July 2018

President’s Newsletter – July 2018

Dear Members,

Greetings from Philadelphia, where I am traveling with senior diplomats from ASEAN Embassies as part of our Annual ASEAN Ambassadors’ Tour.  It has been an exciting month in Southeast Asia and at the US-ASEAN Business Council.

Indonesia held regional elections on June 27.  Five of Indonesia’s most populous provinces (North Sumatra, West Java, Central Java, East Java and South Sulawesi) elected new governors. These provinces alone represent almost 54 percent of the 575 House of Representatives seats.  Ridwan Kamil prevailed in West Java.  In Central Java, incumbent Ganjar Pranowo won the mandate for his second term. In East Java, the election was won by Khofifah Indar Parawansa. Meanwhile Edy Rahmayadi won North Sumatra and Nurdin Abdullah won South Sulawesi. West Java is arguably one of the most important regions in the context of next year’s presidential race. It is home to approximately 46.7 million people, the biggest electorate in the country.  The Council’s current analysis of the regional elections is that the results are a positive sign for the re-election of President Jokowi in 2019.

On July 23, President Rodrigo Duterte delivered his third State of the Nation Address (SONA) to a joint session of Congress.  As expected, President Duterte’s crackdown on illegal drugs and corruption took top billing, but he also expressed his continued support for the Tax Reform for Acceleration and Inclusion (TRAIN) law, which has been blamed for contributing to a recent increase in inflation, called on Congress to pass the Universal Healthcare Bill, and expressed his support for the Bangsamoro Organic Law and proposed draft Constitution that would move the Philippines from a unitary to a federal system of government.  While the SONA was notable for its relative normalcy, it was bookended by drama in Congress, specifically the ousting of Congressman Pantaleon Alvarez as Speaker of the House by supporters of former President and current Congresswoman Gloria Macapagal-Arroyo. Following some confusion earlier in the day, a special session of Congress was convened after the SONA to formally elect and swear in Arroyo as the new Speaker. More details on the sudden change in the House leadership can be found in the Philippines section. 

The Council held its 2018 Thailand Business Mission, which was one of our largest ever to the Kingdom, from June 26-28 with 38 companies and more than 80 executives participating.  We had a chance to meet with Prime Minister Prayut Cha-o-cha for more than two hours at Government House in Bangkok where the Prime Minister and senior members of his cabinet heard about challenges across multiple industries.  They also presented the opportunities for American firms in the Eastern Economic Corridor (EEC) and Thailand 4.0.  The delegation looked to build upon the momentum generated by the revitalization of the bilateral relationship, particularly by identifying tangible economic deliverables and supporting the Government of Thailand in developing and implementing key economic reforms prior to the planned 2019 elections.  The Prime Minister was confident that elections would be held in 2019 between February and May while Thailand will Chair ASEAN beginning in January 2019.  Initial themes for Thailand’s ASEAN year are expected to focus on connectivity and sustainability. 

On June 26, the Council held its inaugural ASEAN-US Digital Policy Consultative Forum in Kuala Lumpur, Malaysia, on the sidelines of the ASEAN Telecommunication Senior Officials Meeting and ASEAN Telecommunication Regulators’ Council Joint Working Group (TELSOM-ATRC JWG) meeting.  The Forum is a platform for policy makers and stakeholders to exchange views on how to establish friendly ICT policies that will allow technological innovations to give greater benefits for ASEAN economic growth and discussed the latest trends on innovation tools and regional policy surrounding these innovative tools in the region, including issues related to cybersecurity, connectivity, cross-border data flow, artificial intelligence, and personal data protection.  The Second Forum is planned during the ASEAN TELSOM Leaders’ meeting in Singapore, the week of August 13.  Broad topics for the 2nd forum will be on data and innovation.

On June 27, Vietnam Deputy Prime Minister Vuong Dinh Hue wrapped up his visit to Washington, D.C. with meetings with American businesses, including one-on-one meetings with several companies and a roundtable with the Council.  During this roundtable, DPM Hue shared the outcomes of his successful trip and reaffirmed the Government of Vietnam’s commitments to removing barriers to trade.  Further, DPM Hue spoke at length on industry concerns related to the agriculture, banking and auto industries as well as cybersecurity, and offered his support in personally following up with each related Ministry to ensure the issues are being properly addressed in a timely manner.  In both his meetings with USG officials and with the Council, DPM Hue repeated his commitment to working closely with the Council on the drafting of the implementing decrees of the cybersecurity law.  By his account, Deputy DPM Hue’s visit to the U.S. had been a great success.  Over the course of three days, the politburo member, who previously has not been this deeply engaged in U.S.-Vietnam bilateral and trade relations, has proven himself capable of skillfully managing the complex relationships on the USG stakeholder map.  Further, DPM Hue has carefully navigated the multifaceted challenges and positioned himself as a friend of U.S. corporations, while at the same time promoting the status of and creating opportunities for Vietnamese businesses.

