President's Newsletter - April 2018 | US-ASEAN Business Council

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

President’s Newsletter – April 2018

Dear Members,

First, I want to wish all our friends in Cambodia, Laos, Myanmar and Thailand a very happy new year.

This past month, like those before it, has been extremely busy. We have moved issues ahead for our members in multiple countries, been hosted by the ASEAN Finance Ministers and Central Bank Governors, host a number of Ministers in Washington, DC and lead a sectoral business mission to Vietnam alongside our annual Business Mission.

This week in Washington, DC we will host Deputy Prime Minister Prawit of Thailand, welcome four U.S. Ambassadors back to Washington for the start of our annual U.S. Ambassadors’ Tour. Ambassadors Donovan (Indonesia), Bitter (Laos), Davies (Thailand) and Kritenbrink (Vietnam) are the Ambassadors joining the 2018 tour.

We will also host our annual dinner in Washington DC on Thursday featuring the first public remarks by newly sworn-in Deputy United States Trade Representative for Asia, Europe, the Middle East and Industrial Competitiveness, Jeffrey Gerrish. Ambassador Gerrish will have the lead for any bilateral Free Trade Agreements with the Philippines and possibly other countries in Southeast Asia. He will also be the lead as USTR reevaluates the CPTPP and America’s reengagement in this important trans-Pacific agreement. We will also welcome Congressman Joaquin Castro, the co-Chairman of the ASEAN Caucus in the United States’ Congress and Congressman Ted Yoho, the Chairman of the Asia Subcommittee of the House Foreign Affairs Committee.

Malaysia elections: On April 10, Malaysia’s Election Commission announced that nominations for parliamentary and state seats will be held on April 28, and the general election is set for May 9. A total of 222 parliamentary seats and 505 seats in state legislatures will be contested. It is expected to be a tough race between the current governing coalition, Barisan Nasional (BN), led by Prime Minister Najib, and the opposition coalition, Pakatan Harapan (PH), led by Mahathir. While BN is expected to win the general election, the margin could be tight. Click here for an analytical update of the Malaysia elections.

Recent Events:

On April 18, the Council hosted a breakfast roundtable with Coordinating Minister for Maritime Affairs, H.E. General (Ret.) Luhut B. Pandjaitan. The discussion focused on Indonesia’s preparation as the host of the 2018 Annual Meetings of the IMF and the World Bank Group. The Coordinating Minister was also joined by His Excellency Rudiantara, Minister of Communication and Information Technology and His Excellency Ambassador Budi Bowoleksono. Later in the afternoon, the Council co-hosted a business roundtable with the U.S.-Indonesia Society in honor of His Excellency General (Ret.) Luhut B. Pandjaitan, Indonesia’s Coordinating Minister for Maritime Affairs, and Her Excellency Sri Mulyani Indrawati, Indonesia’s Minister of Finance on April 18. The roundtable discussed Indonesia’s economic development, overall investment climate, and investment opportunities for U.S. investors in Indonesia.
On April 19, in coordination with the Embassy of Indonesia, the Council hosted a small dinner in honor of Minister of Communication and Information Technology of Indonesia (KOMINFO) H.E. Rudiantara. The dinner provided a unique opportunity for members to engage with the Minister in an intimate setting and raise issues of concern, such as progress on the proposed revision to Government Regulation No. 82 of 2012, as well as KOMINFO’s efforts with regard to data privacy legislation.
From April 20-22, Coordinating Minister Luhut, Minister of Finance Sri Mulyani Indrawati, Bank Indonesia Governor Agus Martowardojo, BAPPENAS Minister Bambang Brodjonegoro and KOMINFO Minister Rudiantara visited Washington, D.C. to attend the IMF/World Bank Spring Meetings.

Past business missions:

Vietnam Business Mission: On March 28, the Council brought a delegation of 33 leading U.S. companies to engage the Government of Vietnam and held meetings with Prime Minister Nguyen Xuan Phuc, Vice Chairman of the National Assembly Uong Chu Luu, and leaders of other key ministries, state-owned enterprises and international organizations. The mission’s theme was framed around supporting the Government of Vietnam’s efforts to maintain economic restructuring and reform momentum in key sectors such as ICT, agriculture, healthcare and tax structure.
HLS Business Mission to Vietnam: On March 30, the Council engaged the Ministry of Health (MOH), the Vietnam Social Security agency, Vinmec International Hospital, and the National Assembly’s Committee on Social Issues. The mission also featured a panel discussion on healthcare industry development in Vietnam and a joint working group meeting with MOH as part of the Council’s MOU with MOH.
Mission to the ASEAN Finance Ministers and Central Bank Governors Meeting (AFMGM): On April 6, the Council held our regular consultation with the assembled Finance Ministers and Central Bank Governors of ASEAN in Singapore. The delegation emphasized the priority of supporting and adapting to new digital trends and supporting innovative technology in financial systems and the growing FinTech industry, which can help advance financial integration and financial inclusion. We highlighted that supporting data-driven analysis in natural catastrophe insurance is critical to sustainable and resilient development in a region prone to natural disasters would be crucial moving forward. In advancing these themes, the delegation drew attention to the importance of developing and harmonizing regulations across ASEAN that support the digital economy.

Upcoming events (Details below in looking ahead section):

Luncheon in honor of Thai Deputy Prime Minister and Minister of Defense General (Ret.) Prawit Wongsuwan in Washington, DC on April 25
Food & Agriculture Industry Mission to Indonesia, May 8-9

Highlights

Looking Ahead

On April 25, as the Defense Committee's first major program for 2018, the Council will host an intimate, off-the-record working luncheon with Thailand's Deputy Prime Minister and Minister of Defense General (Ret.) Prawit Wongsuwan during his official visit to Washington, D.C. for meetings with senior Defense Department officials. General Prawit is considered the second most influential politician in Thailand, directly following Prime Minister Prayut Chan-o-Cha. The luncheon will be a unique opportunity for members to engage with General Prawit and his accompanying delegation of senior military officials to raise issues of importance to U.S.-Thailand military-to-military relations. Per General Prawit's request, discussion will be limited to defense and security issues ONLY and total member participation will be capped at 10-12 representatives. To sponsor, please click here
On May 2-3, the Council’s annual Mission to the ASEAN Directors-General of Customs Meeting will take place in Langkawi, Malaysia. The delegation will join the assembled Directors-General on the afternoon of May 3 for a formal consultation to explore ways to increase cooperation between the U.S. private sector and ASEAN’s customs agencies. Members will also have the opportunity to meet bilaterally with select customs agencies on the sidelines of the event. The deadline for regular-priced registration passed today, April 23. Please contact Ian Saccomanno at isaccomanno@usasean.org or Ying Hui Tng at yhtng@usasean.org if you would still like to join
The Council is now registering members for its Food & Agriculture Industry Mission to Indonesia, May 8-9. This sector-focused mission will offer members an opportunity to engage key public and private sector stakeholders who make up Indonesia's domestic agriculture ecosystem. Please click here to register. The deadline for receipt of registration and mission materials is COB Thursday, April 26.
On May 14, the Council will hold the next lunch in its US-ASEAN President’s Luncheon series. The featured speaker for this lunch will be Professor David Lee Kuo Chuen (bio available here), who will speak on Blockchain and discuss its implications for businesses. The US-ASEAN President’s Luncheons are only for members who are Asia-Pacific or ASEAN Presidents. They serve as a platform for business leaders to engage in robust and informative discussions on broad issues in the region, and to provide an avenue for exploring cross-sectoral solutions and partnerships. More information on the lunch can be found here.

