role China plays in Myanmar’s peace process, it is likely that Myanmar will become increasingly reliant on China as a strategic economic partner.  For more information, see our Analytical Update here.
  • During a trip to Myanmar in April, Eric Jones, Chief of Staff of the Overseas Private Investment Corporation (OPIC), the U.S. Government’s development finance institution, said OPIC is looking for financing opportunities in the country’s energy and infrastructure sectors.  OPIC is in the process of being reorganized into the U.S. International Development Finance Corporation following the passage of the Build Act last October.

View the Council's latest Myanmar updates

Philippines

Major Developments

  • As of May 20 EDT, official results of the May 13 Congressional Election tallied 165 of 167 certificates of canvass (COCs) representing 99.13 percent of registered voters. Results show overwhelming support for Duterte administration candidates with none of the 8 opposition bets on the “ocho derecho” ticket winning a single seat.  The Council will continue to keep members updated on developments.
  • While the May 13 mid-term elections in the Philippines may offer a snapshot on public sentiments regarding the Duterte administration, the Congress of the Philippines is also an important focal point for measures shaping the domestic business environment.  For example, the Philippines Senate Committee on Economic Affairs is currently debating (Senate Bill 2102) which contains among several measures a series of reforms which would lift restrictions on foreign direct investment into the country.   The bill proposes to remove restrictions on foreigners from practicing their professional fields in the Philippines in areas like advertising, provided Filipinos are given reciprocal privileges in the foreign nationals’ own countries.  In addition, the bill contains language which would require the government to hold an annual review of the regular Foreign Investment Negative List to keep it in line with the government’s economic policy.  Similar bills have already been passed in the House of Representatives.  The Council has consistently advocated to the Government of the Philippines the benefits of implementing economic reforms which would enable greater foreign participation in the domestic economy, and engaging key players in the House and Senate will again be part of our agenda during the 2019 Senior Executives Business Mission to the Philippines later this year.  Not only could such reforms increase levels of investment, they would also make it easier for the Government of the Philippines to successfully join high standard preferential free trade agreements in the future like the CPTPP.  For more information, see our Philippines Update here.
  • As ASEAN governments look for ways to mitigate the trade and investment impacts of slower global growth rates and the U.S.-China tariff war, the Government of the Philippines announced that the number of government-approved investments increased by 46.5 percent in the first four months of 2019, relative to the same period in 2018. Investment projects registered with the Philippines’ Board of Investments (BOI) reached US $5.49 billion in the first four months of 2019, up from US $3.75 billion in the same period in 2018.  Energy projects accounted for 64.66 percent of the total at US $3.55 billion, up 77.75 percent from US $2 billion in the first four months of 2018. According to the Department of Trade and Industry, the rise in green energy investment approvals was in line with the government’s commitment to developing “clean and green” infrastructure systems. Meanwhile, investment pledges from local companies grew by almost 14 percent reaching US $4.2 billion, while foreign investment pledges reached US $1.28 billion. While these increases in FDI have likely contributed to the recent growth in the Philippines trade-in-goods deficit, the additional investments can increase the productive capacity in the economy and add to its future export potential.
  • On April 1, the World Bank lowered its 2019 Philippine economic growth forecast to 6.4 percent from the previous 6.5 percent, owing to several factors that include the delay in the approval of the national budget and the slowdown of global trade that may lead to weaker demand for Philippine exports.  For more information, see our Philippines Update here.
  • The Bangko Sentral ng Pilipinas (BSP) is in the process of finalizing implementing rules and regulations of the National Payment System Act, signed into effect by President Duterte in October.  The first set of rules brings good news for financial institutions and non-bank entities, which are expected to experience a more streamlined registration process for approval as electronic payment operators.  The draft circular also provides a transition period that allows for Operators of Payment Systems to register with BSP.

View the Council's latest Philippines updates

Singapore

Major Developments

  • On April 23, Prime Minister Lee Hsien Loong announced the latest Cabinet changes with effect from May 1.  Mr. Heng Swee Keat has taken on the Deputy Prime Minister role, giving him additional exposure and lead time to succeed Prime Minister Lee Hsien Loong in the coming years.  In 2018, PM Lee signaled his intention to pass the baton before he turns 70 in 2022 and that a 2019 General Elections is always possible.  Singapore press and observers have stated that Deputy Prime Minister Heng will likely succeed as Prime Minister.  Rumors suggest an election in the fourth quarter of 2019.  For key updates and a summary of key changes, see our Analytical Update here.
  • On May 8, Singapore passed its controversial “Protection from Online Falsehoods and Manipulation Bill,” also known as “fake news” legislation, after two days of contentious debate in Parliament.  This Bill gives Ministers across the Cabinet the right to identify falsehoods and have them removed. The Government promises that action to enforce this bill would be handled fairly and evenly. For more information, see our recent ICT Update here.
  • On May 7, the Monetary Authority of Singapore (MAS) announced it is considering allowing financial technology firms to operate digital-only banks.  MAS is conducting a study that will review how virtual banks with non-bank parentage would offer value and how potential risks would be mitigated and contained.

