President's Newsletter - May 2020

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

April 2020

Dear Members,

I hope you and your families are well and safe. As we now head into our fourth week of social distancing and working from home, we have been busier than ever before. The Council staff continues to work tirelessly to provide timely updates to members on the ever-changing political, social and economic landscape of Southeast Asia and ensure that our advocacy work continues to bear fruit for your business interests across ASEAN.

On April 22, U.S. Secretary of State Michael Pompeo participated in a Special U.S.-ASEAN Summit with the ten ASEAN Foreign Ministers and launched the U.S.-ASEAN Health Futures initiative, which captures the United States’ existing and ongoing work with ASEAN on public health and lays the groundwork for long-term partnership, targeted assistance, and a renewed focus on the health and well-being of both U.S. and ASEAN citizens. The launch of the initiative also saw an allocation of US$35.3 million in emergency funding for ASEAN Member States to combat COVID-19. The initiative aims to advance the shared health goals of the United States and ASEAN in a wide variety of fields, including HIV/AIDS and other infectious disease control, expanding safe water access, and improving nutrition and maternal and child health. Additionally, joint efforts on health research, strengthening health capacity across the ASEAN region, developing the next generation of human capital, and exploring smart city health solutions through the U.S-ASEAN Smart Cities Partnership are also expected. To read the full press statement on the launch of the U.S.-ASEAN Health Futures Initiative, please click here and to access Secretary Pompeo’s remarks on the matter, please click here.

As the COVID-19 pandemic continues, ASEAN countries are also looking toward expanding regional cooperation efforts for additional support to contain the pandemic. On April 7, Health Ministers of ASEAN Member States joined both the Special Video Conference of the ASEAN Health Ministers and the ASEAN Plus Three Health Ministers in Enhancing Cooperation on COVID-19, reaffirming the commitment to cooperate and contain the pandemic. To read the full press statement, please click here. On April 9, ASEAN foreign ministers agreed in the 25th ASEAN Coordinating Council (ACC) Meeting, held via video conference, to establish a COVID-19 ASEAN Response Fund to help all member states alleviate the impact of the pandemic. Following the meeting, on April 14, during the Special ASEAN Plus Three (APT) Summit held virtually, ASEAN members and China, Japan and South Korea agreed in principle to set up the joint fund to combat the pandemic. Although the meeting did not specify an amount, the money for the fund would be reallocated from existing ASEAN+1 and APT cooperation funds, such as the ASEAN Development Fund. The fund would be used to procure equipment and medical supplies for front line workers and medics and to finance long-term research and development into antiviral drugs and vaccines. To read the official joint statement of the Special ASEAN plus Three Summit on COVID-19, please click here. On the same day, Vietnam chaired the Special ASEAN Summit on COVID-19, coordinating an ASEAN plan to fight the pandemic by utilizing ASEAN resources and network.

Earlier this month, the Council launched a dedicated COVID-19 Digital Dashboard to help our members track government actions across Southeast Asia. The dashboard includes all the latest updates on movement of people, goods and services, as well as background on national emergencies declared across ASEAN. The Digital Dashboard also collates all of the Council’s critical updates and analysis released to date as a one-stop resource to make it easier for our members to better understand the full picture of what is happening across ASEAN at this time and in the months to come. If you have not done so already, please visit the dashboard at covid19.usasean.org. I hope this resource will be valuable as your company navigates this challenging landscape resulting from the COVID-19 pandemic. As usual, please feel free to reach out to me or members of the Council team for assistance.

As the disruptive effect of the COVID-19 pandemic affects the business operations for small businesses, the Council would like to invite member companies to maximize our online learning platform by providing online courses and/or webinar training to the Council's signature ASEAN SME Academy The Academy aims to provide free, centralized, online access to relevant and region/country-specific training resources, to enhance ASEAN SMEs' digital skills to become more competitive in domestic markets and help SMEs to be better integrated into the regional and global value chain. This is a unique and timely opportunity for members to showcase their expertise to strengthen ASEAN SMEs during a disruptive time. Please contact Nugraheni Utami at utami@usasean.org and Norika Pineda at npineda@usasean.org with any questions or to express interest.

On April 22, the Council hosted a video conference call featuring the Honorable Michael G. DeSombre, U.S. Ambassador to Thailand. We had a very successful call, with more than one-hundred participants and sixty member companies dialing in. The Ambassador and our members discussed how the U.S. Embassy can better assist U.S. companies operating in Thailand during the COVID-19 pandemic, and beyond. Members also had the opportunity to answer questions posed to them by Ambassador DeSombre, including a discussion on how the Royal Thai Government can better attract supply chains to Thailand and best practices in re-opening facilities post COVID-19. We’re looking forward to hosting another dynamic call with the Ambassador again soon. To access the full list of questions sent from Ambassador DeSombre, please click here.