Advocacy

As Malaysia prepares for its General Election on May 9, the Council has continued its advocacy efforts regarding Bank Negara’s new regulations governing domestic electronic payments. The final regulations contained in the Interoperable Credit Transfer Framework (ICTF) were released on March 16. In response, the Council recently transmitted a letter to the office of the Prime Minister reiterating our concerns about the ICTF and noting that the same concerns have been transmitted to the office of the United States Trade Representative.
The Council utilized our 2018 Business Mission to Vietnam to recognize Vietnam’s strong GDP growth and to advocate that the Government of Vietnam continue to implement its institutional reform agenda in further addressing structural challenges in its economy. For Vietnam to sustain the developmental quality of its growth trajectory, continued reforms and investments are needed in areas such as infrastructure (physical and human capital), the SOE sector and the digital economy ecosystem. A clear statement of support for Vietnam to use the ratification and full implementation of the CPTPP as an external driver of domestic institutional reforms was delivered on our mission.

Relationship Building

This week, the Council will host our annual gala dinner in Washington, D.C. The dinner will feature remarks from Chairman of the Subcommittee on Asia and the Pacific Congressman Ted Yoho, Co-Chair of the U.S. Congressional Caucus on ASEAN Congressman Joaquin Castro, and the new Deputy U.S. Trade Representative for Asia, Europe, the Middle East, and Industrial Competitiveness Ambassador Jeffrey Gerrish; this is expected to be Ambassador Gerrish’s first public remarks since taking office. This year, our dinner will also officially kick off our annual U.S. Ambassadors’ Tour program, which includes U.S. Ambassador to Indonesia Joe Donovan, U.S. Ambassador to Laos Rena Bitter, U.S. Ambassador to Thailand Glyn Davies, and U.S. Ambassador to Vietnam Dan Kritenbrink. In addition to Washington, D.C., the Ambassadors’ Tour will also visit Seattle and Los Angeles for a week of engagements with Council members, business leaders, local government and the academic community.

Promotion

On April 26, at the Council’s office in Singapore, AlphaBeta will host a roundtable to discuss strategies to promote and implement sustainable urbanization in ASEAN cities. The discussion will help further the Master Plan on ASEAN Connectivity (MPAC) 2025's project, "Study to Advance Sustainable Urbanisation in ASEAN." Participants will be briefed on the ASEAN Sustainable Urbanisation Strategy, be welcomed to contribute perspectives on potential or existing challenges in implementing sustainable urbanization projects in ASEAN, and raise ideas on priority opportunities to drive sustainable urbanization. More information on the roundtable can be found here. Please contact Sunita Kapoor at skapoor@usasean.org with any questions.

Membership

We are pleased to welcome Alcoa to the Council as of April 15. Additionally, IBM has upgraded to the Chairman’s Council level as of April 1. This brings total membership to 154 members, with 73 Corporate members and 81 Chairman’s Council members.

The Council would like to thank the many members who were able to act as mentors to this semester’s Washington interns through our Brown Bag Lunch Series. These lunches are informal meetings between members and interns, meant to provide real-life advice and guidance to our interns. Thanks go out to: Anthony Nelson, Albright Stonebridge Group; Jennifer Schuch-Page, The Asia Group; Tom Egan, Baker McKenzie; Carr Slayton, Boston Scientific; Farrah Meisel, Bower Group Asia; Michael Bates, Citi; Kate Irvin, Coca-Cola (former); Rebecca Karnak, Dell; Flavia Alves, Facebook; Orit Frenkel, GE (former); Matthew Reisman, Microsoft; and Leslie Griffin, UPS. Thank you for being so generous with your time!

For more information on the Brown Bag Lunch Series, please contact Membership Director Kathi Lunardi at klunardi@usasean.org.

Regional Highlights

APEC

Major Developments

In late March, U.S. President Donald Trump sent a letter to Papua New Guinea (PNG) Prime Minister Peter O’Neill to confirm his attendance at the APEC Leaders’ Summit at the end of this year in Port Moresby. The summit will be the first hosted by PNG, and the country is taking steps, in terms of security, logistics and infrastructure, to make sure that the 21 leaders of the APEC economies are comfortable come November.

View the Council's latest APEC updates

ASEAN

Major Developments

On March 26, Dr. Aladdin D. Rillo of the Philippines assumed the position of Deputy Secretary-General for the ASEAN Economic Community (AEC), replacing outgoing DSG Lim Hong Hin. He will remain in office until 2021. In this role, DSG Rillo will lead the Secretariat’s regional economic integration efforts under the AEC Blueprint 2025 and will be the primary point of contact for all issues relating to the implementation of the AEC. Most recently, DSG Rillo worked as a Senior Economist at the Asian Development Bank Institute. From 2008 to 2013, he served at the ASEAN Secretariat as Head of Finance Integration Division (2008-2010) and as Director and Chief Economist, ASEAN Integration Monitoring Office (2010-2013). According to the ASEAN Charter, two DSGs are nominated by ASEAN Member States for a non-renewable three-year term, while two DSGs are recruited based on merit for a three-year term which may be renewed for another three years. The position of DSG for the ASEAN Economic Community is an openly-recruited, renewable position. The Council’s first engagement with DSG Rillo in his current capacity took place during the ASEAN Finance Ministers and Central Bank Governors Meeting (AFMGM), on April 5 in Singapore.
On April 5, operations of the ASEAN SME Academy, a joint project of USAID and the Council, was formally handed over to the ASEAN Coordinating Committee Meeting on Micro, Small, and Medium Enterprises (ACCMSME) and the Department of Trade and Industry of the Philippines (DTI). The Council will remain the key private sector partner in operating and expanding the Academy, offering a platform for leading U.S. companies to share their expertise among ASEAN’s SMEs. The Academy currently offers 52 courses and 360 links to resources for SMEs. As of 2018, more than 50,000 visitors have visited the site, and nearly 3,000 of these are active users regularly accessing new knowledge and skills that global companies and industry leaders have shared in the form of courses. View this press release for more information, and contact Mario Masaya at mmasaya@usasean.org and Vinsensius Kangen at vkangen@usasean.org with any questions.

