President's Newsletter - September 2020

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

President's Newsletter

September 2020

Dear Members,

Another busy and eventful month has gone by in Southeast Asia.

The Council is just wrapping up its third virtual business mission, this time to Cambodia. Cambodia has managed to navigate the health challenges of COVID-19 well. As of September 25, Cambodia had a total of 275 cases with zero COVID-related death and 274 recovered. Prime Minister Hun Sen opened our mission with a two-hour meeting in which the economic cabinet and U.S. Ambassador to the Kingdom of Cambodia W. Patrick Murphy participated. Despite COVID-19, trade between the Cambodia and the United States grew by 17 percent to US$3.57 billion for the first half of 2020. 2020 also marks the 70th anniversary of the establishment of U.S. – Cambodia diplomatic relations, a milestone the U.S. Embassy in Cambodia is celebrating throughout the year.

New political uncertainty has emerged in Malaysia’s seven-month-old coalition government led by Prime Minister Muhyiddin: Earlier this week, opposition leader and Member of Parliament Anwar Ibrahim announced that he had the support of roughly two thirds of the 222 members of Parliament and that he would seek an audience with Malaysia’s King to name him the new Prime Minister. To date, Malaysia’s King has not met with Anwar but spokesmen for parties in the ruling coalition have admitted that there have been some defections of sitting MPs to the opposition. According to Malaysia’s constitution, if the King believes that the sitting Prime Minister does not have the support of the majority in Parliament, he can dissolve the Parliament and call for elections within 60 days, or call for Parliament to hold a vote of confidence at their next session. If a sitting Prime Minister were to resign, the King could also name a new Prime Minister. While there are a number of scenarios which could play out, many analysts believe this latest challenge by the opposition, coupled with the results of the upcoming state election in Sabah on September 26, will increase the likelihood that Prime Minister Muhyiddin will call a snap general election in order to seek a stronger political mandate for his coalition government. Malaysia’s political situation and navigating COVID-19 continue to hamper the government’s ability to promote forward-looking economic recovery initiatives such as ratifying the CPTPP agreement and utilizing its current chairmanship of APEC to promote Malaysia as a foreign investment destination.

On September 11, U.S. Secretary of State Mike Pompeo issued a statement affirming the United States’ enduring commitment to ASEAN:

“The ASEAN Outlook for the Indo-Pacific and the U.S. Indo-Pacific Strategy share a respect for sovereignty, the rule of law, transparency, openness, and inclusivity. These shared principles form the core of our work with ASEAN and are the basis for this week’s launch of the Mekong-U.S. Partnership. We reiterate U.S. support for ASEAN as it speaks with a strong, collective voice to advance these shared values.”

Secretary Pompeo affirmed his support for transparency and mutual respect as well as inclusive and rules-based economic growth in both the Mekong region and the South China Sea. His attendance at the ASEAN Regional Forum and ASEAN-U.S. Foreign Ministers Meeting signifies the United States’ renewed engagement with ASEAN and the region. To read the full press statement, please click here.

As a part of the implementation activities of the 23rd Meeting of ASEAN Tourism Ministers in Brunei last January, the Council’s Travel and Tourism Committee organized a Digital Economy for Tourism Workshop in coordination with the government of the Philippines as Chair of the ASEAN Tourism Competitiveness Committee (ATCC) and the ASEAN Secretariat on September 11. The workshop served as a virtual capacity-building activity led by experts from Council member companies – such as Expedia Group, Adobe, Airbnb, and Visa – for tourism government officials. It was attended by the tourism officials from all 10 ASEAN countries with digital marketing responsibilities at the technical and policy levels.

On September 1-4, the Council led a delegation of 25 companies in a virtual business mission to the Philippines engaging key Philippine government officials on issues of common interest and priorities. The meetings revolved around mission themes of supporting a strong response and recovery against COVID-19, accelerating digital transformation and reinforcing U.S.-Philippines bilateral ties for regional peace and prosperity. The Council met with a number of key cabinet officials, including the Minister of Agriculture with whom we signed an MOU on Partnerships for Agricultural Cooperation.