To control COVID-19 spread through mass exodus during Ramadhan, Indonesia officially suspended all domestic and international transportation starting April 24. Land transport including private vehicles are banned until May 31, air transport until June 1, sea transport until 8 June, and railways until June 15. Exceptions will be given to VVIPs from government institutions and international organizations, Indonesian repatriates, as well as for law enforcement and emergency services - all subject to permits from Minister of Transport. This ban follows President Jokowi’s ban on Ramadhan exodus (mudik) where every year 33 million people travel from big cities to their hometowns/villages across the country to celebrate Idul Fitri holiday. At the same time, Jokowi announced that social stimulus and pre-employment card aid for Jakarta and the satellite cities are to be disbursed this week. These announcements were built upon the three regulations that Jokowi signed on March 31, namely: 1) Presidential Decree that declares national public health emergency status (Kepres No. 11/2020) 2) Executive order on economic measures in response to COVID-19 and digital taxation (Perppu No. 1/2020), and 3) Government Regulation on Large Scale Social Restrictions or PSBB (PP No. 21/2020). To date, the Health Minister has approved PSBB in ten provinces, including Jakarta Banten, West Java, Central Java, West Sumatra, South Sulawesi, South Kalimantan, North Kalimantan, and West Papua. On the legislative side, despite the pandemic and protests from labor associations, the House of Representatives (DPR) are still scheduled to continue discussing the Omnibus Bills on Taxation and Job Creation, with no specific date on the finalization. We might expect some delay on these discussions due to COVID-19 and the Ramadhan holiday. Read more about the Council’s advocacy effort the Omnibus Bills, PSBB, and Digital Taxation under “Current Advocacy” section of this Newsletter.

As the world continues to combat the ongoing COVID-19 pandemic, China has been more active in asserting control and presence in the South China Sea. On April 18, China established two administrative districts, one on the Paracel islands and another on the Spratly islands, both under the control of China’s Sansha city. Following this, on April 19 Vietnam issued a statement denouncing China’s action, claiming that Vietnam has repeatedly and strongly reaffirmed Vietnam’s sovereignty over the Paracel and Spratly islands. This escalation of tension between the two claimants states is a continuation of an incident earlier this month on April 2, when a Chinese coast guard ship hit and sank a Vietnamese fishing vessel carrying eight fishermen near Phu Lam island of the Paracel archipelago. Following the sinking, Vietnam, the Philippines, and the United States Senators and Department of State have condemned China for its behavior undermining regional stability amid the pandemic. Prior to the sinking, on March 30, Vietnam sent diplomatic notes to the United Nations stating Vietnam’s claims to its territories in the South China Sea.

On April 13, the Malaysian government entered into its third phase of the Movement Control Order as the Ministry of International Trade and Industry (MITI) began accepting online applications again from essential businesses to operate. While there was quite a bit of confusion and technical challenges at the beginning of this new application process, the Council was able to confirm that companies with prior approvals can continue to operate. We do encourage members to resubmit their applications, however, as approvals now come with a QR code to aid workers’ ease to travel to companies’ premises. The new application process has also brought an opportunity to reapply with a slightly scaled-up workforce, allowing companies to return to closer-to-normal operations with safety precautions still in place. The Council’s Malaysia team continues to support members as they seek approvals to operate from MITI.

To all our Buddhist friends in Cambodia, Laos, Myanmar and Thailand, I hope you had a very happy Khmer New Year, Pi Mai, Thingyan and Songkran! And to all our Muslim friends observing the holy month of Ramadan today in Asia, we wish you peace and happiness.

Sincerely,

Alex

 

April Highlights

On April 3, the Council launched a dedicated COVID-19 Digital Dashboard to help our members track government actions across Southeast Asia. The dashboard includes all the latest updates on movement of people, goods and services as well as background on national emergencies declared across the Association of Southeast Asian Nations (ASEAN). The Digital Dashboard also collates all of the Council’s critical updates and analysis released to date as a one-stop resource to make it easier for our members to better understand the full picture of what is happening across ASEAN at this time and in the months to come. Access to this intelligence and analysis is exclusive to members. The dashboard may be accessed at covid19.usasean.org.

 

Country, Industry and Advocacy Updates

 

COVID-19 Update


  1. On April 22, U.S. Secretary of State Michael Pompeo participated in a Special U.S.-ASEAN Summit with the ten ASEAN Foreign Ministers and launched the U.S.-ASEAN Health Futures initiative, which captures the United States’ existing and ongoing work with ASEAN on public health and lays the groundwork for long-term partnership, targeted assistance, and a renewed focus on the health and wellbeing of both U.S. and ASEAN citizens. The launch of the initiative also saw an allocation of US$35.3 million in emergency funding for ASEAN Member States to combat COVID-19. The initiative aims to advance the shared health goals of the United States and ASEAN in a wide variety of fields, including HIV/AIDS and other infectious disease control, expanding safe water access, and improving nutrition and maternal and child health. Additionally, joint efforts on health research, strengthening health capacity across the ASEAN region, developing the next generation of human capital, and exploring smart city health solutions through the U.S-ASEAN Smart Cities Partnership are also expected. To read the full press statement on the launch of the U.S.-ASEAN Health Futures Initiative, please click here and to access Secretary Pompeo’s remarks on the matter, please click here.

