Amb. Ted Osius
President & CEO
US-ASEAN Business Council
Happy New Year! The Council hit the ground running and is ready to build on last year’s success to make 2015 a stellar year for all of our members.
All of our committees are currently in the process of creating or finalizing their 2015 work plans, and you should be receiving invitations for Committee calls. If you are interested in becoming more engaged in a certain country or industry committee, these calls are the perfect way to start. Please visit our country and industry pages on our website to find out more about the work of the committees and our staff.
Highlights
- On January 7, the Council held a conference call with the U.S. Ambassador to Malaysia Joseph Yun.
- On January 21, the Council held a luncheon to welcome the new Vietnamese Ambassador to the U.S. Pham Quang Vinh.
- On January 23, the Council held a briefing with the new U.S. Ambassador to Brunei Darussalam Craig Allen.
- On January 26, the Council held a conference call with the U.S. Ambassador to Myanmar Derek Mitchell.
- On January 29, the Council will host a conference call with U.S. Ambassador to ASEAN Nina Hachigian. Please click here to register.
There are a number of future opportunities for engagement with the US-Business Alliance for Competitive SMEs, but the next opportunity is the January 30 program in Phnom Penh. Please contact Mario Masaya at mmasaya@usasean.org to register.
Membership
In the past 12 months, the Council has welcomed 26 new members, bringing total membership to 150 companies, a true milestone for the Council.
This growing membership is an indicator of the increasing importance of the region. As the Council’s membership continues to grow, its ability to influence policy throughout the region is greatly enhanced as we represent some of the biggest and best companies in the world. Our growth also allows us to strengthen the services we provide by increasing our resources on the ground in the region and strengthening our industry-specific efforts. As we enter 2015, we look forward to continuing our growth and continuing to provide you with the resources and expertise that you need to drive your business forward in ASEAN.
New Members in 2014
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Advocacy
The Council plans to increase its strategic focus and allocation of resources to the advocacy dimension of our work with members in 2015. January has already been a busy month for us as we have taken the following actions: Joint advocacy letter with Information Technology Industry Council (ITI) to the Government of Vietnam on their ICT regulations; letter to Indonesian Minister for ICT regarding ministerial decree on local content for LTE technology; joined the Trade Benefits America’s coalition’s letter to Congress on TPA; and supported a member’s advocacy efforts to secure a Cabotage waiver and import duty exemption in Indonesia.
ASEAN
After a successful chairmanship year, Myanmar passed the chairmanship of ASEAN to Malaysia in November. Malaysia’s upcoming chairmanship will focus on a “people-centered” ASEAN, and look to build momentum towards the successful conclusion of the ASEAN Economic Community.
There are a number of upcoming events for the ASEAN Committee.
- On January 26 and 27, Council members were invited to participate in the ASEAN-BAC meetings and dinner in Kuala Lumpur.
- On January 29, the Council will host a conference call with U.S. Ambassador to ASEAN Nina Hachigian. Please click here to register.
- There are a number of future opportunities for engagement with the US-Business Alliance for Competitive SMEs, but the next opportunity is the January 30 program in Phnom Penh. Please contact Mario Masaya at mmasaya@usasean.org to register.
View the Council’s latest ASEAN updates
Customs
The ASEAN Single Window (ASW) and its component National Single Windows (NSWs) are the centerpiece of ASEAN’s AEC 2015 trade facilitation blueprint, but implementation has not been uniform. Only Malaysia and Singapore have fully developed NSWs while Brunei, Indonesia, the Philippines, Thailand and recently Vietnam have partially implemented systems. Cambodia, Laos, and Myanmar remain in the initial stages of development, mainly due to poor quality infrastructure and limited human and institutional capacity. The Working Group on Legal and Regulatory Matters for the ASEAN Single Window (LWG) is also still working on the Legal Framework Agreement that will synchronize national customs regulations, while the self-certification scheme for the origin of goods also remains in early testing. Given these shortfalls, the ASW can be expected to have a limited scope upon its official launch at the end of 2015. That said, the high level of political interest across ASEAN for the ASW’s success is encouraging.