Washington has welcomed many Ministers in the last couple of weeks and the Council has been honored to engage with these visitors, including H.E. Ignasius Jonan, Minister of Energy and Mineral Resources of the Republic of Indonesia, for a roundtable with member company representatives.  Minister Jonan was in Washington, DC for the World Gas Conference, for which he was a keynote speaker.  During the roundtable, Minister Jonan provided an update on the Indonesian Government’s initiative to expand the country’s power generation capacity by 35 GW, a level that the government now expects to meet in 2025; the Government’s ongoing discussions on devising a regulatory framework for the electric car industry in Indonesia; the Government’s policy objectives with respect to biofuels; and how the Government aims to increase the percentage of renewable energy sources in its national energy mix and meet its Nationally Determined Contribution (NDC) under the Paris Agreement.

This week, the Council has participated in a roundtable with the Indonesian Minister of Trade, the Indonesian Minister of SOEs, Vietnam’s Deputy Chairman of the National Assembly and Vietnam’s Deputy Minister of Agriculture and Rural Development.

Looking Ahead:

• On July 29, Cambodia will hold its general elections to elect members of the sixth National Assembly.  As it stands, a CPP victory led by Prime Minister Hun Sen in the election seems predestined.  Because no credible opposition exists, the government will have to rely upon voter turnout statistics to bolster the legitimacy of the election in the eyes of the international community.  Nevertheless, Western powers may condemn the election results and impose additional sanctions on high-ranking officials and/or take aim at Cambodia’s lucrative garment industry.  Should public protests against the electoral outcome occur, the government may impose public controls to prevent an uprising.  However, a lack of opposition leaders present on the ground significantly reduces the likelihood of a large-scale movement emerging and mobilizing.
• ASEAN Ambassadors’ Golf Tournament
  • On August 2, the ASEAN Committee in Washington and the Council will co-host a golf tournament, featuring the ASEAN Ambassadors and Embassy staff at the Lake Presidential Golf Club in Upper Marlboro, Maryland. For more information or to express interest, please contact Marc Mealy at mmealy@usasean.org.
• Singapore Business Mission: August 20-21
  • This year's Singapore Business Mission will focus on meeting with Ministers who assumed new roles after the May 2018 Cabinet reshuffle, encouraging the adoption of regulatory frameworks that promote innovation and support new business models and new technologies, working with the Government of Singapore (GOS) to improve the city-state's human capital development and management so that both support their future economy, and learning how the U.S. private sector can help GOS achieve its 2018 ASEAN Chairmanship goals. The Council has already confirmed meetings with the new Minister for Trade and Industry, the Minister for Education, and the new Managing Director for the Singapore Economic Development Board (EDB).  More information on the 2018 Singapore Business Mission, including a link to register, can be found here.
• Laos Business Mission: August 23-24
  • This year’s Laos Business Mission will have a greater focus on supporting policy and capacity development, in addition to continuing to strengthen dialogue with key government stakeholders.  Currently, we have the Minister of Planning and Investment and the U.S. Ambassador to Laos confirmed for meetings.  Click here to register before August 9. Please contact Ella Duangkaew at eduangkaew@usasean.org with any questions.
• AEM Business Mission: August 30-September 1
  • On August 30-September 1, the Council is planning its annual Business Mission to the ASEAN Economic Ministers (AEM) Meetings. The engagement includes participation in the USTR-AEM plenary session, as well as bilateral meetings with key trade ministers and the U.S. government delegation.  Click here to register before August 16.  Please contact Mario Masaya at mmasaya@usasean.org with any questions.

To conclude on a positive note, the Council joins the people of Thailand and around the world in rejoicing the successful rescue of the 12 boys trapped in the Tham Laung caves.  We congratulate the Government of Thailand and all entities involved for their great work in this historic event.