    As the COVID-19 pandemic continues, ASEAN countries are looking toward expanding regional cooperation efforts for additional support to contain the pandemic. On April 7, Health Ministers of ASEAN Member States joined both the Special Video Conference of the ASEAN Health Ministers and the ASEAN Plus Three Health Ministers in Enhancing Cooperation on COVID-19, reaffirming the commitment to cooperate and contain the pandemic. On April 9, ASEAN foreign ministers agreed in the 25th ASEAN Coordinating Council (ACC) Meeting, held via videoconference, to establish a COVID-19 ASEAN Response Fund to help all member states alleviate the impact of the pandemic. Following the meeting, on April 14, during the Special ASEAN Plus Three (APT) Summit held virtually, ASEAN members and China, Japan and South Korea agreed in principle to set up the joint fund to combat the pandemic. Although the meeting did not specify an amount, the money for the fund would be reallocated from existing ASEAN+1 and APT cooperation funds, such as the ASEAN Development Fund. The fund would be used to procure equipment and medical supplies for frontline workers and medics and to finance long-term research and development into antiviral drugs and vaccines. On the same day, Vietnam chaired the Special ASEAN Summit on COVID-19, coordinating an ASEAN plan to fight the pandemic by utilizing ASEAN resources and network. Read more here.

    Brunei Darussalam
    With 127 COVID-19 cases confirmed and 1 death as of March 29, Brunei has announced that all foreigners are restricted from entering Brunei via land, while citizens and foreign residents are not allowed to leave the country. Dining in at food premises is banned, while takeout and deliveries continue. As of March 31, Brunei had 829 people in quarantine, with 1,389 individuals having completed quarantine and 5,980 laboratory COVID-19 tests conducted. Individuals who violate the Ministry of Health orders should they require quarantine or medical examinations face a BND10,000 fine and/or six-month imprisonment. Apart from the food and beverage (F&B) industry, transport and tourism are deeply impacted. Royal Brunei Airlines reduced its flights throughout March and April and only fly to Singapore, Melbourne, Hong Kong, and Manila. Read more here.

    Cambodia
    As of April 12, there have been 122 confirmed cases and 1 probable case of COVID-19 in Cambodia; 85 linked to overseas travel, 36 locally acquired linked to cases confirmed in Cambodia or abroad, and 2 under investigation. The Government of Cambodia continues to take various measures to control the situation surrounding the pandemic. On the economic front, US$800 million has been allocated to counter the impact of COVID-19 for a six-month scenario, and up to US$2 billion if it lasts a year or longer. The General Department of Taxation has provided relief for impacted businesses; monthly exemption of payment, not filing of monthly tax for hotels, guesthouses, restaurants and travel agents from February to May, 2020, a tax holiday of six months to one year for factories in the garment sector affected by the pandemic and the EU's recent partial withdrawal of the Everything but Arms (EBA), suspension of stamp duty tax on property worth less than US$70K, and a minimum tax exemption provided to all airlines for a period of three months from March to May, 2020. Read more here.

    Indonesia
    To control COVID-19 spread through mass exodus during Ramadhan, Indonesia officially suspended all domestic and international transportation starting April 24. Land transport including private vehicles are banned until May 31, air transport until June 1, sea transport until 8 June, and railways until June 15. Exceptions will be given to VVIPs from government institutions and international organizations, Indonesian repatriates, as well as for law enforcement and emergency services - all subject to permits from Minister of Transport. This ban follows President Jokowi’s ban on Ramadhan exodus (mudik) where every year 33 million people travel from big cities to their hometowns/villages across the country to celebrate Idul Fitri holiday. At the same time, Jokowi announced that social stimulus and pre-employment card aid for Jakarta and the satellite cities are to be disbursed this week. These announcements were built upon the three regulations that Jokowi signed on March 31, namely: 1) Presidential Decree that declares national public health emergency status (Kepres No. 11/2020) 2) Executive order on economic measures in response to COVID-19 and digital taxation (Perppu No. 1/2020), and 3) Government Regulation on Large Scale Social Restrictions or PSBB (PP No. 21/2020). Government Regulation in Lieu of Law (Perppu) No. 1 of 2020, which was designed in response to the economic slowdown due to COVID-19 global pandemic, lays out measures to mitigate the threats of recession and restore national economic system stability. The provisions in the Perppu mainly regulate fiscal policies including the additional scopes of state budget, regional budget, taxation, financing and the duties of banking and financial authorities during this pandemic. Read more here.

    Laos
    On March 29, the Minister to the Prime Minister’s Office, Chalern Yapaoher, held a press conference conveying Prime Minister Thongloun Sisoulith’s orders concerning the government’s lockdown of Lao PDR in response to the COVID-19 pandemic. The lockdown was initially issued for March 30 through April 19, but has been extended until May 3. Key provisions in the order include a ban on travel to other provinces and areas with confirmed COVID-19 cases. International and interprovincial borders will also remain closed with exceptions for authorized transport vehicles carrying commercial goods.

