President's Newsletter - August 2020

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

August 2020

Dear Members,

On August 8, the Association of Southeast Asian Nations (ASEAN) celebrated the 53rd anniversary of its founding. Since its inception, ASEAN has played a vital role in ensuring continued peace, stability and prosperity across its 10 member nations. As the only U.S.-based organization enshrined in the ASEAN charter, the US-ASEAN Business Council is proud of the role it has played in the strategic economic partnership between the United States and Southeast Asia. To read U.S. Secretary of State Mike Pompeo’s statement on the founding of ASEAN, please click here. To read the ASEAN Foreign Ministers’ statement on the founding of ASEAN and the need to maintain peace and stability across the region, please click here.

The Council joins the United States and the Socialist Republic of Vietnam in celebrating 25 years of diplomatic relations. The past 25 years have passed quickly, and they have been auspicious years filled with growing friendship and partnerships, and increasingly strong ties that have benefitted both of our nations. By overcoming differences and working tirelessly to deepen bilateral relations based on mutual respect and common interest, the U.S. and Vietnam have grown to become trusted partners in economics and trade, defense and security, and people-to-people ties. Over the years, we are encouraged by the determination, commitment and deep resolve of both governments to work towards a brighter and more prosperous future, and we look forward to 25 more years of renewed and improved partnerships and cooperation.

On behalf of the Council, I would also like to offer my congratulations to the people and Government of Indonesia as they celebrated their 75th Independence Day on August 17. The anniversary is especially meaningful this year as President Joko Widodo (Jokowi) in his state of the union address to Parliament (DPR) looked towards navigating the pandemic, rebooting the economy, and undertaking reforms on healthcare facilities and bureaucracy. Additionally, President Jokowi pledged to advance human resources, digital innovation and technology, and downstream industry. To push these goals forward, President Jokowi proposed a US$186.08 billion budget for 2021 to DPR and mandated his administration to optimize spending to revive the economy. This proposal was designed on the assumption of 4.5-5.5% economic growth in 2021 and a budget deficit of 5.5% of GDP, lower than the forecasted zero growth, and a 6.3% deficit earlier this year.

In Singapore on August 9, the 55th National Day was celebrated, and I join all our members in sending the people and Government of Singapore congratulations on this important milestone. You can view Prime Minister Lee Hsien Loong’s full National Day message here. On July 25, Prime Minister Lee unveiled his new cabinet, underscoring continuity by keeping experienced Ministers and rotating younger Ministers to other portfolios to deepen their levels of experience, and renewal by bringing in fresh faces from newly elected Members of Parliament. The Prime Minister hopes to reinforce continuity and stability during the COVID-19 pandemic while responding to the younger electorate's call for new ideas and perspectives. The reshuffle followed the July 10 General Elections in which the People’s Action Party (PAP) saw its share of the popular vote drop to 61.2%, slightly more than its 60.1% all-time low in 2011 and lower than the nearly 70% it won in the 2015 elections. Most of the older Ministers in the government are staying on, including Senior Ministers Teo Chee Hean and Tharman Shanmugaratnam, Defense Minister Ng Eng Hen, Law and Home Affairs Minister K Shanmugam, and Health Minister Gan Kim Yong. DPM Heng Swee Keat continues to serve as Deputy Prime Minister and Finance Minister. He has been designated as Coordinating Minister for Economic Policies, as he chairs the Future Economy Council and the National Research Foundation, which formalizes existing arrangements. He will also continue to oversee the Strategy Group within the Prime Minister’s Office. Among the newly elected Members of Parliament and the newly appointed Minister of State for Trade & Industry as well as Minister of State for Culture, Community and Youth is Alvin Tan, a former Council member when he worked at Goldman Sachs and Facebook. On behalf of the Council members and staff, we send our congratulations and best wishes to our friend Minister of State Tan. The Council looks forward to continuing to work with him in these new and important roles.

