February 2017

A special thank you to those of you who were able to join us for the grand opening of our newly renovated Singapore office. In case you missed the celebration, I encourage you to stop by the office when next you are in Singapore.  We hope this new space will be enjoyed as much by our members as by our staff.

Ambassador Michalak and I attended the NCAPEC executive roundtable in Singapore on February 16-17.  The Council is co-Chair of the U.S. APEC Business Coalition for 2017 as APEC is chaired and hosted by Vietnam this year.

ASEAN continues to be at the forefront of the dialogue in Washington D.C. even as the Trump Administration continues to settle in. The Council offered strong support for the formation of an ASEAN Caucus on Capitol Hill, led by Congressman Joaquin Castro and Congresswoman Ann Wagner. You can read our press statement here.

In light of this news, the Council is proud to announce that we are once again partnering with the East-West Center and ISEAS to update ASEAN Matters for America, a tremendously useful document and tool that offers data to the Congressional District level to demonstrate how vital ASEAN is to America’s future. Companies interested in participating should contact me or Anthony Nelson at anelson@usasean.org to learn more.

February brings with it the start of our annual business mission season with our mission to Cambodia on February 21 and 22.  This will be the Council’s largest Cambodia mission to date with 14 companies participating. In March, we have our business missions to Vietnam and Malaysia.

Finally, I want to note the unexpected passing of Mr. Doan Minh Cuong, the former Chairman of CPK Group. He was a great friend to the Council and the United States, and a key figure in the U.S.-Vietnam relationship. He will be missed.

Highlights

Advocacy

• I met with BKPM (Indonesia Investment Coordinating Board) Chairman Tom Lembong yesterday in Jakarta to go over a range of issues affecting American Business in Indonesia.   I will be sending a follow-up letter detailing key member issues including tax, data management, localization and sanctity of contract issues.  If members have significant issues that they would like to raise for consideration in this letter, please email me at afeldman@usasean.org.
• As part of a joint letter with the Business Software Alliance, the Council advocated to the Government of Singapore that it not use a local cloud computing guideline as the basis for creating a domestic standard for cloud computing services in Singapore.     
• Council staff in Singapore met with U.S. Treasury Department officials and urged that a senior Treasury Department official attend the 2017 ASEAN Finance and Central Bank Governors meeting in the Philippines in early April.  
• In response to members’ request, the Council has started monitoring a campaign in the Philippines which seeks to urge the government to reduce imports of High Fructose Corn Syrup by beverage companies as a means to support the domestic sugar industry.

Intelligence

Our intelligence highlight this month is an analysis of U.S. trade policy from Council VP for Policy Marc Mealy:

• Initial indications of the shift in U.S. trade policy, in terms of process and priorities, include varying degrees of the following:
  • Trade policy bureaucratic center of gravity shifting from USTR to both the newly formed White House Advisory bodies and the Department of Commerce.
  • Return to a priority on the use of bilateral agreements versus plurilateral or multilateral agreements to pursue trade policy priorities.
  • New trade policy priorities include:
    • Tightening rules-of-origin (ROI) requirements.
    • Reducing imports of steel and aluminum that are “dumped”, using anti-dumping measures/enforcement.
    • Reducing the trade deficit by requiring nations to buy more U.S. products.
    • Negotiating rules on state-owned enterprises, which have unfair trade advantages.
  • New priority trade policy engagement targets include:
    • NAFTA
    • China
    • U.K.
    • Japan
    • ASEAN Countries of Vietnam, Malaysia and Thailand have also been mentioned as future bilateral FTA targets but behind the four countries noted above.
• The ongoing POTUS-Congressional negotiations on an economic package of tax, regulatory and border adjustability reforms have sparked a debate within the business community.
  • Last week, over 100 retail businesses and trade groups, including Nike and Wal-Mart, have formed a coalition to oppose proposed changes in how imports of goods into the US are taxed. Read more about this development here.
  • Last week, the American Made coalition of over 25 US companies including Dow, Lily, Pfizer, GE, Boeing and Oracle was formed to support economic reforms including proposed taxes on goods imported into the US. Read more about this development here.
• The remaining eleven members of the TPP are scheduled to meet in March in Chile to explore “options”.
  • The Governments of China and South Korea have also been invited to attend.
  • To date, four governments (Singapore, Australia, New Zealand, and Peru) have indicated an interest in pursuing a path to modify the TPP in order to allow it to go into force without the United States.
  • To date, four governments (Chile, Japan, Mexico and Canada) have signaled that they currently don’t have an interest in pursuing a path to modify the TPP in order to allow it to go into force without the United States.
  • To date, three governments (Malaysia, Vietnam and Brunei) have not signaled whether they are interested in or not interested in pursuing a path to modify the TPP in order to allow it to go into force without the US.

