January 2018

Dear Members,

Happy New Year!  We are off to an exciting start to 2018 and on behalf of the entire Council team, I wanted to take this opportunity to offer our best wishes for a happy, healthy and successful New Year.

Commencing January 1, The Council welcomes its new Board of Directors of 25 directors plus our Chairman and myself, as President & CEO.  The new board is much smaller than our previous board of 67 directors, but still represents the breath of Council membership across major industries.  We are grateful to our Chairman Keith Williams for his continued leadership.

2018 will also mark the launch of our new Chairman’s Council Advisory Board.  We are excited for the possibilities that it offers to our Chairman’s Council members and the ability for them to help drive the direction of the Council and the services we offer to our members.

In this regard, I wanted to thank the 177 members from 118 companies who responded to our 2017 Membership Survey.  These 118 companies represented 77% of our membership.  We are grateful for your feedback and suggestions that many of you offered.  Furthermore, we were pleased to see a high satisfaction rate for our services among members including over 95% who felt that the Council delivered a positive Return on Investment for your time and resources and the over 55% who felt that as an organization we were better than our peers.  We are grateful and will continue to innovate and improve the services we offer you.

The New Year also officially welcomed Singapore to the Chairmanship of ASEAN and H.E. Lim Jock Hoi to the role of Secretary General of ASEAN

Singapore’s ASEAN Chair year is off to a quick and productive start.  January activities include a meeting of the ASEAN Coordinating Committee on e-Commerce (ACCEC); an ASEAN Trade Facilitation Joint Consultative Committee (ATF-JCC) Meeting; a Meeting of the Senior Economic Officials; and the Meeting of ASEAN Tourism Ministers.

2018 marks our first engagement with the ASEAN Tourism Ministers with Ambassador Michalak leading a group of our members to the Ministerial in Chiang Mai, Thailand from 24-26 January. 

The Council’s Health & Life Sciences Industry Mission to the Philippines will take place in Manila from January 30-31.  The mission aims to support the national health agenda and identify opportunities for collaboration with the Department of Health and its new Secretary, Dr. Francisco Duque III.  Deadline to register for the mission is Tuesday, January 23.  Please contact Ying Hui Tng at yhtng@usasean.org and Hai Pham at hpham@usasean.org with any questions or to express interest.

On January 1, the Council assumed operations of the US ICT Council for Myanmar, an existing association of eight U.S. technology companies. The ICT Council will remain as a separate entity, conducting advocacy, organizing workshops, and generally supporting member companies in building a forward-looking ICT regulatory environment in Myanmar.

Highlights

Looking Ahead

• On January 24-26, the Council will lead its inaugural Business Mission to the Meeting of ASEAN Tourism Ministers Meeting (M-ATM), which will take place in Chiang Mai, Thailand. This mission will be the Council’s first engagement with the ASEAN Tourism Ministers, and will be an opportunity for members to discuss the relationship between infrastructure development and tourism.  The Council will propose a formal dialogue session with the group of ministers and organize bilateral meetings with priority countries.  The ASEAN Tourism Forum will take place alongside the M-ATM. For a background on the M-ATM please read this note here. To register, please click here.  Please contact Ying Hui Tng (yhtng@usasean.org) for any questions or to express interest. 
• On January 30-31, the Council will be conducting a Health and Life Sciences (HLS) Industry Mission to the Philippines.  To register, please click here. More information on the HLS Industry Mission to the Philippines can be found here.
• On March 12, the Council will be conducting its ASEAN Secretariat Business Mission, which will take place in Jakarta.  This will be the first opportunity for mission participants to formally engage the new Secretary-General of ASEAN H.E. Lim Jock Hoi, the new Deputy Secretary-General for ASEAN Economic Community, and other officials.  To register, please click here. Please contact Mario Masaya at mmasaya@usasean.org with any questions.
• On March 6-7, the Council will be conducting its annual Business Mission to the Philippines.  The mission’s themes will be framed within the context of the Government of the Philippines’s major economic policy objectives for 2018, including the passage of the second package of the Comprehensive Tax Reform Program, acceleration of the construction of infrastructure projects under the “Build, Build, Build” initiative, and the opening of certain economic sectors to greater foreign participation and ownership.  Please note that the registration deadline is February 20.  More information on the 2018 Philippines Business Mission can be found here.  To register for the mission, please click here.  Contact Riley Smith at rsmith@usasean.org with any questions.
• The Council is now registering executives for its Annual Business Mission to Indonesia, which will take place in Jakarta on March 13-15. The mission’s themes will be to maintain and promote FDI; deregulation and regulatory harmonization; and to enhance a vibrant ecosystem to support Indonesia’s development. This timely mission is especially valuable in light of Indonesia’s upcoming 2018 regional elections and 2019 national elections. Please note that the registration deadline is February 27. To register, please click here. Contact Artha Sirait at asirait@usasean.org with any questions.
• The Council is now registering executives for our Health & Life Sciences Industry Mission to Vietnam, which will be held on the margins of the Council's annual Vietnam Business Mission on March 27-29.  This mission will be focused on continuing our strong engagement with the Ministry of Health (MOH), including our regular Joint Working Group Meeting as part of the Council's MOU with the MOH.  To register, please click here.  For questions, please contact Hai Pham at hpham@usasean.org.