In Thailand, a new Cabinet proposed by Prime Minister Prayut Chan-o-Cha was approved by His Majesty King Rama X on August 6. The Thai Cabinet appointed seven new ministers, including two new Deputy Prime Ministers, while all other cabinet positions remain unchanged. One of the new Deputy Prime Ministers is Foreign Minister Don Pramudwinai who will retain the role of Foreign Minister and add the role of Chair of the International Economic Policy Committee. Deputy Prime Minister Don was previously the Thai Ambassador to the United States (2009-2010) and knows the Council well. On behalf of the Council, our members and staff, we send Deputy Prime Minister Don our congratulations and best wishes. Replacing former Deputy Prime Minister Somkid Jatusripitak will be Deputy Prime Minister and Minister of Energy Supattanapong Punmeechaow, who is expected to take on the role of head of the economic team as well. The new economic team will also be headlined by Predee Daochai, former president of the Thai Bankers’ Association, who has been named Thailand’s Minister of Finance. Together with newly-named Central Bank Governor Sethaput Suthiwart-Narueput, the new economic team will be working to shape Thailand’s policy response to the economic impacts of the COVID-19 pandemic. According to the Fiscal Policy Office (FPO), Thailand’s economy is forecasted to shrink by 8.5% this year. Early in July, Uttama Savanayana quit the ruling Palang Pracharat Party and shortly after, announced his resignation from his post as Finance Minister. Sonthirat Sontijirawong and Suvit Maesincee also announced their resignations from their posts as Energy Minister and Higher Education and Science minister, respectively. Somkid Jatusripitak, former Deputy Prime Minister, also submitted his resignation letter. To read the Council’s analytical update on Thailand’s cabinet reshuffle, please click here.

A further announcement was made recently by Thailand’s Ministry of Foreign Affairs that current Ambassador of Thailand to the United States Thani Thongphakdi will be the Ministry of Foreign Affairs’ next Permanent Secretary. The Permanent Secretary is the third highest ranking official in the Ministry of Foreign Affairs. Ambassador Thani’s appointment will mean that all three of the top officials in Thailand’s Ministry of Foreign Affairs are former Ambassadors to the United States and friends of the Council. The current Vice Minister of Foreign Affairs (the second highest ranking official in the Ministry) is Vijavat Isarabhakdi, who was Thailand’s Ambassador to the United States from 2013-2015. We are excited by Ambassador Thani’s promotion and look forward to continuing to work closely with him in his new role in Bangkok.

While balancing the public health and economic recovery responses to COVID-19 continues to represent strategic challenges in ASEAN, we now have a clearer picture of the magnitude of the pandemic’s short-term impacts on GDP growth rates in the region. Reporting on Q2 GDP growth rates (year on year) indicates the severity of economic contractions ranged from Philippines (-16.5%); Malaysia (-10% to -15%); Singapore (-12.6%); Thailand (-11% to -15%); and Indonesia (-5.3%). While annual GDP growth rates are likely to be negative for these economies in 2020, the good news is that Brunei, Laos, Myanmar and Vietnam are expected to achieve positive GDP growth rates in 2020, and most forecasts indicate all ten ASEAN economies will see positive GDP growth rates in 2021.

In this momentous month, the Council congratulates Ambassador Sung Y. Kim for his confirmation as Ambassador of the United States to Indonesia, succeeding Ambassador Robert Donovan, Jr. In his testimony before the U.S. Senate in 2019, Ambassador Kim promised a more significant, balanced bilateral economic and trade relationship and stated, “our trade should better reflect the size of our markets and depth of our cooperation in other areas.” He also aims to advance the U.S.-Indonesia Strategic Partnership to flourish private sector cooperation, address strategic challenges on the international stage and provide better learning opportunities for young leaders. The Council values our close relationship with Ambassador Kim during his time in the Philippines and looks forward to working him to deepen business cooperation between two of the world’s largest democracies. We would also like to convey our heartiest congratulations to Ambassador Jason Myung-Ik Chung, who was confirmed by the U.S. Senate on August 6 to be the U.S. Executive Director of the Asian Development Bank, with the rank of Ambassador. In his testimony before the Senate in June, Ambassador Chung committed to alleviating corruption and improving transparency in the region, while providing developing nations with better lending practices to promote a more sustainable economic growth. Ambassador Chung has had extensive experience with development financing, including in his most recent role as U.S. Deputy Assistant Secretary of Treasury for Public Affairs. Additionally, the U.S. Senate has heard testimony from two other U.S. Ambassadors-designate to the region: Thomas Vajda to the Republic of the Union of Myanmar (read full testimony here) and Barbera Thornhill to the Republic of Singapore (read full testimony here).