Relationship Building

• Please save the date for the following Business Missions:
  • Vietnam Business Mission, March 6-9
  • Myanmar SME Program, March 14
  • Malaysia Business Mission, March 27-29
  • Digital Economy Mission to Indonesia, April TBC.

Promotion

The Council is exploring different ways to promote ASEAN’s 50^th anniversary and the 40^th anniversary of U.S.-ASEAN relations.  If you feel your company has a good story to tell as part of this effort, please contact Anthony Nelson at anelson@usasean.org

Membership

We are pleased to welcome to the Council our newest members:

• Access Partnership,
• Heidrick & Struggles and
• Pearson PLC. 

We are also happy to report that Mars and S & P Global have upgraded to Chairman’s Council.

Our membership current stands at 155 members.

Regional Highlights

ASEAN

Major Developments

The Council held its first ASEAN committee call of the year on February 10.

Looking Ahead

Please mark your calendars for the 2017 AEM, tentatively scheduled for August 27-September 2 in Manila.

View the Council's latest ASEAN updates

Industry Highlights

Customs

Major Developments

• The Philippine Bureau of Customs (BOC) is continuing to release implementing regulations for the Customs Modernization and Tariff Act.  The most recent calls for input were on draft Customs Administrative Orders (CAOs) Customs Jurisdiction and Exercise of Police Authority and Relief Consignment.  One CAO is posted every Thursday, with a public hearing on the following Thursday.  BOC has also recently issued the final CAOs for de minimis values of goods not subject to duties and taxes, an advance ruling system for valuation and rules of origin, Balikbayan Box shipping, and tax procedures for returning Philippine residents.  Details of the drafts, consultation procedures, and a publication schedule can be found on the BOC website here. 
• The Indonesian government has issued Regulation No.182/PMK.04/2016 on the Importation of Consigned Goods, which enters force on January 28, redefining all aspects of the consigned goods import procedures.  The new regulation creates Designated Postal Operators, which will need approval from the customs office to operate; imposes several restrictions on goods that can be imported as consigned goods, which may now exclude sample or promotional products; and may require end-consumers to submit a Notice of Importation of Specialized Goods (PIBK) for consigned goods meeting certain criteria.  Further details of changes can be found here and a copy of the regulation (in Bahasa Indonesia) can be found here. 

Looking Ahead

The 2017 ASEAN Customs Directors General Meeting is scheduled for May 16-18 in Bali, Indonesia.  The Council looks forward to bringing a delegation for its annual consultation session and bilateral meetings. Please contact Ian Saccomanno at isaccomanno@usasean.org or Shay Wester at swester@usasean.org for more information.

View the Council's latest Customs updates

Defense & Security

On January 23, the Council in coordination with Lockheed Martin International (LMI), launched the inaugural ASEAN Defense Attaches’ Tour. The Attaches visited LMI's facility in Washington, D.C. for a tour of its Concept and Development Center (CADC) on Littoral Combat Ships, followed by a discussion with industry experts on regional defense procurement trends and priorities. Participating countries included Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore and Thailand. Companies interested in a similar opportunity should contact Jack Myint at jmyint@usasean.org

View the Council's latest Defense & Security updates

Energy

Major Developments

• On February 13, the Council’s Energy Committee held a planning call on the Committee’s 2017 Work Plan.  The Council will send out notes from the call as well as an updated draft of the Energy Committee Work Plan for 2017 soon.
• On February 2, the Ministry of Energy and Mineral Resources (Energi dan Sumber Daya Mineral – ESDM) announced three new ministerial regulations on electricity.  The new regulations were issued in the context of supporting the Indonesian government’s plan to exponentially increase the nation’s electricity production capacity by 2019.  More information on the new ministerial regulations can be found here.
• In its December 14 decision, the Indonesian Constitutional Court declared certain provisions of the 2009 Electricity Law “conditionally unconstitutional.”  This ruling does not appreciably change the regulatory framework that allows private sector participation in Indonesia’s power sector.  However, the Court would likely view any attempts by the Government to enact major power market liberalization as eroding State control of the sector and consequently violating the conditions laid out in the ruling.  More information on this decision by the Constitutional Court can be found here.