Highlights

Advocacy

• On June 26, the Council successfully launched the ASEAN-US Digital Policy Consultative Forum series in Kuala Lumpur, a new advocacy platform to engage ASEAN policymakers on rules, regulations and policies shaping the national and regional ecosystems governing the development of “digital economies.” The Forum was held on the sidelines of the ASEAN Telecommunication Senior Officials Meetings and enabled public and private sector stakeholders to exchange views on how to establish friendly ICT policies that will allow technological innovations to support higher quality economic growth benefits in ASEAN.  Advocacy messages were transmitted during the discussions on emerging technology trends and best practices in policy and regulatory formulation in areas such as cybersecurity, connectivity, cross-border data flows, artificial intelligence, and personal data protection.  The forum series represents a tangible deliverable from the Council’s participation in the 2017 ASEAN Telecommunications Ministers meetings.
• The Council is continuing to evolve its advocacy efforts with the Government of Indonesia regarding the Draft Amendment to the GR82 Regulation. While the Council has been successful in getting positive changes in the Draft Amendment, the process of finalizing the changes into the GR82 Regulation has stalled and in its current form the government could impose data localization requirements. Based on feedback from members, the Council is exploring two options to guide future advocacy efforts: Advocating that the Draft Amendment be signed in its current form and then continuing to work with sectoral agencies to influence the implementing rules and regulations without requiring data to be on-shored, or engaging with officials to edit the existing problematic provision of the Draft Amendment, Article 83K. In addition, the Council has continued to engage key policymakers on the Draft Amendment. I travelled to Jakarta early this month to obtain greater clarity on the “internal bureaucracy dynamics” of the Draft Amendment to further sharpen our future advocacy steps.
• Earlier this month, the Council transmitted a letter to Myanmar’s Minister of Commerce regarding the government’s announced policy reforms to liberalize the wholesale and retail sectors in the areas of agriculture and manufacturing. The letter strongly advocated for the government to adopt implementing rules and regulations which would fully liberalize the domestic wholesale sector for agriculture imports and domestic distribution as a means of significantly improving Myanmar’s competitiveness to attract new foreign direct investment in the agricultural sector. The letter also advocated that the government strengthen its stakeholder consultation processes with the private sector to maximize the business expansion responses by market participants to the liberalization measures.
• As part of the leadup to our 2018 Singapore business mission in August, the Council is looking to utilize the mission for a wide range of current and future advocacy efforts. One new effort the Council plans to initiate is to advocate that the Government of Singapore carefully consider the economic competitiveness dimensions of a draft Goods and Services Tax (GST) (Amendment) Bill, which levies GST on imported services, including digital services such as streaming movies and music. The Council will facilitate a U.S. business submission of members’ comments on the proposed Bill during the public comment period. We also plan to include the issue as a discussion agenda item during the mission with appropriate Singaporean officials.  As the current Chair of ASEAN and spearheading the development of several regional digital economy framework formulation processes, the direction Singapore takes on tax policies towards digital services is something which the Council plans to monitor closely and proactively engage other governments in the region.

Intelligence

• Malaysian Prime Minister Mahathir’s cabinet is coming together with one deputy prime minister, 26 ministers and 23 deputy ministers now sworn in, as well as the appointment of Nor Shamsiah as the new Bank Negara Governor.  Three more ministers are expected to be named after their appointments as members of Parliament.  More information on the latest cabinet members can be viewed in this analytical update and more on the first round of ministers sworn in can be found here.
• To quicken the shift from cash and checks to digital payments, Singapore has pledged to slash cash withdrawals from automatic teller machines (ATMs) and eliminate the use of checks by 2025, according to a speech by Singapore’s Minister for Education Ong Ye Kung on June 20 at the 45th Annual Dinner of The Association of Banks in Singapore.  Ong, who sits on the Monetary Authority of Singapore’s (MAS) board, said that Singapore will attempt to hasten this shift by expanding the government-endorsed PayNow digital funds transfer system to companies starting August 13.  Ultimately, by accelerating the transition to e-payments, the city-state aims to better position itself as a regional financial hub that can compete with the likes of Hong Kong and London.  More information on this topic can be found here.

Membership

As of July 1, we are pleased to welcome two new members to the Council, both at the Chairman’s Council level: JUUL and Marriott International.  This brings our total membership to 154, with 70 Corporate Members and 84 Chairman’s Council Members.