Advocacy

• The Council is looking to organize a group of interested members under the broad-based theme of Manufacturing in ASEAN to develop a work plan consisting of advocacy priorities, programs, relationship development activities and information products.  Some of the issue areas to be covered in the work plan include: Industry 4.0, labor, and “green manufacturing”.  A separate note on this effort will be transmitted soon. Interested members should contact Marc Mealy at mmealy@usasean.org  
• In early December, the Council, BSA | The Software Alliance (BSA) and our members met the Infocomm Media Development Authority (IMDA) of Singapore to discuss the revised draft Cloud Outage Incident Response (COIR) standards.  At the meeting, IMDA reaffirmed its intent to proceed with the conversion of COIR guidelines to a local Singapore Standard.  Brief meeting notes are available here.  Following the meeting, the Council and BSA, with input from our members, submitted joint-association comments to the Singapore Government to reiterate concerns from our July 13 submission.  The most recent comments submitted by the Council and BSA can be found here.
• The Council is exploring an advocacy effort with the Government of Thailand (GOT) regarding the implementation of a new excise tax structure on tobacco products.  Currently, this has been done in a non-discriminatory manner.  However, recent reports have indicated that the domestic industry is requesting that GOT revise the tax structure to protect the domestic industry from foreign competition and thus violate Thailand’s WTO non-discrimination commitment.  Such an approach could set a precedent for any excisable good in Thailand and could have negative implications for the business confidence of foreign firms in Thailand.
• In 2018, the Council plans to continue to expand our SME development initiatives in ASEAN.  Part of this expansion will be additional advocacy related efforts with ASEAN governments on trade and customs policies and other regulatory issues of mutual value to both SME’s and MNC’s in ASEAN.  To support this, the Council plans to expand our joint advocacy cooperation work with both the ASEAN BAC and the Asia Trade Centre’s newly created  Asia-Pacific MSME Trade Coalition.

Intelligence

• The 2018 National Budget for the Philippines, officially called the General Appropriations Act (GAA) of 2018, or Republic Act 10964, is the first national budget to be a sole product of President Rodrigo Duterte’s administration.  Coming one full year after President Duterte took office, the budget provides a clearer take on the priorities of the administration.  When looking at which departments received the largest shares of the 2018 National Budget, education, infrastructure development, and internal security are clearly the three top priorities of the Duterte administration for 2018.  President Duterte signed the 2018 National Budget into law on December 19, 2017.  The P3.767 trillion (US$75.6 billion) budget is the largest passed by any administration to date, surpassing last year’s budget by 12.4%.  Education overall received the largest allotment in the budget, while the Department of Public Works and Highways, which is tasked with carrying out the administration's "Build, Build, Build" infrastructure development initiative, received the largest single share of funds on a per-department basis.  More information on the 2018 National Budget can be found in this Philippines Analytical Brief.

Relationship Building

On January 16, the Council hosted a breakfast roundtable featuring a delegation from the Myanmar Development Institute (MDI), a leading Myanmar think-tank responsible for advising the Myanmar Government on its economy policy. The delegation is visiting Washington as part of a USAID-organized study tour. The roundtable provided a unique opportunity for members to learn first-hand about the ongoing economic reform efforts in Myanmar, and to raise any specific concerns/questions. Please contact Jack Myint at jmyint@usasean.org with any questions.

Promotion

The Council is currently planning its 2018 initiatives under the US-ASEAN Business Alliance for Competitive SMEs.  Building upon Singapore’s 2018 ASEAN Chairmanship and the fast-approaching Industrial Revolution 4.0, the Council will focus on supporting the Digital Economy through in-person workshops, the online ASEAN SME Academy, and SME-related advocacy.  Please find the 2018 SME Work Plan here and sponsorship opportunities here.  Please contact Mario Masaya at mmasaya@usasean.org or Vinsensius Kangen at vkangen@usasean.org with any questions or to express interest.

Membership

We are pleased to welcome four new members to the Council as of January 1: APR Energy, Burson & Marsteller, Discovery Networks, and Nestle Purina Petcare.  Additionally, Amazon and Mattel have upgraded to Chairman’s Council as of January 1. Total Council membership currently stands at 157. 

Thank you to the 177 members from 118 companies who responded to our 2017 Membership Survey.  These 118 companies represent 77% of our membership and we are grateful for your input.

We are currently reviewing your feedback and look forward to coming up with ways to improve the Council based on your responses.  Please don’t hesitate to provide your thoughts at any time of the year by contacting me, directly, any member of Senior Management, or our Membership Director, Kathi Lunardi at klunardi@usasean.org.

Regional Highlights

ASEAN

Major Developments

• Singapore’s ASEAN Chair year is off to a quick and productive start.  January activities included a meeting of the ASEAN Coordinating Committee on eCommerce (ACCEC); an ASEAN Trade Facilitation Joint Consultative Committee (ATF-JCC) Meeting; a Meeting of the Senior Economic Officials; and the Meeting of ASEAN Tourism Ministers. View the notional ASEAN 2018 calendar here.
• On January 5, the new SecretaryGeneral of ASEAN H.E. Lim Jock Hoi participated in a “transfer of office” ceremony at the ASEAN Secretariat, marking his assumption of the five-year role.  "The world is looking at ASEAN and will measure its success on ASEAN resilience, how it stays on course in its integration efforts and how it responds to emerging issues and developments arising from the interconnected world," he said. The ceremony also included a groundbreaking for the Secretariat’s long-planned new building, next door to the current headquarters.

Looking Ahead

• Registration is now open for the Council’s 2018 ASEAN Secretariat Business Mission, scheduled for March 12 in Jakarta.  This will be the first opportunity for mission participants to formally engage the new Secretary-General of ASEAN H.E. Lim Jock Hoi, the new Deputy Secretary-General for ASEAN Economic Community, and other officials.  To register, please click here. Please contact Mario Masaya at mmasaya@usasean.org with any questions. 
• The Council is currently planning its 2018 initiatives under the US-ASEAN Business Alliance for Competitive SMEs.  Building upon Singapore’s 2018 ASEAN Chairmanship and the fast-approaching Industrial Revolution 4.0, the Council will focus on supporting the Digital Economy through in-person workshops, the online ASEAN SME Academy, and SME-related advocacy.  Please find the 2018 SME Work Plan here and sponsorship opportunities here.  Please contact Mario Masaya at mmasaya@usasean.org or Vinsensius Kangen at vkangen@usasean.org with any questions or to express interest.
• On March 7, the Council will host a one-day Small and Medium Enterprise (SME) workshop titled "Surabaya SMEs Go Digital and International" in Surabaya, Indonesia. The workshop aims to improve the competitiveness of Surabaya SMEs by giving them an introduction to available digital tools, solutions, and services to participate in cross-border trade in the digital economy era.  Click here for the workshop draft agenda and here for sponsorship opportunities.  Please contact Vinsensius Kangen at vkangen@usasean.org with any questions or to express interest.
• The Council and U.S.-ASEAN Connect are seeking members interested in participating in the new US-ASEAN Internship program, which will place ASEAN interns within existing internship programs.  More details are outlined in this concept note.  Please contact Mario Masaya at mmasaya@usasean.org or Vinsensius Kangen at vkangen@usasean.org with any questions or to express interest.

