Key Developments Indonesia 2021 Cabinet Reshuffle
After gaining parliamentary approval to reorganize and combine several government agencies, President Joko Widodo reshuffled
his cabinet on April 28. President Jokowi also created a new Ministry of Investment and installed the current head of the Investment Coordinating Board (BKPM) Mr. Bahlil Lahadalia as the Minister of Investment. Minister Lahadalia will retain his title and duties as Chair of BKPM. This transformation is in line with the Omnibus Law on Job Creation, which mandates all business licensing matters to be streamlined, simplified, and digitalized. Merging the Ministry of Research and Technology into the Ministry of Education and Culture, President Jokowi appointed Minister of Education and Culture Mr. Nadiem Makarim to lead the newly created Ministry of Education, Culture, Research and Technology.
Malaysia’s National Investment Aspirations
The Ministry of International Trade and Industry (MITI) has unveiled
the National Investment Aspirations (NIA), as a forward-looking economic growth strategy. The policies will begin by being reflected in all future Malaysian investment regulations, including the Fourth Industrial Revolution masterplan
Malaysia Plan. The NIA is also influenced by the Shared Prosperity Vision (SPV) 2030
, a long-term plan for inclusive economic growth, and the Environmental, Social and Governance (ESG) goals. MITI identified 5 core parameters
that the NIA will focus on in order to further promote Malaysia as an international investment hub:
- Develop sophisticated goods and services to increase economic diversity and complexity via high levels of local research and development and innovation.
- Work to create a larger domestic market for high-skill jobs.
- Connect and integrate domestic linages into the global supply chain by improving their resiliency.
- Create high productivity sector clusters and develop existing ones.
- Continue improving economic inclusivity for the socio-economic developmental agenda.
Senior Minister and Minister of International Trade and Industry Dato’ Seri Mohamed Azmin Ali stated
that “in order to enable further diversification and ventures into more complex industries, emphasis should also be accorded towards fostering a robust and dynamic tax and incentives regime, building our talent pool in close collaboration with relevant industries, improving our licensing and regulatory frameworks and augmenting the facilitation elements such as customs procedures.” The NIA is seen as a methodology for Malaysia to curb investment
flows out of the country. The full press release for the NIA may be found here
ASEAN Leaders' Summit on Myanmar
On April 24, the heads of state of Brunei, Cambodia, Indonesia, Malaysia, Singapore, and Vietnam, along with the foreign ministers of Laos, Philippines, and Thailand, attended an ASEAN emergency summit on the coup in Myanmar, which took place in Jakarta, Indonesia. On the Myanmar side, Senior General Min Aung Hlaing was invited to attend but was referred to throughout the Summit as Commander-in-Chief of the Military, not as the Head of State. The National Unity Government (NUG), the parallel government formed by elected civilian members of Parliament, did not receive an invitation to the summit. Following the summit, the leaders issued a formal Chairman’s statement
that included a “Five-Point Consensus.” The leaders also renewed their commitment to resolving the humanitarian crisis in Rakhine state and to repatriating displaced members of the Rohingya community. The five points agreed to are as follows:
- There shall be an immediate cessation of violence in Myanmar and all parties shall exercise utmost restraint.
- Constructive dialogue among all parties concerned shall commence to seek a peaceful solution in the interests of the people.
- A special envoy of the ASEAN Chair shall facilitate mediation of the dialogue process, with the assistance of the Secretary General of ASEAN.
- ASEAN shall provide humanitarian assistance through the ASEAN Coordinating Center for Humanitarian Assistance (AHA Center).
- The special envoy and delegation shall visit Myanmar to meet with all parties concerned.
On April 26, the press release
by the State Administration Council (SAC) indicated that it would give “careful consideration” to receiving an ASEAN Special Envoy-led delegation, depending on the stability of the country, and would take the five-point consensus into positive consideration if it “facilitate[s] the implementation of the [SAC’s] five-step roadmap
.” With protests on the ground not looking to subside anytime soon, this response can be viewed as a move by the military to stall the visit for as long as possible. Several armed conflicts are also continuing to escalate between the military and the Ethnic Armed Organizations in the Chin and Karen states near the Thailand border.
