President's Newsletter - President's Newsletter - June 2015

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

Greetings! I am pleased to report that I will be spending extra time in the region this summer in order to address the growing needs of our membership and our regional staff as well as leading numerous business and industry missions, including our annual engagement with the ASEAN Economic Ministers. I will, of course, make trips back to DC, as needed, including in early July for our dinner in honor of Vietnam’s General Secretary, Nguyen Phú Trong.

As many of you know, Kathy Santillo has stepped down as Regional Managing Director after almost three extraordinary years. The Council owes her a debt of gratitude and she will be greatly missed. As I hope you all saw earlier today, we have hired Ambassador Michael Michalak as Senior Vice President & Regional Managing Director to lead our staff and engage our members in the region. Mike will be starting in Singapore in early September, and he and I will overlap for the first two weeks of the month, starting with our Business Mission to the Philippines on September 1-2, 2015.

As always, you can check out the calendar at the Council website to get a sense of our many upcoming events in Southeast Asia and Washington, D.C.

Highlights

Advocacy

Our key advocacy efforts over the past month have included:

Joining other US business organizations on letters to the US Senate opposing Amendment 1266 and 1417 to the TPA bill.
Co-authoring a letter with the US Chamber of Commerce and American Chamber of Commerce in Indonesia to the Government of Indonesia (GOI) advocating that the GOI review and consider alternative policy approaches to the proposed local content requirement regulation on mobile ICT devices.
Transmitting a letter to the Indonesian financial sector regulator (OJK) asking for greater clarity on the proposed limits on foreign equity investment in the domestic insurance industry in the implementing regulations of the new insurance law.
A special trip to Bangkok by me to handle time sensitive, company specific issues for three member companies. The Thai government seriously considered our arguments and have decided to study the issues further which is seen as positive by those members.

If you have questions about the Council’s advocacy efforts, please reach out to Marc Mealy at mmealy@usasean.org.

Intelligence

Our Myanmar team examined some of the issues surrounding refugees in ASEAN, with a particular focus on Rohingya Muslims. Please click here to read the update.

We’ve added the ASEAN Top 5, a twice monthly refresh of the top business stories in the region, to our website. Click here to check it out, or search on twitter under #ASEANTop5

Relationship Building

Myanmar Business Mission
Our annual business mission to Myanmar will take place next week from June 22-24 for more information please contact: Anthony Nelson at anelson@usasean.org.

The US-ASEAN Business Alliance for Competitive SMEs is a powerful way to support the growth of small businesses in ASEAN. The Business Alliance was created at the request of the ASEAN Economic Ministers, and the AEM receives regular updates on the progress of the Business Alliance. Please contact Mario Masaya at mmasaya@usasean.org for more information.

Promotion

Annual Gala Dinner
On June 15 at the Four Seasons Hotel in Washington, D.C., U.S. Deputy Secretary of State Antony Blinken and Chairman of the House Foreign Affairs Committee Matt Salmon were the keynote speakers at the Council’s annual Gala. More than 250 business, think tank and government leaders attended the event. Read Deputy Secretary Blinken’s remarks here.

Membership

We are pleased to welcome Phibro Animal Health as a Corporate member. We are also happy to announce that Archer Daniels Midland has upgraded to Chairman’s Council. This brings our current membership to 64 Chairman’s Council and 88 Corporate members, for a total of 152 members.

Phibro Animal Health Corporation (PAHC) is a developer, manufacturer and marketer of a range of animal health and mineral nutrition products for use in the production of poultry, swine, cattle, dairy and aquaculture. The company's products include antibacterial products, nutritional specialty products, vaccines and specialty ingredients. PAHC operates in the United States, the UK and Israel. It is headquartered in Teaneck, New Jersey and employs around 1,100 people.

APEC

On May 23-24, the APEC Ministers Responsible for Trade (MRT) met in Boracay, the Philippines. The meeting was chaired by Philippines Department of Trade and Industry Secretary Gregory Domingo. In the lead up to the MRT, the APEC Business Advisory Council (ABAC) held their second meeting of the year in Mexico City from April 20-23 and the APEC Senior Officials held their second meeting (SOM-II) between May 10-21. Trade Ministers from the 21 APEC member economies issued a statement on expanding trade and driving inclusive and sustainable economic growth. The MRT statement reflects the outcomes of the 2015 APEC Ministers Responsible for Trade Meeting chaired by Philippine Trade and Industry Secretary Gregory Domingo, and describes joint actions to be taken forward by APEC members in the following priority areas: Supporting the Multilateral Trading System; Enhancing the Regional Economic Integration Agenda; Fostering SMEs’ Participation in Regional and Global Markets; Investing in Human Capital Development; Building Sustainable and Resilient Communities; Strengthening Economic and Technical Cooperation.