View the Council's latest ASEAN updates

TPP

Major Developments

With the signing of the CPTPP agreement, the 11 member nations each have their own timetable for ratifying the deal. With Malaysia and Mexico holding national elections in May and July respectively, both are not likely to initiate their ratification processes until the later part of 2018. We expect CPTPP members such as Brunei, Japan, Singapore and Vietnam to have some of the least complicated ratification processes this year.

Advocacy

In business missions to Singapore and Malaysia later this year, ratification and implementation of the CPTPP will be a key advocacy element in the agendas of both missions.

Looking Ahead

The Council continues to monitor developments in the Regional Comprehensive Economic Partnership (RCEP) negotiations, ASEAN’s #1 international trade policy priority. While the process remains slow, analysts have begun to note the potential additional income benefits of CPTPP-only members (Canada, Mexico, Peru, and Chile) joining RCEP, and RCEP-only members (Cambodia, China, India, Indonesia, Laos, Myanmar, Philippines, South Korea, and Thailand) joining the CPTPP.

View the Council's latest TPP updates

Industry Highlights

Customs

Major Developments

The 24th ASEAN Economic Ministers (AEM) Retreat and related meetings took place in Singapore February 28-March 3. The ministers discussed matters related to the ASEAN Economic Community (AEC), including the implementation of the AEC Blueprint 2025, which aims to deepen regional economic integration. Singapore Minister for Trade and Industry Lim Hng Kiang called on the ASEAN members to enhance and upgrade their trade infrastructure by improving trade facilitation, deepening services and investment integration, cultivating a conducive regulatory environment, and progressing ASEAN’s external relations. The ministers are planning to jointly promote the digital economy, including the creation of a new cross-border e-commerce framework, to allow the region’s businesses to better capture growth opportunities.

On March 1-3, the fourth intercessional Regional Comprehensive Economic Partnership (RCEP) Ministerial meeting was held alongside the AEM Retreat, during which Ministers from the 16 RCEP countries discussed ways to further the negotiations. While the leaders still hope to complete the agreement this year, a “divergence on the levels of ambition in some areas” and a need to find “pragmatic landing zones” for the negotiations were noted in the joint statement, which can be accessed here. The Ministers instructed all negotiators to ensure that every negotiating round and intercessional meeting achieve concrete outcomes and reiterated the commitment to expedite negations on rules.

Advocacy

The Council joined other private sector representatives to hold a consultation with the ASEAN Customs Coordinating Committee in Bandung, Indonesia, as ASEAN prepares for the next meeting of the ASEAN Directors General of Customs May 2-4. The Council’s delegation presented proposals to work with ASEAN on cross-border e-commerce capacity building, workshops on new customs technologies, export controls enforcement, brand protection training, and increasing cooperation on transfer pricing issues. These initial proposals will form the basis of the white paper the Council brings to the Customs DG meeting in May.

Looking Ahead

On May 2-3, the Council’s annual Mission to the ASEAN Directors-General of Customs Meeting will take place in Langkawi, Malaysia. The delegation will join the assembled Directors-General on the afternoon of May 3 for a formal consultation to explore ways to increase cooperation between the U.S. private sector and ASEAN’s customs agencies. Members will also have the opportunity to meet bilaterally with select customs agencies on the sidelines of the event. The deadline for regular-priced registration passed today, April 23. Please contact Ian Saccomanno at isaccomanno@usasean.org or Ying Hui Tng at yhtng@usasean.org if you would still like to join.

View the Council's latest Customs updates

Defense & Security

Looking Ahead

On April 25, as the Defense Committee's first major program for 2018, the Council will host an intimate, off-the-record working luncheon with Thailand's Deputy Prime Minister General (Ret.) Prawit Wongsuwan during his official visit to Washington, D.C. for meetings with senior Defense Department officials. In addition to his role as Deputy Prime Minister, General Prawit serves as Minister of Defense, and Deputy Chairman of the National Council for Peace and Order (NCPO). In these capacities, he is considered the second most influential politician in Thailand, directly following Prime Minister Prayut Chan-o-Cha. He is a close and trusted advisor to the Prime Minister and is in charge of all key defense procurement decisions for the Royal Thai Military.

The luncheon will be a unique opportunity for members to engage with General Prawit and his accompanying delegation of senior military officials to raise issues of importance to U.S.-Thailand military-to-military relations. Per General Prawit's request, discussion will be limited to defense and security issues ONLY and total member participation will be capped at 10-12 representatives. To sponsor, please click here. Please contact Jack Myint at jmyint@usasean.org or Ella Duangkaew at eduangkaew@usasean.org with any questions.

View the Council's latest Defense & Security updates

Energy

Major Developments

On March 6, Sarawak Chief Minister Abang Johari Openg announced that the Malaysian state would assume full regulatory authority over the upstream and downstream operations of the state's oil and gas industry by July. The Chief Minister made the announcement at the launch of Petroleum Sarawak Bhd (Petros), Sarawak's state-owned oil and gas company. Currently, Petronas, Malaysia's national oil and gas company, maintains legal ownership and rights over all oil fields nationwide. As part of this arrangement, federal and state governments receive cash payments from Petronas for petroleum deposits that are exploited and processed within their jurisdictions. With the formation of Petros, the first state-owned oil and gas company in Malaysia, Sarawak will be able to earn its own revenues through exploration and downstream activities. More information on this topic can be found here.
On February 23, the Asian Development Bank (ADB) announced a US$235 million loan to B.Grimm Power Public Company Limited, one of the largest power producers in Thailand, to support the company's implementation of the ASEAN Distributed Power Project (Phase 2), which will expand renewable and distributed power generation into new markets in ASEAN. The project will involve the execution and operation of distributed and utility-scale solar, wind, biomass, waste-to-energy, gas-fired power, energy storage, as well as associated infrastructure in ASEAN countries. The ADB intends for the main beneficiaries of the project to be communities, small businesses and micro enterprises, and industrial firms employing large workforces in Cambodia, Laos, and Myanmar, where a significant proportion of the population still lacks access to electricity. The ADB intends for the main beneficiaries of the project to be communities, small businesses and micro enterprises, and industrial firms employing large workforces in Cambodia, Laos, and Myanmar, where a significant proportion of the respective populations still lack access to electricity. More information on the implementation of the ASEAN Distributed Power Project (Phase 2) can be found here.
On March 20, Philippines Foreign Secretary Alan Peter Cayetano visited Beijing, at the invitation of Chinese Foreign minister Wang Yi to discuss a legal framework through which both countries could pursue offshore oil and gas exploration schemes. After the meeting, the Chinese Foreign Minister said that China will prudently advance cooperation with the Philippines on joint oil and gas exploration in the South China Sea. During President Rodrigo Duterte’s visit to China to participate in the annual Boao Forum for Asia, Duterte and Xi reportedly discussed joint offshore oil development in the South China Sea and subsequently agreed to craft a framework for joint exploration. The timeline for the crafting of the framework is currently unclear.