Negotiations continue on both the Trans-Pacific Partnership (TPP) and the Regional Comprehensive Economic Partnership (RCEP). Final approval for the TPP in the United States depends heavily on dynamics between the new Republican leadership in Congress and President Obama, while RCEP remains at a less advanced stage and is unlikely to meet its targeted late-2015 completion date.
The 24th ASEAN Directors-General of Customs Meeting is tentatively scheduled for May 20 - 22 in Brunei Darussalam. As in previous years, the Council looks forward to leading a strong U.S. business delegation to exchange views with senior ASEAN customs officials on impediments and opportunities to trade and investment in Southeast Asia. The schedule will likely consist of two days of bilateral meetings and a formal consultation with the Customs Directors-General. Further details will be circulated at a later date.
Additionally, with the formal launch of the AEC scheduled for the end 2015, the Customs and Trade Facilitation Committee plans to launch country and issue specific meetings and advocacy documents on priority areas in customs, trade facilitation, and logistics performance for U.S. investors. An interest survey will be distributed to the committee in the coming weeks. Please contact Shay Wester at swester@usasean.org with any questions or comments.
View the Council’s latest Customs updates
Defense & Security
In 2014, the Defense & Security component of the rebalance to Asia witnessed a number of key milestones which the Council will look to build on in the year ahead. Chief among these was the inaugural US-ASEAN Defense Forum hosted in Hawaii last April. The U.S. and the Philippines announced the Enhanced Defense Cooperation Agreement (EDCA) which will allow the U.S. military to return to Philippines bases with longer troop rotations. In October, the U.S. State Department partially lifted a long-time ban on lethal weapon sales to Vietnam. Finally, Indonesian military (TNI) Commander General Moeldoko visited the U.S. as part of a broader move to boost military ties. In 2015, the Defense & Security Committee will prioritize further engagements around multilateral issues. Priority will be given to engagements with Indonesia, Malaysia, Vietnam, and the Philippines, with a secondary focus on Thailand and Singapore.
View the Council’s latest Defense & Security updates
Energy
In 2015 the Energy Committee will be focusing on participating in the annual ASEAN Energy Ministers Meeting. We invite you to fill out the 2015 Energy Committee Priorities Survey, which will remain open until January 30. Your input is important in helping us determine the Committee’s direction and focus for the year. The Energy Committee will be organizing the year’s first committee call for the first week of February to discuss priorities and programming for 2015.
The biggest trend currently affecting the region is the continued decline of oil prices. On January 5 the price of US crude oil dipped below USD 50 a barrel for the first time in over five years which sent markets reeling. Crude oil prices have decreased by as much as 50 percent in just the last six months. Lower oil prices and expected changes to interest rates in the United States contributed to a sell-off in emerging markets as investors move to reduce their risk exposure to emerging markets. Lower oil prices are also impacting investment decisions. Malaysia’s state-owned oil and gas firm Petronas announced it will delay starting a USD 32 billion liquefied natural gas project in western Canada due to the sharp drop in oil prices. Petronas also announced a 15-20 percent cut in capital spending and a USD 570 million drop in third-quarter profits compared to the same quarter in 2013. Malaysia’s budget will be hard-hit, as oil and gas revenue makes up nearly a third of the budget.
On the flipside, lower oil prices also present an opportunity to introduce much needed reform. In Indonesia, the government has taken advantage of plummeting prices to take swift action to address fuel subsidies. In November the Jokowi administration raised fuel prices by an average of 30 percent and took further action at the end of the year to cap the subsidy for diesel and to entirely scrap subsidies for gasoline, saving the government an estimated USD 18 billion and lowering overall dependence on imports of oil. Lower prices are a welcome relief for Indonesia who is a net importer of oil, however, the lower prices also mean reduced revenue from oil exports and may curb investment in the sector in the long run.
