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On May 9, Vietnamese Prime Minister Nguyen Xuan Phuc and his cabinet conducted a video conference addressing more than 1,000 domestic and foreign industry representatives across the country to discuss the Government’s recovery strategy for a post-COVID world. As part of the event, USABC Chairman, President & CEO Alex Feldman was invited to deliver a video message to the group to offer recommendations from the American business community during the recovery period. Mr Feldman's message, delivered both at the conference and broadcast nationally during an evening news segment, lauded the Vietnamese Government’s impressive efforts in its fight against COVID-19 and offered policy recommendations in the healthcare, ICT and tourism sectors.
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In an interview with ANC TV, USABC Senior Vice President and Regional Managing Director Amb. Michael Michalak says ASEAN may be better placed to recover from COVID-19, than other geographies around the world. He added that Vietnam, Indonesia, and the Philippines are viewed as the preferred choices for American investments post-pandemic as they relocate away from China following COVID-19 disruptions.
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Country, Industry and Advocacy Updates
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COVID-19 Update
Indonesia
To protect both lives and livelihood during the pandemic, the Government of Indonesia released several policies that aim to balance between reducing COVID-19 and unemployment cases. First, Transport Ministry reopened all means of public transportations commencing May 7, subject to applicable health protocols under Large Scale Social Restriction (PSBB). Transport Minister Budi Karya clarified that the lift is limited to travelers with essential urgencies such as work, sick family members or family weddings. However, he emphasized that the ban on Idul Fitri holiday travels (mudik) still applies. The travel ban relaxation has led to massive crowds at Soekarno Hatta Airport in Jakarta. Meanwhile, incoming air travel bans for foreigners are still in place, with a few exemptions. Amidst some criticism over the government’s travel ban relaxation, Indonesian Ulema Council (MUI) Commission issued an edict (fatwa) allowing Eid prayers to be conducted at home, especially those who live in COVID-19 red zones. Similarly, Nahdatul Ulama (PBNU) Secretary-General also called for Indonesian Muslims to do Eid prayers at home and encouraged everyone to prioritize safety during the pandemic.
Furthermore, the Government is preparing an exit strategy and will gradually re-open businesses in June 2020. According to the five-phase plan being finalized by the Coordinating Ministry of Economic Affairs, if Indonesia sees a decline in new cases and meets their target to provide 300,000 tests per month, this plan can be applied as early as June 8. In the first phase, shopping malls will resume their activities and all businesses will open at the end of July or early August, subject to periodic reviews.
In addition to the previous stimulus, the Ministry of Finance is finalizing a new stimulus package for 11 business sectors, including food, trade, electricity, oil and gas, coal and mining, forestry, creative economy, telecommunications, logistics, transportation, and construction. Expected incentives include individual income tax exemptions, import tax deferrals for six months, a 30 percent corporate tax discount for six months, and an expedited restitution process with an IDR 5 billion (US $322,000) in VAT restitution limit.
Laos
The Lao People’s Democratic Republic is easing lockdown restrictions after more than a month of no new COVID-19 infections. Officials have reported that the total number of cases is 19 to date, with zero deaths. Ease of lockdown restrictions started on May 4, when some restaurants, shopping centers and service businesses could re-open, as long as people wore face masks in public and were not travelling across provincial border. On May 15, the National Task Force for COVID-19 Prevention and Control announced that more offices and businesses could resume normal operations on May 18. Foreign visitors are still not allowed entry to the country, but domestic travel for Laos’ citizens is now permitted.
Malaysia
With Malaysia’s COVID-19 infection rates slowing, the government has begun to relax restrictions on movement and business operations. While social distancing measures will remain in place until June 9, the government’s Conditional Movement Control Order (CMCO) has re-opened the majority of the country’s economic sectors. Prime Minister Muhyiddin Yassin has clarified that businesses re-opening their doors must adhere to the governments standard operating procedures and provide company details to the Ministry of International Trade and Industry if they had not received approval to operate under the previous MCOs. Restrictions will remain in place for mass gatherings, certain social activities, and various other sectors as they involve close contact, groups of more than 20 people and places with high infection risk. The conditions for businesses to operate outlined in the government’s SOP include social distancing protocols creating at least one meter between people, use of face masks and sanitation of company property at least twice a day. Companies must monitor and prevent infection through symptom screening/reporting of COVID-19 symptoms and use of protective personal equipment when social distancing is not feasible. Regarding logistics and transportation sectors, thermal scanning, use of face masks, social distancing measures, and strict sanitation of restrooms will be required for air travel. Maritime ferry services and port operations will follow similar procedures, as well as encourage the use of e-wallets and ban preference block seats by passengers. The logistics sector is required to periodically clean vehicles, provide face masks and sanitation resources for employees, and provide one-meter social distancing marking in warehouses.