Sincerely,

Alex


Upcoming Events

  • 2020 Virtual Business Mission to the 52nd ASEAN Economic Ministers (AEM) Meeting
    The Council is organizing a Virtual Business Mission to the 52nd ASEAN Economic Ministers (AEM) meeting to take place from August 24 to September 11. This will mark the Council’s 21st consecutive mission to the AEM meeting. Topics of discussion this year will be centered around economic recovery and resilience in ASEAN amidst COVID-19, specifically advancing digital trade, and strengthening regional SMEs in these challenging times. Accordingly, we will provide a status update on the Council’s SME Program and the U.S.-ASEAN Internship Program. The mission will also serve as a platform to launch the US-ABC E-Commerce Report, and we are greatly looking forward to presenting it to the AEMs. As before, the Council and its members will join the Plenary Session on August 27 with all AEMs alongside Ambassador Robert Lighthizer who is heading the delegation of the Office of the U.S. Trade Representative (USTR). Bilateral meetings with each ASEAN Economic Minister have also been proposed, and we are working hard to secure meetings with USTR officials, the U.S. Mission to ASEAN, and the ASEAN Business Advisory Council. Contact Hai Pham at hpham@usasean.org or Mario Masaya at mmasaya@usasean.org with any questions.
  • 2020 Virtual Philippines Business Mission: September 1-4
    The Council is organizing its Virtual Philippines Business Mission on September 1-4, along the themes of supporting economic recovery, acceleration of digital transformation, and the strength of U.S.-Philippines bilateral ties. We have confirmed meetings with the Inter-Agency Task Force on Managing Infectious Diseases (IATF) Co-chair Cabinet Secretary Karlo Nograles, Foreign Affairs Secretary Teodoro Locsin, Finance Secretary Carlos Dominguez, Defense Secretary Delfin Lorenzana, Trade Secretary Ramon Lopez, former Senate President Senator Koko Pimentel (Chair, Senate Committee on Trade and Industry), Rep. Sharon Garin (Chair, House Committee on Economic Affairs), and Rep. Joey Salceda (Chair, House Committee on Ways and Means). Other confirmed meetings are with U.S. Ambassador Sung Kim and Secretaries of the following agencies: Budget & Management (DBM), Transport (DoTr), Economic Planning (NEDA), Science & Technology (DOST), Bases Conversion & Development Authority (BCDA). We are working hard to secure meetings with the Department of Health, Department of Agriculture, Department of Information and Communications Technology, National Privacy Commission, and the Asian Development Bank. To register, please click here. Contact Lilibeth Almonte-Arbez at lalmonte@usasean.org or Maxie Magsaysay-Crébassa at em.crebassa@usasean.org with any questions.
  • 2020 Digital Services Tax Policy Retreat: September 14-18
    On September 14-18, the Council’s inaugural policy retreat will convene interested members with subject matter experts and ASEAN-based thought leaders to discuss and formulate a set of guiding principles towards digital services taxes (DSTs) in ASEAN and proactively strategize future advocacy efforts on this emerging policy area. Given the complexity and urgency of this issue, a policy retreat will allow the Council and its membership to move more effectively on this issue and amplify the impacts of our future engagements with ASEAN governments. To register, please click here. Contact Marc Mealy at mmealy@usasean.org with any questions.
  • 2020 Virtual Cambodia Business Mission, September 21-25: Please save the date for the Council’s virtual Business Mission to Cambodia on September 21-25. Contact Jack Myint at jmyint@usasean.org with any questions.
  • 2020 Virtual Malaysia Business Mission, October 5-9: Please save the date for the Council’s virtual Business Mission to Malaysia on October 5-9. Contact Alberto Coria at acoria@usasean.org or Tina Jamaluddin at tjamaluddin@usasean.org with any questions.
 

August Highlights

Message from US-ASEAN Business Council Chairman, President & CEO Alex Feldman on the celebration of 25 years of diplomatic relations between the United States and Vietnam.

 

Country, Industry and Advocacy Updates

 

COVID-19 Update

Brunei
As of August 17, Brunei has one active COVID-19 case. It was the first case reported in 92 days on August 7 when a Bruneian studying in Yemen returned home. The Sultanate immediately quarantine the 13 people he came into contact with and continuing ahead with the final phase of de-escalation that began on July 22. In this final phase, while physical distancing practices remain in place, mass gathering is now allowed to 200 people. Public transportation as well as special needs and childcare centers operate at full capacity. Museums, galleries, and public libraries can host up to 100 people at a time. Brunei’s temporary flying program has started from August until October 24, 2020, including direct flights to Kuala Lumpur, Singapore, Hong Kong, Hangzhou, Manila, Melbourne, and London (in September). To date, Brunei had a total of 142 cases and 3 deaths.

