President's Newsletter - November 2020

Amb. Ted Osius
Amb. Ted Osius
President & CEO
US-ASEAN Business Council
 
November 2020 

Dear Members,
 
To all who celebrated, I hope you had a good Diwali.  I hope all are reading this in good health.
 
It has been an incredibly busy month in ASEAN and for the Council. 
 
We have seen a tale of two worlds in terms of COVID-19.  As the virus spreads widely throughout the United States, many parts of Southeast Asia have managed the pandemic well.  In light of this, the announcement of the inaugural Air Travel Bubble (ATB) between Singapore and Hong Kong is welcome news.  For the first time since the COVID-19 crisis began, people can fly between these two locales for business or, under certain conditions, leisure without having to quarantine.  To learn more about this, click here to read Singapore’s announcement of this policy or scroll down to our COVID-19 Update.
 
The US-ASEAN Business Council and its members congratulate U.S. President-elect Joseph R. Biden and Vice President-elect Kamala D. Harris on their decisive electoral victory.  Voter turnout in the 2020 U.S. general election broke a 120-year record, proving that the American Experiment which started with the Declaration of Independence on July 4th, 1776 is alive and well.  We are proud to see Vice President-elect Harris make history as the first female, first black and first South Asian American to ever hold the position.  A key player in President Obama’s Rebalance to Asia strategy, the President-elect has established relationships with many Southeast Asian leaders.  The Council looks forward to working with the Biden Administration as it engages with ASEAN and each of its member nations.  
 
We also would like to applaud Myanmar on holding its successful second multi-party democratic elections since the end of its decades-long military dictatorship.  Despite the challenges of a pandemic, over 70% of the 37 million registered voters, in a population of 56 million, participated in the electoral process.  As the Union Election Commission (UEC) finalizes the official results, they show a clear landslide victory for the ruling National League for Democracy (NLD) led by Daw Aung San Suu Kyi.  This will allow the NLD-dominated parliament to choose the president and one of two vice-presidents, appoint and confirm cabinet ministers and deputy ministers, as well as pass any legislation it pleases.  For American business, this development means a steady continuation of the NLD’s economic reform efforts, with perhaps a greater momentum.  We expect many of the same players over the past five years to remain in power.  U.S. Secretary of State Mike Pompeo in an announcement offered support and recognized the important step Myanmar had taken in the country’s democratic transition.  To read Secretary Pompeo’s statement, please click here.  To read the Council’s analysis on the 2020 Myanmar elections, click here.
 
Vietnam successfully kicked off the 37th ASEAN Summit and Related Summits virtually on November 12.  During the Summit, ASEAN leaders approved the ASEAN Comprehensive Recovery Framework and its implementation plan at the plenary session.  The leaders also adopted the ASEAN Travel Corridor Agreement, which will facilitate the safe resumption of essential business in the region.  Despite the COVID-19 pandemic, Vietnam has successfully performed as the 2020 ASEAN Chair to coordinate and lead ASEAN to maintain the momentum of building the three pillars of the community, while promoting co-operation in response to the pandemic and post-pandemic recovery. 15 Asian nations shared a major accomplishment at the ASEAN Leaders Summit this past weekend by successfully concluding an eight-year negotiating process and officially signing the Regional Comprehensive Economic Partnership (RCEP) agreement.  Once it goes into force, RCEP will become the world’s largest free trade agreement encompassing roughly 30% of global GDP and over one-third of the world’s population.
 
On November 13, representatives to the ASEAN-U.S. Summit met and reaffirmed the strategic partnership between the United States and the region and issued a Joint Statement on Human Capital Development accessible here.  The U.S. State Department also published a press release following the summit highlighting the various programs that link the United State to ASEAN which can be found here.  In terms of U.S. participation and representation in past ASEAN Leaders Summits, President Trump had only participated once in the 2017 summit and has sent representatives every year since.  National Security Advisor Robert O’ Brien represented the United States this year.  We are deeply disappointed by the Trump Administration’s repeated decision to have neither the President, Vice President nor a Cabinet Member lead the U.S. delegation to these critical Summits in the last two years.  Showing up matters.  High-level representation not only reaffirms the U.S. commitment to the Indo-Pacific and ASEAN, but as a Pacific nation, the United States has an obligation to help forge a free and open Indo-Pacific for all.
 
Alongside the ASEAN Leaders Summit, Vietnam also hosted the 15th Anniversary of the East Asia Summit on November 14.  Attended virtually by heads of states and delegates from member states of the ASEAN, Australia, the People’s Republic of China, India, Japan, South Korea, New Zealand, Russia, and the United States, the summit continued to focus on the coordinated responses to the pandemic and highlighted the need to maintain peace and stability in the region.  You can read the declaration here.
 
From October 23-27, a delegation led by U.S. International Development Finance Corporation (DFC) Chief Executive Officer Adam Boehler, visited Indonesia, Vietnam, and Myanmar to explore investment and trade opportunities in the Indo-Pacific region.  The delegation was joined by senior U.S. Government officials including President and Chairman of the Export-Import Bank of the United States Kimberly Reed, Under Secretary of the Treasury for International Affairs at the U.S. Department of Treasury Brent McIntosh, Acting Under Secretary for International Trade at the U.S. Department of Commerce Joseph Semsar, and Principal Deputy Assistant Secretary for the Office of International Affairs at the U.S. Department of Energy Matt Zais.  The delegation was received by heads of states and senior officials including Vietnam Prime Minister Nguyễn Xuân Phúc and Myanmar State Counsellor Daw Aung San Suu Kyi.
 
