Amb. Ted Osius
President & CEO
US-ASEAN Business Council
Happy New Year! This year marks the Council’s 30th anniversary, and we look forward to working with you to celebrate this important milestone!
One of our changes for 2014 is the introduction of the President’s Newsletter. Released monthly, this email will include key Council business you need to know, our latest reports and analysis on major regional developments, opportunities for you to contribute to regional advocacy, and upcoming major events – all in one convenient package. Future editions will likely be shorter but we would be grateful for your feedback on the composition and content of the newsletter. Please send feedback to anelson@usasean.org.
2013 Year in Review
2013 was a year of expansion for the Council. We now have offices in Kuala Lumpur and in New York City, bringing our total to 8. You can find contact information for the Council’s various offices here.
We’ve also expanded our staff, adding Senior Representative Elizabeth Magsaysay-Crebassa to our Philippines office, Ezani Mansor as our Country Representative in Malaysia, Sunita Kapoor will cover Singapore, Food and Agriculture, and Infrastructure from our Singapore office, while in D.C. John Corrigan will focus on Financial Services, Infrastructure, and Manufacturing, and Kim Yaeger manages our Brunei efforts and supports our Malaysia, Health & Life Science, and ICT teams. We have added an entirely new Indonesia team during the year, with Desi Indrimayutri and Caroline Tanjaya based in Jakarta, and Alexandra Stuart covering Indonesia, Energy and APEC from Washington. Colette Morgan joined our team as Business Development Associate at the beginning of 2013, and now manages the Malaysia portfolio as well. We welcomed Saravadee Homsub in our Bangkok office and Nguyen Thu Trang in Hanoi as well.
Last year also saw us grow the Council’s membership, as we welcomed Salesforce, Darden, VSE Corp, Amgen, BD, Autodesk, Bank of America, Covidien, Moody’s, Halliburton, and PepsiCo as members, and already in 2014 Eastman Chemical, FleishmanHillard and 3M have joined the Council.
Key Accomplishments
The Council engaged the leaders of ASEAN at the highest level in 2013, meeting with President Susilo Bambang Yudhoyono of Indonesia, Prime Minister Najib Razak of Malaysia, President U Thein Sein of Myanmar, Prime Minister Lee Hsien Loong of Singapore, Prime Minister Yingluck Shinawatra of Thailand, President Truong Tan Sang and Prime Minister Nguyen Tan Dung of Vietnam and the Secretary General of ASEAN Le Luong Minh.
The Council released a Chairman’s Policy Paper for the first time, outlining the Council’s most important priorities in the region and providing a key resource to government officials in both the U.S. and ASEAN. The key goals outlined in the policy paper were: 1) Increasing U.S. support for strengthening regional connectivity in ASEAN, (2) Increasing comprehensive U.S. economic engagement with ASEAN via the E3, (3) Advocating for a vision of an eventual U.S.-ASEAN FTA via TPP or APEC, (4) Increasing more inclusive U.S. engagement with ASEAN via people to people efforts and including Myanmar, Cambodia, and Laos in APEC-related initiatives, (5) Elevating U.S. economic engagement with ASEAN via more direct contacts with American CEO's and U.S. Cabinet level officials.
You can read the US-ABC Chairman’s Policy Paper here.
In support of goal number 5, Council Chairman Evan Greenberg led a mission of CEOs to visit Indonesia, Malaysia, and the ASEAN Secretariat in June. The Council will continue this important effort in 2014 with a CEO mission to Vietnam and the Philippines June 1-4. You can read the press release describing the 2013 US-ASEAN Business Council CEO mission here.
During the Council’s annual visit to the AEM, we launched a substantial expansion of our Small and Medium Enterprise program. Further information is available in the press release from our AEM mission here.
Key Regional Developments
ASEAN Wide
President Obama is expected to travel to the region in April 2014. The itinerary is not yet confirmed, but is likely to include stops in the Philippines and Malaysia.
During his December regional visit, U.S. Secretary of State John Kerry announced packages of support for Vietnam and the Philippines, with $32.5 million and $40 million respectively focused on building the maritime security capabilities of those ASEAN nations. The money comes from the Global Security Contingency fund. Vietnam’s package included dedicated funding to purchase patrol boats from the United States, with the potential to lead to Vietnam’s first significant purchase of U.S. defense equipment since the Vietnam War. The Council will continue to follow regional developments in the Defense and Security space, and the latest analysis of defense trends in Southeast Asia can be found here.
Brunei
At the end of the year Brunei made waves in the international press when it was announced that Sharia Law will be introduced in the penal codes beginning April 2014. While this has had no major impact as of yet, the Council will continue to monitor and report on any potential effects on the business environment. The Council will also continue to track the progress of the Trans Pacific Partnership (TPP) negotiations, particularly regarding Brunei’s key advocacy issues (state-owned enterprises and IPR).
For the latest Council update on Brunei, please click here.
Cambodia
During the weekend of January 3rd and 4th, there was a Royal Government of Cambodia crackdown on opposition supporters and garment workers who were respectively demanding fresh elections and an increase to the minimum wage. The ruling CPP and opposition CNRP had planned to sit down for talks last week, but negotiations were cancelled after a series of increasingly violent exchanges. On January 14th, opposition leaders Sam Rainsy and Kem Sokha made their court appearance accused of pushing for the demonstrations. At the same time, rumors are circulating that secret negotiations have been taking place between the opposition and the government, with a potential deal insight. Read Council Cambodia expert Daniel Henderson’s take on Cambodia’s political future.