Cambodia
As of August 2020, Cambodia has a total of 272 confirmed cases of COVID-19. Since June, Cambodian authorities have slowly been lifting restrictions for travelers entering the country. U.S. citizens have been given permission to enter, but only for diplomatic, official, and sponsored business linked individuals. The travelers are still required to obtain a medical certificate, local health insurance package and undergo quarantine measures when arrival. To see specific guidelines, please click here. Domestically, grocery stores, restaurants, and other services remain available, while having restrictions on operation of certain businesses such as cinemas, karaoke, and entertainment clubs (bars, discos, beer gardens). Large meetings and gatherings (parties and religious gatherings) are banned until September 2020. The Cambodian Ministry of Education is laying out a three-phase plan for reopening of educational institutions for this year.

Indonesia
With confirmed cases over 141,370 and more than 6,000 lives lost as of August 18, Indonesia’s fight against COVID-19 is still ongoing with Jakarta at the epicenter. Following the trend of these stark figures, Indonesia Q2 economy also contracted by 5.32% as reported by the National Statistics Agency. President Jokowi advised ministries to accelerate disbursement of the IDR 695.2 trillion (USD 47 trillion) pandemic-response fund and urged central and local administrations to optimize spending going forward.

In Jakarta, although transitional PSBB -- a relaxed version of the large-scale social restrictions -- was set to end on August 13 after being extended three times since implementation in early June, it is once again extended until August 27. Jakarta will see intensified public gathering restrictions and health protocol compliance monitoring by joint patrols. The country has also extended ban on foreign tourism until the end of 2020. The Government will focus on reviving 70 percent of domestic tourism, before reopening its border early next year.

Laos
Since the onset of the COVID-19 outbreak, Laos has recorded 20 cases in total. On July 24, the Lao Ministry of Health reported one new case of COVID-19 for the first time in 102 days. The new case is a foreign national who was tested positive after arriving in Laos. On August 7, the Lao Prime Minister’s Office issued an announcement to tighten COVID-19 prevention measures amid the country’s easing measures. Relevant agencies were asked to enhance examination of people exiting from or entering Laos to detect any illegal entry cases and monitor entertainment venues that had been ordered to close temporarily. Meanwhile, Laos is considering implementing a “green lane” or bilateral Fast-Track immigration policy with Vietnam and China. If implemented, the policy would allow certain privileges for individuals such as diplomatic staff, technical experts, and foreign labor for special projects to be exempted from undergoing the mandatory 14-day quarantine period.

Malaysia
As of August 17, Malaysia had a total of 211 active COVID-19 cases. This brought the total cumulative COVID-19 cases to 9,212 to date. Face masks are mandatory in crowded public places where physical distancing cannot be observed as of August 1. The government is closely monitoring new clusters in the country and had announced that the movement control order (MCO) may be re-imposed if the number of COVID-19 reaches three-digits. While the majority of the country is under the Recovery MCO, several states and areas including Kedah and Perlis are put under semi-enhanced MCOs due to emerging COVID-19 clusters at the beginning of August. The Malaysian Government has allowed employers to rehire foreign workers who are still in Malaysia with valid work permits. Malaysia and Singapore opened their cross-border travel under the Reciprocal Green Lane (RGL) and Periodic Commuting Arrangement (PCA) schemes on August 17. Some 400 people per week (RGL) and 2,000 people per day (PCA) are allowed to travel between Malaysia and Singapore for essential business or official purposes.

Myanmar
Over the course of five months, Myanmar has recorded a total of 369 cases, most of which were detected among returnees from overseas. The international commercial flight suspension into the country has been further extended to August 31, while repatriation flights, cargo and medical flights remain an exception. There are also several “fast lanes” allowed for essential businesses and officials to be able to enter Myanmar upon request. Currently, the plan has started with China and Japan and eventually will be extended to other countries. On the other hand, factories, workshops and schools have reopened and despite some restrictions lifted, the country has not reported any new local transmission of COVID-19 for nearly a month. According to the Ministry of Health and Sports (MOHS), they will be allowing cinemas to reopen in the next three weeks. On the economic recovery efforts, the COVID-19 Economic Relief Plan (CERP) Committee launched an additional Kyat 100 billion fund on July 29 which is said to give out to agricultural and livestock businesses, export/import, manufacturing, supply chain, F&B, foreign job agencies and vocational schools.