Secretary Pompeo held a series of engagements in the region during and after the Indo-Pacific Business Forum (For a readout of the Indo-Pacific Business Forum, please see here). On October 29-30, the Secretary of State, joined by then-U.S. Defense Secretary Mark Esper, made an official visit to Vietnam as part of his five-day Asia tour to demonstrate U.S. commitment to the region.  In Vietnam, Secretary Pompeo met with Prime Minister Nguyen Xuan Phuc, Deputy Prime Minister and Foreign minister Pham Binh Minh, and Public Security Minister To Lam to commend Vietnam’s performance as the ASEAN Chair this year and as the United Nations Security Council non-permanent member for the 2020-2021 term, while also pledging to continue cooperation with Vietnam to elevate bilateral ties.  
 
In Indonesia, Secretary Pompeo met with President Joko Widodo and Minister of Foreign Affairs Retno Marsudi.  According to a spokesperson, they discussed ways the United States and Indonesia can work together to promote a prosperous, secure, and democratic Indo-Pacific region, as well as strategies for building stronger economic ties between our two countries.  They also reviewed recent security developments across the Indo-Pacific and discussed ways to enhance cooperation on maritime security, supply chains, and post-pandemic economic recovery. These engagements signaled a more proactive role of the United States in supporting the regional development, economic growth, and stability of the Indo-Pacific.
 
Immediately after this visit on October 30, the Office of the United States Trade Representative (USTR) announced that Indonesia would retain its status as a Generalized System of Preferences (GSP) recipient, following a two-year review of the nation’s eligibility.  In 2018, the Trump administration initiated an audit of Indonesia’s eligibility for the program, partly due to the US $12.6 billion trade deficit the U.S. was running with Indonesia at the time.  However, according to the USTR, Indonesia will maintain its GSP privileges due to the positive steps towards market access for U.S. goods, services, digital trade, insurance and reinsurance, and agricultural import policies.
 
Simultaneously, USTR announced that it would suspend preferential trade benefits for 231 Thai products under the GSP, which is expected to cause losses of THB 600 million, or USD 19 million.  According to the USTR statement, the move will suspend duty-free access for USD 817 million in goods, about one-sixth of Thailand’s current benefits under GSP, beginning on December 30 due to “lack of sufficient progress providing the US with equitable and reasonable market access for pork products.”  Products that will be affected include auto parts, plastic glass frames, chemical products, and rubber.  Keerati Rushchano, Director-General of Thailand’s Department of Foreign Trade, said that the Commerce Ministry is consulting with USTR on solutions to expand the market in the US and find new markets for affected products.  He also stressed the need for Thai operators to accelerate upgrading and branding for their products to avoid losing out in price competition.  Supant Mongolsuthree, the chairman of the Federation of Thai Industries (FTI), said he was not surprised by the move, which may reflect that Thai industries are becoming stronger.  The FTI stressed that Thai exporters have two months to make adjustments before the suspension takes effect and called on the government to prevent baht fluctuations to support the export sector.
 
Following consultations with our members, the Council submitted comments to USTR on how the Section 301 investigation on Vietnam would affect business, trade and the overall bilateral relationship on November 12.  As Vietnam continues to work with both the U.S. government and the U.S. business community to further reduce barriers to trade and balance its bilateral trade with the United States, the Council believes maintaining a cooperative relationship is in the best interest of both countries, especially during the COVID-19 pandemic.  This potential imposition of new tariffs on Vietnam would create greater uncertainty and unpredictability for many American businesses, especially those looking to align with the Trump Administration’s trade policy strategy by diversifying their supply chains away from China.  To that end, the Council requested that USTR schedule a public hearing on this matter to allow interested parties to contribute views on the Section 301 investigations.  To view the Council’s full submission to USTR, please click here.  For more background on the USTR 301 investigation on Vietnam, please click here.
 
On the economic recovery front, President Joko “Jokowi” Widodo signed Indonesia’s Omnibus Law on Job Creation on November 3.  Targeting bureaucratic efficiency, licensing, and regulations, the Law is meant to help create one million jobs a year, bounce Indonesia forward from the crisis and get the nation out of the middle-income trap.  We had the opportunity to congratulate Indonesian policymakers on this achievement during our recent virtual Indonesia business mission.  We look forward to working with the government on key implementing regulations to ensure the legislation continues to improve the business environment.  To read more on Indonesia’s Omnibus Law, please click here.
 
On October 20, I was thrilled to announce to our members the establishment of a new Sustainability Committee with in the Council.  The committee will serve as a convening platform between senior leaders across ASEAN and the U.S. private sector to discuss sustainability needs, share information and best practices, exchange ideas and showcase available technologies and services. Our work will involve developing coalitions among our members to collectively address pressing sustainability needs and helping our members amplify the business case for sustainability. As of today, more than 40 companies have already reached out to indicate their interest in joining this committee.  Please click here to download our short overview of the committee which sets out its areas of focus, how we define sustainability, key issues and areas of action, and potential activities for the coming years.  I encourage you to read this overview, share it within your organizations and with those teams that are focused on sustainability, and consider how your company can get involved in this exciting new committee.  For further information on the Sustainability Committee and how to get involved, please reach out to either me or Bernie Baskin (bbaskin@usasean.org), who will be spearheading this effort.
 