View the Council's latest Energy updates

Financial Services

Major Developments

On April 2, the fourth annual ASEAN Finance Ministers and Bank Governors Meeting (AFMGM) convened in Singapore. With Singapore’s overall chairmanship theme for ASEAN focusing on resilience and innovation, the Ministers and Governors reaffirmed their commitment to international trade and investment as they remained “vigilant against risks.” In keeping with the innovation theme, the Ministers and Governors recognized both the significance of technology in transforming the financial industry and the potential of secure, interconnected payment systems to promote ASEAN economic integration. They also explored challenges to infrastructure finance, pledged to raise investor understanding of infrastructure investment opportunities in ASEAN, and promote wider adoption of standardized contractual provisions to help attract institutional investors and private capital. They also announced plans to build up capabilities in project preparation and management through cooperation with the Asian Development Bank, Asian Infrastructure and Investment Bank, and the World Bank.

Advocacy

On April 5-6, a 15-company delegation from the Council joined the AFMGM for a luncheon consultation with the assembled leaders. The Council’s presentation, which mostly focused on enabling digital finance, can be accessed here. The Council also held bilateral meetings with the Central Banks of Thailand, the Philippines, Myanmar, and Singapore, as well as the Indonesian Minister of Finance Sri Mulyani Indrawati.

View the Council's latest Financial Services updates

Food & Agriculture

Major Developments

In Vietnam, the introduction of a new safeguard duty on fertilizer has raised concerns regarding high fertilizer prices and domestic agricultural production. Vietnam’s Ministry of Industry and Trade (MOIT) introduced Decision No. 686/QĐ-BCT, which issues a two-year long safeguard measure for fertilizer, in March. Beginning March 7, imported fertilizers will be subjected to a tax of VND 1,128,531 (US$50) per ton, equal to the difference between the fertilizer sale price and the break-even price for domestic producers. One year after that, the tax will drop to VND1,072,104 (US$47) per ton through March 6, 2020. MOIT will then decide if extending safeguard measures is necessary. While MOIT has taken care to align the safeguard measures with domestic trade and WTO policies, farmers note that these measures will simply increase the already costly prices of fertilizer. Instead of an import tariff, farmers and other experts are arguing for policies that would decrease illegal smuggling and the selling of fake fertilizers and raise the standard of quality for domestic fertilizers to match imported ones. Most notably, farmers have advocated for a zero percent value-added tax (VAT) in the wake of Decision No. 686, which would allow businesses to receive a refund on taxes paid for input materials.

Looking Ahead

The Council is now registering members for its Food & Agriculture Industry Mission to Indonesia, May 8-9. This sector-focused mission will offer members an opportunity to engage key public and private sector stakeholders who make up Indonesia's domestic agriculture ecosystem. Please click here to register. The deadline for receipt of registration and mission materials is COB Thursday, April 26. For more information on the mission, please contact Sunita Kapoor (skapoor@usasean.org) and Hai Pham (hpham@usasean.org).

View the Council's latest Food & Agriculture updates

Health & Life Sciences

Major Developments

On March 29 in Singapore, the Agency for Care Effectiveness (ACE) published the first Health Technology Assessment (HTA) evaluation for a medical device in Singapore. The technology evaluated was bilateral cochlear implants (CI) for children with severe-to-profound sensorineural hearing loss in both ears. The Ministry of Health’s (MOH) Medical Technology Advisory Committee recommended the implants as early as clinically suitable, and a recommendation was made to provide subsidies to the CI devices (standard package) in the Annex of the report. It includes products from four different companies, which differs from how drugs are normally subsidized, as typically only the cheapest molecule in a therapeutic class receives subsidies. Possible reasons for this include a non-significant difference between the prices of the recommended devices, and that device design may differ to the point that one model does not fit the needs of all patients.

The expansion of the HTA process in Singapore to include medical devices helps to provide manufacturers with clarity on expectations and processes around government subsidies for devices. In February 2018, the ACE Drug Evaluation Methods and Process Guide laid out the process for evaluating drugs in Singapore. A revision or separate document would help ensure consistency of the evaluation process for medical devices and indicate how much the ACE will focus on medical device HTA. At present, it is unclear how HTA will be used in Singapore for medical devices, and which medical devices will undergo HTA in the future.

Advocacy

The Philippines recently released an Administrative Order for Medical Device Registration that took effect on March 30. The Order aims to provide guidelines on the documentary requirements for medical device registration and align the requirements to the CSDT based on the provisions of the ASEAN Medical Device Directive. The list of medical devices and classifications have not been released yet. However, in-vitro diagnostic and refurbished medical devices are exempted from the AO. One major concern is the lack of clear timelines on certain outstanding items from the FDA, including a list of medical devices per classification A to D, setting up a notification process, and when the separate AO for IVDs and refurbished medical devices will be completed. Furthermore, it is unclear when companies need to comply with the AO, as it appears to have come into effect on March 30, 2018 and includes a one-year implementation period that ends on March 30, 2019. The Council is following this issue closely and welcomes feedback and concerns from members.
On March 29-30, the Council organized its annual Health & Life Sciences Industry Mission to Vietnam. On the first day of the mission, the delegation of 13 companies met with Vice Minister of Health Truong Quoc Cuong as part of its regular joint working group activity under the Council’s MOU with the Vietnam Ministry of Health. During this meeting, Vice Minister Cuong was open to partnering with the Council on a workshop to guide the implementation of Decree 54, and the Council is currently working to follow up with Vice Minister Cuong on this engagement. The Council is also following up with MOH to receive the draft circular on centralized procurement for medical devices to provide comments. For more information, please contact Ying Hui Tng at yhtng@usasean.org and Hai Pham at hpham@usasean.org.