View the Council's latest ASEAN updates

CPTPP

Major Developments

As we enter 2018, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) process will require continued negotiations on four sensitive issue areas: SOEs in Malaysia; coal in Brunei; dispute settlement and trade sanctions in Vietnam; and cultural exceptions in Canada. These issues will need to be resolved before the 11-nation agreement can be signed.  Aside from Taiwan seeking support to join the agreement, ongoing trade and political processes in key nations, including NAFTA in Canada and elections in Malaysia, are also likely to influence the pace of negotiations.  

View the Council's latest CPTPP updates

Industry Highlights

Customs

Major Developments

• Some ASEAN governments may begin applying consumption taxes or even tariffs to e-commerce imports in 2018.    Singapore, Thailand, Malaysia, Indonesia, and Vietnam all began unveiling proposals for varying plans in late 2017. Thailand and Singapore held public consultations while Vietnam incorporated a proposal into a draft tax reform law. A regulation from Indonesia will likely be coming soon as part of a larger body of e-commerce regulations.  A common theme seems to be the application of Value Added Tax (VAT) to cross-border transactions, though reporting has indicated that some countries, such as Indonesia, may go further.  Solutions for who will be responsible for processing these taxes are varied, with Indonesia and Vietnam likely using their national e-payments systems to collect the tax while others are looking to shippers, sellers, and payment providers. With the WTO’s moratorium on e-commerce tariffs recently renewed, there have been indications that some of these proposals will be scaled back or delayed. However, increased government attention to taxing cross-border e-commerce will remain a trend to watch in 2018. In 2017, the Council engaged the Thai, Singaporean, and Vietnamese governments on these issues and will continue to be active on the topic in 2018.
• Ministers overseeing the negotiations of the Regional Comprehensive Economic Partnership (RCEP) called for intensified efforts to complete the agreement in 2018 by both the negotiators and the ministers themselves in the joint statement of their November 2017 ministerial.  Their statement, available here, defined each chapter of the agreement, but stopped short of laying out a detailed framework of the agreement as some observers had hoped.  If the framework agreement is completed by the next ministerial meeting on March 4, it would bolster the case that RCEP could be substantially finished in 2018.  Core challenges between the negotiators on goods and services offers remain to be settled.  There are additional RCEP negotiating rounds and related meetings scheduled between April 28 - May 8, and a possible third meeting later in 2018.

View the Council's latest Customs updates

Defense & Security

Major Developments

• On January 8, the Vietnamese government established Cyber Command, a new unit in the Ministry of Defense to protect national sovereignty in cyberspace. Cyber Command will build and submit projects directly to the Vietnamese Prime Minister for approval and implementation. The unit will also coordinate with relevant government agencies, such as the Ministry of Public Security and the Ministry of Information and Communications, and will study and apply advanced military, scientific and technological tactics and weapons. Cyber Command’s establishment closely copies that of the National Cyber and Encryption Agency (BSSN) in Indonesia (established in May) and follows a larger trend in ASEAN of governments placing high priority on cybersecurity issues.
• On December 31, a Malaysian naval vessel arrived in the Philippines as part of Malaysia’s efforts to provide humanitarian assistance, following Typhoon Tembin the week prior.  This interaction highlighted the longstanding security cooperation between Malaysia and the Philippines, of which humanitarian aid and disaster relief has been a major component.  This recent cooperation serves as a good platform for several other areas of regional collaboration including combating terrorism, piracy, and illegal fishing.  With security cooperation one of the priority topics on the agenda in ASEAN’s new chairmanship year under Singapore’s leadership, more mil-to-mil exchange can be expected between Malaysia and the Philippines in the coming months.

View the Council's latest Defense & Security updates

Energy

Major Developments

• On November 29, 2017, a Cabinet shuffle by Thai Prime Minister Prayut Chan-o-cha was confirmed when new Cabinet members took their oath before King Maha Vajiralongkorn.  In the new Cabinet, General Anantaporn Kanjanarat was moved from Energy Minister to Social Development Minister.  Siri Jirapongphan, a new Cabinet member and former Executive Director of the Petroleum Institute of Thailand, was appointed the new Energy Minister.  In total, the new Cabinet line-up removes nine officials from the last Cabinet, reshuffles six officials, added a portfolio to one official, and introduces 10 new officials.  A full run-down on the Cabinet changes can be found in this Thailand Analytical Brief.
• The Department of Energy (DOE) of the Philippines will declare a planned US$2 billion liquified natural gas (LNG) terminal as an energy project of national significance (EPNS) under Executive Order (EO) 30.  The DOE intends for the move to support the Government's aims of simultaneously improving the Philippines’ energy security and becoming an LNG trading and transshipment hub in the Asia Pacific region.  EO 30 also possesses a provision entitled “Presumption of Prior Approvals,” meaning that the LNG terminal project could start construction before the end of 2018.  More details on the implications of a project being EPNS can be found here.

View the Council's latest Energy updates

Financial Services

Major Developments

• Bank Indonesia (BI) issued its first sweeping regulation overseeing fintech on December 7, BI Regulation 19/12/PBI/2017 (full regulation here in Bahasa Indonesia). To support the implementation of this regulation, BI also issued Regulations 19/14/PDAG 2017 and 19/15/PDAG/2017 (found here and here in Bahasa Indonesia), which both came into effect on November 30. Among their provisions, the regulations define fintech, fintech activities, and fintech providers; establish registration procedures; ban virtual currencies from being used as forms of payment; establish a regulatory sandbox; and establish how BI will monitor the industry. The regulations’ stated aim of fostering innovation and the positive move to introduce a regulatory sandbox indicates that BI intends to provide freedom and flexibility to fintech providers. There is concern, however, around potentially restrictive provisions like the requirement that any cooperation between registered fintech providers and payment system service providers obtain approval from BI.
• The combined size of the ASEAN bond markets has grown significantly over the past two decades, from US$112.76 billion in 1997 to US$1.19 trillion in 2017. That growth has been enabled by incentives and policies by the governments to growth the markets, including reductions of withholding taxes and improving market liquidity. Despite this growth, however, ASEAN bond markets remain small relative to overall GDP, are reliant on foreign portfolio investment, and are mostly government bonds. Progress is gradually continuing with notable recent progress in some ASEAN countries. In the Philippines, the Central Bank launched an 18-month peso debt market development roadmap aimed to establish an integrated financial market in November 2017. In Indonesia, all three major credit agencies now consider Indonesian sovereign debt to be investment grade and the OJK issued a roadmap in June 2017 for the development of Islamic finance. In Thailand, the Securities and Exchange Commission has been meeting with representatives to gather input on new regulations that would reduce the risks facing individual investors in short-term and long-term bonds, likely to be finalized in 2018.