I am excited to announce that the Council is gearing up for the 5th edition of our flagship publication ASEAN Matters – to be released in the Spring of 2021.  Launched in 2009 with our partners, the East-West Center and the ISEAS-Yusof Ishak InstituteASEAN Matters explores the important and multi-faceted relationship between the United States and the 10 countries of ASEAN.  This publication contains deep insights on a wide array of important subjects such as ASEAN growth projections, trade issues, the digital economy, educational exchange, travel and tourism, and more.  It is distributed widely, including to U.S. Congress, Executive Brach Agencies, Governors, Mayors and ASEAN Embassies in the U.S. and to heads of government, ministers and U.S. Embassies in Southeast Asia, and is among our most visible annual publications.  If you have not read through our 2019 edition, you can find it here.  For more information on how to get involved in this publication, please reach out to Bernie Baskin (bbaskin@usasean.org), who will be spearheading this effort.
 
Our first virtual Singapore business mission is underway this week and it is our largest mission in my history with the Council with 30 companies participating.  We have had very engaging conversations with Minister for Foreign Affairs Dr. Vivian Balakrishnan, Minister for Sustainability and the Environment Grace Fu, Minister for Education and Second Minister for Finance Lawrence Wong, among other key leaders in Singapore.  The delegation will also meet Minister S Iswaran on November 20, a timely opportunity soon after the signing of the mega-trade deal RCEP.  Minister Iswaran is the minister-in-charge of trade relations and oversees the city-state’s bilateral and multilateral trade negotiations at Singapore’s Ministry of Trade and Industry.  I look forward to continued discussions this week and our members’ post-mission engagements in areas like innovation, R&D, digital transformation. Our members stand ready to help the Singapore government rebound from the current pandemic and continue its growth as a trade and innovation hub.
 
The Council would like to welcome the Coordinating Ministry of Maritime Affairs and Investment Luhut Pandjaitan, Vice Minister of Foreign Affairs Mahendra Siregar and the Second Vice Chairman of Investment Coordinating Body (BKPM) Kartika Wirjoatmodjo, to Washington D.C.  During its current visit from November 15-19, the delegation will meet with USTR Robert Lighthizer following the renewal of the Generalized System of Preferences (GSP).  The delegation will also continue its discussion with DFC CEO Adam Boehler in Jakarta on October 23 and explore investment opportunities through Sovereign Wealth Funds this week.
 
Looking ahead, Malaysia will host the APEC CEO Dialogues (APEC CEO Summit) virtually on November 19-20, convening around the theme of “APEC Re-Imagined: Priorities in the Aftermath of COVID-19.”  Discussions will focus on both the region’s and the world’s most pressing challenges and how we can work together to spur growth in the aftermath of the pandemic.  On the sidelines of the CEO Dialogues, the U.S. APEC Business Coalition is organizing several virtual meetings with leaders and ministers from APEC economies.  The coalition has confirmed meetings with representatives from USTR, Vietnam, and the Philippines, with other meetings to be scheduled.
 
The Council’s annual Business Mission to Thailand will take place from November 23-27.  This year, we are excited to organize the Council’s first series of hybrid-format engagements to enhance the experience of the Business Mission since we switched to fully virtual programs earlier in the year.  The Mission comes at an opportune time to build on our robust relationship with Prime Minister Prayut-Chan-o-cha and his administration, while establishing connections with the new Cabinet members.  We are fortunate to have confirmed a meeting with the Prime Minister himself. Other confirmed engagements are with the Ministry of Foreign Affairs, Ministry of Tourism and Sports, Ministry of Commerce, Ministry of Energy, Ministry of Public Health, Ministry of Agriculture and Cooperatives, Ministry of Digital Economy and Society, Ministry of Finance, Ministry of Industry, the Bank of Thailand, and the U.S. Embassy.  Having controlled COVID-19, Thailand has had admirable recovery efforts. We hope this Mission continues to underscore the U.S. private sector as a trusted resource and partner to the Kingdom as its government continues to promote investment, drive innovation through Thailand 4.0, and prioritize sustainability development in all areas.
 
Thank you as always for your support. I want to wish all of our friends and colleagues celebrating a very happy Thanksgiving!
 
Best,
 
Alex


Upcoming Events
 
Virtual Brunei Business Mission, December 7-11
We are now accepting registrations from companies interested in participating in our Virtual Business Mission to Brunei, December 7-11.  We have timed this year’s mission not only to better understand the opportunities in Brunei, but also to learn about the government’s plans and priorities for its Chairmanship of ASEAN in 2021.  Please contact Mega Valentina at mvalentina@usasean.org if you would like to join.
 
Virtual Consultation at the 26 ASEAN Transport Ministers Meeting (ATM), November 24
The Council will lead its fifth consecutive delegation to the 26th Transport Ministers’ Meeting (26 ATM) and engage with top transport officials during its inaugural virtual consultation on November 24.  The virtual consultation session will be chaired by H.E. Dato Seri Setia Abdul Mutalib Yusof, Minister of Transport and Infocommunications, Brunei and the Council’s Senior Vice President & Regional Managing Director, Ambassador (ret.) Michael Michalak.  During the session, industry experts from the Council’s membership will provide an exclusive briefing to reinforce the U.S. business community's commitment to ensuring ASEAN’s transport continuity amidst the COVID-19 pandemic. 
 