View the Council’s latest Energy updates
Financial Services
The Financial Services Committee (FSC) will engage an array of ASEAN’s key financial sector stakeholders throughout 2015. The FSC plans to work closely with ASEAN chair Malaysia’s Ministry of Finance and Bank Negara Malaysia on convening valuable discussions during the ASEAN Finance Ministers Meeting (AFMM), to be held on March 21. In past years the mission has included bilateral and multilateral discussions with ASEAN finance ministers, central bank governors, as well as senior U.S. treasury officials, Asian Development Bank representatives and private sector stakeholders. This year’s AFMM will be particularly meaningful given Malaysia’s long-standing regional leadership role in banking, insurance and payments sector development, as well as in capital markets integration. Committee members will have the opportunity to address key policy components of regional integration in banking, insurance, e-payments and how the unimpeded transit of data across borders advances policymakers’ financial development objectives.
In April, the committee plans to meet ASEAN central bank governors and finance ministers traveling to Washington for the IMF/World Bank spring meetings. During those meetings in 2014, committee members engaged Thai Central Bank Governor Prasarn Trairatvorakul in Washington and Governor Agus Martowardojo of Bank Indonesia and Indonesia’s then-Finance Minister Chatib Basri in New York. The committee is also developing plans to hold a number of additional programs in the region and in the U.S. later in the year, including an ASEAN Day on Wall Street and attending the biennial ASEAN Insurance Congress, which is likely to be held in Phnom Penh in November. Additionally, the committee will carry key 2014 initiatives into 2015. Committee members will continue collaborating with the ASEAN Capital Markets Forum on a post-2015 agenda for regional capital markets development, consulting with regional governments on advancing financial inclusion and literacy, and enhancing natural catastrophe risk financing products available to ASEAN private and public consumers.
View the Council’s latest Financial Services updates
Health & Life Sciences
The long-awaited ASEAN Medical Device Directive (AMDD) has taken effect from January 1, 2015 bringing standardized registration and classification criteria that should reduce red tape and boost trade efficiency for medical device manufacturers operating across the region. While a step forward for the industry, implementation progress still differs across markets given its non-binding nature.
ASEAN member states such as Indonesia, Vietnam and the Philippines are continuing to make progress in pursuing universal health coverage (UHC). In the Philippines a new law was passed in November 2014 that now grants senior citizens (those aged 60 and above) automatic enrolment as members of the Philippine Health Insurance Corp (PhilHealth), the national health insurance scheme. In the past, only indigent senior citizens were automatically subsidized. However concerns remain, particularly in countries such as Indonesia and Vietnam, about the readiness of infrastructure and supplies of medicines, medical devices, and skilled healthcare workers. Steep increases in demand for these good and services are expected. According to Frost & Sullivan, drug spending as a percentage of the Indonesia’s total health expenditure will increase to an estimated 19 percent after implementation of Indonesia’s national health insurance scheme, Jaminan Kesehatan Nasional (JKN). While this means more opportunities for drug and medical device manufacturers, legislation favoring local industry remains a hindrance for foreign companies.
With regard to shortages in skilled healthcare workers, AEC implementation should see the freer movement of skilled medical labor. International hospitals in Vietnam, for instance, will begin accepting nurses from other ASEAN countries in 2015. That said, domestic regulations are expected to continue to limit cross-border movement due to protectionist sentiment remaining strong amongst local physicians and other healthcare professionals concerned about foreign competition.
The planning group for the APEC Life Sciences Innovation Forum (LSIF) will next convene in conjunction with the first APEC Senior Officials’ Meeting (SOM1) and related meetings from January 26 to February 7 in Clark, the Philippines. Likely 2015 priorities for the LSIF include healthcare financing, improving workforce productivity through NCD prevention and control, regulatory harmonization, and supply chain integrity. There is also an APEC meeting on Fiscal Intelligence & Sustainable Health Financing that is tentatively being planned for June 10, as well as the 5th APEC High-Level Meeting on Health & the Economy, tentatively scheduled for August 30 in Cebu.
The first HLS Committee Quarterly Call will be held on January 29 to discuss priorities and programming for 2015. Please click here to register.