View the Council's latest Health & Life Sciences updates

ICT

Major Developments

The Office of the U.S. Trade Representative issued its 2018 National Trade Estimate report citing new data localization policies and other digital practices in Indonesia, Vietnam, and Thailand as “key barriers to digital trade.” Click here for the official fact sheet and here for the full report.
Singapore recently became the sixth APEC economy to participate in the Cross-Border Privacy Rules System (CBPR) and the second APEC economy to participate in the Privacy Recognition for Processors System (PRP). For more information, see our recent ICT Update here.
The Ministry of Digital Economy and Society of Thailand and the Ministry of Internal Affairs and Communications of Japan are jointly launching an ASEAN-Japan Cybersecurity Capacity Building Center in Thailand in June. The Center aims to enhance the cybersecurity workforce for governmental agencies and critical information infrastructure operators in ASEAN. For a detailed summary, see our recent ICT Update here.

Advocacy

During the 2018 Indonesia Business Mission March 13-15, the Council followed up with the Indonesian government on our comments to the draft amendment to Government Regulation 82/2012. BKPM Chairman Tom Lembong informed the Council delegation that he did not think the draft amendment was up to the standard needed and the amendment was subsequently stalled. Minister of Communication and Information Technology Rudiantara reiterated that the amendment was not yet finished, but that an upcoming inter-ministerial meeting would be held to discuss the draft amendment and he would share an update with the Council when he visits Washington this month. in April.
On April 19, the Council co-hosted a dinner with the Indonesian Embassy to the U.S. in honor of H.E. Rudiantara, Minister of Communication and Information Technology of Indonesia. The dinner included senior-level representatives from ICT, financial services and defense member companies, as well as U.S. government representatives from the White House Office of Science and Technology Policy, the National Security Council and the U.S. Department of State Office of International Communications and Information Policy, and representatives from the Indonesian Ministry of Communication and Information Technology (KOMINFO) and the Indonesian Embassy. The participants discussed the status of Government Regulation 82 and data privacy regulations, with emphasis on the APEC Cross-Border Privacy Rules as a model for data privacy legislation in Indonesia. as well as prospects for 5G and satellite innovation, fintech regulatory sandboxes, and other opportunities for investment, innovation and public-private partnerships for ICT companies in Indonesia.

Looking Ahead

The Council will be hosting its first roundtable discussion of the ASEAN-US Digital Policy Consultative Forum on the sidelines of the ASEAN TELSOM-ATRC Joint Working Group Meeting in Malaysia, which is tentatively scheduled for June. The aim of this half-day roundtable is to examine and exchange views on policy approaches to innovation and new digital tools to unleash their economic potential. Please contact Ella Duangkaew (eduangkaew@usasean.org) or Mario Masaya (mmasaya@usasean.org) with any questions.

View the Council's latest ICT updates

Infrastructure

Major Developments

On March 28, the "ASEAN-Australia Infrastructure Co-operation Initiative" was revealed during the ASEAN-Australia Special Summit in Sydney. The initiative aims to fulfill Southeast Asia’s infrastructure needs through Public Private Partnerships (PPPs) and the use of high-quality products and advanced technology. In an announcement made by the Australian Government that same day, plans to take on an active role in the design and planning of [Southeast Asia’s infrastructure] projects were outlined including use of the Sydney-based G20 Global Infrastructure Hub as a resource to "increase collaboration between the public sector and private investors towards funding ASEAN infrastructure projects." It is currently unclear how much in funding Australia intends to allocate towards this endeavor but it is clear that it has laid out its first concrete step in joining the likes of the United States, Japan, and India to compete with China’s preeminent and domineering One Belt, One Road (OBOR) Initiative in the region’s infrastructure space, which seeks to fund and build trade and transportation links in more than 60 countries with an estimated price tag of US$ 5 trillion globally. According to the Asian Development Bank (ADB), there is need for approximately US$ 26 trillion in new infrastructure spending in Asia over the next 15 years, less than half of which is currently under way. This leaves plenty of space for the United States, Japan, India, and Australia, to fill in the gaps, and the creation of joint infrastructure schemes with ASEAN could also create additional commercial opportunities for more players.

Looking Ahead

View the Council's latest Infrastructure updates

Country Highlights

Brunei

Major Developments

On March 20, Brunei’s Legislative Council unanimously approved a national budget allocation of B$5.3 million (US$4 billion) for the 2018/2019 fiscal year. The new budget, which took effect on April 1, is lower in comparison to the B$5.6 billion budget for the 2016/2017 fiscal year and the B$6.3 billion for the 2015/2016 fiscal year. According to Second Minister of Finance Mohd Amin Liew, the proposed allocation will be insufficient to cover total government spending projected to be B$3.76 billion, resulting in a B$1.54 billion financial deficit. The projection has taken into account a revenue of B$2.5 billion from the oil and gas sector and B$941.3 million from the non-oil and gas sector which makes up 27.3 percent of total revenue. Deliberating on the budget during the ongoing 14th Legislative Council session, Minister Mohd Amin Liew stated that although the recent global oil economic situation has shown positive development, volatile oil price and other factors beyond control have made a significant impact to the nation’s economy. To build economic growth and ensure continued prosperity of the nation, the focus is given to fiscal consolidation and sustainability by emphasizing cost effectiveness, pro-business and prudent spending without affecting productivity and government revenues in the long term. Brunei’s 2018/2019 budget promotes prudent spending, establishment of job opportunities and capacity building, enhancement of productivity through innovation, business facilitation, and the upholding of public welfare.

View the Council's latest Brunei updates

Cambodia

Major Developments

In late March, the U.S. Congress passed a $1.3 trillion omnibus spending bill, which included a provision to cut international development aid to Cambodia unless the government reverses course on its continuing crackdown on free speech, releases all political prisoners and legally reinstates the opposition Cambodian National Rescue Party (CNRP).

The bill outlined that none of the funding allocated to assist the Cambodian government will be made available unless the Secretary of State reports that Cambodia is “taking effective steps” to respect the rights of citizens’ political and civil liberties. Additionally, in an attempt to limit China’s influence in the country, the bill stipulates its release of U.S. funds be contingent upon Cambodia’s strengthening of “regional security and stability, particularly regarding territorial disputes in the South China Sea and the enforcement of international sanctions towards North Korea.”

Funding will continue, however, for democracy-oriented education and research programs, education surrounding the Khmer Rouge, and “programs in Khmer language that aim to counter the influence of China in Cambodia.” Prime Minister Hun Sen was quick to respond to this in his public speech the next day by aligning his government’s foreign policy closer towards China, and lauding its non-interference policy, unlike “others who talk much, and do less,” hinting at the United States. The Council will continue to monitor the USG for other changes in policy which could impact U.S.-Cambodia economic relations.