View the Council's latest APEC updates

ASEAN

The ASEAN Online SME Academy is a fantastic opportunity to share content with a wide variety of SMEs and contribute to the lasting success of the US-ASEAN Business Alliance for Competitive SMEs. To contribute to the Academy, please contact Mario Masaya at mmasaya@usasean.org to discuss opportunities.

Please save the date for the next ASEAN committee meeting: June 29, 9:30-11 am Singapore time. Please click here to register.

View the Council's latest ASEAN updates

Customs

The Customs Committee led its annual Mission to the ASEAN Directors-General of Customs Meeting from May 20-21 in Bandar Seri Begawan, Brunei Darussalam. The US-ASEAN Business Council has been a key dialogue partner of annual ASEAN Directors-General of Customs Meeting for the past nineteen years. The Council submitted a briefing paper to the Customs officials, focusing on implementation of the AEC by year-end and the post-2015 AEC agenda. In addition to this joint consultation, the Council delegation met separately with Customs officials from most of the ASEAN Member States and the ASEAN Secretariat.

There will be a Committee call on June 18, 9:30 - 10:30 AM (SG time) / June 17, 9:30 - 10:30 PM (DC time) to discuss follow-up activities. Suggested follow-up items from the mission include:

Organize consultation session with private sector
Reactivate the ASEAN Trade Facilitation Joint Consultative Committee (ATF-JCC)
Grievance system for the private sector in ASEAN
Consultations with the private sector on RCEP
Possible engagement with the ASEAN Customs Enforcement and Compliance Working Group (CECWG)
Proposal by ASEAN Secretariat to organize a workshop on issues such as transfer pricing and valuation and recommendations to enhance cooperation.
Customs input for country level e-commerce workshops
Draft concept paper on third party invoicing
Submit recommendations on de minimis

At the meeting, the assembled Customs Directors-General reiterated their shared commitment to trade facilitation and endorsed the Strategic Plan of Customs Development (SPCD) for 2016-2020. Their press release can be found at this link.

View the Council's latest Customs updates

Defense & Security

The United States has stepped up diplomatic efforts to counter China’s growing assertiveness in the South China Sea. In May, Defense Secretary Ashton Carter and Senator John McCain visited Vietnam separately to discuss security ties between the U.S. and Vietnam. Senator McCain took the opportunity to call for the further lifting of a 30-year U.S. embargo on lethal arms sales to Hanoi. Secretary Carter focused his visit on strategic cooperation as well as regional and international issues of mutual concern. His visit to Hanoi was part of a broader trip to the region, which included attendance at the 14th Annual Shangri-La Dialogue security conference in Singapore. Secretary Carter told summit attendees that China was threatening security in the region through its actions, while acknowledging that other littoral states had an important role to play in mitigating the crisis. Some commentators have suggested that Beijing’s construction activity in the South China Sea foreshadows its intent to declare an air defense identification zone (ADIZ) over the disputed territory. On May 26, a senior Chinese diplomatic official said his country’s decision to establish a SCS ADIZ would be contingent on “whether and to what extent the security of airspace is threatened” U.S. military forces began to expand operations in the South China Sea in early May, sending reconnaissance aircraft and combat ships to the area. Recently, the Obama administration has also indicated it could send ships to within 12 miles of the Chinese-built islands unless the work is halted.

A recent report by IHS predicts that Indonesia will have the fastest growing defense budget among Asia-Pacific countries over the next five years. The business intelligence company forecasts that Indonesia’s military budget will grow by 17 percent in 2015, an increase of about US$1.1 billion. IHS further says that gross Indonesian Defense expenditures are likely exceed US$14.3 billion annually by 2020. “Growth of this scale is certainly exceptional and the Indonesian government appears committed to raising [military] spending significantly,” said Craig Caffrey, a senior analyst for IHS Aerospace, Defense & Security. “The economic outlook for Indonesia remains strong and President Widodo’s removal of the fuel subsidy will free up additional money for defense.” During his election campaign, President Widodo pledged to increase Indonesia’s defense budget to 1.5 percent of GDP from its current 0.8 percent. Despite recent advances, domestic arms manufacturers are not in a position to meet this demand in qualitative or quantitative terms. IHS data indicate Indonesia was the world’s 15th largest importer of military equipment in 2014, importing more US$1.8 in foreign defense articles. The single largest supplier of equipment remains South Korea, although Western defense companies are also carving out an increasing market share. The IHS report can be obtained here.