    Malaysia
    On April 13, the Malaysian government entered into its third phase of the Movement Control Order (MCO) as the Ministry of International Trade and Industry (MITI) began accepting online applications again from essential businesses to operate. While there was quite a bit of confusion and technical challenges at the beginning of this new application process, the Council was able to confirm that companies with prior approvals can continue to operate. We do encourage members to resubmit their applications, however, as approvals now come with a QR code to aid workers’ ease to travel to companies’ premises. The new application process has also brought an opportunity to reapply with a slightly scaled-up workforce, allowing companies to return to closer-to-normal operations with safety precautions still in place. The Council’s Malaysia team continues to support members as they seek approvals to operate from MITI. On April 10, Malaysian Prime Minister Muhyiddin Yassin announced that the (MCO) will be extended for another two weeks until April 28. In his speech, Prime Minister Muhyiddin had stated that although the number of new daily COVID-19 cases has been declining in recent days, the government is maintaining its stringent movement control protocol to further slow the outbreak in the coming weeks. He also noted that some sectors will be allowed to reopen during the extension period in order to mitigate the outbreak’s economic impact, following consultations facilitated by the special Cabinet committee co-chaired by Senior Ministers Datuk Seri Mohamed Azmin Ali and Datuk Seri Ismail Sabri Yaakob. To see the list of reopened sectors and the Council’s full analysis on this, please click here.

    Myanmar
    On March 28, the Myanmar Ministry of Foreign Affairs announced that the Government would be enforcing four critical measures, effective March 29 until April 30, to contain the spread of COVID-19 within the country. The temporary restrictions are as follows: issuance of all types of visas has been temporarily suspended except for diplomats, accredited to Myanmar, UN officials with resident in Myanmar, and crew of ships and aircraft operating to and from Myanmar; the visa exemption program for ASEAN nationals has also been suspended except for those with diplomatic passports; diplomats and United Nations officials must present a negative COVID-19 test issued by recognized laboratories before boarding their flights; they will also be subjected to a mandatory home quarantine of 14 days; crew of aircraft and ships are to follow mandated guidelines issued by the Ministry of Transport and Communication as the situation continues to evolve. Myanmar has also banned all inbound international commercial flights effective March 30 until April 13. However, the temporary ban does not affect cargo flights, relief flights, medical evacuation flights or special flights with pre-approval from the Department of Civil Aviation. Read more.

    Philippines
    Following the passage of Republic Act 11469 (Bayanihan to Heal as One Act) colloquially known as the emergency powers law, the President of the Philippines delivered two reports, one on March 30 and the other on April 6, on the government’s efforts in addressing the COVID-19 pandemic. The reports shed light on the source of funds and allocations which the government is prepared to use during the 3-month effectivity of the law which spans the implementation of the Enhanced Community Quarantine (ECQ) covering the island of Luzon. The ECQ was supposed to end on April 12 but has been extended until April 30. Read more.

    Singapore
    On April 21, Singapore announced that circuit breaker measures will be extended until June 1 and existing measures will be tightened until May 4. More workplaces will be closed such as hairdressing, barber services and standalone outlets that sell only beverages, packaged snacks, confections, or desserts. The Ministry of Trade and Industry issued a press release reducing the number of businesses allowed to operate at their work premises and outlining the restrictions on food and beverage and retail establishments. In his 4th national address on COVID-19, Prime Minister Lee Hsien Loong assured Singaporeans and residents that the government will take more measures to protect affected workers. COVID-19 cases increased in foreign worker dormitories amidst more testing and overcrowding concerns. Mild cases will be housed either on site, in a separate facility within the dorm, or in community care facilities elsewhere. Those who need more active treatment will get immediate medical attention and will be taken promptly to the hospital. In his address to parliament on April 6, Deputy Prime Minister (DPM) Heng Swee Keat announced an unprecedented 3rd Relief Package for Businesses and Workers as COVID-19 Circuit Breaker Measures are Implemented. This new budgetary supplement is named the Solidarity Budget and will cost an additional S$5.1 billion (US$ 3.57 billion). The Solidarity Budget will utilize S$4 billion (US$2.80 billion) from past reserves, adding to the S$17 billion drawn upon in the Resilience Budget – unveiled earlier on March 26, 2020. This latest budget aims to provide further assistance for businesses, workers and families who have been further affected by the Government’s Circuit Breaker measures. In total S$4 billion (US$2.80 billion) will be spent on further enhancing Temporary Bridging Loan Program (TBLP), Enterprise Financing Schemes (EFS), and the Job Support Scheme (JSS). The remaining S$1.1 billion (U.S.$770 million) will be reserved for Solidarity Payments that are additional cash payments to help Singaporean families. Read more here.