Advocacy

From May 7-9, the Council led its annual Business Mission to Singapore with 18 members.  The delegates met with officials of the Government of Singapore to support key economic policy and connectivity goals after its 2018 ASEAN Chairmanship, with a focus on Singapore’s Smart Nation initiative.  For more information, see our press release about the mission here.

Looking Ahead

View the Council's latest Singapore updates

Thailand

Major Developments

  • On May 20, it was officially decided that Parliament will open on May 24, and the first session will be presided over by the King and Queen.  This follows the Election Commission’s (EC) official release of results on May 7 and 8, of the March 24 general election, Thailand’s first election in eight years.  The EC announced constituency MPs on May 7 and party list seats on May 8, just days shy of the Constitutionally-mandated, 90-day deadline from the polls, which was May 9.  In addition, on May 14, the Royal Gazette published the final list of 250 senators, whom were pre-selected by the current administration and royally mandated Parliament to open on May 22.  See our Analytical Update here for more.  
  • From May 4-6, Thailand held its first coronation in 77 years, officially crowning His Majesty Maha Vajiralongkorn, Rama X, as the King of Thailand.  The three-day ceremony marked a historic transition, as Rama IX was the longest reigning monarch in history before his passing.  The coronation comes as the country prepares to transition into a new government, during which the King may serve as an important figure for stability.  For more information, see our Update here.
  • Thailand has made major strides recently to build up the digital aspects of the Eastern Economic Corridor (EEC). On May 6, the Digital Economy Promotion Agency (DEPA), under the Ministry of Digital Economy and Society (MDES), announced that it will open and operate three research and development (R&D) centers in June that will also be part of the Internet of Things (IoT) Institute in the EEC Digital Park. See our Update here for more.
  • On April 15, the Government of Thailand established its Rail Department.  This was closely followed by several plans to upgrade Thailand’s rail infrastructure, including plans to establish three train assembly plants, open a rail route linking to Cambodia, build a new bridge as a border checkpoint between Thailand and Cambodia, and develop a new commuter rail network in the Greater Bangkok area, among others.  For more information, see our recent Thailand Update here.
  • On April 10, the Secretary General of the National Broadcasting and Telecommunications Commission, Takorn Tantasith, announced that Thailand will not impose a surcharge on over-the-top service providers.  The proposed plan was not well received by the public, who labeled the plan impractical and believed the surcharge would not only impose additional costs to consumers but also interfere with the growth and development of Thailand’s digital economy. For more information, see our recent Thailand Update here.
  • On April 30, Thailand’s cabinet approved the country’s updated Power Development Plan for 2018-2037 (PDP 2018-2037) after three years of revision.  The new PDP is expected to be enacted within the second quarter of this year.  It calls for an increase in Thailand’s power production capacity by 67 percent, from 46,090 MW in 2017 to more than 77,000 MW by 2037.  The new PDP also places greater focus on renewable energy at the expense of coal.  Under the plan, renewable sources will make up about 37 percent of power production, while coal will account for only 12 percent.  In contrast, the previous PDP (PDP 2015-2036) had coal making up to 25 percent.  The new PDP also includes a larger role for natural gas, up to 53 percent from 40 percent in the last PDP.