ASEAN Innovation Series, November 23-30
Following the launch of the Innovation Sub-Committee, the Council is launching its inaugural ASEAN Innovation Series to introduce the Council’s Innovation initiative to stakeholders, showcase members’ innovation projects, and facilitate discussion and exchange of best practices on innovation between private sectors, government, and the public.  Addressing the theme “Harnessing Innovation for Advancing ASEAN,” the Series will include an ASEAN Plenary Session as well as bilateral Country Sessions in the Philippines, Vietnam, and Indonesia with keynote addresses by high-level officials to review the policy, challenges, and partnership opportunities related to the innovation ecosystem.  The Philippines Session will take place on November 25 with the theme “Science & Innovation for the People: Shaping Post COVID-19 Future Through Science, Technology, and Innovation” followed by the Vietnam Country Session in the first week of December with the theme “Inclusive Innovation to Boost Vietnam Acceleration Development and Growth.”  The Indonesia Country Session held in the same week will address the theme “Indonesia: Toward Innovation-Driven Economy and Development”.  The Council welcomes members who are interested in either joining the Innovation Sub-Committee or supporting the upcoming Innovation Series.

COVID-19 Update 

Brunei
On November 13, 2020, the Ministry of Health reported 0 active cases, 3 deaths, 145 recovered individuals, and 148 total number of cases.  As of September 28, the authorities have further eased local restrictions.  This includes some sports events being able to resume with no spectators if they have a permit, including badminton, golf, sepak takraw, squash, table tennis, and tennis.  Additionally, swimming pools can reopen with a user limit of 100 people.  Additionally, playgrounds and arcades can operate at 80% 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 October 30, it was announced that Japan will lift its entry ban on Brunei, along with a few other nations, for non-tourist arrivals and government officials.  Travelers from Brunei will no longer need to observe a 14-day quarantine period, as long as they take similar preventative measures such as limiting overseas travel seven days within entering Japan and providing a negative test upon their return.
 
Cambodia
After several months of zero confirmed cases, Cambodia’s COVID-19 tally is increasing again and has a total of 301 confirmed cases.  The increase in numbers is due to imported cases.  Mainly after the Hungarian Foreign Minister tested positive during the visit to Cambodia on November 3, several Cambodian officials and citizens who came in contact with the minister also tested positive for COVID-19.  In a statement issued by Prime Minister Hun Sen, he called for tightening preventive measures and requiring utmost caution from all citizens to prevent a second wave of transmission.  The government advised strict quarantine measures and immediately closed all karaoke bars, nightclubs, cinemas, and museums across the country.  Both public and private schools in Phnom Penh and Kandal provinces are to be closed for on-site learning until November 22.  The government has also reordered the temporary closure of gyms and fitness centers across the country until further notice.  However, Cambodian air traffic remains open with specific regulations, and people will not be barred from travel.  The COVID-19 testing and treatment requirements for arrival passengers remain unchanged as of November 16.
 
Indonesia
With nearly 470,000 confirmed cases of COVID-19 as of November 15, Indonesia continues to be the worst-affected ASEAN country by the coronavirus pandemic.  The nation registered an increase of 120,000 new infections between mid-October and mid-November – roughly on par with the 125,000 new cases that were tallied between mid-September and mid-October.  Friday, November 13, saw the biggest daily jump in cases since the pandemic began, with 5,444 new infections being recorded.  Indonesia’s death toll now stands at 15,211.  The worst-impacted provinces are West, Central, and East Java, as well as the Special Capital Region of Jakarta.  In a bit of bright news, however, Indonesia and Singapore recently established a reciprocal “green lane” travel corridor, allowing for a resumption of cross-border business and official travel between the two countries.  Applications to use the corridor opened on October 26, and approved travelers will need to abide by strict health protocols, such as receiving COVID-19 tests both prior to and after arriving at their destinations. Furthermore, the Indonesian government has announced plans for a “mass vaccination campaign” slated to begin in December.  The first stage of the campaign will use two Chinese-developed vaccines, which are set to be issued to health workers, police, and members of the armed forces.  The campaign will commence once both vaccines receive approval from the Indonesian Food and Drug Agency.
 
Laos
Laos continued to report zero new COVID-19 cases through November.  So far, 23 patients have recovered and been discharged, with one remaining patient of all confirmed cases currently being treated in Vientiane.  Under an agreement with China, Chinese nationals from COVID-free provinces were permitted to enter Laos starting November 1.  The fast-track service is confined to the Boten border gate between Luang Namtha province in Laos and Yunnan province in China and allows travelers who tested negative to quarantine for only 48 hours upon arrival in Laos.  Despite the harsh economic impact of the pandemic, the Lao government is expecting GDP to grow by 3.3% this year, bolstered by growth in the agriculture and industry sectors.  The government is also optimistic that growth will continue in 2021 due to the uninterrupted construction of large-scale development projects like the Laos-China railway.
 