As many of you may already know, Ambassador Thani Thongphakdi is leaving his post as the Thai Ambassador to the United States to become the next Permanent Secretary of the Thailand Ministry of Foreign Affairs, a much-deserved promotion. Since assuming the ambassadorship in September 2019, Ambassador Thani and the Embassy of the Kingdom of Thailand have shown great dedication and commitment to deepening all aspects of U.S.-Thailand relations and continued to strengthen their relationship with the Council and our members. The Council considers Ambassador Thani a good friend and advocate who has focused on opening new doors to trade and investment between the United States and Thailand. We wish him the best of luck in his new posting.

As we bid adieu to one Ambassador, we are welcoming another. The new Indonesian Ambassador to the United States, H.E. Muhammad Lutfi, presented his credentials to U.S. President Donald Trump on September 17. Ambassador Lutfi is no stranger to the Council or the American business community, having served as Indonesia’s Trade Minister as well as Chairman of the Indonesian Investment Promotion Board (BKPM) in addition to Indonesia’s Ambassador to Japan under President Susilo Bambang Yudhoyono.

When the Council met with President Joko Widodo in December last year, he outlined his vision for his second term focused on making Indonesia an easier place to do business for American companies. President Jokowi’s appointment of Ambassador Lutfi to represent him in the United States is certainly a clear indication that he wanted an Ambassador in Washington who can move the economic relationship forward. Ambassador Lutfi has an insider’s grasp of trade and investment issues from both a public and private sector perspective and will be able to make an immediate impact on the business, trade and investment relations between Indonesia and the United States. Immediately prior to his appointment to the Indonesian Embassy in Washington, DC, Ambassador Lutfi served as the President Commissioner of PT Medco Energi Internasional Tbk, one of Southeast Asia’s leading energy firms. The Ambassador is a 1992 graduate of Purdue University in Indiana where he earned a Bachelor’s degree in economics. To read more about Ambassador Lutfi and his arrival in Washington, please click here.

On August 27, the Council sent its 21st consecutive delegation to the 52nd ASEAN Economic Ministers’ Meeting (AEM), with a consultative plenary session with all ten ASEAN Economic Ministers co-chaired by Vietnam Minister of Industry and Trade Tran Tuan Anh and U.S. Trade Representative Ambassador Robert Lighthizer. During the plenary session, the Council shared its view on the uncertainty surrounding the COVID-19 pandemic and proposed actionable steps and contributions to bounce ASEAN economies forward, including through the initiatives of the Council’s COVID-19 Economic Recovery Task Force. The delegation also discussed the importance of digital trade agreements as a catalyst to accelerate digital transformation. During the session, delegates presented the Council’s recent E-Commerce Report on “A Vision for Cross-Border E-Commerce in ASEAN” to the AEM. Moreover, the Council is proud to demonstrate its commitment to digitalization by integrating these themes into ongoing programs, such as the ASEAN SME Academy, U.S.–ASEAN Internship Program, the work of the standards and innovation committees, and the Digital Trade Roadshow.

The Council recently conducted its inaugural Policy Retreat on Digital Services Taxes (DSTs). The three-day retreat convened interested members with both subject-matter experts and ASEAN-based thought leaders to discuss and formulate guiding principles towards digital services taxes in ASEAN as well as a set of building blocks for developing proactive strategies for future advocacy efforts in this emerging policy area. The retreat itself featured two panel discussions on global and regional developments on DSTs and a dialogue with tax officials from the governments of Singapore and Indonesia. Government affairs, public policy and tax executives from 15 US-ABC members also participated in breakout discussions on topics including priority DST policy principles, priority DST compliance and implementation principles and targeted advocacy strategies towards DSTs in ASEAN. Following the conclusion of the retreat, the Council is now identifying next steps for strengthening our presence in the DST policy space in the region by incorporating industry principles into existing programs and developing new advocacy strategies in specific ASEAN nations.