View the Council's latest Defense & Security updates

Energy

On May 27, ASEAN senior officials for Energy met for the 33rd Energy ASEAN Senior Officials Meeting (SOM) in Kota Kinabalu, Malaysia. As Chair of ASEAN for 2015, the Malaysian Ministry of Energy, Green Technology and Water (KeTTHA) led the discussions. The Energy SOM is traditionally utilized as a platform for discussions on regional energy issues. This year the SOM will prioritize discussions on the next phase of the ASEAN Plan of Action for Energy Cooperation, a blueprint for how the region will advance energy cooperation from 2016 to 2020. One example of greater energy cooperation and connectivity within ASEAN is a pilot project currently being negotiated between Malaysia, Thailand, Singapore and Laos to install power transmission lines to fully connect the four countries’ energy grids. Following discussions between senior officials on the sidelines of the SOM, a Memorandum of Understanding is expected to be signed between the four countries in September of this year. According to the Malaysian Secretary General of the Ministry of Energy, Green Technology and Water, Datuk Loo Took Gee, “the capacity will be 100 MW initially, which can be scaled up later”. Energy projects like this multilateral power transmission plan will allow for the further facilitation of electricity trading between countries within ASEAN.

View the Council's latest Energy updates

Financial Services

Indonesia’s Constitutional Court is reportedly nearing a decision on a legal challenge to the role of the Financial Service Authority (OJK), in a case that could decisively impact oversight of ASEAN’s largest banking market by returning microprudential oversight to the central bank. The OJK was originally established under Act No. 21 of 2011 to replace the now-defunct Bapepam-LK in supervising the country’s capital market and non-bank financial institutions. The OJK assumed supervision in that capacity in December, 2012. In late 2013, however, the OJK additionally assumed Bank Indonesia’s (BI) function as microprudential regulator of banks. BI, in its macroprudential role, is still responsible for the broader stability of the financial system as related to banks, but not non-bank institutions. The past year-and-a-half has witnessed growing controversy over the jurisdictional reach, fees, and intended remit of the new regulator. These questions are in part the basis for the judicial review of Act No. 21, which was filed in February 2014 by a group of plaintiffs representing some of Indonesia’s private banks. The legal complaint hinges on the law’s purported abrogation of the 1945 Constitution, which vests sole authority over banking supervision to the central bank. The plaintiffs are seeking either the dissolution of the OJK, the return of banking supervision to BI alongside BI’s fundamental role of independently managing monetary policy, or for the OJK’s fees to be paid directly to the government. Currently, the OJK collects an annual fee from banks, equivalent to 0.03 percent of their assets, to pay for its operations. Supporters say these fees give the OJK the funding to effectively discharge its oversight function. On the other hand, some private banks have argued that these levies compromise the OJK’s independence. For its part, the OJK alleges it has not had sufficient time to demonstrate its credibility as a regulator. In the event that the court hands down a verdict returning microprudential authority over banking to BI, the ensuing period of regulatory uncertainty could pose difficulties for local and international financial players. The Council will closely monitor the outcome of this case.

View the Council's latest Financial Services updates

Health & Life Sciences

The Thai government is deliberating measures to rein in private healthcare costs in part due to a major push by civil society groups protesting against alleged overcharging for medicines and medical services at private hospitals. A working group of officials from the Ministry of Public Health, Ministry of Commerce, as well as the Medical Council of Thailand and the Consumer Protection Board, has been convened to hold talks with the private sector. Two options have been proposed to solve these challenges: allow private hospital patients to buy medicine from a pharmacy of their choice using a prescription issued by the hospitals; or require hospitals to display how prices charged to consumers are calculated by including transport, service, and other costs incurred. A second committee, comprising private hospitals, the Pharmacy Council of Thailand (PCT), Food and Drug Administration, Department of Internal Trade, academics and members of the public, will make a final decision on these options.