View the Council's latest Energy updates

Financial Services

Major developments

• The Vietnamese Ministry of Finance is preparing a new law for the securities markets to replace the 2006 Securities Law.  The Ministry has proposed expanding the power of the State Securities Commission to make it the sole authority for securities markets. This means stricter disclosure rules, requiring securities companies to expand their supervision mechanisms.  The new law will be part of an effort to improve the quality of the markets to facilitate more listings and foreign investment.  The new law is expected to be ready by 2018.  Vietnam will also merge its two stock exchanges this year and launch a derivatives market.
• Indonesia’s Financial Services Authority (OJK) issued two new wide-ranging insurance regulations on December 28, which implement portions of the 2014 Insurance Law, Regulation No. 69/POJK.05/2016 on the Organization of Insurance, Sharia Insurance, Reinsurance and Sharia Reinsurance Companies, and Regulation No. 67/POJK.05/2016 on Business Licenses and the Organizational Structures of Insurance, Sharia Insurance, Reinsurance and Sharia Reinsurance Companies.  Regulation 67 sets out the guidelines for the licensing and organization of insurance and reinsurance companies while Regulation 69 focuses on the conduct and activities of insurance and reinsurance businesses.  Regulation 69 includes the mandate that data centers and disaster recovery data centers be moved to Indonesia by October 12, 2017.  Regulation 67 includes new criteria and permitting processes for foreign ownership of insurance companies, which may make the 80 percent foreign ownership cap stricter by requiring that certain joint venture companies might need to be publicly listed, though there is a specific context as to when this requirement applies.  Further regulations are expected to guide the implementation of some of the provisions in these regulations.

View the Council's latest Financial Services updates

Food & Agriculture

Advocacy

The Council’s Food & Agriculture Committee has been engaging the Government of Indonesia on several regulations that may have impact on American business in the region in the agriculture sector. They are as follows:

• Ban on use of antibiotics and hormones in feed additives:  In January 2017, the Directorate of Animal Health, Ministry of Agriculture (MOA) effectively banned all imports of antibiotics and hormones being used as commercial animal feed additives to implement the Law No. 18, 2009 on Livestock and Animal Health.  However, as it currently stands, there is no implementing regulation for the Law yet.  Instead, a MOA Animal Health Director General (DG) Circular Letter dated July 14, 2015 has been used to put the ban into effect.  The F&A Industry was not notified of this earlier, and have not received an official letter informing them of the ban.  ‘’A new ministerial decree allowing antibiotics and hormones in animal feed is being developed and finalized by the Directorate of Animal Health, MOA but the issuance date has not been confirmed.”
  
  The stopping of the issuance of import permits to animal health companies from Jan 1 has resulted in various disruptions for animal health and feed companies, and accumulation of shipping charges for local and foreign companies due to stranded shipping vessels at Indonesian ports.  Many of the companies’ import permit requests for December 2016, have not been approved either.  As a result, animal production is being affected as antibiotics for therapeutic use and anticoccidials, which are critical for disease treatment for food animals, are running low.  This could result in disease outbreaks that will lead to economic losses for animal production companies in Indonesia.  Moreover, this negative development on animal welfare can impact food security, which will be a serious public concern for the Government of Indonesia.
   
• BPOM Regulation No 37/2013 on permitted levels of colorants and titanium dioxide: In 2013, BPOM promulgated regulation number 37/2013 (maximum limits for food additives dye), setting out new limits for colorants and titanium dioxide used in food products.  This regulation has affected the import and distribution of key products in Indonesia.  The Council is seeking clarification for the basis of this regulatory revision.
   
• Restrictions on the Export of Wet Cocoa Beans: MOA regulation number 67/2014 outlines that the export of wet cocoa beans be stopped effective 2019; only fermented cocoa beans will be allowed for export.  This may impact the global supply chain of members.  The Council is currently requesting that as regulations and laws are developed, that the affected industries and all stakeholder, domestic and foreign, be fully involved and consulted.