Looking Ahead

Please save the date for the annual Mission to the ASEAN Finance Ministers and Central Bank Governors Meeting (AFMGM), which will take place in Singapore on April 5-6. The Council plans to hold its regular consultation with the assembled Finance Ministers and Central Bank Governors on ASEAN integration issues, including digital financial innovation, capital markets development, and insurance development. The delegation will also hold bilateral meetings with Ministers and Governors and join official AFMGM programming. A full invitation will be distributed soon. The Council will also hold several planning calls in February and March to plan the Mission and write the consultation paper which the delegation will present at the AFMGM consultation. Please contact Shay Wester at swester@usasean.org or Ian Saccomanno at isaccomanno@usasean.org for more information.

View the Council's latest Financial Services updates

Food & Agriculture

Major Developments

In 2017, countries around the world began to create and implement tax legislation on sugar.  These sugar taxes, which often focus on sugar-sweetened beverages (SSBs), were introduced in different forms and for a variety of public policy purposes ranging from responding to adverse health trends such as diabetes in populations attributed to diet, to creating new revenue streams for public health and infrastructure development initiatives.  However, opponents of sugar taxes have cited numerous studies showing little evidence of changes in behavior, underwhelming revenue generation, detrimental consequences to the lower-class population, and, in some cases, WTO violations.  In ASEAN, the Council is tracking developments across four major economies: the Philippines, Singapore, Thailand and Vietnam. In 2018, we plan to monitor this space closely and look to develop appropriate advocacy efforts noting both an understanding of growing fiscal pressures to support public policies and the economic linkages between ASEAN’s FDI competitiveness, innovation, and SME development and tax policies.

Advocacy

• In December 2017, the Food & Agriculture Committee held a 2018 committee planning call to review our activities in 2017 and discuss upcoming priorities and advocacy efforts.  The call also included a presentation on potential partnership opportunities by William Sparks of Winrock International, a USAID project in Asia.  Please click here for a readout and follow-up items from the call.  If you have any questions, please contact Sunita Kapoor (skapoor@usasean.org) and Hai Pham (hpham@usasean.org).
• Following on our advocacy effort in December 2017 to engage the Government of Indonesia on agricultural import restrictions (focusing on soybean), the Council is sending a letter to Indonesian President Jokowi to highlight the potential costs and consequences of using import restrictions as a tool to increase domestic supply.  The letter also highlights the connection between the ability to import/export to foreign direct investment, and technology transfer for key farm inputs which could lead to significant yield and income opportunities for farmers.  The Council’s Food & Agriculture Committee will also work towards gaining access to a dialogue with the Government of Indonesia in 2018, providing opportunities for members to provide concrete examples of how they can be a resource to GOI, if they can import their products to conduct business and invest.  For more information, please contact Sunita Kapoor at skapoor@usasean.org.

View the Council's latest Food & Agriculture updates

Health & Life Sciences

Major Developments

In 2017, a new National Health Security Bill was drafted, which sparked the first step in the upcoming healthcare reform process in Thailand.  As the legislation moves forward in 2018, the public health discussion is being revisited by many with speculations on potential changes to the current health system, which is a universal healthcare scheme that offers most medical services to about 48 million citizens for free.  Speaking in an interview in late December, Minister of Public Health Dr. Piyasakol Sakolsatayadorn touched on the topic of co-payments and how the healthcare reform bill would seek to address hospital overcrowding.  Dr. Piyasakol mentioned that the reform may include adding co-payments to the system to help relieve the pressure on the government to undertake financial responsibility of the scheme, while not reducing people’s rights to healthcare (note – basic healthcare services), for overall sustainability and long-term efficiency.

Dr. Piyasakol also discussed proposed reforms to ease hospital overcrowding, including: more one-day surgeries at major hospitals to free up beds and rooms; specialized clinics outside normal work hours at major hospitals; referral system that allow large hospitals to transfer patients back to smaller hospitals for recuperation/rehabilitation; and increasing the number of family-medicine units. Dr. Piyasakol added that overall, conflicts over the draft bill has already been reduced since its inception as relevant parties like the National Health Security Office (NHSO – in charge of managing the universal healthcare scheme) and the Public Health Ministry (in charge of the scheme’s operation) have had close cooperation.

Advocacy

Continuing its efforts on Indonesia's e-catalogue issue, the Council is sending a letter to the Indonesia Ministry of Health (MOH) and National Public Procurement Agency (LKPP) to propose a knowledge-sharing or capacity-building workshop in Q1 2018 before the next re-opening of the e-catalogue.  The workshop will support the POKJA team in MOH and LKPP in understanding the varying technological differences in medical devices and how they may benefit users.  For more information, please contact Ying Hui Tng at yhtng@usasean.org.

Looking Ahead

• The Council is now registering executives for our Health & Life Sciences Industry Mission to the Philippines, which will take place in Manila from January 30-31.  The mission aims to support the national health agenda and identify opportunities for collaboration with the Department of Health and its new Secretary, Dr. Francisco Duque III.  Deadline to register for the mission is Tuesday, January 23. To register, please click here. Please contact Ying Hui Tng at yhtng@usasean.org and Hai Pham at hpham@usasean.org with any questions or to express interest.
• The Council is now registering executives for our Health & Life Sciences Industry Mission to Vietnam, which will be held on the margins of the Council's annual Vietnam Business Mission on March 27-29.  This mission will be focused on continuing our strong engagement with the Ministry of Health (MOH), including our regular Joint Working Group Meeting as part of the Council's MOU with the MOH.  To register, please click here.  For questions, please contact Hai Pham at hpham@usasean.org.