The Myanmar Ministry of Health will be shifting its focus in the coming year, allocating more resources toward hiring additional staff and purchasing medications. In the past, the Ministry has been criticized for allocating most spending toward buildings and facilities. At a May 4 press conference, Dr Myint Han, temporary Director General of the Department of Medical Care, revealed that K65 billion (US$60 million) had been earmarked to provide medicine in public hospitals for the 2015-16 financial year, which began on April 1. Total health spending this year will be K691 billion (US$633 million), an increase of about 10 percent over last year. U Sein Win, a spokesperson for the health minister’s office, said that the Ministry was going to use the budget increase to hire more than 100,000 additional staff and to raise salaries, as well as buy extra medical supplies.

The Council is now registering executives for our inaugural Health & Life Sciences Industry Mission to the Philippines on Wednesday, July 8. The mission invitation, which contains further details on fees, mission themes, meeting targets.. For further information, please contact Fatimah Alsagoff at falsagoff@usasean.org.

View the Council's latest Health & Life Sciences updates

ICT

On May 27, the ICT committee held its second quarterly conference call. During the call, we reviewed the Council’s recent engagement in Vietnam and Indonesia, and set priorities for the remainder of the year. Click here for notes from the call.

In Vietnam, the Council has collected member input to submit comments regarding the draft decision on the importation of used technology products. While the draft decision is a positive step from the Vietnamese government to allow for the import of refurbished IT products, our comments will seek clarification on some measures and urge the government to further ease restrictions on imports. For more information contact Kim Yaeger at kyaeger@usasean.org.

The Council continues to monitor the proposed local content regulations for LTE devices in Indonesia. The Council, Business Software Alliance, Information Technology Industry Council, and US Chamber of Commerce held a joint meeting with the Office of the United States Trade representative on June 3 to discuss this developing issue. During the meeting, which was off-the-record, members conveyed the serious implications of this proposed legislation. The Council and its partner organizations will seek to engage other government departments in order to brief officials on the local content issue before President Jokowi’s visit, which is expected this Fall.

The Council is also tracking the Digital Economy bills in Thailand currently under review by the Council of State and Cabinet. In addition, the Ministry of Information and Communications Technology Reform Bill passed its first reading in the National Legislative Assembly (NLA). The NLA is expected to finish its consideration of the bill by the end of June. The bill would establish a new Digital Economy Ministry that would incorporate the four offices of the old ICT ministry, specifically the ministry's office, permanent secretary's office, Meteorology Office and National Statistical Office. Alongside these four offices, the Digital Economy Ministry would incorporate a newly-created fifth office, called the Digital Economy Office. The bill is one of eight draft bills that would reshape the Thai digital economy, tackling a wide array of challenges from cyber security to consumer rights, in some cases by increasing direct government supervision of the digital economy.

View the Council's latest ICT updates

Infrastructure

On June 4, the Council led a delegation of 10 member companies for an inaugural Infrastructure Industry Mission to Indonesia. President Jokowi has made infrastructure development a key priority for his administration to support both broader based economic growth and industrial led economic development in Indonesia in the coming years. The President has stressed the need to upgrade Indonesia’s infrastructure to lower costs in Indonesia’s export ecosystem for SME’s and increase the competitiveness of the manufacturing sector to attract both foreign and domestic investment. The delegation, led by the Council’s Vice President for Policy, Marc Mealy, met with leaders of government ministries and state owned enterprises involved in the management of key projects. To read the press release please click here.

One of the Infrastructure Committee’s key advocacy messages is the value of using technology in the design and construction of hard infrastructure projects. By using technological software and processes, a government infrastructure owner can save significant costs and time in completing a project, as well as increase the visibility and transparency in the project for all stakeholders. In alignment with this message and following up from the Council’s Infrastructure Industry Mission to the Philippines on October 24, 2014, the committee will be organizing an “Infrastructure Technology Seminar in Philippines” tentatively scheduled for the end of July.

Please note: The initial date of this mission was July 1 and the date has been changed. A formal invitation to this mission will be provided shortly. Please convey your interest in participation and provide topics to the Sunita Kapoor at skapoor@usasean.org.