Philippines
As COVID-19 case numbers continue to rise in the Philippines, the government has reverted to stricter community quarantine measures in the National Capital Region (NCR). On August 17, President Rodrigo Roa Duterte announced placing Metro Manila and its nearby provinces of Laguna, Cavite, Rizal, and Bulacan under general community quarantine (GCQ) starting August 19 until August 31. Other areas that were put under GCQ include Nueva Ecija, Batangas, Quezon Province, Iloilo City, Cebu City, Lapu Lapu City, Mandaue City, Talisay City, and the municipalities of Minglanilla and Consolacion in Cebu. Under the government's guidelines, the extent of restrictions varies from the strictest enhanced community quarantine (ECQ), modified ECQ, GCQ, to the most relaxed modified GCQ. Under GCQ, most businesses are allowed to operate and public transportation resume operations at a limited capacity and with observance of health protocols. The rest of the Philippines is under modified general community quarantine (MGCQ). For more information on Philippine community quarantine rules, please see here. Metro Manila, Laguna, Cavite, Rizal, and Bulacan was under modified enhanced community quarantine (MECQ) on August 4-18, 2020 after President Duterte approved a Cabinet recommendation based on Philippines’ health professionals call for a 2-week time-out.

Singapore
Singapore has recently seen a stable number of new daily cases in the community and new unlinked cases in the community. The Ministry of Health expects COVID-19 cases among migrant workers to taper off in the coming days as workers conclude their quarantine periods. On August 11, the Ministry of Manpower announced that all migrant worker dormitories had been declared clear of COVID-19, with the exception of 17 dormitory blocks serving as quarantine facilities. This will permit the majority of foreign workers to resume work in sectors such as construction, marine shipyard, and processing. On August 17, Singapore and Malaysia will begin to reopen the Johor-Singapore border to travelers approved under the Reciprocal Green Lane (RGL) and the Periodic Commuting Arrangement (PCA). The RGL permits a short period of travel for official purposes and business dealings, while the PCA arrangement enables Malaysian citizens and permanent residents with valid Singapore work passes to work in Singapore for a minimum of 90 days before returning to Malaysia.

Thailand
Thailand has recorded zero new locally contacted cases for over 80 days, as all new cases were imported from other countries. Thailand has been named one of the 7 low- risk countries for COVID-19 transmission by the U.S. CDC as well as one of the 11 countries on the “EU Safe to travel countries” list. On August 7, the Centre for COVID-19 Situation Administration (CCSA) announced further easing of lockdown restrictions. The new easing measures would allow full resumption of school services, full service on passenger buses, sports competitions with spectators, the return of inflight food served in the plane, and the closing time of entertainment places at 2:00 a.m. The state of emergency has been extended until the end of August. Meanwhile, while the list of groups of foreigners allowed to enter Thailand, under strict health measures, has been expanded in the beginning of August, it is expected that Thailand’s borders will remain closed to general travel until the end of this year.

Vietnam
On July 25, 99 days after no reported cases of COVID-19 community transmission, central Da Nang city recorded the first local COVID-19 patient who had not traveled outside of the city. On July 27, in a meeting with the National Steering Committee for COVID-19 Prevention and Control, Acting Health Minister Nguyen Thanh Long confirmed that these patients are infected with a strain of the virus new to Vietnam but common in several regional countries. The Prime Minister has ordered tightened management of border gates to prevent illegal entry at borders and virus transmission at concentrated quarantine sites. The authorities are still identifying the source of infection. the Prime Minister on August 2 called for resolve to perform the dual task of containing COVID-19 and preventing negative economic growth in the context of the pandemic returning in the country with complexity. He outlined a few key directions and noted that stimulus measures need to be adjusted in accordance with the priority of preventing the disease from spreading. On August 4, Deputy Prime Minister Vu Duc Dam in a National Committee on COVID-19 Prevention and Control meeting said that Vietnam is determined to prevent the pandemic from spreading widely and avoid a nationwide social distancing. Lock down has been imposed in parts of Da Nang city and other locations including popular tourist destination Hoi An. As of August 13, Vietnam has recorded 20 deaths related to COVID-19, despite having none prior to the July 25 new case. Vietnam Institute of Vaccines and Medical Biologicals (IVAC), partnering with US-based Icahn School of Medicine and global health non-profit organization PATH expects to conduct COVID-19 vaccine trials on human as early as this October.