JUUL’s mission is to improve the lives of the world’s one billion adult smokers by driving innovation to eliminate cigarettes. They are a team with backgrounds in consumer technology, healthcare and biotech, and they are growing to deliver on their mission. They are actively looking to hire the world’s best scientists, engineers, designers, product managers, supply chain experts, customer service and business professionals.

Marriott International is one of the world's leading hoteliers.  The company has some 6,000 operated or franchised properties worldwide.  Its hotels include such full-service brands as Renaissance Hotels and its flagship Marriott Hotels & Resorts, as well as select-service and extended-stay brands Courtyard and Fairfield Inn.  It also owns the Ritz-Carlton luxury chain and resort, and manages about 80 golf courses.  The Marriott family, including J. W. Marriott Jr., owns 30 percent of Marriott International.  The company acquired Starwood Hotels & Resorts Worldwide in 2016.

Regional Highlights

ASEAN

Major Developments

• On June 27, more than 200 entrepreneurs from Manila and neighboring cities participated in a one-day workshop entitled “Empowering Philippines SMEs with Digital Tools and Mentorship Opportunities."  The workshop was a joint initiative between the Council and the Philippines Department of Trade and Industry (DTI).  The workshop also marked the new partnership launch of the ASEAN SME Academy, following the management transition under DTI with the support of the Council.  The workshop was generously supported by Booz Allen Hamilton, Cisco, FedEx, HP Inc., and Procter & Gamble.  View press release here and workshop documentation here.
• On July 8, Singapore hosted the inaugural meeting of the ASEAN Smart Cities Network (ASCN) alongside the World Cities Summit. At the meeting, ASEAN member states formally endorsed the draft ASEAN Smart Cities Framework, which defines “smart city,” outlines key principles, and identifies core outcomes. The meeting also included engagement with private-sector solution providers to kick-start commercially viable projects. Five signings took place between ASEAN cities and corporate partners.
• The Council recently held two successful SME training workshops. On June 27, more than 200 entrepreneurs from Manila and neighboring cities participated in a one-day workshop entitled “Empowering Philippines SMEs with Digital Tools and Mentorship Opportunities." The workshop was a joint initiative between the Council and the Philippines Department of Trade and Industry (DTI). The workshop also marked the new partnership launch of the ASEAN SME Academy, following the management transition under DTI with the support of the Council. Click here for workshop documentation. On July 9, approximately 250 Vietnamese entrepreneurs from Can Tho and 13 neighboring Mekong Delta provinces participated in one-day SMB workshop titled “Trade Facilitation: Integrating SMBs into Inclusive Global Value Chains.” As a joint initiative with Vietnam Chamber of Commerce and Industry (VCCI), the workshop provided SMBs with knowledge on how to become an integral part of global value chains and regional e-commerce. View the press release here. For more information about the Council’s SME program, contact Vinsensius Kangen at vkangen@usasean.org.

Advocacy

On July 9, approximately 250 Vietnamese entrepreneurs from Can Tho and 13 neighboring Mekong Delta provinces participated in one-day SMB workshop titled “Trade Facilitation: Integrating SMBs into Inclusive Global Value Chains.”  As a joint initiative with the Vietnam Chamber of Commerce and Industry (VCCI), the workshop provided SMBs with knowledge on how to become an integral part of global value chains and regional e-commerce from Council members such as Coca-Cola and Cisco, as well as from Vietnam’s Minister of Industry and Trade (MOIT) and General Department of Customs.  View the press release here.  Contact Vinsensius Kangen at vkangen@usasean.org for more information related to this workshop and other Council’s SME activities.

Looking Ahead

The Council is planning its annual Business Mission to the ASEAN Economic Ministers (AEM) Meetings on August 30-September 1.  The engagement includes participation in the USTR-AEM plenary session, as well as bilateral meetings with key trade ministers and the U.S. government delegation.  Click here to register before August 16. Please contact Mario Masaya at mmasaya@usasean.org with any questions.  