Indonesia
Indonesia implemented a ban on the export of raw commodities. The ban, which went into effect on January 12, is an attempt to boost state revenue by turning Indonesia from an exporter of raw commodities into a manufacturer of higher-value products. Freeport McMoRan, Newmont Mining Corp and others were given special exemptions that will allow them to continue to ship copper, manganese, lead, zinc and iron ore concentrate until 2017.
Indonesia is facing a widening current account deficit (due primarily to dependence on oil imports and weak commodity prices) which is undermining investor confidence and placing continued downward pressure on the Rupiah. Trade numbers, however, have improved in the last two months. The World Bank released its Indonesia Economic Quarterly in December 2013- a comprehensive review of key economic developments over the last 3 months. Despite the fact the trade numbers have improved over the last couple of months, the World Bank report predicts that growth will be slower than expected in 2014 (5.3%) and the risk will remain high. This prediction is important because it is a different outlook to what domestic policymakers are stating. While policymakers in Indonesia have taken steps to encourage near-term macroeconomic stability, especially through monetary policy and exchange rate adjustments, further structural reforms are needed to support export performance and encourage long-term faster growth.
Malaysia
In late October, Prime Minister Najib released Malaysia’s budget for 2014. The budget features numerous spending cuts and plans for the implementation of a Goods and Services Tax (GST). These measures signify the Prime Minister strong commitment to reducing the deficit. While several ratings agencies have responded to the budget with positive outlooks, the public is increasingly concerned over rising prices. Full Council analysis of Malaysia’s 2014 budget can be found here.
Myanmar
Myanmar enters its ASEAN chairmanship with a focus on elevating ASEAN’s sociocultural pillar by building people-to-people connections, and strengthening the security pillar by reviewing the ARF vision statement and working towards a vision for a post-2015 ASEAN.
Myanmar’s government has already committed to spend more than $30 million on logistics for the 300+ meetings it will host as chair of ASEAN.
President Thein Sein has made indications he would support an amendment of the 2008 constitution which would remove the prohibition against those with foreign spouses or children from serving as President or Vice President, clearing the way for NLD Chair Aung San Suu Kyi to potentially take office following the 2015 elections. Read the Council’s take on key trends to watch in Myanmar in 2014 here.
Philippines
Typhoon Yolanda left more than physical damage in its wake. Inflation ticked up to 4.1 percent in December 2013, the highest rate in the country since December 2011. Prices surged particularly in the Visayas region hit hardest by the storm, with food items’ increases most directly affecting consumers. The Philippine government’s 2013 inflation target of 3 to 5 percent was not breached, however, as 2013 average inflation held at 3 percent.
The U.S. response to the crisis was swift and comprehensive. In December, Secretary of State John Kerry announced that the U.S. Government, through USAID, will provide an additional nearly $25 million in humanitarian aid. This addition increases the total U.S. assistance package to more than $86 million for the relief effort. The American business community has also provided substantial support to the relief and reconstruction efforts with an estimated contribution of $59.1 million and growing. The Council will continue to monitor the situation and the relief effort, and members with questions can contact Carr Slayton at cslayton@usasean.org.
For the latest Council update on the Philippines, please click here.
Thailand
The recent anti-government protests in Bangkok started in November 2013 when the Yingluck Shinawatra administration attempted to pass a controversial amnesty bill through parliament. Many Thais viewed the manner in which the amnesty bill was being pushed quickly through the legislative process as a violation of Thailand’s democratic principles on the part of Prime Minister Yingluck’s Pheu Thai party. Suthep Thaugsuban, a former MP from the opposition Democrat party and a seasoned politician, is the leader of the anti-government, “anti-Thaksin”, and anti-corruption movement that has taken shape in Bangkok over the past few months. The protests led to a dissolution of parliament in December, and the scheduling of a new election for February 2nd.. The Democrat opposition party continues to boycott the elections, leaving no major political party running against Prime Minister Yingluck’s Pheu Thai party. Monday, January 13th marked the start of the protesters’ efforts to “Shutdown Bangkok”. Approximately 80,000 protesters set up demonstrations in seven key intersections throughout Bangkok and continued to pressure Prime Minister Yinguck to resign. The demonstrators plan to maintain the blockades until Prime Minister Yingluck agrees to postpone the February 2nd election and agree to their demands for a Council to reform the political system. The protests remain mainly peaceful with little fear of escalating violence – both the protestors and the Yingluck administration continue focus on avoiding violence. February 2nd is far away and time will tell if the protesters have the stamina to press on in their drive for desired reforms.
For the latest Council update on Thailand’s political situation, please click here.
Vietnam
Vietnam’s National Assembly approved a revised constitution in November of 2013. For Council expert Vu Tu Thanh’s take on Vietnam’s revised constitution, please click here.
U.S. Secretary of State John Kerry visited Vietnam December 14-16 with an agenda focused on trade and economic engagement, defense and security cooperation, the environment, and education.