Myanmar
As Myanmar looks to better deal with Covid-19, it has adopted lockdown measures and temporary restrictions and has also published a comprehensive economic recovery plan. The stimulus package titled “Overcoming as One: COVID-19 Relief Plan (CERP)” takes into account all stakeholders with actionable items such as waiving or deferring taxes, reallocation of budget within the Government, and developing stronger business ties in the realm of public-private partnerships. The Council’s analytical update of the CERP can be accessed here. All incoming international commercial flights have been banned until May 30; however, the Government has arranged for relief flights, returning more than 1,800 Myanmar citizens from around the world. THe wearing of face masks is compulsory when going out, and a nationwide curfew from 12:00-4:00 a.m. is to be adhered. Officials have reported 188 confirmed cases and six deaths to date.
Philippines
The Philippines started to ease restrictions and modified the enhanced community quarantine (MECQ) covering Metro Manila, Laguna and Cebu City from May 16 to May 31. Essential industries like health care, pharmacies, veterinary clinics, food manufacturing and supply chains, and groceries can operate at full capacity. However, there will be an addition to these allowed industries: certain manufacturing and processing plants, which can operate at only 50 percent capacity. More commercial establishments can also operate at 50 percent capacity. There will still be no public transportation. Private shuttles will be allowed but only for essential work and services. Private cars are allowed as long as only two people sit per row. Motorcycles, bicycles and e-scooters are allowed with only one rider. There will be no domestic flights, no inter-island travel and limited international flights. Filipinos from abroad will be allowed to fly home. Government offices will have a skeletal workforce in office premises while the rest would work from home. Only gatherings of up to five people are allowed, with health protocols observed. Community quarantine has been lifted in low risk areas, but strict health protocols continue to be in place. However, most areas in the country remain under general community quarantine. On May 11, the Inter-Agency Task Force on Managing Emerging Infectious Disease (IATF) issued Resolution No. 35 series of 2020 to provide implementing guidelines.
Singapore
As a first step towards opening the economy, the Singapore government has allowed the reopening of select businesses – more than a month after implementing its Circuit Breaker Measures on April 7. Food manufacturers, hairdressers, specified food retail outlets and laundry services have been permitted to resume operations starting May 12 following a steady decrease in locally transmitted cases. The Ministry of Manpower in cooperation with the National Trades Union Congress and the Singapore National Employers Federations have released general workplace guidelines to prevent the re-emergence of community cases. Sector-specific guidelines for manufacturing, customer-facing and transportation sectors have also been released to supplement general guidelines.
Thailand
The first phase of reopening in Thailand began on May 3 with the reopening of several businesses and the lift on the alcohol ban. The second phase of reopening commenced on May 17, which shortens the night-time curfew one hour, running from 11 p.m. to 4 a.m. It also allowed for the reopening of department stores, shopping malls and other businesses. However, shoppers are required to download the Thai Channa app when checking in or out of the premises as a way for the Thailand Centre of COVID-19 Situation Administration (CCSA) to better keep track of the number of people inside, and to enable contact tracing in the case that any customers tested positive for COVID-19. New COVID-19 infections remain in the single-digits each day, and there have been no new deaths reported. CCSA spokesperson Dr. Taweesilp Visanuyothin said that more types of businesses will be allowed to reopen in the next few weeks, given that there is no rise in the infection curve.