Upcoming Events

2020 Malaysia Business Mission, October 5-9
Planning is under way for our upcoming Malaysia Business Mission from October 5-9. The mission will include both a virtual component and in-person meetings for Malaysia-based representatives. The mission will be a great opportunity to engage officials from the Perikatan Nasional government. Given recent political developments in Malaysia, we will inform you if we plan to postpone this mission by the end of this month. Contact Alberto Coria (acoria@usaesan.org) or Kim Yaeger (kyaeger@usasean.org) with any questions.

2020 Virtual Indonesia Business Mission, October 19-23
Planning is under way for our upcoming Indonesia Business Mission, to be held October 19-23. The mission will be an opportunity to engage key government officials across the cabinet. Contact Mega Valentina (mega@usasean.org) or Kim Yaeger (kyaeger@usasean.org) with any questions.

Indo-Pacific Business Forum, October 28-29
The Council is proud to collaborate once again with the U.S. Trade and Development Agency on this year’s Indo-Pacific Business Forum, to be held in Hanoi, Vietnam on October 28-29. During this public-private event, senior government officials, industry executives, and other partners will gather for a series of high-level panel discussions on infrastructure, the digital economy, health, and market connectivity. There will also be a robust offering of sideline events, including one that we’re helping to organize focused on sustainability in the region. Interested parties may register for the 2020 IPBF here. For more information, please contact Bernie Baskin (bbaskin@usasean.org) or Hai Pham (hpham@usasean.org).

 

Country, Industry and Advocacy Updates

 

COVID-19 Update

Brunei
As of September 17, Brunei had one active COVID-10 case. Due to the case count remaining extremely low, the government of Brunei has continued reducing its COVID-19 social and physical distancing measures. These measures allow playgrounds, cinemas, and swimming pools to operate at 80% capacity. Special needs classes, childcare centers, and public transportation are now able to operate at 100% capacity. Travel to Brunei is still restricted, and anyone seeking to enter or exit Brunei must apply for a permit from the Prime Minister’s Office. However, on September 2, Brunei and Singapore established Reciprocal Green Lane facilities, enabling travel between the two nations. On September 3, the Sultanate announced that travelers entering the country must provide a negative COVID-19 test on arrival, which must be obtained within 72 hours of travel. On September 14, Royal Brunei Airlines (RBA) declared plans to operate a commercial flight to London’s Heathrow Airport. RBA has still suspended most of its routes till October 25, with limited service continuing to Kuala Lumpur, Melbourne, Singapore, Hong Kong, and Manila. Brunei has had 145 cases, 3 deaths, and 141 recoveries so far.

Cambodia
On September 11, Cambodia’s Ministry of Health announced zero active cases of COVID-19 for 11 consecutive days. As of now, there are 274 identified cases and all 274 of the patients have completely recovered. All of the cases were imported, and there has been no reported community transmission in the country. Since mid-June, Cambodia has resumed international flights with strict screenings, testing and contact tracing, and proper quarantine and safety measures. Recently, the Ministry of Tourism implemented measures to be undertaken by foreign tourists. The Ministry of Education is planning to reopen education institutions through a three-phase plan, starting with 20 private schools which reopened in August. Moreover, the Ministry of Economy and Finance has been developing economic stimulus packages, and so far, distributed US$78 million to underprivileged families suffering from the pandemic. The cash support program for poor and vulnerable families is expected to maintain the balance of business for economic recovery. On the other hand, Save the Children in collaboration with USAID, has launched its first toll-free call service and interactive game to provide updated information on COVID-19 around the country. The application aims to educate the importance of transmission prevention techniques.