    Thailand
    An Emergency Decree has been enforced across the country from Thursday, March 26 until Thursday, April 30 as the Royal Thai Government steps up the fight against the COVID-19 pandemic. The decree authorizes Prime Minister Gen. Prayut Chan-o-cha to chair the center to fight the virus, with the Permanent Secretaries of Public Health, Interior, Commerce and Foreign Affairs to help him. The Supreme Commander of the Armed Forces has been given responsibility for security affairs. Deputy Prime Minister Wissanu Krea-ngam confirmed that there will be no curfew and factories including cross-border shipping will be operated as normal. As of April 4, the governor of Chiang Rai, Thailand’s northernmost province, has decided to reopen four ports along the Mekong River to resume trade with China. Operation in the four ports will be limited to three days a week, and travelers are prohibited for the time being. The Royal Thai Government has also approved a stimulus package on March 12 valued at 400 billion baht (US$12.7 billion). The package covers all sectors of the economy, including SMEs which account for 99 percent of business enterprises in the country. Prime Minister Prayut added that a second phase of the stimulus could follow if the current measures required supplementation. 150 billion baht will be directed to facilitate soft loans that give commercial banks the ability to lend at 2 percent. Meanwhile, 30 billion baht is used to set up a fund with a 3 percent lending rate, while withholding taxes for businesses have been reduced to 1.5 percent. On March 30, Finance Minister Uttama Savanayana announced that another stimulus package worth 500 billion baht (USD 15.3 billion) was being worked on. On April 6, the Thailand cabinet approved the third and latest economic stimulus package worth 1.9 trillion baht (US$58 billion). The Bank of Thailand will disburse up to 500 million baht to SMEs with a 2% annual interest. Additionally, the central bank will allow a 6-month debt moratorium for loans less than 100 million baht. To aid investors refinance markets, 400 billion would be used to set up the Corporate Bond Liquidity Stabilization Fund. To discourage social gatherings during the Songkran period, a temporary ban on the sale of alcoholic beverages has been placed in Bangkok. The ban initially ran from April 10 to April 20 but has been extended to April 30. A full list of the nationwide ban of alcohol can be found here. On April 21, Energy Minister Sontirat Sontijirawong announced that the cabinet approved a measure to waive or cut electricity charges for three months, from March until May, and covers 22 million households. The measure is intended to help lessen the burden of electricity charges for households, as a way to assist those who are working from home due to COVID-19. Read more.

    Vietnam
    On March 31, Prime Minister Nguyen Xuan Phuc issued Directive 16 to put in place a two-week nationwide stay-at-home order and establish social distancing measures across the country, and on April 3 the Office of the Government issued a document detailing the instructions on the implementation of the Directive to standardize the implementation at the provincial and municipal levels across the country. While the limited lockdown was extended through April 22 by PM Phuc in localities deemed at high-risk of COVID-19 infections, with no new COVID-19 cases in Vietnam over the past week, the decision was made to officially ease social distancing measures in Hanoi as of April 23. The loosening of social distancing measures include the resumption of some public transportation services at 20-30 percent capacity (while still following disease prevention and control measures), as well as the reopening of universities and high schools on May 4 and secondary and primary schools on May 11. The Government of Vietnam has also approved a social welfare package of US$2.6 Billion (proposed by MPI) for people affected by the COVID-19 pandemic, focusing on removing difficulties in production and businesses and accelerating the disbursement of public investment. Of the seven groups subject to the package, six will benefit from the State budget while the remaining group - businesses - will be allowed to access bank loans with a zero percent interest rate to support their workers. Further, on April 9, PM Phuc approved Decree No 41/2020/NĐ-CP (proposed by MOF) which would extend deadlines for tax and land use fee payments to support businesses suffering from the COVID-19 pandemic, a total of US$ 7.8 Billion. Read more here.
 