Vietnam
Vietnam is the first among its ASEAN peers to lift its movement restriction order on April 22 by beginning to slowly reopen tourist attractions, schools and services including non-essential, and increasing the number of domestic flights. The Vietnamese Government has required businesses to adopt safety measures and encouraged the public to continue hygienic practices including wearing masks in public and washing hands. Now, the country is beginning to shift focus and enter a new phase to revitalize the economy after the pandemic. On May 5, Prime Minister Nguyen Xuan Phuc set a target of over five percent GDP growth and an inflation rate below four percent for the remainder of the year. He requested ministries, agencies and localities to offer support to firms, continue improving the business environment and step up major projects to create a driving force for the economy. Specifically, he outlined five pillars of action critical to economic recovery, including attracting foreign direct investment, boosting exports, stepping up public investment, attracting investment from the private sector, and promoting domestic consumption. The Prime Minister also said the Government had agreed to issue a thematic Resolution that addresses tax and fee exemptions or reductions; extends payment time for export tax and special consumption tax on domestically assembled and manufactured cars until the end of December; allows special entry procedures for foreign experts, business managers and technical workers; and promotes disbursement of public investment. The Government has assigned the Ministries of Finance, Planning and Investment, and Industry and Trade to coordinate an economic recovery plan.
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Key Developments
- Vote of No Confidence Against Malaysia Prime Minister Removed from Parliament’s Schedule
In a letter to Malaysia’s members of Parliament (MPs) dated May 13, Dewan Rakyat Secretary Riduan Rahmat stated that the meeting of Parliament on May 18 will be limited to solely the Royal Address, precluding the motion of no confidence by former Prime Minister Mahathir Mohamad against current Malaysian Prime Minister Tan Sri Muhyiddin Yassin. Speaker Mohamad Ariff noted that the “amendment is in line with the Parliament’s Standing Orders 11(2) and 15(2).” Aside from the motion of no confidence, the session was also originally set to discuss government business such as the appointment of the opposition leader, appointment of the chairman and deputy of the Public Accounts Committee, and tabling of two Supplementary Supply Bills. Dr. Mahathir quickly criticized the Dewan Rakyat Speaker’s decision. Parliament is set to meet again on July 13.
- Malaysia’s 2020 Q1 GDP Expands but Growth Rate Slows
In an announcement on Malaysia’s economic performance in the first quarter of this year, Bank Negara Malaysia (BNM)—Malaysia’s central bank—stated that the country’s GDP grew 0.7%, contradicting predictions of contraction but lagging 3.6% growth in the fourth quarter of last year. The growth rate is the lowest since the third quarter of 2009 during the global financial crisis. BNM Governor Nor Shamsiah Mohd Yunus added that the bank is not able to predict full-year economic growth in 2020 due to the inherent uncertainty surrounding COVID-19, but expects that the economy will contract in the second quarter (when the majority of the MCO occurred) and will gradually improve as economic sectors re-open under the Conditional Movement Control Order (CMCO). Nor Shamsiah stated that the impact is expected to be “severe" in the first half of 2020, with unemployment likely surpassing BNM’s earlier four percent predictions. The government is hopeful that growth will pick up during the second half of 2020 and 2021, with strong assistance from pharmaceuticals and medical supplies and equipment. Malaysia is the world’s top producer of medical gloves, and the electrical and electronics sector is likely to benefit from “new normals” surrounding working remotely. Read more.
- Cambodia Requests the United States to Support Infrastructure Development
In a bilateral meeting on April 30, Cambodia Minister of Public Works and Transport Sun Chanthol requested U.S. Ambassador to Cambodia Patrick Murphy to consider providing assistance to the ports sector, transportation, land infrastructure, and railroad infrastructure. The Minister outlined some key areas in which the United States can support, including building capacity on road construction and training and exchange tours between the Los Angeles Port and Sihanoukville Port. In response, the Amb. Murphy welcomed the close collaborations between the two countries on infrastructure and thanked the Cambodia government for allowing the cruise ship Westerdam to dock at the Sihanoukville Port earlier during the COVID-19 pandemic. Read more.