Mid-Term Review of the ASEAN Economic Community Blueprint 2025
ASEAN released the report of the Mid-Term Review (MTR) of the ASEAN Economic Community Blueprint 2025
on April 28. The report was developed by the ASEAN Secretariat, with funding and capacity building support from the ASEAN Regional Integration Support by the EU (ARISE) Plus Program. The MTR provides assessment on the progress of implementation
of the overall AEC Blueprint 2025
and the 23 sectoral work plans under the AEC pillar for the period of 2016 to 2020. The Blueprint has five key characteristics which define the goals and objectives of the AEC 2025:
Government of Malaysia Implements Tighter MCO 3.0
- Highly Integrated and Cohesive Economy
- Competitive, Innovative and Dynamic ASEAN
- Enhanced Connectivity & Sectoral Cooperation
- Resilient, Inclusive, People-Oriented & People-Centered ASEAN
- Global ASEAN
The Government of Malaysia has unveiled stricter Standard Operating Procedures (SOPs) to be implemented under the MCO 3.0, to be in effect from May 25 to June 7. In general, the SOPs allow for economic activity in permitted economic sectors, for consumers to purchase and obtain essential goods and services, for citizens and residents to receive healthcare and medicine, and for officials to conduct authorized government initiatives. The SOPs do not authorize inter-district movement in MCO areas or inter-state movement without the permission from the Royal Malaysia Police, and a variety of activities which are further detailed by the general SOP
RCEP Ratification Update: Malaysia
Malaysia signed onto RCEP with the rest of the participating nations in November of 2020. The Government has stated
that it plans to ratify the agreement sometime during Q1 of 2022. While the Federation of Malaysian Manufacturers (FMM) commends the Government on setting this target date for ratification, it would prefer a quicker timeline to kickstart Malaysia’s post-pandemic economic recovery. “FMM firmly believes that these regional trade agreements [RCEP and CPTPP] will greatly contribute to manufacturers’ post-pandemic recovery and in creating resilient supply chains,” said
FMM President Tan Sri Soh Thian Lai. “The manufacturing sector has been hit hard … therefore, the post-COVID-19 trade recovery for Malaysian companies is going to be more about re-establishing critical supply chains and establishing new global value chains to boost economic growth.”
Philippines Aiming to Develop a Military Hub on Contested South China Sea Island
General Cirilito Sobejana, Chairman of the Joint Chiefs of Armed Forces of the Philippines, is planning
to ask President Duterte to fund a logistics hub on Pag-asa Island (Thitu Island) in the Spratly Islands to boost the nation’s military capacity in the South China Sea. The general’s plan also involves installing high-resolution, night-capable cameras to monitor activities around islands claimed by the Philippines. During an interview, General Sobejana stated
“our objective is to drive away Chinese maritime militia and other Chinese vessels from our exclusive economic zone.” This move comes amid increased China-Philippines tension in the South China Sea, highlighted by the Philippine Foreign Secretary’s use of plain, yet colorful, language
to dictate his thoughts on Chinese fishing boats sailing into the Philippines’ exclusive economic zone (EEZ). Additionally, the Philippine Government has urged
local fishermen to ignore China’s annual ban on summer fishing in the Sea, expanded
military patrols near the disputed Julian Felipe Reef (Whitsun Reef), and rejected
the Chinese Government’s opposition to ongoing Philippine naval exercises. All of this activity suggests that geopolitical competition is intensifying in the South China Sea, and that while China may possess a larger navy, the Philippines refuses to capitulate to Beijing’s demands.
Thailand’s Personal Data Protection Delayed Until May 2022
Initially slated for June 2021, the implementation of Thailand’s Personal Data Protection Act (PDPA) has been delayed
once again to May 2022. The PDPA was originally introduced in 2019 with a one-year grace period for adjustment but delayed in May 2020 due to pandemic-related financial and legislative stress on private companies and the Government. The appointment of the 16-member Personal Data Protection Committee by the Ministry of Digital Economy and Society (MDES) has also been delayed due to complaints that some nominated members lack technical expertise or experience. The committee has a broad range of powers
, including “drafting the master plan on personal data protection, issuing notifications or rules for the execution of the act, and advising the cabinet on the enactment or revision of the existing laws so as to protect personal data.” While this delay has granted businesses more time to understand the provisions and bring their operations into compliance, further delays may not be so forthcoming in future.