View the Council’s latest Health and Life Sciences updates
ICT
The Council and Indonesia’s Coordinating Ministry for Economic Affairs led a successful first year of the Indonesia ICT Consultative Forum (IICF). The IICF wrapped up the year with a report to summarize its 2014 activities and set priorities for 2015. The full report can be found here. The aim of the IICF is to serve as a collaborative platform between government and industry to develop Indonesia’s ICT industry and to support the creation of a knowledge based economy in Indonesia. In 2014, the Executive Committee addressed cloud computing, cyber security, e-commerce, and encouraging trade and investment in Indonesia’s ICT industry. In 2015, the IICF will continue its multi-stakeholder consultative process and engage on digital technologies that have the potential to strengthen Indonesia’s ICT sector and have a significant impact on the country’s economy. These disruptive technologies include the mobile internet, big data, the Internet of Things, the automation of knowledge work, and cloud technology.
2014 saw both Singapore and Malaysia enact data privacy laws. How these countries will implement their privacy laws will not only impact multiple sectors, but will also be influential throughout the region as other countries look to protect their citizens’ personal data. In 2015 the Council will organize a mission to engage with the Malaysian and Singapore governments to on industry perspectives on privacy rules. The mission will aim to meet legislators, regulators, and policymakers to explore improved cooperation on domestic and cross border dimensions of privacy.
As Vietnam looks to boost local innovation and develop its ICT infrastructure, the government has also been developing several regulations that impact the sector. In recent months, the Ministry on Information and Communications draft a decree on Information Technology Services and Circular on the management, provision and use of Internet-based texting and calling services. Click here for the letters the Council submitted with the Information Technology Industry Council (ITI) on the decree on Information Technology Services and the over-the-top (OTT) circular. The Council will continue to engage with the Vietnamese government on legislation affecting the ICT sector and is currently planning a dialogue on data flows (proposed for March 23, 2015).
View the Council’s latest ICT updates
Food & Agriculture
2014 saw the promulgation of agri-innovation and biotechnology taking place throughout ASEAN, as governments search to find ways increase crop yields, resist against crop diseases, reduce costs and strengthen food security. The Council’s Food & Agriculture Committee will be following up on an opportunity to work with the U.S. Embassy Hanoi team on a “US-ASEAN Business Council Biotechnology Capacity Building Seminar” where members will share international best practices to test the quality of GMO products imported in Vietnam. The Committee is also developing a biotechnology subgroup to engage on this important topic in 2015. We will be looking for opportunities to continue engagement with ASEAN government on ways to accept greater adoption of biotechnology and learn from Philippines as an example, which not only increased their corn production but the country is now exporting bt corn.
The Council conducted its 2014 Food & Agriculture Mini Mission to Vietnam on 3 December 2014. Topics for discussion included lack of science based decisions on Crop Protection Regulation and Maximum Residue Limit (MRL), ability/freedom to trade veterinary vaccines in Vietnam, clarifications sought on Decision 10 (prohibiting foreign invested enterprises from conducting retail distribution of medicines) and Circular 34 (limits the restrictions to products defined in the Pharmacy Law, which refers only to human medications), outdated seed registration regulation and promulgation of national technical regulations on livestock feed, ASEAN harmonization standard on Prepared Foodstuff Product, GM labeling requirements and the emergence of antibiotic resistance among certain bacteria. The delegates also received updates from Vietnam’s Minister of Planning & Investment (Mr. Bui Quang Vinh) on Article 6 of the Investment Law which narrows down the list of prohibited business activities to six activities instead of 51 activities in the 2005 Investment Law. The Vietnamese government official also expressed interest in expanding the export opportunities for agricultural products.
The Committee has identified Thailand for the next Food & Agriculture Mini Mission, tentatively scheduled for March 2015. Please contact the Council’s Food & Agriculture Manager, Sunita Kapoor (skapoor@usasean.org) to express interest and provide preliminary topics for discussion. More details on the committee’s two mini missions in 2014 and upcoming activities for 2015 will also be provided during a conference call to be held in late February. We hope you will be able to join the discussions as the Council works to boost activities and engagement in 2015 in the broader committee and three new subgroups-Animal Health, Biotechnology and Seafood & Aquaculture. The committee is especially keen to gather feedback and gauge membership interest in in ASEAN level forums e.g. ASEAN Ministers Meeting on Agriculture and Forestry.