View the Council's latest Infrastructure updates

Food & Agriculture

On April 16, a prohibition on convenience stores selling beer in Indonesia went into effect. The decree prevents convenience stores from selling drinks with an alcohol content higher than 1 percent. The regulation does not pertain to sales of alcohol in supermarkets and restaurants, and foreigners on the tourist islands of Bali and Lombok will be exempt from the restrictions. The Ministry of Trade reportedly initiated the ban to curb underage drinking in residential neighborhoods and school areas. The regulation may significantly curtail consumer sales as minimarkets and small retailers account for about 60 percent of the beer market. According to ISWR, an alcohol research group, consumer demand in Indonesia’s beer, wine, and spirits sector is expected to grow 5-6 percent annually. Retailers argue that the ban will exacerbate black market distribution of bootlegged alcohol and deter additional foreign investment. Some analysts say the ban is a reflection of conservative Islamic groups’ growing influence over politics. Two Islamic parties recently proposed a bill to criminalize the distribution and consumption of alcohol. It is unlikely the bill will get through Parliament. On the sidelines of this week’s World Economic Forum, Coordinating Minister for the Economy Sofyan Djalil said, “If we want to attract tourists to Indonesia, the availability of alcoholic beverages is a must. I believe the Parliament will agree with the government that there’s no need to ban alcohol totally.” Members of the Indonesian Brewers Association, which represents four official beer producers, are concerned about the minimarket ban and expressed their intent to work with the government to discuss alternative measures to address underage drinking.

View the Council's latest Food & Agriculture updates

Manufacturing

Estimates from Vietnam’s Ministry of Industry and Trade suggest that 2015 could be another banner year for the country’s textile and apparel sector, which has enjoyed robust growth over the past decade. This achievement is due largely to the industry’s success in capturing foreign direct investment. FDI-linked firms already comprise about 60 percent of Vietnam’s total textile export revenue. Now, anticipating tariff windfalls under several pending free trade agreements, foreign investors are now increasing their holdings in the country’s garment and textile industry. Vietnam has already brokered FTAs with Japan, South Korea and the Eurasian Customs Union, and expects to finalize a deal with the EU later this year. Yet it is Vietnam’s accession to the Trans-Pacific Partnership (TPP) which holds the most promise for textile and apparel manufactures as well as for the long-term possibilities for Vietnam’s ascending the global value chain in manufacturing. Even with the tariff in place, Vietnam is already the second-largest exporter of textiles to the Unites States, and foreign firms recognize the enormous potential offered by increased access to the American market. Last month, for example, Korea’s Hyosung announced it would spend US$600 million to further expand its operations in Dong Nai province. Other companies planning aggressive expansion include Hong Kong’s Texhong Group, Black Peony, and Luen Thai; China’s Yulun Jiangsu Group; and Singapore’s Huntsman.

Cambodia

U.S. Deputy Assistant Secretary of State for Democracy, Human Rights and Labor Scott Busby recently completed a two-day visit to Cambodia. During his visit he met with representatives of international NGOs, local civil society groups and government officials. His visit follows the publication of an article by U.S. Ambassador William E. Todd, addressing the reemergence of the controversial draft NGO law. In the article he urged the Royal Government of Cambodia to consider the effect the law might have on Cambodia’s image as an investment destination. These high profile discussions by U.S. government officials have helped raise awareness of the draft NGO law after 272 local and international NGOs released a joint statement demanding the government scrap it. Meanwhile, Cambodia’s Cyber-Crime Law is also prompting fears when the Ministry of Posts & Telecommunications announced it will be sent to the Council of Ministers and National Assembly for a vote soon. This follows a December 2014 announcement that the Cybercrime Law had been “scrapped.” Critics fear that the government will clamp down on online freedom of expression.

View the Council's latest Cambodia updates

Indonesia

The Indonesia Committee has been intensely engaging the Indonesian government and other stakeholders this month to provide member input on the Halal bill to the Indonesian Chamber of Commerce (KADIN), provide input on the draft regulation for local content regulations for LTE devices and to obtain more information on the Indonesia’s mandatory use of the rupiah which will go into effect on July 1.

View the Council's latest Indonesia updates

Malaysia

On May 21, Prime Minister Najib Razak announced the USD 72 billion 11 Malaysia Plan (11MP). The 11MP will guide development for the next five years and prioritize areas for economic growth. The 11MP follows the New Economic Model from 2010, but will place greater emphasis on economic inclusiveness. The government of Malaysia hopes to translate economic gains to improve the well-being of its people and narrow the income gap.