View the Council's latest ASEAN updates

TPP

Major Developments

• With Malaysia’s new cabinet established, the new Minister of Trade has publicly reiterated a similar position as that of Prime Minister Mahathir regarding Malaysia’s intent to conduct a review of the CPTPP agreement which it signed in April before it would initiate its ratification process. While the review is to be expected, the new government is reviewing all major policies of the previous government, and many analysts expect the governments of fellow CPTPP members like Japan, Singapore and Vietnam to move forward with ratifying the agreement and encouraging Malaysia to do the same. While Malaysia would have to implement a number of domestic economic, legal, policy and regulatory changes to ratify the CPTPP, the U.S.-China trade relationship is also impacting the broader trade policy environment in Asia by elevating the value to Asian economies of joining alternative preferential trade frameworks like the CPTPP. As a result, analysts are expecting Malaysia to ratify the CPTPP in early 2019, which is within the window of when the agreement is likely to go into force once at least six of the 11 members have ratified the agreement.

View the Council's latest TPP updates

Industry Highlights

Customs

Major Developments

• On July 1-5, the ASEAN Coordinating Committee on Electronic Commerce (ACCEC) held its final round of negotiations, finalizing most of the agreement’s content.  The most aggressive binding section of the agreement is likely on modernizing domestic regulations on electronic authentication.  It also contains sections that at least somewhat promote trade facilitation, the free flow of data across borders and server localization, and the adoption of international best practices for cyber security.  Many of these promotions may be broad or non-binding, potentially limiting their effectiveness.  It also does not substantially address challenges facing payments regulation.  How the agreement would incorporate the WTO moratorium on tariffs on intangible goods tariffs also appears to remain an open issue in the negotiating text.  Though the agreement misses some key opportunities to open the sector further, it is still an important success for moving the ASEAN Economic Community forward and could lay the foundation for future negotiations.
• On July 1, trade ministers from the 16 negotiating countries of the Regional Comprehensive Economic Partnership (RCEP) met in Tokyo at the Fifth Intersessional Ministerial Meeting and pledged “to focus efforts towards achieving a package of year-end outcomes.”  After negotiating throughout the past few years without producing an arrangement and missing multiple year-end targets, officials face significant political pressure to produce a substantive agreement by the end of 2018.  The 23rd round of negotiations are taking place in Bangkok from July 17-27, followed by a ministerial meeting in late August on the sidelines of the ASEAN Economic Ministers’ Meeting (AEM).
• On June 29, Singapore and Thailand’s customs departments signed a mutual recognition agreement (MRA) for their authorized economic operator programs (AEO).  Under the agreement, companies that are members of either Singapore’s Secure Trade Partnership (STP) or Thailand’s AEO Program will receive the benefits of the other program.  Signed under the framework of the Singapore-Thailand Enhanced Economic Relations program (STEER), it is also the first AEO MRA signed between ASEAN Member States.  This begins the process of interconnecting ASEAN’s AEO programs, an important step for the ASEAN AEO plan.  The ASEAN AEO program supports member states in implementing national AEO programs based on the World Customs Organization’s SAFE Framework of Standards (FoS) and ultimately aspires to integrate the national AEO programs through a network of mutual recognition agreements.

Advocacy

On July 5, the Council, along with the EU-ASEAN Business Council and ASEAN Business Advisory Council, attended the ASEAN Trade Facilitation-Joint Consultative Committee (ATFJCC) meetings to present the private sector’s short- and long-term recommendations for trade facilitation.  The presentation’s message was that the private sector wants to be included in more of the discussions, especially on e-Commerce and non-tariff measures, and proposed to form working groups to discuss the recommendations in detail.  During the discussion following, ASEAN provided updates on the e-Commerce agreement and said they are planning to update their non-tariff measures database.  The meeting concluded with the ASEAN Secretariat suggesting it facilitate workshops on sector-specific topics to improve private sector engagement.