Key Developments

  • Singapore reaffirms commitment to maintain open and connected supply chains
    Singapore remains committed to ensuring supply chain connectivity amidst COVID-19. On March 25, the country issued a joint ministerial statement with Australia, Brunei Darussalam, Canada, Chile, Myanmar, and New Zealand. On April 2, Singapore Minister for Trade and Industry Chan Chun Sing had a productive teleconference meeting with the People’s Republic of China Minister for Commerce Zhong Shan. They reaffirmed commitment to maintaining supply chain connectivity to ensure the free flow of goods, in particular essential medical and food supplies, amidst the COVID-19 pandemic. They also discussed how they could work together to overcome the health, economic and financial challenges that the region faces today. On April 1, top foreign ministry officials from Singapore and China made a commitment at a “virtual meeting” to keep their borders open to ensure the smooth movement of essential goods and personnel, while safeguarding public health, amid the coronavirus pandemic. The virtual meeting was co-chaired by the Permanent Secretary of Singapore’s foreign ministry, Mr. Chee Wee Kiong, and Vice-Minister Luo Zhaohui from China’s foreign ministry. Education, trade and industry, customs and immigration, transport, health, and manpower officials also attended the virtual meeting. Both sides also exchanged views on the impact of Covid-19 at the regional level and agreed to explore ways to provide support where necessary to regional countries on epidemic prevention and control.
  • Brunei Announces 2020/2021 Budget
    The IMF reported that Brunei’s proposed a budget of $8.56 billion for the 2020/2021 financial year, will likely also result in a projected $1.81 billion budget deficit due to the recent plunge in global oil prices. The budget entails $192.1 million to boost investment, $19 million to facilitate businesses, $228 million for employment and capacity-building, $337.5 million for education, $1.53 billion for public infrastructure, and $160 million for public health and welfare. Brunei also set aside $2 million to chair ASEAN in 2021. Brunei’s fiscal budget is increased as the Ministry of Finance and Economy allocated an $853 million, a 4.8% increase from the previous fiscal year. Brunei’s fiscal budget is increased as the Ministry of Finance and Economy allocated an $853 million, a 4.8% increase from the previous fiscal year. The Ministry of Foreign Affairs tabled a $113.9 million budget, while the Ministry of Defense was allocated $432.15 million.
  • Cambodia Announces Cabinet Reshuffle
    On March 30, the National Assembly of Cambodia approved the reappointment of four senior cabinet positions, the second time such an event has happened since 2016. In the Ministry of Justice, Seretary of State Koeut Rith was promoted to replace Ang Vong Vathana as minister. In the Ministry of Public Service, Secretary of State Prum Sokha replaced Pich Bunthin as Minister. In the Ministry of Posts and Telecommunications, Chea Vandeth, a Takeo lawmaker in the National Assembly, was promoted to replace Tram Iv Tek as minister. Lastly, in the Ministry of Religions and Cults, Chhit Sokhon, former Preah Sihanouk governor and current secretary of state at the Council of Ministers, takes over Him Chhem as Minister. The four outgoing ministers were promoted to the rank of Senior Minister with no portfolio, effectively retiring them from day-to-day government tasks. Additionally, the Ministry of Industry and Handicrafts was repositioned to become the Ministry of Industry, Science, Technology and Innovation, with Senior Minister Cham Prasidh staying on to lead it. Cham Prasidh is a long time ally of Prime Minister Hun Sen and previously served as the Senior Minister of Commerce for 15 years. The Council will continue to monitor the scope and impact of the newly created Ministry of Industry, Science, Technology and Innovation.
  • The European Council passes EU-Vietnam Free Trade Agreement
    The European Council on March 30 passed the decision to ratify the EU-Vietnam Free Trade Agreement (EVFTA). Following the decision, on April 1, the Vietnam National Assembly Standing Committee proposed the Government to assign Ministries and relevant agencies to complete the dossier on the ratification of the EVFTA to submit to the Committee at its 44th session scheduled for mid-April. Previously in February, the Government assigned the Ministry of Industry and Trade (MOIT) to complete the dossier and submit to the National Assembly for approval at the ninth session. Under the agreement, Vietnam will cut 65 percent of import tax on EU commodities right after the deal takes effect, while the rest will be eliminated over a 10-year period. Meanwhile, the EU will cut more than 70 percent of tariffs on Vietnam's commodities right after the deal takes effect, while the rest will be eliminated over the seven subsequent years. According to the World Bank, once it comes into effect, the EVFTA, along with the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), will help the economy of Vietnam stay resilient to external shocks, particularly the COVID-19 pandemic. In its East Asia and Pacific Economic Update April 2020, the World Bank projects GDP growth to decline to about 4.9 percent in 2020 but will recover to 7.5 percent in 2021 and converge at around 6.5 percent in 2022, reflecting an improved external demand and a firming of the services sector, as well as a gradual recovery in agricultural production. The Asian Development Bank released its annual publication Asian Development Outlook 2020 projecting similar trajectories while also forecasting Vietnam’s growth rate to remain one of the highest in Southeast Asia. Vietnam has taken full advantage of the CPTPP by gaining market access to Canada and Mexico, two CPTPP members with which Vietnam did not previously have FTAs with, according to the MOIT. In the first two months of 2020, Vietnam’s exports to Canada rose by 20.39 percent to US$578 million year on year while exports to Mexico reached US$497.2 million.
  • Malaysia Medical Players Call for Drug Production Plan, Ensures Sufficient Supply During Outbreak