Malaysia
On November 16, the Malaysian Health Ministry reported 1,103 new COVID-19 cases, bringing the national total to 48,520.  There have been 35,606 cured and discharged individuals, representing 73.4% of all cases.  However, the deal toll has reached 313.  On November 7, Senior Defense Minister Datuk Seri Ismail Sabri Yaakob announced that all but three states in the Peninsular will be placed under the Conditional Movement Control Order (CMCO) from November 9 to December 6, 2020.  States under the CMCO also have to adhere to the previous standard operating procedures (SOP).  The three states excluded from the CMCO are Perlis, Pahang and Kelantan. While Perlis, Pahang and Kelantan do not fall under the CMCO, they are under the Recovery Movement Control Order (RMCO), which only allows inter-district travel within the three states.  One of the major changes that has come along with these recent CMCOs is the work from home order that started on October 22.  While there were numerous confusions initially as to what this order entailed, it is now clear that those individuals who work in the private and public sectors, at the management and supervisory levels must work from home.  If these groups of employees need to be present at the office, only 10% of them are allowed to do so, starting from 10:00AM to 2:00PM for three days a week.  There are specific industries, such as finance department employees, enforcement and other individuals whose jobs require being present at the workplace.  Exemptions apply for those employees who are allowed to be in the office. However, if they live in a COIVD-19 red zone, they must take a COVID-19 swab test.
 
Myanmar
According to the Ministry of Health and Sports, Myanmar continues to report high numbers of confirmed COVID-19 cases, now exceeding 70,000 cases throughout the country.  Myanmar has surpassed Singapore’s total cases of over 50,000 and now has the third-highest number of COVID-19 cases in the ASEAN region.  The government is still suspending international commercial passenger flights, and this restriction has been further extended through November 30.  The national curfew, ban on gatherings of 30 or more people and stay-at-home restrictions in major cities remain in place.  However, even with safety restrictions, cases have spiked since the General Election on November 8 mostly due to post-election mass gatherings in Yangon and Mandalay.  In fact, Mandalay has reported record-high numbers of COVID-19 cases.  To ease the burden on government hospitals overloaded with patients, the government has allowed private hospitals and clinics to treat the virus.  Additionally, Myanmar is planning to adopt a new community-based containment strategy on the idea of “Know Early, Report Early, Benefit early.”  On the economic side, the economic impact of the second wave of COVID-19 has been more severe on Myanmar businesses than the first wave.  According to the survey conducted by the World Bank, 83% of firms in Myanmar reported a negative impact on their businesses.  The government’s new medium to long-term economic recovery plan, MERRP is currently still underway.
 
Philippines
On November 16, the Philippines’ Department of Health (DOH) reported 1,739 new COVID-19 cases, pushing Philippine’s national total to 409,574 cases.  Among the regions, Davao City recorded the greatest number of new COVID-19 cases with 140, followed by Cavite with 117, Rizal with 89, Laguna with 87 and Batangas with 79.  Although the Philippines has been hit by a series of super typhoons this past month, the aftereffect of these extreme weathers does not create a significant increase in the nation’s COVID-19 cases.  On October 27, President Rodrigo Duterte has issued an extension of general community quarantine (GCQ) towards the National Capital Region, the provinces of Batangas and Lanao del Sur as well as the cities of Iloilo, Bacolod, Iligan and Tacloban.  These areas will remain in GCQ until November 30. Since November 1, Filipino authorities have reopened the country’s doors for certain foreigners, particularly those with investor visas, visas issued by the Department of Justice as well as visas issued by the Aurora Pacific Economic Zone and Freeport Authority and the Subic Bay Metropolitan Authority.  However, they still need to abide by the national COVID-19 protocols set by the Inter-Agency Task Force for the Management of Infectious Diseases (IATF) such as having valid and existing visas as well as a pre-booked quarantine facility.
 
Singapore
As of November 13, Singapore has discharged 58,008 cases with 78 remaining active cases. 50 patients are under hospitalization with stable conditions while the rest 28 patients are assigned to community facilities. No critical hospitalized patients are recorded so far. No deaths have been recorded since November with the number of deaths so far staying at a low of 28. In November, Singapore has seen several consecutive days with no new cases of locally transmitted COVID-19 infection. Recently, Singapore’s Ministry of Health appointed a 14-member Expert Committee on COVID-19 to make recommendations on Singapore’s COVID-19 vaccination strategy.The Expert Committee will monitor the dynamic of global vaccine development, assess the vaccines, and provide recommendations. In addition, Singapore will begin to receive visitors from Hong Kong starting with the inaugural Air Travel Bubble (ATB) flights on November 22. Under the ATB, visitors will not be required to observe a 14-day quarantine or Stay-Home Notice. Instead, visitors from the two cities will be only required to undergo COVID-19 tests. Moreover, to be eligible for travel under the Air Travel Bubble, visitors must travel on designated ATB flights. For now, the plan is to fly one flight per day with a quota of 200 travelers per flight. From December 7, 2020, the flight number will increase to two flights a day. 

Thailand
Thailand has continued to record small numbers of imported cases daily, with a current case total of just over 3,800 cases (an increase of 200 cases from last month) and 60 deaths.In a bid to revive the battered tourism sector, the Association of Thai Travel Agents (ATTA) has submitted an open letter to the Ministry of Tourism and Sports to allow quarantine-free entry to Chinese tourists by January 2021.  2 million workers in the tourism industry are expected to lose their jobs if international arrivals are still restricted by the first quarter of 2021.  The first batch of Chinese tourists under the current Special Tourist Visa (STV), which requires a 90-day minimum stay, arrived in the country on October 20.  Health experts have also proposed shortening the mandatory quarantine from fourteen to ten days to bolster long-term efforts to reopen the country.
 