Singapore Will have to Rely on Foreigners to Fill the Shortage of Tech Workers
On May 4, Managing Director of the Monetary Authority of Singapore (MAS), Ravi Menon, said that the country will have to rely on foreigners to fill the shortage of tech workers. A boom in technology jobs across all sectors is projected as Singapore emerges as a regional tech hub. Up to 500 new tech vacancies are posted each week on job sites, according to NodeFlair, which is helping hire for Bytedance and Sea Group’s e-commerce business Shopee. There were nearly 10,000 tech-related job postings on a government-run careers portal in mid-September, and another 6,800 jobs and traineeships would be created by June 2021 through industry partnerships. The financial sector will see 6,500 new jobs created this year, with technology leading the hiring, based on a MAS and Institute of Banking and Finance (IBF) survey conducted late last year of financial institutions' projected hiring from January to December 2021. The financial sector alone added 2,200 net jobs in 2020, a year when the Singapore economy as a whole lost 180,000 net jobs. While Singaporeans took up 75 percent of the total net jobs, they accounted for only 35 percent of the tech jobs. The jobs exist but the local skills are not present in sufficient quantities. Many firms moving to Singapore look for data scientists and coders at a pace in which the current graduate and skills pipeline cannot fill. Recruiters say this is partly because of Government policies to tighten foreign hiring to offset falling Singaporean employment amid the coronavirus pandemic. According to Mr. Menon, if Singapore tightens this inflow excessively, it will impair not just the competitiveness of being a financial center but dampen the prospects for creating good jobs in the future, especially for Singaporeans.
Ecological Sustainability & Green Economy Will be the Philippines’ Post-Pandemic Recovery Focus
The COVID-19 pandemic has highlighted the need for a greater focus on sustainable recovery by Philippine policymakers to pursue ways of "greening" post-COVID-19 economic recovery strategies. They are putting together a green stimulus plan which prioritizes the creation of a carbon-neutral society for all Filipinos. The green economy stimulus package could provide an alternative to low-paid work bound up in carbon-intensive supply chains like those at fast-food chains and shopping centers, which are currently the major employment opportunities for many Filipinos in large urban centers. The Philippines also recently took part in the in the GloLitter Partnerships Project, a major United Nations-backed initiative to tackle marine litter scourge, to clean up the oceans, and to decrease the use of plastics in industries. The project will assist 30 developing countries, including the Philippines, in preventing and reducing marine litter from the maritime transport and fisheries sector. The project, which was funded by the Norwegian Agency for Development Cooperation launched on April 8.
U.S. and Philippine Forces Conclude 36th Balikatan Exercise
The challenges that COVID-19 brought did not stop the United States and the Philippines from conducting a successful two-week joint military exercise amid recent developments in the disputed South China Sea. On April 23, service members from the Armed Forces of the Philippines (AFP) and the United States Armed Forces concluded the 36th iteration of ‘Balikatan’ (Shoulder-to-Shoulder) Exercise, with a small ceremony held at the General Headquarters at Camp Aguinaldo in Quezon City. The exercise focused on testing the readiness of the AFP in response to threats, such as natural disasters and militant extremism. However, the magnitude of Balikatan 2021
had to be scaled down in the number of events and participants due to the pandemic. Activities included close airport support training to increase interoperability across the joint forces; a virtual Global Health Engagement; and Civic and Humanitarian Assistance, all of which respected strict COVID-19 safety protocols.
World’s First Sustainability Sukuk Introduced in Malaysia
A U.S. dollar Sukuk, a Sharia law compliant debt instrument backed by identifiable assets similar to a traditional bond product, has been issued in Malaysia to encourage sustainable investments. Malaysia is the world’s first country
to offer such a sustainability-linked Sukuk. Malaysia issued
US$800 million worth of the 10-year Islamic finance notes and US$500 million for the 30-year track version of the Sukuk. Once issued, the sustainability Sukuk were oversubscribed
by 6.4 times within a few days of their release, indicating significant international demand for these green investment opportunities. This caused the Government of Malaysia to upsize the initial target investment size of US$1 billion to US$1.3 billion. Prime Minister Muhyiddin Yassin took the opportunity to announce this as a strong indicator of Malaysia’s future GDP growth rates, with the Government of Malaysia stating
that this reflected the international community’s faith in the country’s planned economic recovery. The proceeds from the Sukuk are intended
to help Malaysia meet its commitments under the United Nations Sustainable Development Goals
and to finance green projects in Malaysia. These efforts are also in line with the Government’s Shared Prosperity Vision 2030
. Additionally, the Government has referenced
plans to use the sustainability-linked Sukuk to further widen the investor base, as demand in the country for ESG related bonds is only continuing to grow.