View the Council's latest Food & Agriculture updates

Health & Life Sciences

Major Developments

In Singapore, the Ministry of Health is working with the Agri-Food and Veterinary Authority (AVA), the National Environment Agency and the National University of Singapore to develop a nationwide strategy for antimicrobial resistance.  This could be a result of more people in Singapore using antibiotics inappropriately.  A study conducted in November 2016 by the Yong Loo Lin School of Medicine at the National University of Singapore with public health experts from the National University Health System found that a third of about 900 patients with upper respiratory tract infections surveyed expected antibiotics to be prescribed.  The strategy would include educating the public on which illness should or should not be treated with antibiotics, and stepping up the monitoring of their use.  The plan will likely stick closely to recommendations made by the World Health Organization in 2015 to tackle antimicrobial resistance.  One of the key objectives of the plan is to improve awareness and understanding of antimicrobial resistance through communication, education and training.

Advocacy

The Council organized its second Health & Life Sciences Industry Mission to Vietnam on January 11-12, where we engaged with the Minister of Health, APEC Secretariat, Bach Mai Hospital, and held the 2^nd MOU Joint Working Group Meeting.  During the 2nd MOU Joint Working Group meeting, MOH mentioned several areas of concerns where they require support from the private sector (outlined in the notes).

Looking Ahead

The work plan is an ongoing project; suggestions and feedback from members are always welcome.  If you have date or location suggestions for the next HLS committee industry mission, please contact Ying Hui Tng (yhtng@usasean.org) and Hai Pham (hpham@usasean.org).

View the Council's latest Health & Life Sciences updates

ICT

Major Developments

• On January 24 & 25 the Council’s ICT Committee held its first quarterly call of 2017. Following a recap of major activities/issues from 2016, members discussed the Committee’s draft 2017 Work Plan (updated version available here). Notes from the call are available here. 
• On February 8 in Singapore, the Council held a “Roundtable Discussion on ICT engagement in Indonesia & Vietnam,” featuring the Council’s Country Representatives from these two priority markets.  Members received updates on policy developments and discussed strategies for continued engagement.

Advocacy

On February 9 the Council, along with BSA | The Software Alliance, submitted a letter to Singapore’s Info-communications Media Development Authority (IMDA) urging the Government of Singapore to refrain from converting its Cloud Outage Incident Response (COIR) Guidelines into a set of prescriptive local Singapore standards.  To do so could stifle innovation and negatively impact cloud service providers operating in Singapore and local cloud users.  The letter is available here.

Looking ahead

Please save the date for the Council's inaugural Digital Economy Mission to Indonesia, taking place in April TDC in Jakarta. The purpose of the Mission is to engage the government on an array of time-sensitive digital economy regulatory issues, including data localization, data privacy, e-payments, and internet governance. Official invitation with registration details to follow. Please contact Matt Solomon at msolomon@usasean.org and Ian Saccomanno at isaccomanno@usasean.org if you are interested in attending or have any questions.

View the Council's latest ICT updates

Infrastructure

Major Developments

Vietnam’s Deputy Prime Minister Trinh Dinh Dung is set to improve the domestic railway sector following his visits to several train stations last December in the country.  DPM Dung identified how the railway sector was only able to accommodate a mere 2 percent of passenger demands and transporting goods in comparison to air and road transportation.  Moreover, there was an imbalanced distribution of investment allocation within the transport sector, where the railway sector only secured 3 percent of total investment available from 2001 to 2015.  As such, it was further revealed by Deputy Minister of Transport Nguyen Ngoc Dong that the current investments were only able to meet about 40 per cent of the growing annual demand.  Additionally, the railway sector suffered heavy competition against low cost airline carriers that has had significant impacts on the railway sector.  Moreover, the problem is further exacerbated by limited loading capacities on trains and the low speed of trains. In response, DPM Dung has proposed a series of plans to improve the railways system in Vietnam by 2020.  Firstly, his plan aims to modernize underlying infrastructure and transform Vietnam Railways, a monopolistic state entity, into a financially efficient organization. He has also commissioned to attract more private investment capital to increase connectivity of the railway infrastructure with domestic and regional seaports to conveniently transport goods and passengers.  He also added that while additional investment capital is to be spent to develop the railway infrastructure, the sector is required to remain efficient and effective.  In total, about $1.8 billion is required to revamp and induce significant improvements in Vietnam’s railways landscape, where currently the high costs to maintain the old system has been consistently straining the state budget.