View the Council’s latest Food & Agriculture updates
Manufacturing
In 2015 the Manufacturing Committee is well positioned to expand its programming and membership as ASEAN countries absorb manufacturing operations leaving China, Japan and Korea in search of lower costs. Thailand, long a regional leader in auto and electronics manufacturing, seeks to maintain its lead in those industries while climbing the value chain. In Indonesia, particularly Central and East Java as well as Jakarta, President Jokowi aims to attract manufacturing operations across multiple sectors with improved infrastructure and lower energy costs. Vietnam stands to become a critical exporter of apparel to the U.S. under a completed Trans-Pacific Partnership amid Hanoi’s plans to attract electronics manufacturing with generous tax holidays. In 2014 Singapore recommitted to supporting advance manufacturing central to its economic growth strategy. Lastly, Cambodia, Myanmar and Laos are in ideal positions to establish positions on low-end manufacturing value chains given their cost advantages and improving logistics. The Council will run annual business missions to most if not all of these countries in 2015 to engage ministries at the center of national manufacturing development strategies. Members with established or exploratory manufacturing interests are welcome on each of these missions to request meetings with key ministries to explore national and regional manufacturing potential. Additionally, the Manufacturing Committee plans to create sector-specific programming throughout the year to advance members’ business objectives in requested countries.
Brunei
In 2014, Brunei garnered international attention with the adoption of Syariah Law into the penal code. The first phase, which came into effect May 1, includes general offences determined by the state, such as not performing Friday prayers, and are punishable by fines and/or imprisonment. Corporal punishment (caning and amputation) for crimes such as theft and adultery will be enforced in the second phase (expected to be enacted in May 2015) and the death penalty will come into force in the last phase. The first person was convicted under the Syariah penal code for smoking in public during Ramadan in July and served 180 days in prison. The Council will continue to monitor the situation and keep members apprised of further developments. In 2014, we also saw the departure of Ambassador Yusoff Hamid from his post in Washington D.C. and more recently the departure of Ambassador Daniel Shields, the U.S. Ambassador to Brunei. Both Ambassador Yusoff and Ambassador Shields were great supporters of the Council and will be missed. We welcomed incoming Ambassador to Brunei Craig Allen on January 23 in DC.
In 2015, we expect the Brunei government to continue efforts for economic diversification. These efforts are ever more important as Brunei’s crude oil exports fell 34 percent in 2014, significantly effecting total exports, which decreased by 11.8 percent. During the 2014 Business Mission delegates saw the government’s strong support for Brunei’s small and medium-sized enterprises (SMEs). The Council will support these efforts in the first quarter of 2015 when the US-ASEAN Business Alliance for Competitive SMEs will host an event in Bandar Seri Begawan. For more information please contact Kim Yaeger (kyaeger@usasean.org) or Mario Masaya (mmasaya@usasean.org).
The 2013-2014 Global Competitiveness Report from the World Economic Forum revealed that the largest obstacle for doing business in Brunei is now access to financing. The Council plans to address this problem, along with other issues affecting members’ business in Brunei, during the 2015 Business Mission to Brunei.
View the Council’s latest Brunei updates
Cambodia
In the year ahead, the Council will build on the strong momentum established during 2014. The Cambodia Committee engaged with Prime Minister Hun Sen and his new Cabinet during the 2014 Cambodia Business Mission. We also enjoyed additional bi-laterals with H.E. Sun Chanthol at the AEM and H.E. Suy Sem at the AMEM. U.S. Ambassador William E. Todd joined the 2014 U.S. Ambassador’s Tour to Houston, Los Angeles and San Francisco. The priority for the Cambodia Committee this year is working with the Royal Government of Cambodia to achieve its commitments for AEC 2015. The second area of engagement will be increasing opportunities for consultation with the legislature.
Finally, the Committee will incorporate more region wide initiatives into our activities in Cambodia, including participating in the US-ASEAN Business Alliance for Competitive SMEs. Our first SME Workshop in Phnom Penh will take place on January 30, 2015. The workshop will focus on e-commerce, shipping basics, marketing tools and the legal aspects of cross-border trade. The SME Workshop is an important opportunity for the Council to further business interests in Cambodia. The timing compliments a recent announcement by H.E. Cham Prasidh, Minister of Industry and Handicrafts that a new comprehensive small and medium-sized enterprises (SMEs) policy is near completion. The policy is aimed at boosting competitiveness, improving training and upgrading safety standards. Cambodia has an estimated 500,000 SMEs that accounts for 99 percent of all businesses and 1.67 million jobs.