Vietnam
As of November 16, Vietnam has gone 75 consecutive days without a single community transmission case of COVID-19.  The country is currently treating 178 active patients with none in critical health conditions.  Riding on a successful public health response, Vietnam recorded a GDP growth of 2.12 percent in the first nine months of 2020, one of the few countries in the world to post positive growth during the pandemic.  The Ministry of Planning and Investment is also preparing a second stimulus package that will focus on affected sectors including the aviation and tourism industry, in addition to a support package worth VND3.6 trillion (US$155 million) to vulnerable groups.  On November 13, newly appointed Minister of Health Nguyen Thanh Long called for COVID-19 prevention and control measures to be tightened amid the swift and complicated evolution of the pandemic around the world.  Vietnam pledged to contribute US$100,000 to the ASEAN COVID-19 Response Fund and US$5 million worth of medical supplies to the ASEAN Regional Reserve of Medical Supplies at the 37th ASEAN Summit in a collective effort to contain the COVID-19 pandemic and promote comprehensive recovery.
Country, Industry and Advocacy Updates
Key Developments 
  • U.S.-China Techno-Nationalism and the Impact on ASEAN
    As he assumes the stewardship of U.S. foreign policy vis-à-vis China in January of 2021, President-elect Joe Biden will undoubtedly encounter a host of challenges that will have profound implications for ASEAN.  Since 2018, the Trump administration has exacerbated an already tense strategic relationship through the U.S-China trade conflict.  However, this represents one piece of a broader “national security” led process of U.S.-China decoupling that has occurred under the Trump administration, from international trade and investment to travel and academic exchange.  In the ICT sector, decoupling often comes in the form of “techno-nationalism,” which ties technological innovation and enterprise directly to the nation – its security, prosperity and culture become intertwined with technological capacity.  As such, techno-nationalist policies can range from government-directed industrial policies and anti-competitive mercantilist trade policies to outright prohibitions on business activities with an aim to block other perceived adversaries from accessing and potentially exploiting vulnerabilities in one’s national digital infrastructure, which may inadvertently detriment neutral third parties. To read more on this, click here.
  • Philippines National Budget 2021 Approved by House, Mulled by Senate
    On October 16, the House of Representatives approved the third and final reading of the P4.506-trillion (USD 93 billion) 2021 General Appropriations Bill (GAB).  The submission of the GAB came earlier than the initial October 28 deadline, noting that the extra time shall give the Senate sufficient time to deliberate the national budget.  The 2021 General Appropriations Bill includes:
    • P5.5 billion (USD 113.6 million) for the procurement of COVID-19 vaccine once available for mass use
    • P4 billion (USD 82.7 million) for the Department of Labor and Employment to give assistance to displaced workers
    • P2 billion (USD 41.4 million) for pandemic assistance to afflicted families
    • P2 billion (USD 41.4 million) for the Health Facilities Enhancement Program of the Department of Health (DOH)
    • P2 billion (USD 41.4 million) for the Armed Forces of the Philippines' acquisition of C-130 airplanes
    • P2 (USD 41.4 million) billion for the Department of the Interior and Local Government to mobilize the assets of the Philippine National Police
    • P1.7 billion (35.1 million) for the Department of Education to address the internet needs of schools amid the distance learning scheme
    • P400 million (USD 8.3 million) for the Philippine National Oil Company's development of renewable energy
    • P300 million (USD 6.2 million) for the DOH's mental health programs
    • P100 million (USD 2.1 million) for the modernization of the Energy Regulatory Commission
      To read more, click here.
  • Philippines Lifts Oil Exploration Ban in West Philippine Sea
    On October 13, President Rodrigo Duterte approved the lifting of the moratorium on oil and gas exploration between the Philippines and China in the West Philippines Sea, a contested area in the South China Sea.  With this decision, petroleum exploration in the West Philippines Sea would resume.  According to Energy Secretary Alfonso Cusi, DOE has issued a ‘resume-to-work’ order notice to service contractors in the areas of service contract (SC) 59, 72 and 75; operated by The Philippines National Oil-Company Corp. Forum Ltd., and PXP Energy Corp respectively.  Secretary Cusi further stated that the lifting of the ban will create employment and stimulate the economy through Foreign Direct Investments (FDI).  The urge to lift the ban came from the acknowledgment that the energy source in Malampaya is expected to run out in 2030.  Hence, various companies involved in the Malampaya project have been reported to request exploring other gas resources.  In 2014, the administration of former President Benigno Aquino III suspended the exploration activities in the West Philippines Sea.  However, in 2018, Duterte’s administration resumed the proposed cooperation through a memorandum on joint exploration, but to date, the service contracts have not been implemented.
  • Malaysia's 2021 Budget Officially Tabled
    On November 6, 2020, the Malaysian Parliament tabled the 2021 Budget.  The 2021 Budget is centered on four key areas and is projected to be worth RM 330 billion, 10% higher than the RM 297 billion 2020 Budget.  The first key area targets support for economically vulnerable groups during the COVID-19 pandemic.  The second area will focus on supporting industries through specific incentives once recovery measures are implemented. The other two areas include empowering service delivery and developing sustainable living.  The 2021 Budget will also focus on revitalizing the economy, protecting the lives and livelihood of Malaysian citizens, and building on the current economic recovery momentum from the recent RM 205 billion economic stimulus packages.  The 2021 Budget will have a combination of business-friendly policies, constructive fiscal management, and effective transformation tools to help with building Malaysia’s resilience against future economic shocks.  To read the Council’s analysis of the budget proposal, click here.
  • Indonesia Pushes for Diversification of Local Commodities
    The COVID-19 pandemic has acted as a catalyst for the Indonesian government to re-focus on the diversification of local food consumption.  Despite the wide variety of locally produced foods, dietary diversification remains small.  Campaign efforts to promote the consumption of local foods has proven to be essential in the midst of lockdowns, as locally grown produce can help supplement the nation’s food security.  For example, the administration of Riau, Pekanbaru has made increased consumption of local foods a key element of its strategy to enhance food security.  This strategy consists of the establishment of two special zones for food sovereignty and food sustainability, as well as a food barn.  The food sovereignty and sustainability zones are created to incentivize local farmers to utilize private land to grow horticultural crops through stimulus packages.  The food barn will function as a food storage facility as a way of stockpiling products to respond to natural disasters or emergencies.  To read more, click here.
  • Vietnam’s Agriculture Ministry to Develop National Program on Agricultural Processing
    In Vietnam, fruit and vegetable exports are expected to increase after a big drop in the first three quarters of the year.  With signs of recovery in sight, a program developed by the Ministry of Agriculture and Rural Development (MARD) to improve vegetable and fruit processing is set to be submitted to the Government for approval.  The focus of the national program will be on farming zones and processing facilities.  The objective of the program is to address how the agriculture processing and market development industry only contributes a small increase in the production of added-value products because it only processes 10% of the annual vegetable and fruit output.  The program aims to improve agricultural output by encouraging the use of advanced processing and preservation technologies as well as technology transfer and research & development (R&D).  Moreover, the program hopes to incentivize the adoption of high-tech agriculture and farming practices.  This program aims to increase exports of fruits and vegetables by USD $10 billion in 2030, 30% of which come from processed items.  It is expected that by 2030, businesses will able to optimize production towards high value-added and variant products.
  • U.S. Department of Commerce Imposes Duties on Vietnamese Tires Over Undervalued Currency