View the Council's latest Customs updates

Defense & Security

Major Developments

• On July 8-9, U.S. Secretary of State Mike Pompeo visited Vietnam and met with General Secretary of the Communist Party of Vietnam Nguyen Phu Trong, Prime Minister Nguyen Xuan Phuc, and Deputy Prime Minister Pham Binh Minh.  During Secretary Pompeo's meeting with DPM Minh and General Secretary Trong, the U.S. and Vietnamese officials affirmed their shared interest to uphold the freedom of navigation in the South China Sea and stated their mutual concerns over the militarization and reclamation currently taking place in the area, which run counter to existing international maritime law. To further promote peace, security and prosperity in the Indo-Pacific region, Pompeo also stressed the importance of strengthening the U.S.-Vietnam Comprehensive Partnership.  These discussions of U.S.-Vietnam working-cooperation follow the State Department's fifth U.S.-Vietnam Dialogue on Maritime Issues and the Law of the Sea on June 19-20, which further affirmed the joint commitment on maritime cooperation at the regional and international level.  During this meeting, the parties also discussed the two countries' strategic partnership in other areas, including politics and diplomacy, increasing mutual trade and investment, defense and security issues, and further relief for legacy of war issues.
• On June 21, Philippines President Rodrigo Duterte approved the purchase of multi-role fighter jets (MRF) as part of the Philippine Air Force (PAF)’s Horizon 2 modernization program.  The Horizon 2 modernization program is a five-year program to recapitalize the department’s obsolete equipment and upgrade military facilities.  With implementation plans from 2018-2022, the budget has been set to approximately 300 billion Philippine pesos (US$5.6 billion) and will be split among the three military branches accordingly: US$890 million for the Army, US$1.44 billion for the Navy, and US$2.61 billion for the Air Force, with the rest of the budget going to the military’s General Headquarters and the government’s arsenal.  More information can be found in our recent update here.
• On June 14, Major General Weerayuth Intaworn, the director of the Army Aviation Center (AAC), announced that the Royal Thai Army is seeking to acquire at least six new attack helicopters to replace its aging fleet of Bell AH-1F Cobra combat helicopters. The acquisition plan commenced after the Thai Military unveiled a new US$10 billion Defense and Security budget for the 2019 fiscal year.  Pending approval by the National Legislative Assembly, the budget is broken down into: US$7 billion for defense maintenance and procurement with an additional US$3 billion in security spending to manage new threats, maintain internal peace and order, prevent transnational crimes and cyber-attacks, as well as to protect the monarchy.  More information can be found in our recent update here.

View the Council's latest Defense & Security updates

Energy

Major Developments

• Since the United States announced plans in May to impose new sanctions on Iran, a major oil exporter, global oil prices have risen to their highest levels since November 2014, leading to rising costs of not only retail crude but also other consumer goods.  In Southeast Asia, the price surge has boosted inflation, and governments across Southeast Asia have taken steps to mitigate the negative economic effects.  Governments in Indonesia, Vietnam, Malaysia, and Thailand have attempted to cap fuel prices using subsidies.  However, these subsidies are unlikely to be sustainable in the face of a prolonged global oil price hike, so governments may have to consider other mechanisms to try to stem the effects of inflation in the long term, such as reducing import tariffs, seeking other oil importers, and developing alternative fuel.  More information on this topic can be found here.
• A draft policy from the Philippine Department of Energy (DOE) aimed at increasing price transparency and curbing alleged profiteering has raised concerns among oil and gas industry stakeholders because it would require oil firms to itemize the costs of petroleum products.  The draft policy is yet another example of how the Philippine Government is searching for ways to tamp down stubbornly high inflation that has bedeviled the Philippine economy since the start of the year.  Fuel that would be covered by the draft policy includes gasoline, automotive and industrial diesel, kerosene, jet fuel, bunker fuel oil and household and automotive liquefied petroleum gas.  More information on this topic can be found here.
• On May 3, the Ministry of Energy and Mineral Resource (ESDM) of Indonesia issued ESDM Regulation 25/2018 with the intent of meeting two aims:  improving the overall effectiveness, efficiency and accountability in the mining sector; and promoting development of the mineral and coal industries.  Specifically, ESDM Regulation 25/2018 makes changes to regulations governing ore exports, non-state tax revenue derived from processing and refining activities, and regulatory reporting obligations, among others.  More information on this topic can be found here.

Advocacy

• On June 26, the Council hosted H.E. Ignasius Jonan, Minister of Energy and Mineral Resources of the Republic of Indonesia, for a roundtable with member company representatives in Washington, DC.  Minister Jonan was in Washington for the World Gas Conference, for which he was a keynote speaker.  During the roundtable, Minister Jonan provided an update on:
  • The Indonesian Government’s initiative to expand the country’s power generation capacity by 35 GW, a level that the Government now expects to meet in 2025
  • The Government’s ongoing discussions on devising a regulatory framework for the electric car industry in Indonesia
  • The Government’s policy objectives with respect to biofuels
  • How the Government aims to increase the percentage of renewable energy sources in its national energy mix and meet its Nationally Determined Contribution (NDC) under the Paris Agreement.
• On July 2, representatives from Singapore's National Climate Change Secretariat (NCCS), the Ministry of Trade and Industry, the Ministry of the Environment and Water Resources, and the Economic Development Board met with the Council and industry representatives to provide clarification on the Government of Singapore's (GOS) intent to impose a carbon tax starting in 2019.  The proposed carbon tax was first introduced as part of the Singapore Budget 2018.  The GOS subsequently introduced a Carbon Pricing Bill (Bill No. 17/2018, available here) in May of this year.  GOS hopes that imposing the carbon tax will help it maintain its commitments under the Paris Agreement of the United Nations Framework Convention on Climate Change.