Looking Ahead

• Global Infrastructure Investors Summit 2017
  Supported by Preqin, LTIIA and large names in infrastructure investment, the Global Infrastructure Investors Summit (GIIS) is an annual private C-level event serving as an exclusive platform for large institutional investors, fund managers, asset managers, banks, government representatives and advisers representing Americas, Asia, Europe and Australia for networking and establishing partnerships for future projects.  The Summit will be held on June 1, 2017 in London. Interested parties can register here. 
• Global Think Tank Summit 2017
  The Asian Development Bank Institute (ADBI) and the Think Tanks and Civil Societies Program (TTCSP) of the University of Pennsylvania will be holding the Global Think Tank Summit 2017 in Yokohama, Japan on 2-3 May 2017.  Interested parties may contact Dr. Stefan Angrick (E-mail contact form here).

View the Council's latest Infrastructure updates

Country Highlights

Brunei

Major Developments

• The Ministry of Foreign Affairs and Trade issued a statement that Brunei Darussalam remains committed to enhancing multilateral trade rules, following President Donald J. Trump’s signing of an executive order to withdraw from the Trans-Pacific Partnership (TPP) in January.  Brunei is one of the four founding partners of the TPP along with Chile, New Zealand and Singapore in 2005.  The TPP in its latest form, with the United States and 10 other pacific rim nations, would have been a tremendous economic gain for Brunei. It would have opened the playing field to investors, while introducing progressive standards such as increased competition, improvement of labor standards and environmental protections.  With the uncertain future of the TPP, the European Union (EU) Ambassador to Indonesia and Brunei, Vincent Guerend, has recently affirmed the EU’s commitment to pursue trade liberalization initiatives in Brunei and throughout ASEAN. Ambassador Guerend mentioned the possibility of reviving the talks on region-to-region Free Trade Agreement which were suspended almost a decade ago.  He further stated that the EU is embracing a possibility of a trade deal with ASEAN, especially after concluding a deal in Indonesia which has a sizable GDP and population.
• Brunei Darussalam and Malaysia are working on the implementation of the Pan Borneo Highway project, a significant infrastructure development, which would further expand commercial ties between Brunei, Sabah and Sarawak of Malaysia. The project is expected to be completed in June 2021.

View the Council's latest Brunei updates

Cambodia

Major Developments

• In the ASEAN Business Outlook Survey 2017, the U.S. Chamber of Commerce cited high energy costs and inaccessibility as a significant challenge to doing business in Cambodia. Only about 25 percent of Cambodia’s population is connected to the national grid and electricity prices fluctuate between US $0.11 to $0.27 per kilowatt hour, which is a significant drop from $0.50 kWh just a few years ago. Much of this price drop was a result of reduced electricity tariffs that CNRP lawmakers demanded early in 2015. In comparison, neighboring Laos’ electricity rate is still a low US $0.07. Improvements showed in 2016 as Cambodia’s electricity purchase from neighboring Thailand, Vietnam, and Laos fell by about 25%. Electricite du Cambodge (EDC) reports that this year’s imports are projected to drop further by 20% due to increasing domestic production. EDC predicts that 1,732 MW of electricity will be generated this year using the country’s six hydroelectric plants and coal powered plant. In April, a new coal -powered plant in Preah Sihanouk will also start to operate. The government also continues its efforts to connect rural Cambodia to the national grid. The World Bank Group’s Doing Business Profile ranks Cambodia 131st out of 190 in ease of getting electricity for 2017. However, the developments in Cambodia’s energy capacity is set to increase the country’s capacity in industrial and light manufacturing sectors, and lower electricity costs. According to the ASEAN Business Outlook Survey 2017, 88% of American Businesses in Cambodia expect to earn a profit this year and 27% plan to expand their business operations. Last November, General Electric announced a partnership with the Cambodian government to increase power capacity, electrify the rural areas, and reduce carbon emissions.
• On January 30, Transport Minister Sun Chanthol launched The Cambodia Driving Rules Application, which processes the registration and inspection of vehicles, and facilitates cashless payments through smartphone apps such as Wing, Smart Luy and Ly Hour. The minister promoted the idea of this online platform to both make the process more convenient and to curb corruption by minimizing face-to-face interaction between motorists and bureaucrats. This program could also help people in the provinces get licenses easily. How the payments work and its possible impact on overall road safety is still unclear.