    After a four-month investigation, on October 29 the U.S. Department of Commerce imposed preliminary countervailing duties of 6.23 percent to 10.08 percent on imported light vehicle tires from Vietnam, applying for the first time a new rule to combat undervalued currencies.  The new duties will apply to imported passenger vehicle and light truck tire imports of US$469.6 million annually, with a final injury determination due by April 30 next year, Commerce said in a statement.  The duties come as USTR has also initiated the Section 301 Investigation into Vietnam’s policies related to currency valuation on the ground that the Treasury Department placed Vietnam on a “watch list” as a currency manipulator because of its trade surplus with the U.S and a perception that Vietnam’s central bank, the State Bank of Vietnam, has been actively buying foreign currency to consistently undervalue its currency.  Vietnamese officials have repeatedly stated that Vietnam does not use an exchange rate policy to help its exports.  Deputy Foreign Ministry Spokesperson responded that Vietnam would continue to coordinate with U.S. authorities to clarify and better understand the situation and protect the legitimate interests of Vietnamese businesses in accordance with World Trade Organization regulations.  To read more, click here.
  • Vietnam Aims for 6 Percent GDP Growth in 2021 and 3 Percent in 2020
    On October 20 Vietnam’s Prime Minister delivered the Government’s socio-economic reports of 2020 and of 2016-20, as well as the plan for 2021 and tasks towards 2025 to the 10th Session of the National Assembly.  He said the Government is committed to maintaining control of the COVID-19 pandemic as a basis for continued socio-economic growth and aims for a GDP growth rate of 6 percent in 2021.  Following this statement, in an October 30 Government meeting, the Prime Minister said the economy had bottomed out in the second quarter and started to recover following a V-shaped trend in the third quarter.  He asked the entire political system to speed up the economic recovery in order to gain a growth rate of 2.5-3 percent this year.  Citing an IMF report, the Prime Minister said that Vietnam is the only country in ASEAN forecasted to have a positive growth at 1.6 percent in 2020 and would reach 6.7 percent by 2021.  At that rate, Vietnam’s GDP would hit US$340.6 billion in 2020, making it the fourth-largest economy in Southeast Asia.  Standard Charter Bank forecasts that Vietnam would post a growth rate of 3 percent this year and surge to 7.8 percent in 2021, while the World Bank expected Vietnam’s economy to grow 2.5-3 percent this year.  To read more, click here.
  • Singapore Launches the “Singapore Green Finance Centre”
    On October 13, 2020, Singapore launched the Singapore Green Finance Centre (SGFC), its first institute dedicated to green finance research and talent development.  This institute was launched by the Imperial College Business School and Lee Kong Chian School of Business at Singapore Management University.  The Singapore Green Finance Centre will focus on researching climate science, financial economics and sustainable investing.  The research and training within this centre will enable financial institutions, corporates, and policymakers to improve the management of environmental risks, develop financial solutions to promote environmental sustainability and to design policies for a sustainable future.  SGFC will also work to bridge the gap between investors and policymakers on climate change and could help lead the world into a low carbon future.  To learn more about SGFC, click here.
  • International Telecommunication Union (ITU) Digital World 2020 Virtually Opens in Vietnam, 5G Pilot Commercial Run Permitted
    The International Telecommunication Union (ITU), the United Nations specialized agency for information and communication technologies, in collaboration with the Vietnam Ministry of information and Communications (MIC), organized the ITU Virtual Digital World 2020 on October 20-22.  The 3-day event served as a platform for high-level debate and knowledge-sharing resources on the role of digital technologies in the COVID-19 era.  It also hosts a virtual exhibition showcasing national and private sector’s technology, innovative solution, and SMEs, open until November 30.  Speaking at the opening event, Deputy Prime Minister Vu Duc Dam affirmed the importance of digitalization, especially in the context of the pandemic, and affirmed the Vietnam Government’s commitment to digital transformation by highlighting the National Digital Transformation Program (Vietnamese) as the work plan.  Related to this commitment, MIC has permitted local telecoms Viettel and MobiFone to launch the pilot commercial running of the 5G network.  Military-owned Viettel has been allowed to test 5G in Hanoi with a maximum of 140 base transceiver stations while state-owned MobiFone can do so in Ho Chi Minh City with 50 stations.  Their licenses will be expired on June 30 next year.  The commercial pilot will help the telecom carriers assess their technology and the market size before officially providing 5G commercial operations.
  • Roundup of Indonesia Defense Minister Prabowo Subianto's Visit to the United States
    On October 16, Indonesia’s Defense Minister, Prabowo Subianto, attended a series of bilateral security talks with top Pentagon officials in Washington, DC.  According to a press release issued by the U.S. Department of Defense, Minister Prabowo and his American counterpart, Secretary Mark Esper, discussed a range of issues, among which included “regional security, bilateral defense priorities, and defense acquisitions.”  Secretary Esper also underscored the significance of upholding human rights and the rule of law as the two countries expand their engagement, while Defense Minister Prabowo expressed his appreciation for the United States' support of Indonesia’s defense modernization efforts.  Additionally, the two promised to boost military-to-military ties and activities, as well as to collaborate on enhancing regional maritime security.  Also in attendance throughout the meetings were Indonesia’s Defense Attaché, First Marshal Age Wiraksono, and the newly arrived ambassador, Muhammad Lutfi.  To read more about Minister Prabowo Subianto's visit, please click here.
  • Singapore’s October Ministerial Statement on Fiscal Policy Overview
    On October 5, 2020, Minister of Finance Heng Swee Keat announced Singapore’s fiscal policy plan for several months ahead during the October Ministerial Statement.  The government affirmed its priority to continue investing decisively on Singapore's national priorities.  In so doing, the government plans to make “difficult choices” including imposing higher taxes, and more effective spending to help lift the economy from further contraction.  The government so far has been heavily implementing fiscal policies through tax and budget reallocation, redistributing under-utilized projects such as policlinics and MRT lines to avoid the need to draw down from the national reserve.  However, the Singapore government signaled the possibility of using reserves whenever necessary.  This pledge to help its citizens and business by using reserves can be “challenging” as the country’s economy is in its worst recession since its independence.  Moreover, this year’s government revenue is predicted to be 16% lower than what was estimated in February.  The Monetary Authority of Singapore estimated that the country’s economic growth in 2021 will remain modest due to cross-border restrictions and cautious external demand.  For now, Deputy Minister Heng Swee Keat will focus on effectively using the S$8 billion (US$5.8 billion) stimulus budget that was announced back in August.  To read more, click here.
  • Myanmar Develops New Reinsurance Directive
    Beginning in 2019, Myanmar has progressed in its market reform efforts by liberalizing the insurance industry, regulating the reinsurance market and allowing participation for foreign players, while giving flexibility in product development and enabling bancassurance.  Two new directives were released by the government, which took effect commencing October 1, 2020.  The first directive includes allowing private insurance companies to expand into Commercial Lines, which are general insurance products for corporations and businesses, which generally include large construction or national infrastructure projects.  Even though the range of Commercial Lines is still limited due to the possibility of higher risks, this is still considered a step in the right direction.  The new directive now ensures a portion of premiums to be retained and obtain higher profits and revenues in the country.  Secondly, the other insurance directive permits private insurance companies to reinsure risk to overseas reinsurance companies.  By having direct access to international reinsurance companies, domestic insurance companies are able to grow their revenue further without being constrained by risk management.  This development is expected to incentivize international corporations to invest in Myanmar and source insurance protection domestically.  Domestic companies will also have more competition in the global and regional markets.
 