View the Council's latest Thailand updates

Vietnam

Major Developments

  • During an April 5 press conference, Director of the Electricity Regulatory Authority of Vietnam (ERAV) announced that the Ministry of Trade and Industry (MoIT) is considering allowing companies that use a large amount of power to purchase electricity directly from power plants.  ERAV reportedly aims to launch a competitive retail electricity market in 2021.  MoIT previously launched competitive power generation and wholesale power markets in 2012 and early this year, respectively, and plans to gradually increase the number of power corporations participating in the latter.
  • At the CEO Forum 2019, which was hosted by the Vietnam Economic Times in Hanoi last month, Deputy Prime Minister Vuong Dinh Hue addressed government leaders along with both local and foreign business executives to emphasize the importance of creativity and innovation as key elements for businesses as the country looks to prepare for Industry 4.0.  Also in attendance at the Forum was Minister of Information and Communications Nguyen Manh Hung, Minister of Labor, Invalids and Social Affairs Dao Ngoc Dung, Deputy Minister of Science and Technology Bui The Duy, Deputy Governor of the State Bank of Vietnam Nguyen Kim Anh and many other Vietnamese government leaders and local and foreign business executives.
  • Noting that Industry 4.0 will affect all sectors and greatly impact the economy, Deputy Prime Minister Hue called on the private sector to grasp this opportunity to improve competitiveness, embrace digital transformation and leverage the industrial revolution to propel the country forward.  For its part, the Vietnamese government has also taken steps to encourage innovation across key sectors.  For example, it has placed a high emphasis on science and technology, productivity and high-quality investment, and promoted entrepreneurship.  In recent years, the Government of Vietnam, led by Prime Minister Nguyen Xuan Phuc, has begun shifting to an e-Government framework, embracing the digital economy (and the challenges and opportunities that come with it), and becoming more open to receiving innovative business models.
  • At a separate conference on cybersecurity in late April, Minister of Information and Communications Nguyen Manh Hung announced that Vietnam will adopt a national digital strategy this year to build a digital economy, noting that cybersecurity will be a key aspect to this strategy and digital transformation on the whole.  At the conference, Minister Hung also announced that the Government will conduct annual cybersecurity assessments and risk management exercises of all State organizations and agencies, and this task was assigned to the Ministry by Prime Minister Phuc.  As the Ministry of Information and Communications takes on more responsibilities in dealing with cybersecurity, the Ministry of Public Security continues to work on the draft implementation decree of its Law on Cybersecurity, which is expected to be released for public consultation soon.

Advocacy

  • Vietnam Cybersecurity Law Implementation Decree: Last week, the Council learned that the Vietnam Ministry of Public Security (MPS) has submitted the consolidated draft of the cybersecurity decree to the Government of Vietnam (GOV). The government will now review this draft and direct MPS to conduct another round of industry consultations and comments if deemed necessary. The draft will first be circulated to relevant departments within the Office of the Government for initial comments, and then sent out to all government agencies for their comments. Following this step, a cabinet meeting will be called to vote on the decree. This process could take place within the next month, and the government will not be rushing this process. Following this update, the Council will be engaging with the Government of Vietnam to advocate for another round of industry comments to the decree. If you have any questions, please contact Vu Tu Thanh at tvu@usasean.org and Ella Duangkaew at eduangkaew@usasean.org.   
  • Vietnam Decree 06/2016 (OTT Regulation): The Council's advocacy efforts on Vietnam's Decree 06/2016 (OTT Regulation) with the Government of Vietnam has stalled the drafting process, and a new draft requested by the Minister of Information and Communication (MIC) has not been completed by the drafting team. There is currently no indication of when this draft will be completed and submitted to the government for approval. If you have any questions, please contact Vu Tu Thanh at tvu@usasean.org and Ella Duangkaew at eduangkaew@usasean.org.
  • In April, the Council continued its advocacy efforts with the Government of Vietnam (GOV) regarding agricultural regulations and import policies.  The Council co-signed a letter with the EU-ASEAN Business Council to Minister Dung, Chairman of the Office of the Government requesting the Ministry of Agriculture and Rural Development suspend its decision to impose a ban on glyphosate-based crop protection products in Vietnam and conduct a consultation process with industry and other stakeholders.  The letter noted that such a consultation process would be consistent with Vietnam’s commitments under recent guidelines adopted by the ASEAN Economic Ministers governing imposition of non-tariff measures on goods.  The Council is also participating in a multi-stakeholder teleconference regarding upcoming advocacy steps to address the GOV’s phytosanitary import policies on wheat which have disrupted commercial exports to Vietnam.

Looking Ahead

  • 2019 Food & Agriculture Industry Mission to Vietnam, June 26-28:  The Council is registering members for its Food & Agriculture Industry Mission to Vietnam, including an ASEAN Safe, Nutritious Food PPP Initiative Workshop on June 26.  This sector-focused mission will offer members an opportunity to engage key public and private sector stakeholders who make up Vietnam's domestic agriculture ecosystem.  The deadline for registration is Friday, June 7.  If you have any questions, please contact Sunita Kapoor at skapoor@usasean.org and Hai Pham at hpham@usasean.org.

View the Council's latest Vietnam updates