View the Council's latest Cambodia updates

Indonesia

Major Developments

The Ministry of Industry launched a “Making Indonesia 4.0” roadmap as part of the 2018 Indonesia Industrial Summit aimed at accelerating the development of the country’s manufacturing industry. The roadmap identifies five core manufacturing sectors, deemed as the backbone of Indonesia’s economy: food and beverages, chemical, textile, automotive and electronics. In the early 2000s, Indonesia’s manufacturing industry contributed 27.4 percent to the nation’s GDP. However, the figure fell to 21 percent in the third quarter of 2017. The new roadmap is expected to boost Indonesia’s economy by 12 percent, putting GDP growth rates at 6-7 percent per year. By 2030, Indonesia’s manufacturing industry is targeted to contribute between 21-26 percent to its GDP, and job creation is estimated at 7-19 million.
Following up on Indonesia’s 16th economic policy package aimed at improving ease of doing business in Indonesia, Presidential Regulation No. 20/2018 on the Recruitment of Foreign Workers was issued to simplify the permit application process for foreign workers and expand work opportunities in the country. Effective June 29, the new regulation will revoke Presidential Regulation No. 72/2014 currently governing the same subject. The new regulation extends the scope of employers of foreign workers, allowing qualified employers operating within certain business sectors to recruit foreign workers who are currently working in similar positions for other companies. In addition, Foreign Worker Recruitment Plans (RPTKA) which have been approved by the Ministry of Manpower are now also considered valid permits for the recruitment of foreign workers, thus making them similar in function to Foreign Worker Recruitment Permits (IMTA). Previously, employers were required to secure approvals for both RPTKA and IMTA. This initiative is a followup by President Joko Widodo in cooperation with Vice President Kalla, Minister of Law and Human Rights, Minister of Manpower, Minister of Trade, Minister of Industry, and Minister of Marine Affairs and Fisheries to discuss channels that can be utilized to stimulate investment, in an effort to improve Indonesia’s business environment and boost competitiveness.

Advocacy

On April 18, the Council hosted a breakfast roundtable with Coordinating Minister for Maritime Affairs, H.E. General (Ret.) Luhut B. Pandjaitan. The discussion focused on Indonesia’s preparation as the host of the 2018 Annual Meetings of the IMF and the World Bank Group. The Coordinating Minister was also joined by His Excellency Rudiantara, Minister of Communication and Information Technology and His Excellency Ambassador Budi Bowoleksono. Seniorlevel representatives from the American Council of Life Insurers, American Insurance Association, Institute of International Finance and Reinsurance Association of America were also in attendance, in addition to representatives from multiple sectors such as aviation, ICT, financial services and defense.
The Council cohosted a business roundtable with the U.S.-Indonesia Society in honor of His Excellency General (Ret.) Luhut B. Pandjaitan, Indonesia’s Coordinating Minister for Maritime Affairs, and Her Excellency Sri Mulyani Indrawati, Indonesia’s Minister of Finance on April 18. The roundtable discussed Indonesia’s economic development, overall investment climate, and investment opportunities for U.S. investors in Indonesia.

Luhut, Minister of Finance Sri Mulyani Indrawati, Bank Indonesia Governor Agus Martowardojo, BAPPENAS Minister Bambang Brodjonegoro and KOMINFO Minister Rudiantara visited Washington, D.C. to attend the IMF/World Bank Spring Meetings from April 20-22.
On April 19, the Council co-hosted a dinner with the Indonesian Embassy to the U.S. in honor of H.E. Rudiantara, Minister of Communication and Information Technology of Indonesia. The dinner included senior-level representatives from ICT, financial services and defense member companies, as well as U.S. government representatives from the White House Office of Science and Technology Policy, the National Security Council and the U.S. Department of State Office of International Communications and Information Policy, and representatives from the Indonesian Ministry of Communication and Information Technology (KOMINFO) and the Indonesian Embassy. The participants discussed the status of Government Regulation 82 and data privacy regulations, with emphasis on the APEC Cross-Border Privacy Rules as a model for data privacy legislation in Indonesia. as well as prospects for 5G and satellite innovation, fintech regulatory sandboxes, and other opportunities for investment, innovation and public-private partnerships for ICT companies in Indonesia.

View the Council's latest Indonesia updates

Laos

Major Developments

Laos will be looking to increase its cooperation with Greater Mekong Subregion (GMS) countries. On March 19, Director General of the Planning and Cooperation Department Mr. Sengdarith Kattignasack stated, during the GMS Association Board of Directors General Meeting, that the Government’s goal is to transform Laos into a Transit Transport Service Provider within the region through land links. For more information, see our recent Laos Update here.
Plans have been developed for a commercial development around the Khonphapheng Waterfall in Champassak Province. As of March 27, provincial officials have allocated 7,000 hectares for the development, but are waiting for a decision from the National Government to allot the full 9,000 hectares needed for the project. To accommodate the project, Champassak Provincial Authorities and the Guangdong Yellow River Industrial Group are currently setting up the Khonphapheng Special Economic Zone. For more information, see our recent Laos Update here.

Looking Ahead

The Bank of Laos and the U.S. Embassy in Vientiane are seeking private sector sponsorship of the second Laos Digital Forum on June 29, focusing on FinTech. For more information, or if you are interested in sponsoring, please contact Ella Duangkaew at eduangkaew@usasean.org.

Please save the date for the 2018 Laos Business Mission August 23-24 in Vientiane. Contact Ella Duangkaew at eduangkaew@usasean.org with any questions.

View the Council's latest Laos updates

Malaysia

Major Developments

On April 10, Malaysia’s Election Commission announced that nominations for parliamentary and state seats will be held on April 28, and the general election is set for May 9. A total of 222 parliamentary seats and 505 seats in state legislatures will be contested. It is expected to be a tough race between the current governing coalition, Barisan Nasional (BN), led by Prime Minister Najib, and the opposition coalition, Pakatan Harapan (PH), led by Mahathir. While BN is expected to win the general election, the margin could be tight. Click here for an analytical update on the upcoming election.
On February 9, the Ministry of International Trade and Industry (MITI) released its first-ever proposal of the National Industry 4.0 Policy Framework (found here). The draft outlines Malaysia's goals and objectives to achieve the status of the fourth industrial revolution by empowering key stakeholders in this initiative, particularly SMEs in the manufacturing sector. To achieve those goals, the framework outlined that Malaysia would have to attract stakeholders to Industry 4.0 technologies and processes, and further increase its attractiveness as a preferred manufacturing location; create the right ecosystem for Industry 4.0 to be adopted and align existing and future development initiatives; and transform its industry capabilities in both a holistic and an accelerated manner.