Advocacy

The Ministry of Agriculture, Forestry and Fisheries of Cambodia has asked the Council to provide some practical feedback on the constraints U.S. companies are facing in investing in the agriculture sector in Cambodia, and comment on any difficulties in the existing regulatory procedures.  If your company is currently doing business in Cambodia, please share any feedback with Jack Myint at jmyint@usasean.org.

Looking Ahead

The Council’s 2017 Business Mission to Cambodia will take place in Phnom Penh from February 21-22.

View the Council's latest Cambodia updates

Indonesia

Major Developments

• Indonesian Coordinating Minister for Economic Affairs, Darmin Nasution, stated that his ministry is currently finalizing the 15th economic policy package to be released soon, though no particular date has been given.  Minister Darmin stated that the major theme will be on logistics-related policies, including the Indonesia National Single Window (INSW).  The INSW came into existence in 2007 and is an outcome of the 2003 Bali Concord, in which ASEAN leaders committed to establishing the ASEAN Single Window.  INSW aims to integrate the export and import licensing process across all of the relevant ministries. Minister Darmin also stated that his ministry is working in conjunction with the Coordinating Ministry of Maritime Affairs in preparing the package to cut the duration and costs of shipping logistics between regions in Indonesia.  Indonesia last issued its 14th economic policy package in December 2016, with emphasis on e-commerce. 
• The Indonesian government is proceeding with its plan to transform its many state owned enterprises into a smaller number of holding companies, with the government set to no longer provide state-capital injections in 2017.  According to Rini Soemarno, State-Owned Enterprises Minister, the purpose of such holding companies is to create more efficient organizational structures to support the business development of the enterprises without relying on the state budget.  The target is to form six state-owned holding companies in the sectors of oil and gas, mining, toll roads, finance, housing, and food.
• President Joko “Jokowi” Widodo has tasked Finance Minister Sri Mulyani to lead a selection committee to oversee the selection process of new OJK Board of Commissioners.  On February 8, the OJK selection committee announced the 107 candidates who succeeded in making it to the next round, including all of the seven incumbent commissioners.  The shortlisted candidates also include several well-known political figures currently holding legislative roles with the House of Representatives, which raises concerns of political intervention in the financial and capital market industry.  The next round of selection will take place from February 8 – 24, entailing the assessment of public input on the candidates.  The selection committee will further scrutinize the process and name its 21 final candidates to President Jokowi in March, who will then shortlist it further and propose his 14 candidates to the House of Representatives for yet another screening from March through June.  The new commissioners are expected to be inaugurated on July 21.

Looking Ahead

The Financial Services Committee and the ICT Committee are working to hold a Digital Economy Mission to Indonesia, taking place on May 3-4 in Jakarta. An official invitation with additional details will be distributed soon. Please contact Ian Saccomanno at isaccomanno@usasean.org and Matt Solomon at msolomon@usasean.org for further information.

View the Council's latest Indonesia updates

Laos

Major Developments

The planned Pak Beng dam in northwestern Laos, the third on the lower Mekong mainstream, is stirring controversy due to the potential impact on fisheries, sediment flow, and water levels.  The 912-megawatt project, 100 kilometers from Luang Prabang, points to the difficulties Laos faces in harnessing hydropower for export.  Cambodian environmental groups are expected to raise concerns during a consultative forum on February 22-23, and international groups have issued statements denouncing its anticipated impact on the surrounding villages.  Construction is expected to begin this year, with a completion date of 2023. 

View the Council's latest Laos updates

Malaysia

Major Developments

Bank Negara has eased some of the foreign exchange restrictions that were recently put in place late last year.  Since November 11, transactions involving foreign currencies were handled by the central bank.  As of February 7, local banks can now make transactions up to US$1 million in foreign currencies.  Other restrictions made by Bank Negara included prohibiting local banks from transacting with banks that are not incorporated in Malaysia, requiring exporters to convert 75% of their proceeds into the ringgit, and requiring non-Malaysian banks to attest that their US dollar-ringgit transactions were not used to settle trades in the non-deliverable forward(NDF) market.  Bank Negara’s foreign exchange restrictions were an effort to curb the influence of the offshore ringgit market on onshore exchange rates between the US dollar and ringgit.  While the measures have reduced volatility of the ringgit, they have come at huge costs for exporters.

Advocacy

On February 9, the Council hosted the Honorable Kamala Shirin Lakhdhir, the new U.S. Ambassador to Malaysia, for a welcome roundtable in Washington.  The roundtable was an opportunity for members to introduce themselves and their company’s business interests in Malaysia and raise any concerns to the Ambassador.