View the Council's latest Health & Life Sciences updates

ICT

Major Developments

On January 8, the Vietnamese government established the Cyber Command, a new unit in the Ministry of Defense to protect national sovereignty in cyberspace. Cyber Command will build and submit projects directly to the Vietnamese Prime Minister for approval and implementation.  The unit will also coordinate with relevant government agencies, such as the Ministry of Public Security and the Ministry of Information and Communications, and will study and apply advanced military, scientific and technological tactics and weapons.  Cyber Command’s establishment closely follows that of the National Cyber and Encryption Agency (BSSN) in Indonesia (established in December) and follows a larger trend in ASEAN of governments placing high priority on cybersecurity issues.

Advocacy

• On February 1, Council President & CEO Alexander Feldman will be meeting with H.E. Rudiantara, Indonesia’s Minister for Information and Communications Technology.  If members have any topics or issues they wish to be raised with the Minister, please contact Ella Duangkaew at eduangkaew@usasean.org.
• On January 1, the Council assumed operations of the US ICT Council for Myanmar, an existing association of eight U.S. technology companies.  The ICT Council, which is currently seeking a full-time Executive Director, will remain as a separate entity, conducting advocacy, organizing workshops, and generally supporting member companies in building a forward-looking ICT regulatory environment in Myanmar. Please contact Acting Executive Director Matt Solomon at msolomon@usasean.org with any questions.
• On November 29 - December 1, the Council held its inaugural Business Mission to the 17th ASEAN Telecommunications and Information Technology Senior Officials and Ministers’ Meeting (TELSOM and TELMIN respectively).  According to the official TELMIN press release (found here), key outcomes of the meeting include the establishment of a Working Group for a Framework on Digital Data Governance, which is targeted for completion by 2019. For more information, see our press release on the Mission here.  For follow ups to the Mission, please contact Mario Masaya at mmasaya@usasean.org or Ella Duangkaew at eduangkaew@usasean.org.

Looking Ahead

• The Laos Ministry of Posts and Telecommunications, Lao National Chamber of Commerce and Industry (LNCCI), Lao ICT Commerce Association and US Embassy alumni are seeking private sector sponsorship and participation in the first Laos Digital Economy Forum, taking place on January 26.  For more information, please contact Ella Duangkaew at eduangkaew@usasean.org.

View the Council's latest ICT updates

Infrastructure

Looking Ahead

Registration is now open for the inaugural Business Mission to the Meeting of ASEAN Tourism Ministers Meeting (M-ATM) taking place on January 22-26 in Chiang Mai, Thailand. This mission will be the Council’s first engagement with the ASEAN Tourism Ministers, and will be an opportunity for members to discuss the relationship between infrastructure development and tourism.  The Council will propose a formal dialogue session with the group of ministers and organize bilateral meetings with priority countries.  The ASEAN Tourism Forum will take place alongside the M-ATM. For a background on the M-ATM please read this note here. To register, please click here.  Please contact Ying Hui Tng (yhtng@usasean.org) for any questions or to express interest. 

View the Council's latest Infrastructure updates

Country Highlights

Brunei

Major Developments

• Brunei is now preparing for long term government issuances according to Brunei’s financial sector blueprint.  Since 2006, the Government of Brunei has maintained a continuous program for sukuk issuance with increasingly longer maturities, which make up most of the local market.  According to the Government, with Muslims accounting for more than 20% of the world’s population, and the increasing awareness on Islamic finance, the Islamic finance industry looks poised to continue its remarkable growth.  Such global progress paired with Brunei’s strong Islamic philosophy would make it a favorable and competitive market for the shariah-compliant industry.  Brunei is also considering undertaking market operations for banking system liquidity-smoothing.  In comparison, currently Malaysia is the largest sukuk market in the world, with approximately 43% of total sovereign sukuk outstanding in 2016, and is actively pushing its sukuk market into innovative new fields.  It structured the world’s first green sukuk in July, which was followed by a second issuance in October.  Furthermore, Malaysia has improved foreign access and is working on basic market improvements. Indonesia, another Muslim-majority ASEAN market,  plans to leverage its large Muslim population by growing its own Islamic capital markets particularly to fund infrastructure projects in line with the Jokowi administration’s plan.  Islamic financing such as project financing, sukuk bonds, are essentially structured as asset-backed or asset-based and therefore are well-suited for Indonesia’s infrastructure financing.  Continued expansion of capital markets and the local investor base across ASEAN requires efforts from policymakers to create a more enabling environment that is also safe and attractive enough to prevent sudden outflows like those that occurred during previous financial crises.  Brunei’s political and macroeconomic stability is something that the sultanate can continue to leverage in developing its potential.

View the Council's latest Brunei updates

Cambodia

Major Developments

On December 6, the U.S. Department of State released a statement announcing that it will apply travel restrictions towards Cambodian government officials, and in certain cases their family members, who have "undermined the country's progress in advancing democracy and respect for human rights."  The list of individuals on the travel restriction list has not been revealed.  The policy was put into place in response to the Cambodian government's dissolution of the main opposition party CNRP, the arrest of its leader Kem Sokha, and continuing crackdown on media and civil society.  For more background, see the Council’s recent Updates here, here, and here.

U.S.-Cambodia bilateral relations have been on a downward slope, a trend that is likely to continue in the run-up to Cambodia's planned July 2018 general elections, which the U.S. has said will "not be legitimate, free, or fair," unless the government reverses course.  In the meantime, the U.S. government announced that it would cut funding to the National Election Committee, which could potentially lead to American observers being excluded from the 2018 general elections.