Looking Ahead

• Powertrends 2018, September 4-6:  The 13th International Exhibition and Conference on Directions for Energy, Power and Electricity will take place September 4-6 at SMX Convention Center in Pasay City, Metro Manila, the Philippines.  Co-organized by the Philippine Department of Energy and Leverage International since 1995, Powertrends is the most significant and longest-running energy-focused conference and exhibition in the Philippines.  Each year, the event draws key business leaders, vendors, developers, institutions and principal energy policymakers responsible for the development of the Philippine energy sector.  More information on Powertrends 2018, including how to get a 20 percent discount on exhibition fees as a Council member company, can be found here.
• The Council is helping Leverage International identify speakers for a panel at Powertrends 2018 on renewable energy technologies, especially:
  • Hybrid energy solutions
  • Energy storage and back-up systems for renewables
  • Power conditioning units.

If you or your organization would be interested in presenting on any of these topics, or if you have a recommendation for a speaker, please contact Leverage International at leverage@leverageinternational.com.

• From October 29-November 2, Singapore will host the Singapore International Energy Week (SIEW) 2018 at Marina Bay Sands.  SIEW is an annual platform for energy professionals, policymakers and commentators to discuss and share best practices and solutions within the global energy space.  The event aims to facilitate the exchange of ideas and discussions on pertinent energy-related issues, as well as provide a platform to showcase innovative products and solutions in the energy marketplace.  More information on SIEW 2018 can be found here.

View the Council's latest Energy updates

Financial Services

Major Developments

• At the Vietnam FinTech Forum 2018 in Hanoi in June, the State Bank of Vietnam (SBV) noted plans for a fintech regulatory sandbox to encourage fintech innovation and strengthen central bank cooperation.  SBV Deputy Governor and head of the steering committee on fintech mentioned the desire to build a regulatory sandbox framework for fintech businesses and start-ups to test new products and services while minimizing risks for clients. In a fintech regulatory sandbox, banking laws and other agreements are eased to create a start-up and new project-friendly environment under the supervision of the SBV.
• On June 22, Nor Shamsiah Mohd Yunus was appointed Governor of Bank Negara.  Nor Shamsiah previously spent 30 years at Bank Negara, including serving as a deputy governor from 2010-2016 under Governor Dr. Zeti Akhtar Aziz.  During her years at Bank Negara, she helped develop rules and guidelines for the finance industry and strengthened supervision of the banking system following the Asian financial crisis.  She also led an investigation into the 1Malaysia Development Bhd (1MDB) until 2016 when she resigned. The Council will continue engaging with the new leadership of BNM on several ongoing policy challenges, a summary of which can be found in the June 21 Financial Services update here.

View the Council's latest Financial Services updates

Food & Agriculture

Major Developments

On July 5, Minister of Agriculture and Rural Development H.E. Nguyen Xuan Cuong emphasized the importance of improving human resource training to leverage Agriculture 4.0.  A term to refer to the agriculture sectors’ utilization of the Fourth Industrial Revolution's technological advances to increase productivity and sustainability, Agriculture 4.0 has the potential to significantly bolster agricultural growth in Vietnam.  At a workshop held in Hanoi on July 4, Minister Cuong stated the necessity of reform for vocational training, as well as the need to shift the agriculture sector's focus onto practice capacity, core techniques and soft skill training.  Regarding the long-term curriculum for Agriculture 4.0, Minister Cuong noted the importance of integrating new technologies – such as bio-technology, digital technology, automation, exact mechanics and new materials – into promoting smart agricultural practices. At this workshop, the Minister of Education and Training H.E. Phung Xuan Nha also underlined that agricultural curricula should be cognizant of shifting market demands. After the initial application of high-tech agricultural models in localities nationwide, Vietnam's agriculture sector has already seen improvements.  Vegetables, flowers, shrimp and poultry farming models in Bac Ninh, Ha Nam and Vinh Phuc have seen high-economic efficiency.  By deploying these new technologies, the quality and quantity of farm produce has increased, allowing local staples to expand and develop their own brands.  Finally, Minister Cuong stressed the importance of enhancing production value chains and the value of agricultural products to further increase the profitability of the agriculture sector.