View the Council’s latest Cambodia updates
Indonesia
The Council led a large trade mission of 40 companies to Jakarta from December 9-11, 2014 to meet with the new administration of President Joko Widodo. In 2015, there will be several activities in follow up to the mission including the possibility of an Infrastructure Industry mission in Q1 and a Food and Agriculture Industry Mission (date TBD). The Infrastructure Committee Mission, in particular, will help to capitalize on important reforms that the Jokowi Administration has been making over the last several months.
President Jokowi has been in office for less than three months and his government has already taken impressive action on a number of fronts. This early and positive movement suggests Jokowi is prepared to take the necessary course of action to address structural challenges in Indonesia such as dealing with costly fuel subsidies and boosting infrastructure development. On November 18, President Jokowi raised fuel prices by an average of 30 percent and took further action at the end of the year to cap the subsidy for diesel and to entirely scrap subsidies for gasoline. These two moves will save the government an estimated USD 18 billion and frees up much needed fiscal space to spend on infrastructure and social programs. The President has also announced the creation of a Land Bank to be jointly managed by Finance, Transportation and Public Works Ministries that will help facilitate infrastructure development.
View the Council’s latest Indonesia updates
Laos
In 2015, the Council will lead the first Business Mission to Laos in several years. In late October 2014, Alex Feldman, along with Laos Committee managers, traveled to Vientiane to engage with the Laotian government and begin plans for the 2015 Business Mission. News of a potential Mission was well received and support for Laos’ small and medium-sized enterprises (SMEs) was strongly encouraged.
On January 12-16, the US-ASEAN Business Alliance for Competitive SMEs, with the support of Microsoft, hosted a Training of Trainers and Basic Training Course on Smart Technology for Smarter Business in Vientiane. Working closely with the Department of SME Promotion of the Ministry of Industry and Commerce of the Lao PDR (DOSMEP), the training was attended by around 45 participants. For more information please contact Mario Masaya (mmasaya@usasean.org).
View the Council’s latest Laos updates
Malaysia
The year ahead will be a milestone for ASEAN and analysts seem to be scrambling to make their predictions. The year presents great opportunity for Malaysia to prove itself as a regional leader and economic role-model.
On October 16, Malaysia’s image as a regional leader took on new significance when it was one of five countries elected as a non-permanent member of the U.N. Security Council. Malaysia’s ascent to the Security Council is significant as it demonstrates that Malaysia’s willingness to be a leader on the international stage. Malaysia’s two-year term on the United Nations Security Council may also become a platform for advancing ASEAN.
Malaysia’s appointment to the Security Council is timely, as Malaysia assumed the Chairmanship of ASEAN for 2015, positioning Malaysia as a regional leader. Malaysia officially assumed the Chairmanship of ASEAN at the close of the ASEAN Summit in Naypyidaw on November 13, 2014. Prime Minister Datuk Seri Najib Razak called for a more “people centered ASEAN” as the region prepares for the ASEAN Economic Community (AEC). The launch of the AEC at the end of 2015 will be at the front of Malaysia’s agenda as they lead the development of ASEAN’s 10-year post AEC plan to guide ASEAN’s continued growth. If promises are delivered, the birth of the AEC under Malaysia’s watch could become a legacy project for Prime Minister Najib.
Malaysia is already ahead of much of the rest of ASEAN in preparing for the AEC, having met 80 percent of their targets versus an average of 72 percent. International Trade and Industry Minister Datuk Seri Mustapa Mohamed said that Malaysia is targeting 90 percent completion by the end of 2015 and that they are not expecting any member to reach 100 percent. In this context, an extensive post-2015 agenda will be critical to the successful completion of the AEC’s goals.
In addition to Malaysia’s position as a regional leader, Malaysia has consistently shown itself to be a regional role-model for its trade and economic policies, as evidenced by its progress on AEC targets and its commitment to sound economic policies. It is no coincidence then that Malaysia is one of the 12 countries currently negotiating the Trans-Pacific Partnership (TPP). Malaysia’s participation in the TPP has garnered an unprecedented amount of interest from the Parliament and public. While Malaysia’s domestic objections to the TPP have waned for now, we can expect renewed attention following the conclusion of negotiations.