- Vietnam Government Issued Draft National Strategy on Industry 4.0
On May 2, the Vietnamese Government issued the Draft National Strategy on Industry 4.0 to outline specific targets for the country to harness Industry 4.0 to advance economic growth and increase competitiveness. In the press release, the Government cited the Boston Consulting Group’s prediction that Vietnam’s GDP may increase by US $28.5 billion up to US $62.1 billion or an increase of 7 to 16 percent by 2030 depending on the level of technology adopted by businesses, generating 1.3 to 3.1 million jobs in the process. Toward that goal, the Draft outlines specific targets by 2025 and measures to implement the strategy, including improving the quality of institutional environment and policymaking ability, the capacity of research and innovation of businesses, the development of a qualified workforce, and the development of e-Government and digital infrastructure. The Draft proposes that by 2025 the digital economy will account for around 20 percent of GDP, and that social investment for research and development will account for at least 1.5 percent of GDP. In addition, by 2030, Vietnam aims to expand 5G coverage nationwide and raise the digital economy’s contribution to GDP to 30 percent. Read more.
- Southeast Asian Health and Delivery Startups Surge in Funding as Other Industries Struggle
While COVID-19 dries up funding for a majority of startups just establishing their financial footing, health sector startups have seen new flows of investor money as part of an effort to address the pandemic through both top-down and bottom-up initiatives. Telehealth app Doctor Anywhere in Singapore, which consists of a practitioner network across Singapore, Thailand and Vietnam, raised US $27 million at the end of March through a series B funding round. Its investors included IHH Healthcare, a Malaysian hospital operator. The app’s funding has nearly doubled throughout the COVID-19 crisis. Finian Tan, the chairman of Vickers Ventures Partners in Singapore, stated that his firm has shifted to investing in healthcare startups to increase vaccine and testing capacity as part of an attack “from every and any angle.” Read more.
- The United States Launches U.S.-ASEAN Health Futures Initiative
The ongoing pandemic has catalyzed further U.S. and ASEAN cooperation in the field of public health. On April 22, U.S. Secretary of State Michael Pompeo participated in a Special U.S.-ASEAN Summit with the ten ASEAN Foreign Ministers and launched the U.S.-ASEAN Health Futures initiative, which captures the United States’ existing and ongoing work with ASEAN on public health and lays the groundwork for long-term partnership, targeted assistance and a renewed focus on the health and well-being of both U.S. and ASEAN citizens. The launch of the initiative also saw an allocation of US $35.3 million in emergency funding for ASEAN Member States to combat COVID-19. The initiative aims to advance the shared health goals of the United States and ASEAN in a wide variety of fields, including HIV/AIDS and other infectious disease control, expanding safe water access, and improving nutrition and maternal and child health. Additionally, joint efforts on health research, strengthening health capacity across the ASEAN region, developing the next generation of human capital, and exploring smart city health solutions through the U.S-ASEAN Smart Cities Partnership are also expected. Read more.
- Thailand Withdrew Proposal to Join CPTPP Amid COVID-19 Pandemic
On April 28, Thailand Deputy Prime Minister and Commerce Minister Jurin Laksanavisit withdrew a proposal to the cabinet to consider Thailand joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The Minister cited the concerns about the trade pact’s impact on health security from civil groups, business interests and the Ministry of Public Health as the reason to withdraw the proposal. The civil society groups opposed to the trade pact, including the Pharmacy Council of Thailand, argued that joining the CPTPP would restrict the rights to access medicine and state procurement activities, threatening public health especially during the COVID-19 pandemic. On April 24, former Public Health Minister Dr Mongkol Na Songkhla warned in a Facebook Live address that Thailand would lose the right to compulsory licensing for patented medicines, especially for HIV and cancer, if Thailand joined the CPTPP. Read more.
Current Advocacy
- US-ABC Launches Advocacy Tracker
In response to member feedback and in our effort to improve members' ability to plug into our many ongoing advocacy efforts, we have launched a simple Advocacy Tracker on our website. The Advocacy Tracker lists all active Call for Inputs with due dates and key points of contact on the Council’s staff. The tracker can be found on our website under the Members Only section. You may reach out to Kim Yaeger at kyaeger@usasean.org if you have any questions or feedback regarding the Advocacy Tracker.
- Financial Services Committee's COVID-19 Paper
The Council is preparing the Financial Services Committee's COVID-19 response and recovery paper. Members are requested to review and provide input no later than May 22. The paper will be distributed to the ASEAN Ministers of Finance, Central Bank Governors, the ASEAN Secretariat, ASEAN Data Governance Working Group, ASEAN ICT, Environment, and Energy Ministers, NGOs and the U.S. Government. Please contact Michaela Wong at mwong@usasean.org or Steven Gunawan at sgunawan@usasean.org with any questions.