Indonesia
With over 262,000 confirmed cases of COVID-19 as of September 25, Indonesia is the region’s second-worst affected country, behind the Philippines. Jakarta remains the epicenter of the nation’s epidemic, with approximately one-fourth of Indonesia’s recorded cases located in the capital city. Reports that Jakarta’s healthcare system was on the “brink of collapse” prompted local authorities to reimpose large-scale social distancing restrictions (PSBB) in the city on Monday, September 14. Last week, West Java announced micro and community-scale social restrictions (PSBMK) in the “red zones” of Jakarta’s satellite cities, namely Bogor, Depok and Bekasi. Despite projections that Indonesia’s economy will shrink by 1 percent this year, President Joko Widodo has stressed that mitigating the spread of the virus must take precedence over efforts to revive the economy. The country’s most recent death toll stood at 9,222, and to date, 59 countries have instituted travel bans on Indonesian citizens over coronavirus concerns.

Laos
Since the onset of the COVID-19 outbreak, Laos has recorded 23 cases in total, with only 3 new cases reported in the past month. The Lao government has continued to closely monitor people entering the country to prevent a second wave of the outbreak, and tourist visas are still suspended for anyone travelling from or transiting via countries with an outbreak. Meanwhile, Japan expanded its travel bubble to include Laos on September 8. The “Business Track” of the travel bubble is still under discussion and all visitors are still subject to the mandatory 14-day quarantine period.

Malaysia
On September 16, the Malaysian Health Ministry reported 62 new COVID-19 cases, bringing the country’s total to 10,031. Currently, there are 668 active COVID-19 cases being treated in Malaysia. Out of the 10,031 cases, 9,235 have recovered and there have been 128 deaths. On August 28, 2020, the Malaysian federal government announced that the Recovery Movement Control Order (RMCO) will be extended until December 31, 2020. This RMCO was originally implemented on June 10, 2020 and was intended to end on August 31, 2020. Under the RMCO, nearly all economic sectors have been permitted to operate, excluding a small number of night clubs and entertainment sectors. Furthermore, sporting activities are permitted, but without the involvement of international participants and spectators. Additionally, the Covid-19 Fund managed by the National Disaster Management Agency has also been extended until December 31, 2020. This fund aids COVID-19 victims and assists with preparing the necessities to control the impact of the pandemic. On September 10, 2020, it was announced that expatriates and professional visit pass-holders from the 23 countries that were previously under the enforced entry ban were now allowed to enter the country. Expatriates and professional visit pass-holders must obtain approval from the Immigration Department before they can enter the country. Their application must also have a support letter from the Malaysian Investment Development Authorities or related agencies. Furthermore, permanent residents, as well as spouses of Malaysian citizens may enter Malaysia, under the regulation that it is a one-way trip, and they will remain in Malaysia. Student pass holders are now also allowed to enter Malaysia if they have approval from the Immigration authority. Also, on September 14, 2020, it was announced that foreign spouses and children of Malaysian citizens who do not have a long-term visit pass can apply for permission to enter the country.

Myanmar
As of September 15, Myanmar has reported a total of 3,502 cases with 35 deaths and 832 recoveries. The locally transmitted cases have been rapidly spreading throughout the country, with the Yangon region having the highest number of cases, followed by Sittwe in Rakhine state. The latest updates indicate that Myanmar has surpassed Thailand, having the fifth-highest number of COVID-19 cases in ASEAN. The Burmese government has reestablished stay-at-home orders, curfews, and bans on public gatherings and public events as well as closures of entertainment venues and religious institutions. Most of the mass election campaigns are currently suspended in virus-stricken areas of Myanmar, but the Union Election Commission stated that the November 8 elections will continue as scheduled while taking health and safety measures. On the other hand, all domestic flights within Myanmar have been suspended until September 30. Traveling outside of Yangon is not allowed until October 1, unless for health and emergency reasons. Mandalay and NayPyiDaw have resumed with social restrictions, which include bans on buses and closures of dine-in restaurants, markets and malls.