Despite domestic objections, ascending to the TPP will be more important than ever to Malaysia’s economy and growth prospects. In December, the World Bank cut its 2015 growth forecast for Malaysia’s economy to 4.7 percent from an earlier estimate of 4.9 percent. The cut came after Malaysian markets began falling amid concerns about the impact of low oil prices on the Malaysian economy and the government’s finances. The government is hopeful that tourism and non-oil exports will be boosted by the depreciation while imports will fall. Conclusion of the TPP would help Malaysia’s growth prospects, as Malaysia is slated to be a net winner in the deal.
Given Malaysia’s position as a regional leader and economic role-model, Malaysia will be a central focus for the Council’s 2015 agenda. The Malaysia Committee launched its engagement on January 7 with a conference call with Ambassador Joseph Y. Yun, U.S. Ambassador to Malaysia. Other major events to look forward to include an Asia-Pacific President’s Business Mission to Malaysia and Indonesia, engaging Prime Minister Najib during his upcoming visit to the US, and the Council’s annual Business Mission to Malaysia.
View the Council’s latest Malaysia updates
Myanmar
Myanmar’s focus turned inward after the November conclusion of a successful ASEAN chairmanship. 2015 will see Myanmar hold general elections in November, an event that will be held up as a key marker in the reform process. Myanmar watchers will be closely observing the country’s different power centers with an eye towards what kind of compromise can be struck before elections to balance the competing interests.
The U.S. government will keep a close eye on Myanmar’s progress on human rights issues in 2015. In particular they will be monitoring the progress on reconciliation between the central government and armed ethnic groups, as well as how the government addresses issues in the Rakhine State and the tension between Muslims and Buddhists throughout the country.
On January 26, the Council held a conference call with U.S. Ambassador to Myanmar Derek Mitchell.
View the Council’s latest Myanmar updates
Philippines
President Aquino approved the 2014 Investment Priorities Plan (IPP), which listed eight preferred sectors that will be eligible for fiscal and non-fiscal incentives within the next three years in an effort to strengthen the country’s local industries. The Department of Trade and Industry (DTI) said the eight “preferred sectors” or key industries were manufacturing; agribusiness and fishery; services; economic and low-cost housing; hospitals; energy; public infrastructure and logistics; and public private partnership (PPP) projects. According to DTI, the purpose for the IPP was to be a “tool for industrial development and economic growth and consist of specific economic activities that – based on industry studies, plans and roadmaps – are strategic or critical to advance a particular industry or improve the product’s value chain.” To ensure an effective and efficient execution of the 2014 IPP, DTI said new mechanisms of coordination and convergence among relevant government agencies would be established as well as venues for enhanced partnership and cooperation with the private sector.
View the Council’s latest Philippines updates
Singapore
Singapore will celebrate its 50th Anniversary in 2015 and the city-state is in the midst of discussions about its future. A model based on attracting foreign investment and paternalistic control is increasingly challenged by some as unsustainable. A falling birth rate, reliance on foreign labour, strained infrastructure and widening income gap are causing more Singaporeans to question the social consensus. The government maintains that fostering debate bolsters the Singaporean identity and provides opportunity for citizens to frame their future. The SG50 Committee, in conjunction with the Singapore Institute of International Affairs, kicked off the first of five Future50 talks titled “Economic Transition: The Next Phase for Singapore." One of the main conclusions was that Singapore must maintain manufacturing as a key pillar in the economy and raise productivity to compete in the region. At present manufacturing accounts for 20 percent of the economy. The Council’s Singapore Committee will look to participate in the discussions by prioritizing engagements with the SG50 in the year ahead.