View the Council's latest Malaysia updates

Myanmar

Major Developments

On March 22, two days after the resignation of Lower House (Pyithu Hluttaw) Speaker U Win Myint, Deputy Lower House Speaker U T Khun Myat was elected Speaker, and Bills Committee Chairman U Tun Tun Hein was elected Deputy Speaker. See our recent Update on the resignations of President U Htin Kyaw and Speaker U Win Myint here.

Speaker U T Khun Myat, an ethnic Kachin, was a member of the opposition Union Solidarity and Development Party (USDP), until he was ousted from the party in 2017 as part of the USDP's efforts to purge allies of former Speaker Thura U Shwe Mann. U Shwe Mann, since leaving the Speakership, has been a close confidante and trusted advisor to State Counsellor Daw Aung San Suu Kyi and heads the powerful Parliamentary Legal Affairs and Special Cases Assessment Commission. U T Khun Myat's rise to power and close relationship to the NLD Leadership has been attributed to U Shwe Mann’s behind-the-scenes influence. The newly-elected Speaker officially identifies himself as “Independent,” but is seen as an U Shwe Mann loyalist.

Deputy Speaker U Tun Tun Hein is a longtime member of the NLD and has served on its Central Executive Committee for several years. He won a seat in Parliament for Nawngcho constituency in 1990, but was denied the position when the military nullified the results of the election. He ran again for the same constituency in 2015 and won in a landslide.

View the Council's latest Myanmar updates

Philippines

Major Developments

On March 15, the Philippines Bureau of Internal Revenue issued Revenue Regulations 11, 12, and 13, which contain Implementing Rules and Regulations (IRRs) of the Tax Reform for Acceleration and Inclusion (TRAIN) Act. The recently released Revenue Regulations amend existing rules involving withholding of income tax, estate and donor taxes, and value-added tax (VAT). These three regulations bring the total count of Revenue Regulations issued since January to 13. More information on the recently released IRRs for the TRAIN Act can be found here.
On March 26, the Department of Trade and Industry announced that the Philippines will continue to enjoy the incentives under the US Generalized System of Preferences (GSP) through December 31, 2020. The announcement follows President Donald Trump's signing of the Omnibus Spending Bill on March 23, which included GSP renewal language as well as a mechanism that refunds tariffs paid from January 1 through the reinstatement date of the program. Philippine Secretary of Trade and Industry Ramon Lopez said that GSP exports account for 18 percent of Philippines exports to the United States, valued at an estimated US$1.59 billion. More information on the renewal of GSP for the Philippines can be found here.
On March 20, Philippines Foreign Secretary Alan Peter Cayetano visited Beijing, at the invitation of Chinese Foreign Minister Wang Yi to discuss a legal framework through which both countries could pursue offshore oil and gas exploration schemes. After the meeting, the Chinese Foreign Minister said that China will prudently advance cooperation with the Philippines on joint oil and gas exploration in the South China Sea. During President Rodrigo Duterte’s visit to China to participate in the annual Boao Forum for Asia, Duterte and Xi reportedly discussed joint offshore oil development in the South China Sea and subsequently agreed to craft a framework for joint exploration. The timeline for the crafting of the framework is currently unclear.
President Rodrigo Duterte continued with his policy of deepening the Philippines’ economic ties with China during his April 9-12 visit to the country to participate in the annual Boao Forum for Asia in Hainan Province. During his visit, which included a bilateral meeting with President Xi Jinping, Duterte witnessed the signing of six bilateral agreements, including agreements on economic and technical cooperation. A key focus of the trip was increasing Chinese investment in Philippine infrastructure, including the role that China will play in rebuilding the battle-ravaged city of Marawi.

Advocacy

As a follow-up to the discussions on key provisions of TRAIN 2 during the 2018 Philippines Business Mission, the second package in the Government's Comprehensive Tax Reform Program, the Council is requesting member company input on the proposed TRAIN 2 (found here). This input will be used to draft a letter to the Ways and Means Committee in the House of Representatives conveying the private sector's feedback to the TRAIN 2 proposal. Please provide your feedback to Riley Smith at rsmith@usasean.org.

View the Council's latest Philippines updates

Singapore

Major Developments

Between March 1-8, the Parliament of Singapore sat as the Committee of Supply (COS) to examine each Government Ministry's expenditure plans under the proposed Budget 2018, which features heavy investments in infrastructure and an emphasis on technological growth, environmental sustainability, and fiscal responsibility. Minister for Trade and Industry (Industry) S Iswaran emphasized the importance of MTI's role in supporting each sector, enterprise, and individual worker during the COS debate. He spoke about forming partnerships in the infrastructure sector to address the significant opportunities that span different industries, such as financial services, professional services, precision engineering, and construction. In terms of trade priorities for MTI, Minister for Trade and Industry (Trade) Lim Hng Kiang spoke about pursuing an ASEAN Agreement on e-commerce to streamline e-commerce regulations and help businesses leverage the e-commerce market potential in Southeast Asia. More information on the COS debate, including the priorities of the Ministry of Communications and Information, the Ministry of Finance, and the Ministry of Transportation, can be found here.
On April 2, the Monetary Authority of Singapore announced that it is working with stakeholders to develop a guide to promote the responsible and ethical use of artificial intelligence (AI) and data analytics by financial institutions (full media release available here). The guide “will set out key principles and best practices” for the use of AI and data analytics, which will help financial institutions “strengthen internal governance and reduce risks of data misuse.” MAS intends to cover all segments of the financial sector including FinTech firms.

Advocacy

On March 20, the Council submitted comments to the Inland Revenue Authority of Singapore (IRAS) on the e-Tax Draft GST Guide on Taxing Imported Services by Way of Reverse Charge (available here) and the e-Tax Draft GST Guide on Taxing Imported Services by Way of an Overseas Vendor Registration Regime (available here). The Council's final submission on the first Draft Guide (which was specific to B2B transactions) can be found here, and the Council's final submission on the second Draft Guide (which was specific to B2C transactions) can be found here. IRAS released the above Draft Guides on February 20 and accepted public comments until March 20. Previously, IRAS had issued a call for input on a proposal for a broader, simplified vendor registration system for imports of low-value goods and digital services. The Council submitted a letter on June 30, 2017 commenting on the proposal (final submission found here).
On March 28, the Singapore Committee held its first Quarterly Call for 2018. During the call the Committee reviewed its activities in 2017 and discussed advocacy priorities and upcoming engagements as part of the review of the Singapore Committee's 2018 Work Plan. Notes from the call can be found here. An updated version of the 2018 Work Plan for the Singapore Committee can be found here. If you have any questions about the call or the 2018 Work Plan, please contact Riley Smith at rsmith@usasean.org.