Philippines
The Philippines recorded the highest number of deaths in a day on September 12 with 186 deaths. Despite this, the government has issued the reduction of physical distancing in public transport from 1 meter to 0.75 meter which will be enacted by September 14. IATF has agreed to this decision. However, this new protocol has been suspended until this matter is further reviewed and agreed by President Duterte this week.On September 11, Bayanihan to Recover as One Act or Bayanihan 2 has been signed into law by President Duterte after being ratified by the House of Representatives on August 24.The economic stimulus package which allotted $7.7 billion will be focused on revitalizing the most vulnerable sectors hit by this pandemic, which are poor households and Micro, Small, and Medium-sized Enterprises (MSMEs). In addition, the allotted fund will also be used to enhance Philippine’s infrastructure, public transport, and agriculture.

Singapore
As of September 18, Singapore recorded 11 new cases, the lowest since March, adding to the total active cases of 466. Despite recording 87 new cases on September 11, Singapore has a declining case count. A total of 27 deaths have been reported to date. Imported COVID-19 cases reached over 1,000 cases on September 17, resulting in a new ministerial update on the Advisory for Employers and Dormitory Operators to Submit Essential Errands for Migrant Workers to Carry Out Essential Errands. The addendum tightens the monitoring of migrant workers by strongly encouraging employers to provide private transport between the workers’ dormitory and the stipulated working location as well as actively monitoring the workers’ compliance with the regulation. In response to the lower daily cases, the government now allows general travel to Brunei Darussalam and New Zealand but still advises to defer all other forms of travel overseas. Foreign travelers who have been staying in those two countries for the past 14 days will be allowed entry to Singapore without the Stay-Home Notice (SHN) procedure. Other countries including Malaysia, Vietnam, and Taiwan are only required a 7-day SHN. Travelers from other countries must follow the 14-day SHN procedure. In the effort to protect the economy and the people, Singapore has supplied five stimuli packages starting February 18 with a total of almost SGD 100 Billion. Different packages target different sectors with the latest being targeted on the aviation and hospitality sectors.

Thailand
Thailand reported its first locally transmitted case in 100 days on September 3 and has recorded just under 3,500 cases since the onset of the COVID-19 outbreak. The state of emergency has been extended until the end of September. On September 15, the Cabinet approved a special long-term tourist visa, valid for 90 days and allowable for renewal up to a maximum stay of 270 days. The government is trying to strike a balance between maintaining public health standards and reviving the tourism sector, as Thailand relies on tourism for 20% of its GDP. The current target is set at 1,200 visitors per month, which will bring an estimated income of THB 1 billion per month and help revive the tourism sector. The Tourism Authority of Thailand does not expect all foreign tourists to be able to visit the country until April 2021 once a vaccine is publicly available.

Vietnam
Since September 2, Vietnam has recorded no community transmission cases of COVID-19, marking two weeks straight without a community infection and having less than 100 active cases as of September 16. As the second wave gradually came under control, the Prime Minister has requested the Ministry of Transport to direct airlines to consider resuming international commercial flights with some countries and regions such as China, Japan, South Korea, Taiwan, Laos, and Cambodia. The Prime Minister also noted that production and business activities have returned to normal in all localities, including Da Nang, the COVID-19 hotspot in the second wave. Starting September 18, the national flag carrier Vietnam Airlines will resume international flights via one-way flights between Vietnam and Japan. The airline is also building a plan to resume flights to the other destinations suggested by the Prime Minister. Earlier before June and the second wave of infection, Vietnam Airlines conducted several one-way flights between Hanoi, Ho Chi Minh City and Seoul in the South Korea and Frankfurt in Germany. In addition, on August 27, the Prime Minister requested ministries and agencies to accelerate granting visas to foreign experts and investors. Currently, only diplomats, foreign experts and investors are allowed to travel to Vietnam since commercial flights were suspended in April.Amid the second wave of the COVID-19 pandemic, the Ministry of Labor, War Invalids and Social Affairs (MOLISA) has proposed a VND18.6 trillion (US$798 million) package for those affected by the COVID-19 pandemic, targeting small and medium enterprises, cooperatives, business households, workers in rural areas, and unemployed workers in difficult living circumstances. The proposal has been sent to the Ministry of Planning and Investment and, if approved, will be the second social security support package, following the first package in April worth VND62 trillion (US$2.66 billion).