View the Council’s latest Singapore updates
Thailand
Political concerns will continue to be a focus in Thailand in 2015. Despite concerns and voiced opposition, the National Reform Council (NRC) Panel on Political Reform seriously considered the direct election of the Prime Minister and the Cabinet. The panel stood by its proposal despite signs of disapproval from some charter drafters, academics and politicians. Democratic Party leader Abhisit Vejjajiva, who warned of a possible setback, says that the direct election of the PM could lead to more political problems in the country as a premier coming to power via a direct-voting system could open the way for the winner to possibly abuse their authority, using the popular mandate as a claim to do anything at their will. Others indicate this proposal will give more power to the Cabinet and weaken checks and balance systems in Parliament. To this end, the NRC panel on political reform insisted that a direct election would help reduce vote-buying as well help a Prime Minister gain more support from members of Parliament. The proposal was later shot down by the Constitution Drafting Committee; however, has been example of some of the creative reform efforts being considered for the future of Thai politics.
Thailand’s leadership approved the seven-year investment strategy of the Board of Investments – a strategy that initially seeks to increase GDP by 3.5-4.5 percent in 2015. The new strategy will be effective from January 1, 2015 to December 31, 2021. The plan will give priority to investments that are beneficial to the industrial sector and the country’s economic development such as high-tech, creative and service industries that support the development of the “digital economy,” and industries that utilize local resources.
Deputy Prime Minister Wisanu Krue-ngam met with U.S. Charge d’Affaires W. Patrick Murphy, during which the DPM clarified that the general election to return Thailand to a democracy will be held in February 2016 at the earliest. The military government, which came into power after the May 22 coup, said that the election originally planned for late 2015 will be delayed until February 2016 in order to give more time for reforms that should bring stability after a decade of factional rivalry. The DPM added that if there is a referendum, polls could be delayed by three additional months, referring to a possible plebiscite on a new constitution. The United States expressed dismay at the coup and froze $4.7 million of security-related assistance, canceled high-level engagements, some military exercises and training programs for the military and police. A spokesperson for the U.S. State Department said Washington calls the delay until 2016 to be unwise and unjustified, and believes Thais should be allowed to choose a democratically elected government as soon as possible.
View the Council’s latest Thailand updates
Vietnam
2013 was considered a milestone in the history of the Vietnam-US relations after the nations established a comprehensive partnership during Vietnamese President Truong Tan Sang’s visit to the US at the invitation of President Obama in July. Since then, both nations have spared no effort to strengthen the partnership for the sake of peace and stability in the region and in the world. With the celebration of 20 years of normalization of relations between US and Vietnam in 2015, both governments are committed to making the development of the comprehensive partnership central to their respective foreign policies. Speaking on Vietnam’s priorities and focus for 2015, Vietnam Ambassador to the US Pham Quang Vinh says that the most important task is how to steer the Vietnam-US relations on the right track to continue the growth that has been in place since 2013. Further, he says that the countries should foster the relationship through more exchange visits during which agreements may be reached; he adds that the embassies of the two countries should plan celebrations in July, a time when the two sides decided to normalize relations in 1995. In terms of cooperation areas, Vinh says, there is room for the two nations to promote trade links, science and technology and education. Speaking on the deepening of comprehensive partnership, US Ambassador to Vietnam Ted Osius presents five goals that he wants to achieve during his term in Vietnam. Osius hopes to focus on strengthening economic and commercial ties, helping improve governance, security partnership (especially in maritime security), education exchanges and cooperation in science and technology, health, and the environment. Ambassador Osius adds that he is optimistic about the prospect of President Obama visiting Vietnam in 2015.
While the Vietnamese government has predicted that Vietnam’s GDP will grow in 2015, the Ministry of Investment and Planning has also indicated that Vietnam’s GDP growth will be impacted by the falling global price of crude oil, a key natural resource export of Vietnam. Each US dollar drop in the per barrel price of crude oil will mean a concurrent drop of between VND1-1.2 trillion ($46.76-56.11 million) for Vietnam’s state budget. A recent government report from the National Assembly predicted Vietnam’s GDP would grow by 6.2 percent in 2015, based on a crude oil price of $100 per barrel. However, Vietnam has been selling its crude oil for approximately $60 per barrel, with prices in some regions dropping to as low as $55 per barrel. Vinh warned that Vietnam may have to reduce its drilling activities to stave off losses. While the ministry expects global oil prices to continue to fall for some time, there are also benefits – namely a cheaper source of imported fuel.