Several other nations have signaled to follow suit on taking action, with Australia considering a similar travel ban, and the European Union threatening to end Cambodia's duty and tariff-free access to its trade zone.  The impact of any economic sanctions, be it the denial of access to free trade zones or removal of GSP privileges, could be particularly disruptive to Cambodia's garment industry, which in 2016 totaled US$6.3 billion in exports and reached $4.9 billion in the first seven months of 2017. Cambodian Prime Minister Hun Sen, in his public appearances, seems characteristically unfazed by the threat of any further action against his government. In fact, he challenged the U.S. and EU to freeze the foreign assets of Cambodian leaders abroad, a measure that has yet to be publicly considered.

View the Council's latest Cambodia updates

Indonesia

Major Developments

• On January 17, President Jokowi swore in new members of the cabinet in the third reshuffle of his five-year term since 2014. The reshuffle was widely expected, as some of his previous staff have requested leaves of absence to participate in the regional elections later this year. The new cabinet line-up is as follows:
  • Idrus Marham (the secretary-general of Golkar; the second-largest party in Jokowi’s coalition) is appointed the new Social Affairs Minister. He replaces Khofifah Indar Parawansa, who is currently standing for the governor’s election in East Java province;
  • Former Indonesian Armed Forces (TNI) chief Moeldoko is appointed the President’s Chief of Staff, replacing Teten Masduki who is now the Coordinator of the President’s Special Staff;
  • Air Chief Marshal Yuyu Sutisna is appointed Chief of Staff of TNI Air Force (KSAU) Marshal, replacing Hadi Tjahjanto who was installed in December as TNI commander;
  • Retired army general and former transportation and defense minister Agum Gumelar is appointed as new member of the Presidential Advisory Council (Watimpres)

The recent key appointments are seen as President Jokowi’s means of securing support from the Golkar Party in light of the 2019 national election. Golkar currently holds 91 out of 560 seats in the House of Representatives and has significantly boosted Jokowi’s influence since it joined the ruling coalition led by the Indonesian Democratic Party of Struggle (PDI-P). The new cabinet line-up is expected to increase the President’s bargaining power within PDI-P for the upcoming president’s bid.

• In addition, Indonesia also has a new House Speaker, Bambang Soesatyo who replaced Setya Novanto who is standing trial on corruption charges for his suspected involvement in a case linked to a national electronic identity card scheme. Bambang was previously the Chairman of the House’s Commission III which oversees human rights, security and legal affairs. His term will end in 2019.
• President Jokowi has appointed Major General Djoko Setiadi to lead Indonesia’s National Cyber Agency (BSSN), a position which has been vacant since the establishment of the agency in May 2017.  His appointment comes ahead of Indonesia’s busy election season which has raised public questions over its authority, after Setiadi stated that BSSN would also monitor the issue of fake news to ensure the integrity of the country’s upcoming regional and national election.  BSSN will be responsible to the President through the Coordinating Minister for Political, Legal and Security Affairs.  The National Encryption Agency (Lemsaneg), previously led by Setiadi; and the Directorate of Information Security under the Directorate General of Applications and IT at the Ministry of Communications and Information Technology will merge into BSSN.
• 2018 will bring the start of election season in Indonesia, beginning with simultaneous regional elections on June 27, which will be consuming an increasingly large amount of the government’s attention this year and next.  The regional elections will be critical to political positioning for the national elections that are set for April 17, 2019, which the country will become focused on soon after the regional elections.  The Jokowi government heads into the elections with a relatively strong position and some significant policy successes, but will be confronted by an opposition newly reinvigorated by a more active Islamist faction, questions over the President’s electability relative to his popularity, accusations that the administration has failed to achieve as much as hoped, and scandals in allied parties.  The regional elections, mandated to be set in June 27, will likely see voting for the leaders of 17 of the 34 provinces, 39 cities, and 115 districts. As the regional elections wrap up and the parties assess their new positions, the coalitions and candidates for the 2019 Presidential and Parliamentary elections will be unveiled.  The presidential campaign will officially begin in September.

Looking Ahead

The Council is now registering executives for its Annual Business Mission to Indonesia, which will take place in Jakarta on March 13-15. The mission’s themes will be to maintain and promote FDI; deregulation and regulatory harmonization; and to enhance a vibrant ecosystem to support Indonesia’s development. This timely mission is especially valuable in light of Indonesia’s upcoming 2018 regional elections and 2019 national elections. Please note that the registration deadline is February 27. To register, please click here.  Contact Artha Sirait at asirait@usasean.org with any questions.

View the Council's latest Indonesia updates

Laos

Major Developments

• On January 9, the Laos-China Railway Project was reported to be 16.4% complete, and on schedule for completion by 2021.  The project is one of the largest infrastructure projects in Laos, and the largest Chinese investment project in the country with combined investments totaling US$5.8 billion.  The railway will be the only other railroad in Laos besides a small portion of a Thai railroad, and can vastly improve transportation infrastructure, reduce transport costs, and allow more people to access more areas in Laos.  The railway also has significance for China, as a part of the Kunming-Singapore regional railway, a project of the One Belt, One Road initiative.  For more information, see our recent Laos Update here.
• On the week of December 12, the government of Laos announced that it will partner with the governments of Thailand and Myanmar to address air quality issues.  These issues are mainly surrounding cross-border smog that occurs as a result of illegal brush fires started by farmers to clear land for agriculture.  The Lao government has already acted on the issue by putting a forest fire prevention plan into place and using technologies to predict and prevent forest fires.  The partnership has promising implications for addressing an issue that is essential to environmental and citizen health in Laos. For more information, see our recent Laos Update here.

Looking Ahead

• The Laos Ministry of Posts and Telecommunications, Lao National Chamber of Commerce and Industry (LNCCI), Lao ICT Commerce Association and US Embassy alumni are seeking private sector sponsorship of the first Laos Digital Economy Forum.  The one-day forum will be held on either January 26 or 27.  For more information, or if interested in sponsoring, please contact Ella Duangkaew at eduangkaew@usasean.org.
• Please save the date for the 2018 Laos Business Mission, scheduled to take place on June 23-24, 2018 in Vientiane.  Contact Ella Duangkaew at eduangkaew@usasean.org with any questions.