On May 22, the U.S. Senate passed the Trade Promotion Authority (TPA) or “fast-track” trade bill, the legislation that is considered essential for the completion of the Trans-Pacific Partnership (TPP). Despite this major victory for the Obama Administration and the TPP, the TPA passed with an amendment that would deny fast-track protections for any trade agreement with a country who has a “Tier 3” status on the State Department’s Trafficking in Persons Report. In the State Department’s most recent report, Malaysia received the lowest “Tier 3” ranking. This ranking is expected to be maintained in the 2015 Trafficking in Persons Report to be released this month. Should this amendment make it into the final TPA agreement as it exists in the current Senate TPA bill, Malaysia’s Tier 3 status could jeopardize the TPP’s fast-track protections, or threaten Malaysia’s participation in the TPP. Either way, the amendment poses a considerable threat to the entire TPP project. Fortunately, Sen. Ron Wyden (D-OR) and Sen. Robert Menendez (D-NJ), the latter of whom originally introduced the amendment, have struck a compromise with the White House and State Department. The compromise would allow the State Department to submit a waiver for Tier 3 countries that have taken concrete steps to combat human trafficking. This waiver would allow for a trade deal such as the TPP to be fast-tracked. The TPA bill has now moved to the House for a vote which is expected to take place in late June. In the House, the language in the human trafficking amendment can be replaced and relaxed by including the waiver compromise. Supporters of the TPP, led by Ways and Means Chairman Paul Ryan (R-Wis.) and Senator Ron Wyden (D-Ore.), are expected to assist with the introduction of the new language and work to drum up support for the bill with the support of House Majority Whip Steve Scalise (R-La.).

View the Council's latest Malaysia updates

Myanmar

The Council has scheduled its annual Myanmar Business Mission for June 22-24. Please contact Anthony Nelson at anelson@usasean.org for more information.

In a statement released on May 15, President Obama renewed the National Emergency with Respect to Burma, which maintains his executive authority to maintain sanctions on Myanmar. The statement mentioned that the although there was significant progress in Myanmar’s transition - marked by the release of more than 1,300 political prisoners, ongoing peace negotiations with ethnic minorities, ending the use of child soldiers, improving labor standards, and the expansion of the role of civil society – the country still needs to address issues surrounding ethnic minorities as well as the role of the military in politics. The renewal came 5 days ahead of the deadline and was expected. Although last year’s announcement caused some consternation in Myanmar, this year’s seems to have passed largely unremarked upon.

View the Council's latest Myanmar updates

Philippines

Senator Ferdinand Marcos Jr. rejected the Aquino administration’s version of the proposed Bangsamoro Basic Law (BBL), citing its alleged incompatibility with the provisions of the 1987 Constitution. The BBL is a draft law intended to establish a semi-autonomous polity on the island of Mindanao, referred to as Bangsamoro, and provide for its basic structure of government. Passage of the BBL has been described as an important step in ending the 45-year insurgency in the predominately-Muslim Southern Philippines. Senator Marcos, who chairs the Senate committee tasked with reviewing the BBL, said that the current draft impinges upon the sovereign authority of the national government. He described as “unconstitutional” a provision which would have made the Bangsamoro legislature equal, not subordinate to the Philippine Congress. Marcos said his committee is ready to present a replacement bill that will address the constitutional issues and other concerns in the BBL. He noted that the Senate is unlikely to meet the Aquino administration’s goal of ratifying the measure before Congress adjourns in mid-June. The House of Representatives still aims to approve its version of the BBL within the current Congressional session. While this latest development is unlikely to decisively impact the peace process, it will disappoint those who had hoped for a definitive end to the decades-long conflict. Recent opinion polls show popular confidence in the BBL has eroded across many strata of Philippine society.

Despite the bid of business groups to ease limitations, the Philippine government has retained its list of investment areas and economic activities with foreign participation restrictions. President Aquino signed Executive Order No. 184 that provides the 10th Regular Foreign Investment Negative List, retaining mainly intact provisions of the preceding order: EO 98 of Oct 2012. This year’s list retained pharmacy, radiologic and X-ray technology, criminology, forestry and law as professions from which foreigners are banned. The government, however, allows foreigners to practice various engineering disciplines, science-related professions, real estate services, and interior design, among others provided some circumstance are met.

