President's Newsletter - May 2014

Welcome to the May President’s Newsletter!  We have another busy few months ahead, and we are currently leading a delegation of seven ASEAN Ambassadors to Memphis and Chicago on the ASEAN Ambassadors’ Tour, and in total nine of ten ASEAN nations are represented on our delegation.   We are meeting with our members, the local business communities, local government and academia in these two important cities in an effort to spread the word about ASEAN Matters for America and build awareness of the region.  We are grateful to Federal Express, Motorola Solutions and UL for their support of the ASEAN Ambassador’s Tour.

In April, I was pleased to travel to Malaysia, the Philippines and Vietnam, where I was honored to be included on behalf of the Council in a number of events alongside President Obama’s trip to the region and worked to lay the groundwork for the Council’s CEO mission in early June, where Commerce Secretary Pritzker will accompany the CEO delegation to Vietnam and the Philippines, and then travel to Myanmar.

HIGHLIGHTS

President Obama Visits the Region
President Obama’s trip had a number of positive outcomes for regional and bilateral relationships. In Malaysia, where he was the first U.S. President to visit the region since Lyndon Johnson in 1966, he met with Prime Minister Najib and the two leaders reaffirmed their commitment to the TPP. To view the joint statement, please click here.

In the Philippines, he met with President Aquino and the two leaders announced the Enhanced Defense Cooperation Agreement (EDCA) to update and strengthen the U.S.-Philippines defense relationship. They also highlighted the removal of the Philippines from the Special 301 Watch List because of improvements in intellectual property rights protection and the announcement by the FAA that the Philippines will be granted a category 1 rating. To view the USG fact sheet on U.S.-Philippines relations, please click here.

President Obama underlined his commitment to the US-ASEAN Leader’s Meeting during his visit to Malaysia on April 26, saying, “I am proud to be the first American President to meet regularly with all 10 ASEAN Leaders, and I intend to do it every year that I remain President.”  This is the strongest commitment yet from the Administration that the President intends to make his second trip to Myanmar this November to participate in the East Asia Forum and the US-ASEAN Leaders Meeting

CEO Business Mission
On April 17, U.S. Secretary of Commerce Penny Pritzker officially announced her intention to travel with the US-ASEAN Business Council’s CEO-level mission to Vietnam and the Philippines followed by a trip to Myanmar in June.  For additional information on the trip, please contact Mads Stockwell at mstockwell@usasean.org.

In preparation for the Commerce Secretary’s visit to Myanmar in June, the Council is working to produce a Myanmar “Sense of Business” Paper, which will highlight opportunities and challenges for trade and investment with Myanmar.  To contribute to the paper, please contact Anthony Nelson at anelson@usasean.org.

The Business Alliance, a collaboration between the Council and USAID, held its first event in Ho Chi Minh City on April 22, serving 130 representatives of Vietnamese SMEs.  Numerous opportunities for engagement exist in the program. If you would like further information, please contact Anthony Nelson at anelson@usasean.org.

EVENTS

CEO Business Mission
On April 17, U.S. Secretary of Commerce Penny Pritzker officially announced her intention to travel with the US-ASEAN Business Council’s CEO-level mission to Vietnam and the Philippines followed by a trip to Myanmar in June.  This tour, organized by the Council, will see a group of ten Council member CEOs visit the three countries to engage the senior-most government officials and business leaders.  For additional information on the trip, please contact Mads Stockwell at mstockwell@usasean.org.

US-ASEAN Business Alliance for Competitive SMEs
The Business Alliance, a collaboration between the Council and USAID, held its first event in Ho Chi Minh City on April 22, serving 130 representatives of Vietnamese SMEs.  Numerous opportunities for engagement exist in the program.  If you would like further information, please contact Anthony Nelson at anelson@usasean.org.

Financial Services Call
On May 8 at 9:30am Singapore time, the Council’s Financial Services Committee will hold its second quarterly call of 2014.  Committee members will discuss key takeaways from the April 3-5 ASEAN Finance Ministers Meeting (AFMM) and how to move Committee initiatives forward in light of reactions from the Finance Ministers at the April 5 working luncheon the Council co-hosted with the Myanmar Ministry of Finance.  Key components of the Committee’s work plan following the AFMM include engaging regional governments on natural catastrophe risk financing schemes, enhancing communication between Finance Ministries, Central Banks and ICT Ministries on cross-border data flows essential to financial services companies, working with 2014 ASEAN chair Myanmar on financial inclusion programming later this year, and developing an ASEAN Day on Wall Street.  Council members interested in joining this call can register here.

ASEAN Customs Directors-General Meeting
The Council's annual mission to the ASEAN Customs Directors-General Meeting will take place in Dalat, Vietnam on June 3-5. The purpose of the mission is to exchange views with senior ASEAN customs officials, and to discuss impediments and opportunities to trade and investment in Southeast Asia. This will include a formal consultation with the ASEAN Customs Directors-General and sideline meetings with individual Customs DGs. To register, please click here. If you have any questions, please contact Shay Wester at swester@usasean.org.