Looking Ahead

• The 2017 Malaysia Business Mission is March 27-29. Click here to register. Contact Kim Yaeger at kyaeger@usasean.org or Ezani Mansor at emansor@usasean.org for more details.
• The Malaysia Committee’s first quarterly call of 2017 will be held on February 23. The call will be used to review the 2017 workplan and discuss plans for the upcoming business mission. Click here to register for the call.

Please click here for the latest Malaysia updates

Myanmar

Major developments

On February 4 Myanmar’s Ministry of Planning and Finance released the third version of its draft Investment Rules.  It is available here.  This draft combines the first set of draft rules (primarily relating to the assessment of permit and endorsement applications and other filings), the second set (concerning rules on the commission, delegation of commission powers, and committees to be established to support the commissions investment approval, investor assistance and investment monitoring functions), and the new, third set (covering reporting, investor responsibilities, administrative penalties and other miscellaneous and transitional matters).  

Looking Ahead

• The Council’s first SME activity of 2017 will take place in Yangon on March 14. The full-day workshop “Digital Tools for SMEs” will share best practices, technical tools, and policy updates to help the SMEs increase their efficiency and international reach.  Please contact Mario Masaya at mmasaya@usasean.org if you are interested in sponsoring, or have any questions. 
• The first Myanmar Committee Quarterly Call of 2017 will take place on March 15 (DC)/ March 16 (Yangon).  Click here to register.  Ambassador Scot Marciel will offer a briefing on the current political and economic landscape, and members will have the opportunity to ask questions.  We will then discuss planned activities and priority policy issues for 2017.

View the Council's latest Myanmar updates

Philippines

• Our Philippines team has published an analytical update examining the Philippine government’s 2017 budget, which, at P3.35 trillion (US$67.4 billion), is the highest budget yet to be proposed by any administration. To read the full update, click here.
• On January 30, President Rodrigo Duterte announced that the country’s anti-illegal drug crackdown would be temporarily suspended, and focus will be shifted to the rooting out of corruption in the Philippine National Police (PNP).  As part of the suspension, authority to carry out narcotics-related operations will be transferred from the PNP and the National Bureau of Investigation to the smaller Philippine Drug Enforcement Agency (PDEA), which may receive assistance from the Armed Forces of the Philippines.  The decision comes after PNP officers were implicated in the kidnapping and murder of a South Korean businessman last October, which was reportedly carried out under the auspices of the anti-drug campaign.  More information on these developments and the government’s possible motivations for the suspension can be found here.
• The Philippine Competition Commission (PCC) has set its sights on the nationality requirement for the licensing of contractors for construction projects as a way to help open up the Philippine construction sector and accelerate infrastructure development in the country.  Last month, the PCC filed a friend of the court brief with the Supreme Court of the Philippines arguing that the nationality requirement be nullified.  The PCC has also reportedly reached out to the Department of Trade and Industry, under which the main contractor licensing body—the Philippine Contractors Accreditation Board—falls, about revising the nationality requirement in the Contractor's License Law.  More information on this subject can be found here.

Looking Ahead

On February 22, the Council will host a roundtable discussion with Ms. Nora K. Terrado, Undersecretary, Industry Promotion Group, at the Philippine Department of Trade and Industry.  Undersecretary Terrado will provide an update on Philippine-U.S. economic relations, the Philippines’ agenda as Chair of ASEAN for 2017, and the priority sectors for investment promotion.

Advocacy

The Council sponsored a policy brief entitled “Air Transport Infrastructure” that analyzes the economic effects of aviation, ASEAN regional developments for connectivity and airports, the Philippine air transport industry, and the binding constraints to improve airlines, airports, and air traffic management in the Philippines.  Arangkada Philippines, the Australian Embassy – the Asia Foundation Partnership in the Philippines, and USAID produced the policy brief, which was officially released on February 15.