View the Council's latest Philippines updates

Singapore

On April 14, the Singaporean Ministry of Trade and Industry revealed a first quarter GDP growth rate of 2.1 percent. Singapore’s manufacturing contracted by 3.4 percent on a year-on-year basis. Meanwhile, construction expanded by 3.3 percent and services by 3.1 percent on a year-on-year basis. The positive data is due in part to the export-reliant country’s price stability and small increases in European demand. In 2014, Singapore had a GDP growth rate of 2.4 percent. With collapsing oil prices posing deflationary risks and a global decline in imports, many feared that Singapore’s economy would suffer. An earlier Reuters poll of 17 economists forecasted a smaller first quarter growth rate of 1.8 percent. The Monetary Authority of Singapore (MAS) took bold actions in January, loosening its monetary policy to thwart deflation. At the time, the unexpected action stoked concerns among investors. However, Daniel Martin, senior Asia economist of Capital Economics, suggested that MAS’s actions succeeded in regaining price stability. The Eurozone’s recent recovery further benefited Singapore with consumer sentiment and spending data in the European Union exceeding expectations. Stefan Hofer, Chief Investment Advisor of Investment Services of BNP Paribas, noted that if the positive data becomes a trend, it can relieve the weak global demand. Europe’s small recovery demonstrates how important trade is relative to Singapore’s domestic economy. The city-state is the fifteenth largest trading partner of the United States. As Asian markets increase in domestic demand, it is well positioned to feed this consumption. MAS will continue setting a monetary policy that positions the country to take advantage of any increases in global demand.

View the Council's latest Singapore updates

Thailand

Thailand has recently negotiated several new deals for Thai infrastructure. First, Japan will build a 715 km high-speed railway connecting Bangkok and Chiang Mai. This Japanese line, whose deal will be finalized this month and construction expected to start in January 2016, will cost about $15 billion and open in 2019. Next, China will build a double track rail to Nong Khai on the border with Laos, with a similar distance to the Japanese rail but with a greater emphasis on freight. This Chinese rail will also cost about $15 billion and is expected to open in 2018. Both projects will use a similar financing model that involves two tiers, a lower rate for the core engineering and construction and a higher rate for rail stock and operational costs. Finally, there is a joint development by China, Thailand and Laos of a standard-gauge railway connecting Kunming, Vientiane and Bangkok. The construction of this railway will begin in October 2015.

View the Council's latest Thailand updates

Vietnam

There have been several high-profile meetings between U.S. and Vietnamese government officials recently. Secretary of Defense Ash Carter and Senator John McCain visited Vietnam separately to discuss bilateral security relations between the U.S. and Vietnam. Senator John McCain, received by Vietnamese General Secretary Nguyen Phu Trong, took the opportunity to call for the gradual removal of the U.S. ban on the sale of defensive weapons (which excludes surveillance capabilities and lethal maritime technology) to Vietnam, with both Senator McCain and General Secretary Trong releasing statements that affirmed the importance of U.S.-Vietnam relations. Secretary Carter will meet with his Vietnamese counterpart Phung Quang Thanh to discuss how to enhance bilateral defense cooperation as well as regional and international issues of mutual concern. Separately, U.S. Assistant Secretary of State for Economic and Business Affairs Charles Rivkin recently delivered remarks on entrepreneurship to participants of the Young Southeast Asian Leaders Initiative in Ho Chi Minh City, and made another speech to University of Economics students commemorating the 20th anniversary of normalization of U.S.-Vietnam diplomatic relations.

The Vietnam Annual Economic Report 2015 was released by the Viet Nam Institute for Economy and Policy (VEPR). The report, launched at VEPR’s annual conference in Hanoi, makes policy recommendations after discussing key developments in the Vietnamese macro-economy. The report argues that the Vietnamese dong is overvalued by between 7-11 percent following sustained appreciation since 201 and suggests that greater exchange rate flexibility is necessary. After conducting macro-prudential analysis of 13 Vietnamese banks, the report finds that the stability of the Vietnamese banking sector is uncertain in some circumstances. Importantly, the report highlights the risk of the rising budget deficit interacting with the overvaluation of the Vietnamese dong to create an inflation-depreciation cycle. If this interaction occurs, Vietnam’s predicted growth rate for 2016 would fall from 6.3 to 6.1 percent, while the predicted inflation rate for 2016 would rise from 1.9 to 3.2 percent. In addition, the report finds strong evidence that Vietnam will benefit from the Trans-Pacific Partnership (TPP), with growth in real GDP predicted to increase from 1.03 to 2.11 percent. However, reforms to Vietnamese primary input markets would increase gains from the TPP. An English translation of the full report can be found here.

View the Council's latest Vietnam updates