View the Council's latest Laos updates

Malaysia

Major Developments

Malaysia’s four-party opposition coalition, known as the Pakatan Harapan, has nominated Mahathir Mohamad, 92, as its candidate for prime minister in this year’s upcoming general election.  Mahathir was a former leader of UMNO and Malaysia’s Prime Minister from 1981 to 2003.  He is partnering with his former deputy prime minister, rival, and the most prominent figure of the opposition, Anwar Ibrahim, in an effort to build unity within the coalition and unseat the incumbent prime minister, Najib Razak.  Anwar’s wife, Wan Azizah Ismail, was named as candidate for the deputy prime minister’s post.

Advocacy

On January 8, the Council submitted comments to Bank Negara in response to their exposure draft on the Interoperable Credit Transfer Framework.  The Framework aims to allow customers of both banks and non-bank electronic money (e-money) issuers to transfer funds across the network, by providing access to a shared payments infrastructure where customers can make transfers using their mobile numbers or QR codes.  Several concerns with the Framework have been raised, including that the creation of an operator of a shared payment infrastructure with conditions imposed on banking and financial institutions for access to the shared infrastructure will distort competition, impede innovation and create bottlenecks.

View the Council's latest Malaysia updates

Myanmar

Major Developments

On December 20, President Donald Trump issued an Executive Order declaring a national emergency due to human rights abuses and corruption, applying economic and visa sanctions under the Global Magnitsky Act to 52 individuals and entities worldwide, including Major General Maung Maung Soe, who until recently led the Tatmadaw’s operations in Rakhine State as Commander of the Western Military Region.  He is the only Myanmar official who was named.  The Order comes less than a week after Secretary Tillerson hinted that targeted sanctions towards Myanmar were forthcoming. The  U.S. Treasury Department’s press release states that “The United States Government examined credible evidence of Maung Maung Soe’s activities, including allegations against Burmese security forces of extrajudicial killings, sexual violence, and arbitrary arrest as well as the widespread burning of villages.”  Treasury’s “Frequently Asked Questions” document relating to the Order explains that “all of the property and interests in property within U.S. jurisdiction of the designated individuals and entities are blocked, and U.S. persons are generally prohibited from engaging in transactions with them.”  The so-called “50% rule” also applies, so that “any entity owned in the aggregate, directly or indirectly, 50 percent or more by one or more blocked persons is itself considered to be a blocked person.”  The extent of Maung Maung Soe’s business interests are not immediately known, but his business ties to the United States, if any, are not thought to be significant.  This is underscored by the fact that none of the 37 SDN-listed entities are linked to him.  Therefore, the direct impact of the Executive Order on U.S.-Myanmar business ties generally should be minimal.

Advocacy

• On January 1, the Council assumed operations of the US ICT Council for Myanmar, an existing association of eight U.S. technology companies. The ICT Council, which is currently seeking a full-time Executive Director, will remain as a separate entity, conducting advocacy, organizing workshops, and generally supporting member companies in building a forward-looking ICT regulatory environment in Myanmar. Please contact Matt Solomon at msolomon@usasean.org with any questions.
• On January 16, the Council hosted a breakfast roundtable featuring a delegation from the Myanmar Development Institute (MDI), a leading Myanmar think-tank responsible for advising the Myanmar Government on its economy policy. The delegation is visiting Washington as part of a USAID-organized study tour. The roundtable provided a unique opportunity for members to learn first-hand about the ongoing economic reform efforts in Myanmar, and to raise any specific concerns/questions. Please contact Jack Myint at jmyint@usasean.org with any questions.

View the Council's latest Myanmar updates

Philippines

Major Developments

• On December 13, the Philippine Congress’s voted to extend martial law on the southern island of Mindanao until December 31, 2018.  The decision was based on local security considerations on the island and does not portend an imminent extension of martial law nationwide.  President Rodrigo Duterte, at the recommendation of Secretary of National Defense Delfin Lorenzana, requested the extension, citing as reasons the threat posed by homegrown and foreign terrorists and intensified attacks by the New People’s Army (NPA) on remote communities on Mindanao.  The request came shortly after the Government canceled peace talks with the Communist Party of the Philippines (CPP) and designated the CPP and the NPA terrorist groups.  The Government had first implemented martial law in response to the takeover of parts of Marawi, the largest Muslim city in the Philippines, located in northern Mindanao, by Islamic State (IS)-inspired militants in May 2017.  Analysis of the martial law in Mindanao can be accessed here.
• The 2018 National Budget for the Philippines, officially called the General Appropriations Act (GAA) of 2018, or Republic Act 10964, is the first national budget to be a sole product of the administration of President Rodrigo Duterte.  It provides a clearer take on the priorities of the administration, coming one full year after Duterte took office.  When looking at which departments received the largest shares of the 2018 National Budget, it is clear that education, infrastructure development, and internal security are the three top priorities of the Duterte administration for 2018.  President Duterte signed the 2018 National Budget into law on December 19, 2017.  The P3.767 trillion (US$75.6 billion) budget is the largest passed by any administration to date, surpassing last year’s budget by 12.4%.  Education overall received the largest allotment in the budget, while the Department of Public Works and Highways, which is tasked with carrying out the administration's "Build, Build, Build" infrastructure development initiative, received the largest single share of funds on a per-department basis. More information on the 2018 national budget has to go out there.  More information on the 2018 National Budget can be accessed here in this Philippines Analytical Brief.

Looking Ahead

• The Council is now registering executives for our Health & Life Sciences Industry Mission to the Philippines, which will take place in Manila from January 30-31.  The mission aims to support the national health agenda and identify opportunities for collaboration with the Department of Health and its new Secretary, Dr. Francisco Duque III.  Deadline to register for the mission is Tuesday, January 23. To register, please click here. Please contact Ying Hui Tng at yhtng@usasean.org and Hai Pham at hpham@usasean.org with any questions or to express interest.
• Registration is currently open for the Council’s annual Business Mission to the Philippines, which will take place on March 6-7.  The mission’s themes will be framed within the context of the Government of the Philippines’s major economic policy objectives for 2018, including the passage of the second package of the Comprehensive Tax Reform Program; acceleration of the construction of infrastructure projects under the “Build, Build, Build” initiative; and the opening up of certain economic sectors to greater foreign participation and ownership.  Please note that the registration deadline is Tuesday, February 20.  More information on the 2018 Philippines Business Mission can be found here.  To register for the mission, please click here.  Contact Riley Smith at rsmith@usasean.org with any questions.