    As the COVID-19 pandemic escalated, Malaysian Medical Association (MMA) President Dr. N. Ganabaskaran and Malaysian Pharmaceutical Society (MPS) President Amrahi Buan on March 14 called for a government master plan to attract local and multinational pharmaceutical companies to set up manufacturing facilities in Malaysia. In the context of the COVID-19 outbreak, medical experts and pharmacists said that encouraging pharmaceutical production, including raw materials, inside Malaysia would be a crucial security measure to prevent a drug shortage crisis during an outbreak like the COVID-19 and to reduce reliance on China. China, the largest producer of active pharmaceutical ingredients (APIs) used in drugs, had closed APIs production plants, raising concern of a possible shortage in generic drugs and an increase in price. MMA President Dr. N. Ganabaskaran called for the government to engage local manufacturers and importers to discuss a mitigation plan. MPS President Amrahi Buan also called for the Health Ministry, the Domestic Trade and Consumer Affairs Ministry, Malaysian Organization of Pharmaceutical Industries, industry experts and universities to cooperate on this effort. The call for a master plan was followed by an assurance to the public by the Pharmaceutical Association of Malaysia (Pharma) on March 23 that supply of essential products and services will be continued during the Movement Control Order period. In order to contain the outbreak, the newly formed Perikatan Nasional government on March 16 announced a 14-day Movement Control Order (MCO) in effect from March 18 and later extended by two weeks until April 14. For further details on the MCO, please refer to the Council’s Update here and here on Malaysia's Movement Control Order. Pharma President Chin Keat Chyuan said that Pharma is working with the Ministry of International Trade and Industry (MITI) to minimize disruption to business by allowing factories producing pharmaceutical products, among other essential products, to operate during the MCO period.
  • Indonesia Receives $300m World Bank Loan for Country’s Financial Sector
    On March 23, the World Bank announced its approval of a $300 million loan for Indonesia aimed at financial sector reforms. The loan seeks to strengthen Indonesia’s financial sector in an effort to prop up the financial security of the country’s middle class. Indonesia and Timor-Leste Country Director Satu Kahkonen said that “a sound and well-functioning financial sector is critical to sustain Indonesia’s growth and achieve the government’s economic growth and poverty reduction goals, particularly amid the continued challenging global tensions,” such as COVID-19-related global supply chain issues. The loan focuses on three areas of policy reform: increasing the size of the financial sector by widening its outreach; increasing the efficiency of the financial sector through transparency and technology initiatives; and strengthening the sector’s sustainable finance and disaster risk finance mechanisms. The funding is a component of the World Bank Group’s Country Partnership Framework for Indonesia. The reform package emphasizes the need for financial inclusion measures to lift up consumers living in poverty and increase the utility of financial services for businesses within the region. Poverty statistics remain bleak in Indonesia, with 9.22% of the population living under the poverty line as of September 2019 and the poverty rate declining only 1.7% between 2014 and 2019 – the slowest decline rate over the last 40 years. In addition, nearly half of Indonesia’s population lack access to a formal bank account, especially segments of the population that live in underdeveloped rural areas across the archipelago’s 17,000 islands.
  • Singapore National Wages Council issues guidelines on wage and training measures
    Cognizant of the impact of the COVID-19 pandemic on businesses, the National Wages Council (NWC) on March 30 released guidelines on wage and training measures for the period of April 1, 2020 - June 30, 2021 and called on employers to consider the following measures in an order of priority in the management of resources and manpower: First, reduce non-wage costs, and consider various measures to utilize and manage excess manpower; Second, tap on Government support to offset business and wage costs, and press on with business and workforce transformation;Third, trim wage costs; and Fourth, if it is necessary to retrench workers as a last resort, ensure it is done in a responsible manner. On the first measure, the NWC recommended focusing on training and upskilling, adopting flexible work schedules, and supporting affected local employees who wish to seek a second job to supplement income. The NWC also called on employees to support cost-cutting measures and reasonable efforts to manage excess manpower. Regarding the second measure, the NWC urged employers to make full use of the government's Job Support Scheme and to instead focus on business and workforce transformation. Employers can develop and bring forward plans for employee training during the downtime. This is in line with SkillsFuture Singapore's course fee subsidies for sectors affected by the pandemic. Also, employers may redesign jobs and train employees for these jobs and further invest in training employees in emerging skills. They may also set up a Company Training Committee in navigating these upgrades. From investing in employees, employers will benefit from the government's enhanced Wage Credit Scheme whereby the government co-pays qualifying wage increases for Singaporeans. Read more.
  • Royal Thai Air Force Publishes White Paper on Procurement Priorities
    On February 20, the Royal Thai Air Force (RTAF) released a white paper that outlines its procurement priorities for the next decade and beyond. Among its comprehensive wish list bearing transport as well as attack aircraft and combat search-and-rescue helicopters, the White Paper also notes the challenges the RTAF faces in attempting to replace its existing assets while ensuring that new procurements are compatible with their Link T datalink system. Of utmost importance on its list is replacing its fleet of Lockheed Martin C-130H Hercules transport aircraft. The acquisition of adding a dozen new air-lifters are to be executed in three phases, involving around 4 aircraft each phase. The three phases are expected to be from 2022 to 2025, 2024 to 2026, and from 2026 to 2029. Along with these, the RTAF is also allocating US$77.5 million for Korea Aerospace Industries T-50th lead-in fighter trainers. To shore up Thailand's defense capabilities, the RTAF also seeks 24 new fighters to replace its fleet of F-16s from Lockheed Martin. The overall procurement of this category is expected to run from 2023 to 2033. Also critical in the defense realm is a sophisticated airborne early warning and control system. To achieve this, the RTAF seeks to upgrade its 2 Saab 340 aircraft. Noting budget limitations, the White Paper emphasizes that new inventory must be able to supplement the old, especially to carry out critical missions characteristic to Thailand. These involve humanitarian assistance and disaster relief. Hence, RTAF works to obtain 6 additional combat search-and-rescue helicopters to replace the existing fleet Bell-US1 and Bell 412. To access the full white paper, please click here.