 

Key Developments

  • Malaysia Hosts Webinar on Halal Pharmaceutical Eco-System, Touts Halal Pharmaceutical Standards
    On July 28, Malaysia’s Halal Development Corporation (HDC), Duopharma Biotech Bhd (Duopharma), and KPJ Healthcare Bhd jointly organized the webinar “Embracing a Halal Pharmaceutical Eco-System” in conjunction with the World Halal Conference 2020 webinar series to highlight the halal pharmaceutical industry. Speaking at the webinar, Duopharma managing director Leonard Ariff Adbul Shatar said that Malaysia’s halal pharmaceutical standard MS2424:2012 is rapidly gaining universal acceptance. He added that its evolution, the MS2424:2019, has significantly expanded the scope of halal certification to address rising demand in biologics and the search for halal vaccines. The standard addresses the entire supply chain from processing to retail. More importantly, it emphasizes the key prerequisites in the halal pharmaceutical manufacturing process, including hygiene, sanitation, and safety. The strict requirements for certification translate into an additional layer to drive quality assurance, resulting in a higher benchmark for quality standards and the certification itself now acknowledged as a most significant value-added in the pharmaceutical industry. To read more, click here.
  • Vietnam to Revise Economic Growth Strategy Amid New COVID-19 Wave
    Following the detection of new community transmitted COVID-19 cases and first COVID-19 related death, Prime Minister Nguyen Xuan Phuc on August 2 called for resolve to perform the dual task of containing COVID-19 and preventing negative economic growth in the context of the pandemic returning in the country. The Prime Minister outlined a few key directions to be focused on, including accelerating public investment disbursement, better implementing both financial and fiscal policies, and pushing ahead with investment attraction, especially capital flows from the private sector and foreign businesses. The PM noted that with the return of the pandemic, stimulus measures need to be adjusted in accordance with the priority of preventing the disease from spreading. He urged ministries and agencies to firstly adopt measures to ensure socio-economic security and safety, protect the economic sector, especially businesses, and prevent widespread unemployment. On August 4, Deputy Prime Minister Vu Duc Dam in a National Committee on COVID-19 Prevention and Control meeting said that Vietnam is determined to prevent the pandemic from spreading widely and avoid a nationwide social distancing. To read more, click here.
  • Vietnam’s Prime Minister Approves Plan to Implement EU-Vietnam Free Trade Agreement
    As the country combats a new wave of COVID-19 infections, Vietnam looks toward the EU-Vietnam Free Trade Agreement (EVFTA) as a new driver of economic growth. After the deal entered into force on August 1, the Prime Minister on August 12 has approved a plan to implement the EVFTA, assigning tasks and responsibilities to ministries, governmental agencies, and provincial and municipal People’s Committees to prepare a concrete plan to implement the agreement. Prime Minister Nguyen Xuan Phuc has emphasized that the trade deal is a highway to promoting economic growth, opening up great opportunities for Vietnamese firms to enter the EU market. However, the EU market also has high standards and strict import requirements which will require Vietnamese businesses to innovate themselves to remain competitive. Recent efforts to improve the business environment and contain the pandemic has earned the EU business communities’ confidence. The European Chamber of Commerce in Vietnam (EuroCham) has just announced the Business Climate Index (BCI) for the second quarter, showing a significant record of European business leaders’ confidence in Vietnam increasing to 34 percent from 7 percent. More than half of executives predicted that Vietnam’s macroeconomic climate would “stabilize and improve” in the next quarter – a significant rise compared to the first quarter, when just 10 percent anticipated an improvement. To read more, click here.
  • Indonesia Readies COVID-19 Vaccine Development and Production
    Through an initiative begun in April by the Ministry of Research and Technology, Indonesia plans to mass produce its own vaccine – the Merah Putih – by 2022 to cover 50% of its population. Also noteworthy is the partnership between state-owned Bio Farma and China’s Sinovac Biotech for a possible COVID-19 vaccine. Its Phase III clinical trials began on August 11 and will last through December. It is one of 26 plausible vaccine candidates in the world currently undergoing clinical evaluation. Erick Thorir, State-Owned Enterprise Minister who also leads COVID-19 Task Force and National Economic Recovery Committee, stated that 250 million vaccines will be manufactured by the end of 2020.
  • Indonesia Seeks to Expand Countertrade Options for Defense Procurement
    Indonesia’s Ministry of Trade and the Ministry of Defense are in discussions to collaborate with several trading partners to expand the application of its countertrade program for Indonesia’s defense procurement. The countertrade procurement process would embrace the trade of Indonesia’s locally produced commodities in return for military equipment and arms from foreign suppliers. The Ministry of Trade indicated that commodities including palm oil, rubber, coffee, cocoa, textile products, tea, fish, fruits, spices, and paper, etc., could be used for the countertrade program. The consideration to procure arms through a countertrade program stemmed from Indonesia’s priorities in the economic recovery from the COVID-19 pandemic. In the second quarter of 2020, the Indonesian economy has contracted by 5.32%, the first contraction in more than two decades due to the pandemic. The government had decided to lower its defense spending this year by about seven percent from US$8.9 billion to US$8.3 billion to aid in the economic recovery efforts. To read more, click here.
  • Myanmar Import Protection Law to Take Effect in July 2021
    On July 1, the Office of the President of Myanmar announced notification 83/2020 that the Law to Prevent an Increased Quantity of Imports will come into effect on July 1, 2021. The law was originally passed on December 24, 2019 by the Pyidaungsu Hluttaw (Assembly of the Union) under the law No. 25/2019. According to the law, an increased quantity of imports is defined as “a quantity of any kind of imports into the country is significantly higher than the amount of domestically produced goods that are similar or directly competitive.” The government informed that the law aims to support the competitiveness of domestic producers as well as protect small and medium enterprises (SMEs). The law also enables the investigation of any injuries or threats to domestic producers due to the increased quantity of imports. The inspection measures include monitoring the share of local production volumes, sales, productivity, profits and losses and the conditions of employment. The full text of the law in Burmese can be found here.