View the Council's latest Philippines updates

Singapore

Major Developments

• The Info-communications Media Development Authority of Singapore (IMDA) announced on January 17 that it plans to undertake a public consultation on the deployment of fifth generation (5G) mobile networks in 2017.  The IMDA will also support public trials of 5G in Singapore.  Next Generation Mobile Networks (NGMN) Alliance, an industry group that includes Singaporean telecommunications company Singtel among its members, is currently in the process of identifying operator-end requirements and technologies for the real-world trials.  More information on Singapore's plans to roll out 5G in Singapore can be found here.
• At a press conference on January 4, the SME Committee (SMEC) of the Singapore Business Federation released its recommendations for the Government of Singapore’s 2017 Budget (Budget 2017).  The recommendations centered on two main themes: encouraging the development of globally competitive firms and implementing broad-based support for small- and medium-sized enterprises (SMEs).  Minister for Finance Heng Swee Keat will deliver Budget 2017 in Parliament on February 20.  Last month, the Council submitted its own set of recommendations for Budget 2017.  The Council’s recommendations were based on member company input and emphasized the long-term competitiveness and benefits that Singapore can glean from maintaining a focus on investing in longer term support for technology and business innovation, skills development, and industry transformation.  More information on the Council’s and SMEC’s Budget 2017 recommendations can be found here.

Looking Ahead

On February 22 in Singapore, the Council and AmCham Singapore will host a roundtable discussion with a U.S. Congressional Delegation that will include Congressman Bradley Byrne (R-Alabama), Congressman Denny Heck (D-Washington), and Congressman Rick Larsen (D-Washington).

Advocacy

Earlier this month, the Council joined BSA | The Software Alliance in an advocacy letter expressing concerns over the Government of Singapore’s intent to turn voluntary Cloud Outage Incident Report Guidelines into local standards.  The letter urged the Government of Singapore to adopt standards developed through international best practices that are widely used across markets instead of converting the COIR Guidelines into local standards.  

View the Council's latest Singapore updates

Thailand

Major Developments

After previous postponements, Thailand’s elections appear on track for early- or mid-2018.  Thailand’s Deputy Prime Minister Wissanu Krea-ngam announced on February 8 that the long-anticipated elections would take place “one year from today.”  The Constitution Drafting Committee is currently in the process of drafting a suite of ten organic laws pertaining to policy parties, the Election Commission, and other foundational areas, which must be approved before elections take place.

Looking ahead

• On February 15, the Thailand Board of Investment will host “Opportunity Thailand,” a day-long investment seminar in Bangkok.  Click here for details and registration information.
• On February 15/16, the US-ASEAN Business Council's Thailand Committee held its first conference call of 2017. The Committee recapped its 2016 activities and reviewed the draft 2017 Work Plan. Call notes will be circulated shortly. Please contact Matt Solomon at msolomon@usasean.org with any questions or further feedback on the Work Plan. 

View the Council's latest Thailand updates

Vietnam

Major Developments

Despite the Executive Order by U.S. President Donald Trump to pull the United States from the Trans-Pacific Partnership (TPP), a trade agreement that promised to deliver an estimated 8% boost to Vietnam’s GDP by 2030, Vietnam is still on track to continue plans for economic reforms, regional cooperation, and market expansion.  The Government of Vietnam plans to fulfill some of the trade related domestic policy reforms and commitments laid out in the TPP, especially the ongoing state-owned enterprise (SOE) equitization and other investor-friendly regulatory reforms.  Vietnam has enjoyed a foreign investor-led economic boom for years as it transformed from mainly an exporter of agricultural commodities, to a Southeast Asian manufacturing hub.  President Trump’s threat to impose 45 % tariffs on Made-in-China products could also be an incentive for foreign companies to shift manufacturing to its neighbors, with Vietnam as a strong contender.  Many American companies were disappointed by President Trump’s decision, reflecting the stake American companies have in the region.  Vietnam does not currently have a free trade agreement with the U.S, but this may be the next step to boost trade relations between the two countries.  Even without the inclusion of the United States, the TPP remains an option for the remaining 11 member countries.  The demise of the TPP is also likely to push Vietnam to explore other initiatives expand its trade and investment opportunities with other markets.  The Ministry of Industry and Trade (MOIT) stressed that there are trade agreements that are similar to the TPP such as the ASEAN led Regional Comprehensive Economic Partnership (RCEP) that Vietnam may now focus on in 2017.

Looking Ahead

The Council is now registering senior-level executives for its annual Business Mission to Vietnam on Monday – Thursday, March 6-9,.  To register, please click here.  For questions about the mission or registration, please contact Hai Pham at hpham@usasean.org.  Deadline to register for the mission is Friday, February 24.

View the Council's latest Vietnam updates