- Vietnam Agriculture Draft National Technical Regulations
In March, the Ministry of Agriculture and Rural Development of Vietnam (MARD) issued two draft National Technical Regulations and corresponding guiding Circulars seeking to regulate the quarantine requirements of imported plants and sets a zero-tolerance requirement for all plant quarantine pests listed under Circular 35/2014, and set tolerances and maximum allowable levels of safety indicators in animal feed and feed ingredients. The Council is currently finalizing its submission to MARD – if you have any questions or for more information, contact Hai Pham at hpham@usasean.org and Thao Nguyen at tnguyen@usasean.org.
- Vietnam Amendments to Decree 72/2013
The Ministry of Information and Communication (MIC) is drafting amendments to Decree 72 of 2013 on the management, provision and use of Internet services and online information. The new Decree proposes to regulate foreign social media platforms, app store platforms, in-app transaction payments, and all other businesses that need to employ user ID verification technologies via SMS, USSD or Livescreen. The Council is currently seeking feedback on the revised Decree 72 and will submit a letter to MIC on May 27. For more information or questions, please contact Vu Tu Thanh at tvu@usasean.org and Natalie Tantisirirat at ntantisirirat@usasean.org.
- COVID-19 Best Practices for the ICT Industry
The Council is finalizing its input on a set of COVID-19 best practices for the ICT industry to share with ASEAN governments and for consideration as input into the ASEAN Digital Masterplan 2025. This document outlines recommendations across four key thrusts: Protect, Sustain, Recover and Transform. It aims to highlight the contributions of the ICT sector and emphasize recommendations for a post-COVID-19 environment. Please contact Shay Wester at swester@usasean.org and Natalie Tantisirirat at ntantisirirat@usasean.org if you have any questions or comments.
- ASEAN Digital Masterplan 2025
The Council is seeking member input on the draft ASEAN Digital Masterplan 2025 (ADM 2025) Framework as requested by the host of the 2020 ASEAN Digital Ministers Meeting (ADGMIN), the Malaysian Communications and Multimedia Commission (MCMC). ASEAN intends to prepare the ADM 2025 for signing at the upcoming ADGMIN, tentatively scheduled for November 26-27, 2020. The document outlines potential theme options, intended outcomes and strategic thrusts for ASEAN for the 2021-2025 period. The Council is currently working on compiling submissions and strongly encourages members to send in feedback. If you have any questions or need more information, please contact Mario Masaya at mmasaya@usasean.org and Natalie Tantisirirat at ntantisirirat@usasean.org.
- US-ABC Engagements with Vietnam and Malaysia Ministries of Health on COVID-19 Response and Recovery
Over the course of the last month, the Council has been coordinating with its Health & Life Sciences (HLS) members to gather operational challenges and recovery strategy recommendations for each ASEAN market to share with respective Ministries of Health and related agencies during bilateral virtual consultative meetings. These meetings are meant to provide a forum for the government and private sector to come together and outline a joint action plan to defeat COVID-19 in ASEAN and bounce forward. Currently, the Council is planning a meeting with the Ministry of Health of Vietnam in early June and has confirmed a meeting with Malaysian Health Minister Dr. Adham Baba on June 5. Both sessions will gather more than 20 HLS companies. For more information on these meetings and future plans, please contact Thao Nguyen at tnguyen@usasean.org and Hai Pham at hpham@usasean.org.
- Joint Statement by ASEAN BAC and Joint Business Councils
The Council is supporting a joint effort by the ASEAN Business Advisory Council and Joint Business Councils to call for action in ASEAN to deal with the COVID-19 crisis and post-pandemic economic recovery. The Council also supported the establishment of the ASEAN High Level Special Commission on COVID-19 Response & Economic Recovery, which aims to make clear, actionable recommendations to improve ASEAN’s collective response to the current COVID-19 pandemic, build capacity at both national and regional levels, and develop a collective medium to a long-term ASEAN-wide approach for post-pandemic economic recovery. Looking ahead, the group will aim to develop an Action Plan, in which the Council will offer sector-specific recommendations. For more information, please contact Mario Masaya at mmasaya@usasean.org.