 

Key Developments

  • 53rd ASEAN Foreign Ministers’ Meeting
    On September 9, Vietnam chaired the virtual 53rd ASEAN Foreign Ministers Meeting. The Joint Communiqué adopted by the Foreign Ministers acknowledged that the COVID-19 pandemic has caused a severe and multi-dimensional impact on the region but also expressed optimism that ASEAN community-building efforts will continue alongside ASEAN’s strong mettle and self-reliance. They also reiterated their commitment to keep the ASEAN markets open for trade and investment, promote and accelerate trade facilitation efforts, as well as facilitation of investment, and refrain from imposing unnecessary non-tariff measures to ensure supply chain connectivity, particularly for food, medicines, medical supplies, and other essential products. In terms of ASEAN Connectivity, the Joint Communiqué called on ASEAN’s external partners and relevant stakeholders to strengthen sustainable infrastructure in the region by investing in and bolstering implementation of projects in the Initial Rolling Priority Pipeline of Potential ASEAN Infrastructure Projects, and supporting efforts to utilize the ASEAN Sustainable Urbanization Strategy (ASUS). To read more, click here.
  • Indonesia Expands List of Foreign Tech Firms Required to Pay Digital VAT
    Jakarta has expanded its list of foreign internet-based firms that are required to pay a 10 percent value-added tax (VAT) on digital sales in Indonesia. By October 1, technology companies that earn at least Rp 600 million (US$40,650) in annual sales from a minimum of 12,000 users must begin charging the VAT to their customers and advertisers. The notification comes after a few technology companies were slapped with the VAT requirement back in July of this year. The move is an attempt by Jakarta to boost government revenues, as the economic fallout from the COVID-19 pandemic has shrunk the country’s tax base. By July, Jakarta had collected Rp 922.2 trillion (US$62.79 billion) in state revenues – a decline of 12.4 percent compared to the previous year. Indonesia boasts the largest and fastest-growing digital economy in Southeast Asia, which forecasters anticipate will reach $130 billion by 2025. By introducing taxes into this burgeoning market, Jakarta hopes it can make companies “pay their fair share” – now that a significant amount of commerce has migrated online due to COVID-19.
  • U.S. government expands engagement with the Mekong region
    On September 11, the U.S., Myanmar, Cambodia, Laos, Vietnam, and Thailand launched the Mekong-U.S. Partnership as a strategic forum for cooperation. Between 2009 and 2020, the US State Department and USAID provided almost $3.5 billion in assistance to the five Mekong countries, and the Partnership will expand on these areas of cooperation, including economic connectivity, energy security, human capital development, transboundary water and natural resources management, and non-traditional security. Other commitments from the U.S. include $55 million in planned investment to strengthen regional law enforcement to combat the flow of illicit goods and human trafficking, $6.6 million to improve energy infrastructure through the State Department’s Power Sector Program, and sponsoring a series of policy dialogues on evolving opportunities and challenges in the Mekong Region. On the one-year anniversary of the Japan-U.S.-Mekong Power Partnership (JUMPP), the governments of the U.S. and Japan also released a joint ministerial statement stating their commitment to promote a more sustainable energy sector and quality energy infrastructure development that meets the needs of people in the Mekong sub-region. To read the statement, please click here.
  • Philippines to Automatically Approve Telco Tower Applications After 7 Days
    On August 5, the Anti-Red Tape Authority (ARTA) in accordance with Section 15 of Republic Act (RA) 11032 or “Ease of Doing Business and Efficient Delivery of Government Service Act of 2018,” all pending applications that have been filed by telcos and tower companies with local government unites (LGUs) and national government agencies (NGA) will be automatically approved after seven days following the submission of the application and the payment of fees. The government has made improving connectivity and telecommunications infrastructure a top priority, streamlining regulations and calling on telco companies to improve their services. In his recent State of the Nation Address (SONA), President Duterte called for Smart and Globe, the leading telcos, to improve their services by December or face shutdown. This new automatic approval process for tower applications represents the government’s efforts to address the bureaucratic red tape and regulatory issues that have frequently hampered the construction of new common towers.
  • Malaysia’s Second Meeting of the Parliament Session