View the Council's latest Philippines updates

Singapore

Major Developments

• Starting in Q3 2018, the Government of Singapore (GOS) will require businesses, both local and foreign, to use the Singapore Corporate Access (CorpPass) for any online transaction with a GOS agency.  The Government Technology Agency of Singapore (GovTech), which oversees digital services in the public sector as part of the Smart Nation and Digital Government Group, announced the requirement on December 18.  According to the announcement, GovTech described the initiative as an effort “to create better efficiencies and a more secure digital ecosystem for businesses to thrive in a Smart Nation.”  More information on the new requirement to use CorpPass can be found here.
• Finance Minister Heng Swee Keat recently stated that he expects government expenditures on healthcare to “rise quite sharply” in the next three to five years and beyond, potentially reaching at least S$13 billion by 2020.  Such an increase is a continuation of the trend of rising expenditures over the past few years, with total spending having almost tripled since 2011.  The budget allocation to health has also accordingly increased from S$4 billion in 2010 to S$10 billion this year.  The impact of a rapidly aging population on Singapore's economy has long been a concern of the Government.  As such, cost-effectiveness has become a focus of healthcare policy in Singapore as the Government seeks to prevent costs from spiraling out of control.  More information on the expected rise in healthcare spending in Singapore can be found here.

Advocacy

• In early December, the Council, BSA | The Software Alliance (BSA) and our members met the Infocomm Media Development Authority (IMDA) of Singapore to discuss the revised draft Cloud Outage Incident Response (COIR) standards.  At the meeting, IMDA reaffirmed its intent to proceed with the conversion of COIR guidelines to a local Singapore Standard.  Brief meeting notes are available here.  Following the meeting, BSA and the Council, with input from our members, submitted joint-association comments to the Singapore Government to reiterate concerns from our July 13 submission.  The most recent comments submitted by the Council and BSA can be found here.
• The Council is following changes to food regulations in Singapore as a potential future advocacy effort.  This month, we are gathering inputs from members on the proposed Amendments to the Food Regulations Regarding Labeling and Advertising for Infant Formula. The Competition Commission of Singapore (CCS) released its findings from a market inquiry into the supply of formula milk in the market. Based on the findings, CCS made recommendations to improve consumer awareness to counter the heavy marketing and "premiumization" messages. To support CCS' recommendation and as part of the "Whole of Government" effort to promote breastfeeding, Singapore will likely tighten the labeling and advertising requirements for infant formula.

View the Council's latest Singapore updates

Thailand

Major Developments

• On December 28, the Thai Food and Drug Administration released a draft regulation to ban the use of partially hydrogenated oils in food. The draft regulation is available for comments until January 28, and comments can be submitted based on instructions found here. While the new regulation may be burdensome and costly for food suppliers, it may provide a boost to Thailand’s growing palm oil sector. For more information, see our recent Thailand Update here,
• On January 4, Excise Department Director General Krisada Chinavichara stated that the department is studying the idea of placing a consumption-based tax on products that pose high threats to consumer health and the environment. The tax will be similar to a value added tax (VAT), which requires consumers to pay 7% on goods and services. The aim of the tax is to reduce consumption of the products in question, particularly because increases of excise taxes from a production base have not been successful in reducing consumption. For more information on the proposed tax, see our recent Thailand Update here.

Looking Ahead

Please save the date for the 2018 Thailand Business Mission, scheduled to take place on June 27-28, 2018 in Bangkok.  Contact Ella Duangkaew at eduangkaew@usasean.org with any questions.

View the Council's latest Thailand updates

Vietnam

Major Developments

2017 saw an economic recovery for Vietnam, including a 6.81% GDP year-on-year growth compared to 6.21% in 2016, as well as a $33 billion inflow in foreign direct investment.  Before the New Year, President Tran Dai Quang praised Vietnam's diplomacy efforts alongside its economic milestones, with highlights to include Vietnam's successful APEC host year as well as the first official state visit of U.S. President Donald Trump in November.

The Government of Vietnam (GOV) aims to continue its economic success of 2017 in the new year with a target GDP growth of 6.7%. In an effort to reach this goal, Prime Minister Nguyen Xuan Phuc has assigned specific economic targets to his Ministries for the new year. In addition to tasking the Ministry of Planning and Investment (MPI) with a target GDP growth of 6.7%, Prime Minister Phuc has also authorized MPI to assign development targets to ministries and government agencies in the ICT and education sectors, and business targets to SOEs and corporations. Further, Prime Minister Phuc has asked the Ministry of Industry and Trade (MOIT) to increase exports by 8-10%, the Ministry of Health (MOH) to provide for 88.5% of the population with the health insurance scheme, and the Ministry of Labour, Invalids and Social Affairs to maintain a 4% unemployment rate while increasing the rate of the skilled workforce to 58-60%. Alongside these economic targets, President Quang highlighted efforts on curbing corruption and wastefulness in 2018. The government will continue to prioritize low-income housing, education, and healthcare in the new year with the hope that improving these social institutions will reduce such problems.

Advocacy

The Council has been monitoring the draft decree to revise Decree 140/2007/ND-CP ("Decree 140") regarding regulations on logistics services. Most notably, this draft decree would allow for 100% foreign investment in three logistics service areas: trade forwarding, warehousing, and fast delivery services. This change is in line with Vietnam's WTO commitments. The draft decree is currently pending and is available here (in Vietnamese). If you are interested in engaging the GOV on this draft decree, please contact Vu Tu Thanh at tvu@usasean.org.

Looking Ahead

Please save the date for the 2018 Vietnam Business Mission on March 27-29 in Hanoi. More details including registration information will be sent to members soon. In addition, the Council’s Health & Life Sciences Industry Mission to Vietnam will immediately follow the general mission, on March 30.  For questions or to express interest, please contact Hai Pham at hpham@usasean.org.

View the Council's latest Vietnam updates