REGIONAL SPOTLIGHT

Defense
In the final leg of his tour of Asia, President Obama stopped in the Philippines where he signed a 10-year agreement to give the U.S. military greater access to Philippines bases.  The agreement establishes a framework for an increased U.S. military presence in the Philippines and is part of the “rebalancing” of U.S. resources toward the fast-growing Asia-Pacific region.  The deal comes 23 years after the Philippine Senate voted to evict the U.S. military from bases there, ending 94 years of American military presence in the Asian nation.  It is expected that the Philippines will also look to buy maritime patrol aircraft, conventional munitions, small warships and helicopters.  The arrangement is part of a trend in U.S. defense policy towards “places, not bases” which has seen U.S. forces establish semi-permanent positions in Singapore and Darwin, Australia, among others, and gives the United States greater flexibility in responding to emerging security situations.  To read the latest Defense update, please click here.

Energy
On April 30, the US-ASEAN Business Council, the U.S. Chamber of Commerce and AmCham Indonesia hosted a private sector roundtable and reception with the Indonesian Vice Minister for Energy and Mineral Resources Susilo Siswoutomo and his delegation. The private sector roundtable focused on opportunities and challenges for the private sector from both countries seeking to invest in the energy sector.  Mr. Siswoutomo and the delegation (consisting of government officials and private sector representatives) were in the U.S. for the 5th US-Indonesia Energy Policy Dialogue hosted by the U.S. Department of Energy.  The two-day dialogue, held every two years, is co-chaired by the U.S. Deputy Assistant Secretary for Energy Dr. Phyllis Yoshida and Edy Hermantoro, Director-General for Oil and Gas.  To read the latest Council update on Energy please click here.

ICT
The Indonesia ICT Consultative Forum (IICF) held a very successful first Executive Committee on April 1 in Jakarta.  The meeting consisted of a presentation and discussion on the IICF concept and workplan; initial presentation and planning of the three IICF workstreams (Emerging Digital Trends, Incentivizing Localization, and Regulatory Affairs); a presentation and discussion on Cloud Computing and its Impact on the Economy and a dialogue on the next steps for the IICF.  The meeting was led by the IICF co-chairs, Elizabeth Hernandez (HP, ICT Committee Chair) and Eddy Satriya (Deputy Assistant for ICT and Utility, Coordinating Ministry of Economic Affairs).  The next Executive Committee meeting will be held in June.  Please contact Mads Stockwell at mstockwell@usasean.org if you would like more information.  To read the IICF update, please click here.

Infrastructure
On April 25 the Council’s Infrastructure Committee held a quarterly conference call to discuss infrastructure priorities, messaging and programs for 2014.  The call was led by Steve Lanctot of committee chair Caterpillar and Marc Mealy, Council Vice President for Policy.  The committee prioritized the Philippines, Vietnam, Indonesia and Myanmar as countries of focus for the year.  Key messaging for programs and projects will focus on the comparative advantage in life cycle costs that Council members bring to projects in ASEAN, U.S. companies’ commitment to sustainability, and the objective of members to find links to bankable projects.  Involvement in the committee from Moody’s, Standard & Poor’s and new Council member Marsh and McLennan looks to bring a new strategic focus on infrastructure financing in addition to the committee’s traditional work on physical infrastructure projects.  The Council’s Infrastructure Committee team is currently preparing a stakeholder map for each of the 10 ASEAN countries for committee members and proposing 2014 programming such as a Washington roundtable between U.S. Government officials, ASEAN economic attachés and members as well as an Infrastructure Committee mini-mission attached to the Philippines Business Mission in October 2014.  Notes from the Infrastructure Committee’s call can be found here.

Cambodia
Cambodia has entered its tenth month of political stalemate since July’s election, with 55 lawmakers-elect from the opposition CNRP boycotting the 123-seat National Assembly.  Last month, with Khmer New Year about to start, there was hope that a deal between the ruling CPP and CNRP might be around the corner. However there appears to have been no major movement since then. Instead, attention has moved to reports that a number of major items of draft legislation are on the National Assembly’s schedule for this year, including the Cybercrime Law, the Law on Trade Unions, the Law on Associations and Non-Governmental Organizations; the Law on the Supreme Council of the Magistracy; the Law on the Status of Judges and Prosecutors; and the Law on the Organization and Functioning of the Courts.  Each of these are said to have been drawn up behind closed doors and have subsequently passed the government's internal review.  They are expected to be sent to parliament in the coming days.  To view the latest Cambodia update, please click here.