Looking Ahead

On April 26, at the Council’s office in Singapore, AlphaBeta will host a roundtable to discuss strategies to promote and implement sustainable urbanization in ASEAN cities. The discussion will help further the Master Plan on ASEAN Connectivity (MPAC) 2025's project, "Study to Advance Sustainable Urbanisation in ASEAN." Participants will be briefed on the ASEAN Sustainable Urbanisation Strategy, be welcomed to contribute perspectives on potential or existing challenges in implementing sustainable urbanization projects in ASEAN, and raise ideas on priority opportunities to drive sustainable urbanization. More information on the roundtable can be found here.
On May 14, the Council will hold the next lunch in its US-ASEAN President’s Luncheon series. The featured speaker for this lunch will be Professor David Lee Kuo Chuen (bio available here), who will speak on Blockchain and discuss its implications for businesses. The US-ASEAN President’s Luncheons are only for members who are Asia-Pacific or ASEAN Presidents. They serve as a platform for business leaders to engage in robust and informative discussions on broad issues in the region, and to provide an avenue for exploring cross-sectoral solutions and partnerships. More information on the May 14 lunch can be found here.

View the Council's latest Singapore updates

Thailand

Major Developments

The Thai Finance Ministry will soon implement a 7 percent value added tax (VAT) on e-commerce transactions between foreign providers and Thai consumers. Currently foreign e-commerce providers are not subject to the 7 percent VAT while local businesses are required to pay it. The Revenue Department will seek cooperation from the Digital Economy and Society Ministry to encourage foreign e-commerce companies to participate in the tax collection system. The VAT draft has already passed the public hearing procedure required by the current Thai Constitution. The Council submitted comments for this draft Act on February 9 (final submission can be found here). For more information, see our recent Thailand Update here.
On March 22, the National Legislative Assembly (NLA) passed a mid-year supplementary budget plan worth Bt150 Billion (US$4.8 billion), with a strong focus on rural economic development, intending to help the agricultural sector become more responsive to market demands and decrease production costs. For more information, see our recent Thailand Update here.
On March 29, the Thai Cabinet approved a draft of a Royal Decree that would regulate cryptocurrencies and initial coin offerings (ICOs). If the draft goes into effect, all cryptocurrency trades will be subject to a flat 7 percent value-added tax (VAT). For more information, see our recent Thailand Update here.

Advocacy

The Revenue Department of Thailand has released a summary and analysis of the comments received during the public hearing period on the E-commerce tax, which closed on February 9. Unofficial translations of the summary and the analysis can be found here and here respectively.
On April 9, the Council hosted a roundtable with Mrs. Nuntawan Sakuntanaga, Permanent Secretary, Ministry of Commerce of Thailand, while she was in Washington for the U.S.-Thailand TIFA talks.

Looking Ahead

On May 17-19, please join the Rubber Authority of Thailand (RAOT) for a Rubber Seminar and Field Trip Program in Southern Thailand. The program will showcase Thailand’s standing as a natural rubber exporter and will provide opportunities to form new partnerships in the natural rubber market. If interested in registering, or if you have any questions, please contact Ella Duangkaew at eduangkaew@usasean.org.
On April 25, as the Defense Committee's first major program for 2018, the Council will host an intimate, off-the-record working luncheon with Thailand's Deputy Prime Minister General (Ret.) Prawit Wongsuwan during his official visit to Washington, D.C. for meetings with senior Defense Department officials. In addition to his role as Deputy Prime Minister, General Prawit serves as Minister of Defense, and Deputy Chairman of the National Council for Peace and Order (NCPO). In these capacities, he is considered the second most influential politician in Thailand, directly following Prime Minister Prayut Chan-o-Cha. He is a close and trusted advisor to the Prime Minister and is in charge of all key defense procurement decisions for the Royal Thai Military.
The luncheon will be a unique opportunity for members to engage with General Prawit and his accompanying delegation of senior military officials to raise issues of importance to U.S.-Thailand military-to-military relations. Per General Prawit's request, discussion will be limited to defense and security issues ONLY and total member participation will be capped at 10-12 representatives. To sponsor, please click here. Please contact Jack Myint at jmyint@usasean.org or Ella Duangkaew at eduangkaew@usasean.org with any questions.
Please save the date for the 2018 Thailand Business Mission on June 27-28 in Bangkok. Contact Ella Duangkaew at eduangkaew@usasean.org with any questions.

View the Council's latest Thailand updates

Vietnam

Major Developments

In 2017, Prime Minister Nguyen Xuan Phuc made a decision that the Government of Vietnam would begin a process to develop long-term economic goals. Last month, Deputy Prime Minister Vuong Dinh Hue officially signed off on the creation of a Secretariat to assist the National Steering Committee on economic restructuring. The 26-member body, which will be helmed by the current head of the Central Institute for Economic Management Nguyen Dinh Cung, will advise the Ministry of Planning and Investment (MPI) on boosting economic growth, collaborating with experts and scientists to prepare reports and economic evaluations, and assisting the national steering committee in its activities.

The Government of Vietnam has also announced several long-term targets for economic growth. Under Resolution 23-NQ/TW, industry will comprise 40 percent of Vietnam’s GDP by 2030. Vietnam’s Politburo, which issued the resolution, has set an industrial growth rate of over 8.5 percent and aims to increase industrial labor productivity by 7.5 percent annually until 2030 and with a vision to 2045. Meeting these goals is contingent on implementing reforms in specific sectors, such as manufacturing, as well as continuing Vietnam’s broader macroeconomic restructuring. The new Secretariat is likely to play a leading role in pursuing these long-term economic goals.

2018 has been a successful year so far for Vietnam in terms of economic growth. At a meeting with the Council on March 28 during our annual Business Mission to Vietnam, Prime Minister Phuc shared the news that Vietnam’s Q1 growth exceeded 7.4 percent, which is unprecedented. The government has also prioritized eradicating obstacles for businesses by implementing industrial reforms in the areas of construction, manufacturing, and processing. For example, at the 6th Greater Mekong Sub-Region (GMS) Summit on March 30 in Hanoi, Prime Minister Phuc announced a reduction in the corporate tax from 20-22 percent to 15-17 percent in order to create a more favorable business climate. As a follow-up to our business mission last month, the Council will look to monitor Vietnam’s GDP trends in Q2 as previously-announced reforms take effect.

Looking Ahead

Please save the date for the Council’s Food & Agriculture Industry Mission to Vietnam July 11-12. For more information or to express interest, please contact Sunita Kapoor (skapoor@usasean.org) and Hai Pham (hpham@usasean.org).

View the Council's latest Vietnam updates