U.S. and Vietnam to Boost Cooperation in the Aviation Industry
The United States and Vietnam are striving
for more cooperation in the aviation industry, following a virtual conference in which both the U.S. and Vietnamese governments and private sectors gathered to discuss cooperative opportunities. During the session, U.S. companies, including Council members Autodesk, Boeing, and Honeywell, among others, shared their expertise in airport development, while U.S. government agencies, including the U.S. Federal Aviation Administration, U.S. Department of Commerce, USTDA, and TSA, looked to work closely with their Vietnamese counterparts to develop a safe and effective air transportation system. Direct flights between the U.S. and Vietnam have been a goal for the two countries for a number of years, and according to experts, while the sector market potential between the two countries are 700,000 passengers per year, only 30,000 to 60,000 passengers per year are needed to open direct flights.
The Philippines Leverages Smart Farming Programs to Educate Farmers on Modern Agricultural Practices
To increase productivity in the agriculture, fishery, and forestry sector, the Philippine Government is implementing smart-farming programs to educate farmers on modern agricultural practices. One such program was announced by the Technical Education and Skills Development Authority of the Philippines: the Agricultural Drone Operation
. This program aims to equip farmers with competencies in utilizing agricultural drone safety standards, applying air law principles to agricultural drone operations, and educating farmers on the use of autonomous and manually piloted drones. The Philippines Technical Education and Skills Development Authority has recognized the importance of leveraging agricultural drones to meet human resource shortages in rural communities to strengthen food security in the Philippines. Drones can bring various benefits to the agriculture sector and have many potential applications, such as analyzing soil conditions, fighting infections and pests, agriculture spraying, crop surveillance, and livestock monitoring. Technology implementations, such as smart-farming and drones, can also attract younger generations of farmers, which is beneficial for the long-term growth of the Philippine agriculture sector. Another Government effort established by the Department of Agriculture is the Unified School-on-the-Air Program on Smart Rice Agriculture (SOA-SRA)
. Created in collaboration with the Agricultural Training Institute and Philippine Rice Research Institute, the program utilizes radio-based distance learning to raise farmers' understanding of climate-smart agriculture technologies and modern rice farming. SOA-SRA aims to reach 3,000 farmers in the Caraga region and targets farmers with an average yield of fewer than four tons per hectare. Using local radio as a medium is a practical solution that aims to lift the limitations of conventional in-person training programs and workshops during the COVID-19 pandemic. SOA-SRA will be airing from May to August 2021 on local radio stations, and farmers may coordinate with their respective Local Government Units to enroll in the program.Current AdvocacyVietnam Prime Minister’s Directive on Regulations which Hinder Business and Investment
Following the recent 11th Session of the 14th National Assembly of Vietnam, the new Prime Minister of Vietnam sent a directive to his Ministers, heads of agencies, and provincial leaders asking for an urgent review of regulations (Laws, Decrees, Circulars) with contradictory, inconsistent, and unfeasible provisions/measures that are causing challenges for business and hindering investment in Vietnam. The Ministers, heads of agencies and provincial leaders are to identify specific problem measures, recommend specific amendments and recommendations, and propose a plan forward to ultimately improve the legal system (with more transparency, consistency and feasibility) and remove barriers to business and investment. Thank you to members who have provided inputs. The Council has consolidated and submitted comments to the Prime Minister by the May 15 deadline. To see a copy of the submission or for any questions you may have, please contact Vu Tu Thanh (firstname.lastname@example.org
) and Minh Vu (email@example.com)
.Ministerial Regulation No. 5. of 2020 on Private Electronic System Operators
The Indonesian Ministry of Communication and Information Technology (KOMINFO) issued Regulation No. 5 of 2020 on the Private Electronic System Operators (ESOs) as the implementing regulation of Government Regulation No. 71 of 2019 (GR71). Following the inputs that we have submitted to KOMINFO in January, as well as the virtual public consultation session in February, the Council reiterated members' concerns regarding KOMINFO Regulation No. 5 of 2020 in a follow-up letter sent on April 30. The Council highlighted several important recommendations regarding the clarification of scope and procedure for data access, as well as the possibility of a registration deadline extension for private electronic systems. The Online Single Submission (OSS) system will be launched on June 2, and KOMINFO is already planning for an upgraded version of the system. Moreover, the registration deadline, which was due in May 2021, will be extended until December 2021. The Council is closely following up with KOMINFO to ensure foreign companies can use the OSS system and/or the upgraded version when it is available. For any questions, please contact Mega Valentina (firstname.lastname@example.org
), Angga Antagia (email@example.com
), or Heidi Mah (firstname.lastname@example.org