Indonesia
The Indonesian legislative elections took place on April 9.  Many pundits were expecting the Indonesian Democratic Party of Struggle (PDI-P) to pick up as much as 30% of the popular vote largely because of the enthusiasm surrounding its popular presidential candidate, Jakarta Governor Joko Widodo (Jokowi).  However, quick counts indicate that the party fell short of such predictions, earning only around 19% of the popular vote.  The threshold required to nominate a presidential candidate (without forming a coalition) is 20% of seats in Parliament or 25% of the popular vote.  Throughout April parties have been engaging in discussions around forming coalitions for the Presidential elections to be held on July 9.  The PDI-P has announced a coalition deal with the National Awakening Party (PKB), and Jokowi of the PDI-P will be selecting his vice-presidential running mate, according to officials of both parties.  PKB Chairman Muhaimin Iskandar and former Constitutional Court Justice Mahfud MD, have been named as potential VP candidates on Jokowi’s ticket. PDI-P formed a coalition with Surya Paloh’s National Democratic Party (Nasdem) earlier this month and may also form a coalition with the United Development Party (PPP).  General Prabowo’s party, Gerindra, who received around 11% of the legislative vote, has been assessing a possible coalition with the Prosperity and Justice Party (PKS), the National Mandate Party (PAN) and Hanura, though no formal announcement has been made.  The Council will continue to monitor these developments and will provide an update once the results of the legislative election have been formally announced and coalitions have crystallized. To read an earlier Council update on the initial results of the legislative elections please click here.

Indonesian Minister of Finance Dr. Chatib Basri was in Washington D.C. for International Monetary Fund/World Bank spring meetings and also gave the keynote address at USINDO’s Gala Dinner on April 11.  During his remarks the Minister emphasized the importance of human capital development and explained that whoever becomes the next president of Indonesia will have to create jobs to reduce poverty, and that this will require maintaining growth at or above seven percent.  Minister Basri’s ultimate point was that despite the economic nationalism seen during the election season, the next administration will have to adopt an open economic rationale once in office in order to maintain growth and count on continued political support.

Malaysia
President Barack Obama made his official state visit to Malaysia April 26-27, the first U.S. president to visit the country since Lyndon Johnson in 1966.  The President met with Prime Minister Najib Razak and both pledged to enhance cooperation in security and trade between the two countries.  During a joint news conference, Prime Minister Najib said, “Malaysia welcomes America’s rebalancing towards Asia, and its contribution to peace, stability and prosperity in the region. Our continents share an ocean; we should be connected by common policy, too.”  While the Trans-Pacific Partnership negotiations are ongoing, both leaders said they were committed to finishing the trade pact and resolving the remaining issues.  Also during the visit, Prime Minister Najib and President Obama witnessed the signing of $2 billion worth of commercial deals between Malaysian and American companies in the aviation, biotechnology and insurance sectors.  Malaysian government officials welcomed the President’s visit saying it underscores the strong economic relations between the two countries and will further boost investment into the country.  To read the latest Malaysia update, please click here.

Myanmar
In preparation for the U.S. Commerce Secretary’s visit to Myanmar in June, the Council is working to produce a Myanmar “Sense of Business” Paper, which will highlight opportunities and challenges for trade and investment with Myanmar.  To contribute to the paper, please contact Anthony Nelson at anelson@usasean.org.

During his visit to Malaysia, President Obama made remarks in his speech focused on broader ethnic and religious tolerance within ASEAN as a whole, and responded to an audience member's question by pointedly remarking that Myanmar will not succeed if the Muslim minority in the country is oppressed.  He noted that one of the challenges faced by nations like Myanmar that are emerging from totalitarian rule is the tendency of some people to organize politically around ethnic or religious identity, a phenomenon which the President said holds back economic development, in addition to generating discrimination and violence.  This follows pointed remarks on the Rakhine situation by both U.S. Assistant Secretary of State Danny Russel and U.S. Ambassador to the U.N. Samantha Power, and promises from the Myanmar government to ensure renewed access and protection for aid workers.  To read the Council’s latest Myanmar update, please click here.

Philippines
President Obama made his first trip to the Philippines since becoming President in April, where he signed an Enhanced Defense Cooperation Agreement with the United States.  Two other key developments in the U.S.-Philippines relationship were marked in April, as USTR removed the Philippines from its Special 301 Watch List of countries with particular problems with intellectual property rights violations.

Singapore
In the latest round of cabinet changes, Prime Minister Lee Hsien Loong has promoted Tan Chuan-Jin to Minister for Manpower and Lawrence Wong to Minister for Culture, Community and Youth.  While the Ministry of Culture, Community and Youth is new, the Ministry of Manpower was formerly led by Tharman Shanmugaratnam, the current Deputy Prime Minister and Minister for Finance.  Prime Minister Lee has also announced two new ministers of state to bolster the social and health teams.  He said the Government was creating opportunities for Singaporeans through skills upgrading and raising productivity, improving lives through sports, culture and youth engagement, and giving people peace of mind through stronger social safety nets in health and for the elderly.  To access the biography of Mr. Tan Chuan-Jin, please click here. To access the biography of Mr. Lawrence Wong, please click here.