    The second meeting of the Third Term of the 14th Parliament ended on August 27. During the session, the Cabinet approved the implementation of the National Digital Identity Initiative. The National Digital ID is an advanced method of authenticating a user’s identity online. The core reason behind this government initiative is to improve Malaysian’s confidence in the digital economy. Additionally, on August 26, 2020, the amendments to the Courts of Judicature Act 1964, the Subordinate Courts Act 1948, and the Subordinate Courts Rules Act 1955 were passed with the majority of votes in support. These amendments allow court proceedings to be conducted through live video or television links. This is a step forward for Malaysia’s remote communication technology and now enables Malaysia to conduct court proceedings throughout any future emergency situations, which would have normally obstructed the judicial system from proceeding. To read more, click here.
  • Malaysia Government to Launch Digital Economy Masterplan in October 2020
    On August 13, the Malaysian Minister in the Prime Minister’s Department (Economy) Datuk Seri Mustapa Mohamed announced that the government expects to launch the Digital Economy Masterplan in October 2020 as an initiative to boost the digital economy in all sector, including non-manufacturing sector. The Masterplan expands on the Ministry of International Trade and Industry’s Industry4WRD plan for the manufacturing sector only and combines with a study on the Fourth Industrial Revolution. The Masterplan will be presented to the government for approval. Ahead of this announcement, the Malaysia Digital Economy Task Force met for the first time on July 24, jointly chaired by the Ministry of Communications and Multimedia and the Ministry of Science, Technology, and Innovation. Aiming at transforming Malaysia into a high-tech nation under the Fourth Industrial Revolution, the 32-member Task Force is a platform to coordinate between agencies to develop and implement 15 high-impact programs. To read more, click here.
  • Vietnam Ministry of Industry and Trade to Draft First National Energy Master Plan
    On August 28, the Ministry of Industry and Trade held a workshop to discuss the first ever national energy master plan for the 2021-2030 period, as the country shifts from being an energy exporter to a net importer. The Ministry is expected to finish drafting the plan by October and submit it to the government by the end of 2020. Five of its planned 14 chapters have been completed, including current status assessment, implementation status of energy sub-sectors in the past, forecasting energy development scenarios, and the current status of energy-use and energy-saving in Vietnam. The first national energy master plan is based on the Resolution No. 55-NQ/TW on "Strategic orientation on Vietnam national energy development to 2030, with a vision to 2045" which provides the general goals for energy development. To read more, click here.
  • ASEAN Governments Signal Major Defense Spending Hike
    Indonesia’s 2021 defense budget is set to rise to US$9.2 billion – a 16.2 percent increase compared to 2020. The spending hike is notable given that other countries in the region have recently slashed defense spending as a result of economic concerns imposed by COVID-19. Funding priorities for 2021 include: procurement of munitions, armored vehicles, and naval vessels, and the support and replacement of military aircraft. Nearly one third of the budget will be dedicated to military modernization. In the Philippines, President Rodrigo Duterte announced last week that Manila would increase its defense spending by 11 percent in 2021. With military modernization a key priority, the majority of the US$4.3 billion budget will go toward the army, while the Philippines’ navy and air force will receive approximately 15 and 14 percent of the budget, respectively. To read more, click here.
  • National Bank of Cambodia (NBC) Establishes New Digital Payment System Using Blockchain Technology
    In an effort to deliver a more efficient and lower cost payment system in Cambodia, the National Bank of Cambodia (NBC) has partnered with a blockchain developer, Tokyo-based Soramitsu to come up with a retail payment system project. Named “Bakong”, it is the first retail payment system in the world, using blockchain technology where users can transfer money, move around digitized cash, while trying to preserve the security and creditworthiness of the central bank. The central bank also stated that the Bakong is expected to help challenge the dollar’s reign by inducing Cambodians to pay via QR codes and mobile applications, with a Hyperledger Iroha blockchain facilitating real-time fund transfers. Additionally, the government expects the introduction of Bakong to fasten the process of establishing a national standard for QR code usage. This project was first developed in 2017, the pilot was launched in July 2019 and currently, there are 16 banks and over 150,000 users, with over 600 shops across the country that accept Bakong. This is an ongoing project with more banks expected to join in the near future.