Current Advocacy 
 
  • Call for Input: Philippines Public Service Act Amendment
    The Council seeks member input to the proposed amendment to the Public Services Act authored by Senator Grace Poe pending with the Philippine Senate Committee on Public Services.  The bill aims to distinguish and define “public utility” from public service (section 5) and proposes a national security review provision (section 19).  This piece of legislation is largely viewed as the next best thing to a constitutional amendment in liberalizing investment sectors closed to foreigners and opening sectors to more foreign direct investment.  The Senate is in the process of drafting a committee report on the bill.  The Council views making a submission at this time is proactive and opportune to advocate member priorities in multiple sectors that need more liberalization and foreign investment.  Members are therefore requested to submit comments to the Council by December 1.  The Council hopes to make a submission to the Senate before Congress breaks for recess over the Christmas holiday.  Please send your inputs or questions you may have to the Philippines team: Kim Yaeger kyaeger@usasean.org, Elizabeth Magsaysay-Crébassa em.crebassa@usasean.org, Lilibeth Almonte-Arbez lalmonte@usasean.org, Norika Pineda npineda@usasean.org.
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Alexander Feldman Speaks about the Implications of RCEP on Trade Relations in ASEAN on CNBC Asia's Squawk Box

On the eve of the signing of RCEP, the Council’s Chairman, President & CEO Alex Feldman appeared on CNBC Asia's Squawk Box to discuss the implications of the new agreement on trade relations in ASEAN.
 
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