Current Advocacy

  • Indonesia Position Paper on Omnibus Bill on Job Creation
    After submitting a position paper on Omnibus Bill on Taxation to the House of Representative (DPR) Commission I, the Council is preparing a position paper for DPR’s Legislation Body (Baleg) which is currently discussing Omnibus Bill on Job Creation. The Bill includes provisions to boost job creation, easier access to procurement, simplification and centralization on business licenses, the launching of investment and Sovereign Wealth Fund, as well as flexibility for trade, SMEs and Halal Certification. Please contact Angga Antagia (aantagia@usasean.org)), Steven Gunawan (sgunawan@usasean.org)) or Mega Valentina at (mega@usasean.org) for input or questions.
  • Indonesia Position Paper on Local Content Requirement for ICT products
    In response to the new Local Content Requirements Regulation by Kominfo the council has submitted input to ICT Ministry regarding Regulation No. 9/2019 and 10/2 019. In addition, the Council is compiling member’s inputs for the Ministry of Industry regarding draft regulation on Local Content Calculation. Questions, please contact Angga Antagia (aantagia@usasean.org)) or Mega Valentina at (mega@usasean.org ).
  • Indonesia Position Paper on Digital Taxation Best Practice
    The Council shared its member companies’ views on digital taxation, which was outlined under the Omnibus Bills on Taxation as well as the new Perppu No. 1/2020, to the Minister of Finance on April 6. For a final copy of our submission, please contact Steven Gunawan at sgunawan@usasean.org or Jamie Lim at jlim@usasean.org
  • Indonesia Position Paper on Large-Scale Social Restriction (PSBB)
    The Council has submitted input regarding PSBB regulation to Coordinating Minister of Maritime Affairs, Coordinating Minister of Econ Affairs, ICT Minister, Health Minister, BNPB, as well as the Governors of Jakarta, West Java and Banten. Members emphasized their request to the Government of Indonesia to guarantee essential businesses and their supporting sectors (energy, consumer goods, financial services, ICT, healthcare) to be able to continue providing essential goods and services for Indonesians. For a final copy of our submission, please contact Angga Antagia (aantagia@usasean.org) or Mega Valentina (mega@usasean.org).
  • AI Pilipinas: An AI Strategy Paper for the Philippines
    The Council shared the final strategy paper with the Department of Trade and Industry (DTI) and the Department of Information and Communications Technology (DICT) on April 6. The strategy paper, was developed in coordination with other organizations including the Makati Business Club, Institute of Corporate Directors, and the IT Association of the Philippines. For a final copy of our submission, please contact Jamie Lim at jlim@usasean.org or Natalie Tantisirirat at ntantisirirat@usasean.org.
  • Singapore's call for feedback on proposed amendments to food regulatory rules
    The Council would like to bring to members’ attention that the Ministry of Health (MOH), Health Promotion Board (HPB), and Singapore Food Agency (SFA) are seeking feedback from stakeholders on proposed amendments to the Food Regulations to introduce a ban on the use of partially hydrogenated oils (PHOs) as an ingredient in all fats, oils and pre-packaged foods sold in Singapore from June 2021.The consultation period is open from March 13, 2020 until May 12, 2020. It may be recalled that MOH announced on 6 June 2019 its decision to introduce a ban on PHOs, the key source of artificial trans fat in diets, as part of the Singapore’s Government ongoing efforts to create a healthier environment for Singaporeans. This will apply to all foods sold in Singapore, including fats, oils, and pre-packaged foods, whether locally manufactured or imported from overseas; and will replace the existing 2% limit on trans fat content in fats and oils sold in Singapore. To give effect to the ban, MOH, HPB, and SFA propose, among others, to insert regulation 36A which bans the import and/or use of partially hydrogenated oils (PHOs) as an ingredient or as an ingredient in the manufacture of any other edible fats or oils or any prepacked food. Please click here for the full text of the proposed regulation and more information on the public consultation. For members who are interested to give input through a Council submission, please email Lilibeth Almonte-Arbez at lalmonte@usasean.org or Nguyen Thi Phuong Thao at tnguyen@usasean.org. Members could also opt to send submissions directly to moh-ncd@moh.gov.sg.
  • Call for feedback regarding Singapore’s “circuit breaker” measures
    The Council continues to work with its members in engaging relevant agencies in Singapore which implement the country’s “circuit breaker” measures. We invite our members to update the Council challenges they encounter as they comply with said measures. For members who are interested to give input through a Council submission, please email Lilibeth Almonte-Arbez at lalmonte@usasean.org.
  • 2020 Vietnam Advocacy Plan
    The Council’s Vietnam team has compiled a list of key advocacy priorities on upcoming legislation and government directives that will impact a range of industries including customs and trade facilitation, food and agriculture, financial services, health and life sciences, and ICT. To see the full list, please click here. Please contact Vu Tu Thanh at tvu@usasean.org and Hai Pham at hpham@usasean.org with any questions or to provide input.
  • Health & Life Sciences: Impacts of ASEAN Governments’ Responses to COVID-19 on the Operation of the Healthcare Industry
    The Council is planning to engage the ASEAN governments through a series of bi-lateral virtual consultative meetings. These virtual consultative meetings will involve various ASEAN government agencies (e.g. Ministries of Health and other related agencies) to discuss how the respective COVID-19 response of each ASEAN country has impacted the operation of the healthcare industry as well as the healthcare system overall. These virtual meetings will also provide a forum for the government and the private sector to come together and outline a joint action plan to defeat COVID-19 in ASEAN. To facilitate the consultations, the Council has reached out to members to provide information on specific issues, challenges or opportunities that are impacting business operations and the healthcare system in the region. We will compile these issues and present them to the Ministry of Health and other relevant government agencies in each ASEAN country ‒ please note that companies and their respective issues will be kept anonymous when presented to ASEAN governments. If you have any questions, please contact Thao Nguyen at tnguyen@usasean.org and Hai Pham at hpham@usasean.org.
 
 

Country and Industry Updates

See our most recent Updates and Analysis for more detail:

 

Questions? Please contact Jack Myint at jmyint@usasean.org

 

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