  • Central Bank of Myanmar (CBM) issues regulations for Non-Bank Financial Institution (NBFIs)
    On July 9, the CBM released a set of basic guidelines to regulate NBFIs in Myanmar’s financial market. Before this new regulation, there were no specific rules set on managing loan agreements between the NBFIs and their clients. Now with the new CBM regulation, this will not only help regulate these businesses, but also ensure a better structured, inclusive, and secure transactions in the market. The NBFIs and the borrowers will also have more alternatives to settle disputes and voice grievances. The CBM has granted 29 NBFIs with official permits to operate. The new rules indicate that NBFIs must present the loan amount, interest rate per annum, repayment period and number of installments whenever the loan agreements are drawn. The repayment schedule must state the capital and interest to be repaid, which the schedule must be shown along with the loan contract. The interest rate is also to be calculated based on the loan balance. This regulation took effect on July 15, 2020.
  • Philippines Adopts Resolution to Receive P66 Billion for Agriculture Stimulus Package
    To help address the economic shocks of COVID-19 in the agriculture and fisheries sector, the House of Representatives adopted a resolution to enact the P66-billion supplemental budget for the Department of Agriculture (DA). This was adopted under the House Resolution No. 925 and aims to “address the urgent need of ensuring the country’s food and nutrition security, and for the sector to contribute to the country’s faster economic recovery." Before the resolution was passed, President Rodrigo Duterte also endorsed the DA’s “Plant, Plant, Plant” program in the fifth State of the Nation Address and requested for the congressional approval of the agriculture stimulus package. Secretary of Agriculture William Dar also mentioned that he expects the stimulus package to be approved as part of the “Bayanihan to Recover as One Act” or Bayanihan Part 2. To read more, click here.
  • What Thailand's Phase 6 Means for the Travel Industry
    Representing Southeast Asia’s second-largest economy, with tourism spending amounting to 11% of the country’s GDP in 2019, Thailand’s phased reopening is critically important to the travel industry. With local transmissions almost non-existent, and positive cases detected only in repatriated Thai nationals, the Center for COVID-19 Situation Administration (CCSA) has revealed Phase 6 reopening measures. These measures largely relax restrictions for travel and apply to migrant workers, diplomats, dignitaries and businesspeople, foreign film crews, leisure tourists, and also medical/wellness visitors. Relevant ministries take responsibility to ensure all foreigners practice recommended health protocols. The CCSA notes that the guidelines become effective at the discretion of the ministries in charge. Going forward, Tourism Minister Phiphat Ratchakitprakarn expressed the idea that tourists be required to plan a trip of at least 14 days within a designated area. After the two-week period expires, a negative COVID-test will allow them to continue to other destinations. A more concrete plan is expected from the Ministry and the CCSA at the end of the month. Currently the five proposed designated areas of travel are Chiang Mai, Koh Samui, Krabi, Phuket, and Pattaya. To read more, click here.
  • Singapore Seeks to Develop Maritime Interoperability
    On July 28, the Maritime and Port Authority of Singapore (MPA) signed a memorandum of understanding (MoU) with five international partners, namely CargoSmart (solution provider for the Global Shipping Business Network); GTD Solutions (representing TradeLens); GeTS and PSA International (jointly representing CALISTA); and the Port of Rotterdam Authority with the goal of developing common data standards to better facilitate the exchange of data for port and maritime services transactions. Port authorities have been working to develop maritime single windows to improve the electronic exchange of information necessary for port clearance, and the MoU would support improvements in the interoperability of individual data platforms used by shipping lines, logistics companies, port operators, port authorities, and platform providers. Given the disruptions to trade that were caused by COVID-19, the MoU seeks to facilitate connectivity in maritime shipping and improve the efficiency of global trade transactions. To read more, click here.
  • Thailand Approves New Electric Vehicle Manufacturing Projects
    Thailand is turning towards Electric Vehicle (EV) manufacturing in the hopes of attracting new investment and becoming the EV and electric motorcycle manufacturing hub of ASEAN. On June 30, the Thailand Board of Investments (BOI) announced that it had approved 24 projects that will produce a combined 500,000 units per year of various types of electric vehicles. The manufacturers whose projects have been approved include Mitsubishi Motors with a 5.48 billion baht investment to produce 39,000 battery electric vehicles (BEVs), and Sammitr Group with a 5.5 billion baht investment to produce 30,000 BEVs. Other manufacturers such as BMW, FOMM, and Nissan have received approval to produce EVs or battery components for EVs. These projects join existing EV production operations by major manufacturers such as Mercedes-Benz, Honda, and Toyota. To read more, click here.
  • Singapore Turns to Innovative Manufacturing to Address COVID-19 Needs
    Singapore continues to be a leader in addressing the COVID-19 response through innovative scientific research and development. On July 13, the National University of Singapore (NUS) announced that researchers had developed new methods of producing nasopharyngeal swabs using smart manufacturing. Singapore had previously relied on foreign suppliers for the swabs used in COVID-19 testing, but the new developed methods will now allow Singapore to mass manufacture swabs locally. The first new design, entitled Python, was developed using additive manufacturing, also known as 3D printing. Two other designs were developed using a manufacturing process known as injection molding. The injection molding process will enable several hundred swabs to be produced in minutes, allowing Singapore to locally mass manufacture swabs and meet the needs of the country at an affordable cost. Clinical trials for swabs are already underway, patents have been filed for the new designs, and multiple companies will soon be mass manufacturing and sterilizing the swabs. It is believed that Singapore is the first country to use injection molding to produce swabs and the first in Asia to use 3D printing for swabs. To read more, click here.