    Current Advocacy
  • Philippines MOU on Partnerships to Strengthen Agricultural Cooperation During the 2020 Virtual Philippines Business Mission on September 1-4, the Council and the Department of Agriculture signed an MOU on Partnerships to Strengthen Agricultural Cooperation. Please contact the Food & Agriculture and Philippines teams to propose and implement initiatives and activities under this MOU. It is recommended for members to align closely with recent government priorities of food security, modernization, and digitization of the Agriculture sector (please refer to the second article on here) and investment opportunities in the fisheries sector, among the top 10 largest in the world.
  • Philippines House Bill No. 6122 (The Internet Transactions Act)
    The Council has obtained information that the Government of the Republic of the Philippines has submitted Bill No. 6122 to the Philippines House of Representatives. If enacted the measure be known by its short title "The Internet Transactions Act". According to the official government news agency, "HB 6122 seeks to establish an eCommerce Bureau that will focus on promoting the development of e-commerce in the country by building trust between sellers and consumers, stronger online consumer protection, safer e-payment gateways, easier online business registration, and formulating other policies and programs to the increase the number of online merchants and consumers." Since this bill could implement many changes to the Philippines digital infrastructure, The Council would like to seek industry inputs from member companies on HB 6122.
  • Philippine House Substitute Bill to Amend the Data Privacy Act of 2012
    The Philippine House of Representative recently released a House Bill in substitution of House Bills 1188 and 5612 amending the Data Privacy Act of 2012. The Substitute Bill combines the House Bills 1188 and 5612 and expands to include a definition of financial data. Overall, it has not addressed the concerns raised by the Council’s submission for the House Bills 1188 and 1152. Please see attached for a copy of the substitute House Bill and contact Lilibeth Almonte-Arbez (lalmonte@usasean.org) for comments and questions.
  • ASEAN Cross-Border E-Commerce Study
    The Council has recently finalized its study on e-commerce and presented the report titled “A Vision for Cross-Border E-Commerce in ASEAN” to the ASEAN Economic Ministers (AEM) during the AEM Consultation with U.S. Trade Representative on August 27. The Report proposes practical and impactful initiatives that would help ASEAN advance a common regional market for e-commerce. These initiatives are clustered into four key themes which look into (i) strengthening the institution of cross-border e-commerce; (ii) enhancing trust and recognition among different players; (iii) harnessing talent, innovation and capacity building for MSMEs; and (iv) developing seamless connectivity to boost e-commerce supply chains. The study itself was developed in close consultations with more than 35 stakeholders who shared their perspectives on the challenges, issues and opportunities across the e-commerce value chains. These stakeholders included the sponsors of the report, UPS, Google, Visa and Amazon, as well as other online platform players, payment, logistics and technology providers, financial institutions, e-commerce associations and ASEAN government officials. The Council will be launching and rolling out the Report in coordination with the ASEAN Coordinating Committee on E-Commerce (ACCEC), with a view to discuss the implementation of the proposed initiatives and how they may complement the current work program of the ACCEC. For more information about the Report, please contact Shay Wester (swester@usasean.org) and Marcella Suwandhi (msuwandhi@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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