- Singapore Personal Data Protection (Amendment) Bill
On May 14, Singapore's Ministry of Communications and Information and the Personal Data Protection Commission released their public consultation on the draft Personal Data Protection (Amendment) Bill (PDP Bill), including related amendments to the Spam Control Act. The Council is currently seeking input from members on the Public Consultation Paper. Please submit initial comments to Shay Wester at swester@usasean.org and Natalie Tantisirirat at ntantisirirat@usasean.org.
- Paper for the ASEAN Finance Ministers and Central Bank Governors’ Meeting (AFMGM)
The Council has launched the Financial Services Committee paper, originally prepared for the AFMGM (now postponed). The paper covers a wide range of financial services topics across two themes: the Role of Financial Services in Sustainable Finance and Digital Transformation in Financial Services. The full report can be accessed here. Please contact Michaela Wong at mwong@usasean.org or Steven Gunawan at sgunawan@usasean.org with any questions.
- Indonesia Personal Data Protection Advocacy Mapping
Indonesia’s Personal Data Protection Bill to the Parliament (DPR) is awaiting deliberation by DPR’s Commission I. Meanwhile, DPR is gathering inputs to its Problem Inventory List and is planning a public hearing with various stakeholders (Rapat Dengar Pendapat). The Council has submitted members’ inputs to Commission I and is preparing a Terms of Reference for public-private engagements with DPR members and expert staff who are involved in the DPD Bill working committee, with an objective to deliberate members’ key inputs. Contact Angga Antagia at aantagia@usasean.org or Mega Valentina at mega@usasean.org with any questions.
- Indonesia Certification Process for non-HKT products (products that are not Cellphones, Computers and Tablets)
Responding to the Council’s advocacy efforts, the Ministry of Communication Information and Technology (MCIT) has agreed to give flexibility on the certification process during the COVID-19 pandemic. Foreign companies will not have to submit test reports for the six months starting in April to October 2020. Contact Angga Antagia at aantagia@usasean.org or Mega Valentina at mega@usasean.org for any questions.
- Indonesia Digital Taxation Regulation
The Council held a Virtual Meeting on the Finance Ministry’s Digital Taxation Regulation on April 27 which was attended by the Head of VAT for Goods and Services, Luxury Goods Sales Tax and Other Indirect Taxes Sub-Directorate. Contact Michaela Wong at mwong@usasean.org and Steven Gunawan at sgunawan@usasean.org with any questions.
- Indonesia Financial Service Implementing Regulation on Private Scope Electronic System Operators (GR 71)
Following the inputs submitted to MCIT, the Council and its members held a conference call to discuss the development of GR 71 and will now prepare a letter to the Financial Services Authority (OJK). Contact Michaela Wong at mwong@usasean.org and Steven Gunawan at sgunawan@usasean.org with any questions.
- Indonesia E-commerce Regulation
Following the recommendation letter for the draft ministerial regulation on E-commerce, the Council has requested a virtual meeting with the Directorate General of Domestic Trade once they begin the public-private consultation stage. Contact Angga Antagia at aantagia@usasean.org or Mega Valentina at mega@usasean.org with any questions.
- Indonesia Local Content Requirements & Calculation
Two recommendation letters have been submitted to MCIT regarding the regulation on local content requirements for ICT products and to the Ministry of Industry on the local content calculation. The Council has requested virtual engagements with both Ministries during the public-private consultation process. Contact Angga Antagia at aantagia@usasean.org or Mega Valentina at mega@usasean.org if you have any questions.
- Indonesia Omnibus Bill on Job Creation
The Council submitted a recommendation letter regarding the Omnibus Bill on Job Creation to the Parliament and requested a consultation with the Legislative Body (Baleg) once they begin their deliberation process. Contact Angga Antagia at aantagia@usasean.org or Mega Valentina at mega@usasean.org if you have any questions.
- Indonesia Telecommunications Service Regulation
The Council provided recommendations on the draft regulation on telecommunication services and has requested a discussion with the Director General of Post and Information once they have entered the consultation stage. Contact Angga Antagia at aantagia@usasean.org or Mega Valentina at mega@usasean.org if you have any questions.
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Country and Industry Updates
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See our most recent Updates and Analysis for more detail:
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