    Current Advocacy
  • Vietnam Draft Circular on Management of Veterinary Drugs Containing Narcotic Substances, Pre-Substances, Additive Substances and Psychotropic Substances; Prescription and Vet Prescription
    Earlier this year, Vietnam's Ministry of Agriculture and Rural Development (MARD) shared a Draft Circular on the management of veterinary drugs containing narcotic substances, pre-substances, additive substances and psychotropic substances; prescription and vet prescription ("Draft Circular") for industry input. Following the Council's advocacy efforts, including a consultative workshop with MARD on July 8 during which member companies and other stakeholders raised issues and comments on the Draft Circular, an updated Draft Circular has been shared and is currently open for comments. Kindly find the updated Draft Circular here for your reference. The Council is collecting member inputs and will consolidate all comments before sharing with MARD. Contact Hai Pham at hpham@usasean.org with any questions.
  • Indonesia Minister of Industry Regulation 16/2020 on Local Content Requirements (LCR) for Pharmaceutical Products
    In addition to the series of advocacy efforts on LCR, the Council, in coordination with the Euro Chamber have sent a recommendation letter to the Ministry of Industry on the LCR for Pharmaceutical Products. The letter sought clarifications on technical definitions stipulated in the Regulation. The letter includes our member’s and EuroCham’s inputs. Contact mega@usasean.org and aantagia@usasean.org with any questions.
  • Indonesia Ministry of Agriculture’s Draft Decree on the Management and Distribution of Veterinary Drugs
    In relation to the LCR advocacy, on July 31, the Council has extended a letter to the Directorate of Livestock and Animal Health Services at the Ministry of Agriculture (MOA) to provide recommendation on LCR for veterinary medicines. The letter urged MOA to align with LCRs for pharmaceuticals and medical devices by the Health Ministry and Industry Ministry. Contact mega@usasean.org and aantagia@usasean.org with any questions.
  • Indonesia Ministry of Trade Regulation No 50/2020 on E-commerce
    As a follow up to its recent advocacy on e-commerce, the Council is having a virtual meeting with MOT to discuss issues related to Digital Economy, including Ministerial Regulation No. 50 of 2020 on E-Commerce Business licensing, Advertising, Development and Supervision of Business Actors. This meeting is part of US-ABC’s 2020 Virtual Meeting Series on Indonesia Digital Economy. Contact mega@usasean.org and aantagia@usasean.org with any questions.
 

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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