Advocacy

On July 11-12, the Council organized its second Food & Agriculture Industry Mission to Vietnam. Among other high-level stakeholders in the agriculture sector of Vietnam, the Council met with Vice Minister of Agriculture and Rural Development Vu Van Tam.  As the Council works to follow up on member issues raised during the mission, members will have the unique opportunity to engage directly with Vice Minister Tam during his visit to Washington, D.C. on July 26.

Looking Ahead

On July 26, the Council will host a roundtable with Vietnam’s Vice Minister of Agriculture and Rural Development Vu Van Tam in Washington, DC.  This meeting is an opportunity for members to follow-up with Vice Minister Tam on issues raised during Deputy Prime Minister Vuong Dinh Hue’s trip late last month to the United States and during the Council’s Food & Agriculture Industry Mission to Vietnam last week.  For more information, please contact Hai Pham at hpham@usasean.org.

View the Council's latest Food & Agriculture updates

Health & Life Sciences

Major Developments

In late June, Philippines President Duterte signed a law extending free mental health care to more than 20 million Filipino adults suffering from mental health illnesses.  As established in the Mental Health Act of 2017, the law will affirm the basic right of all Filipinos to good mental health, in addition to the fundamental rights of all people who require mental health services.  Through this law, mental health care in the Philippines will be integrated into the country's public healthcare system, and the state is committing itself to the promotion and protection of more affordable, accessible and higher-quality mental health care.  The Department of Health (DOH) will also be responsible for creating a national mental health program and formulating a system that delivers psychiatric services at the regional and provincial levels.  Free mental health services provided per this law include counseling, medication, and psychological and neurological services to promote mental health stability in schools and workplaces.

The law arose as part of an effort to preempt and treat preventable mental health illnesses.  Currently, records show that seven Filipinos are turning to suicide every day and one in five suffers from some form of mental disorder.  In November 2017, the Philippines House of Representatives approved the third and final reading of the proposed Comprehensive Mental Health Care Bill, removing the final hurdle towards more accessible public mental healthcare in the Philippines.

While this law is a new landmark for the Philippines' mental healthcare system, many critics remain doubtful about the effectiveness of the law.  Some skeptics denigrate the law for focusing on human rights instead of practical service delivery.  Others lambaste the government for not allocating enough of its health budget to provide greater mental health services.  As allocations for mental health services now stand at five percent, with most of the budget going towards operating mental hospitals and paying staff salaries, critics are concerned that funds for actual mental health patients will quickly run dry.

Advocacy

The Ministry of Health (MOH) of Singapore invites industry to submit feedback on the proposed amendments to the Infectious Diseases Act (IDA).  The public consultation will be held from June 27, to August 7, 2018.  The Ministry will consolidate and publish a summary of the feedback provided as well as their responses after the close of the consultation period.  Please click here to view the Ministry's announcement for more information and submission details.

Looking Ahead

As a follow-up to the study visit that the Council put together for the Ministry of Health and Vietnam Social Security (VSS) officials in May, we will be organizing workshops to help regulators in drafting Vietnam's tendering policy for medical devices and supplies.  This workshop will be a three-part series, covering topics on rules of origins, best practices of tendering regulations, and understanding specifications of medical devices.  All sessions will be conducted in Vietnamese.  For more information regarding registration, speaking and sponsorship opportunities, please contact Ying Hui Tng (yhtng@usasean.org) and Vu Tu Thanh (tvu@usasean.org).

View the Council's latest Health & Life Sciences updates

ICT

Major Developments

• On July 1-5, the ASEAN Coordinating Committee on Electronic Commerce (ACCEC) held its final rounds of negotiation before the upcoming Senior Economic Officials’ Meeting (SEOM). More information can be found in our most recent update here.
• On June 27, representatives from all ten ASEAN countries met in Thailand to discuss possible countermeasures against cybercrime in the ASEAN Economic Community (AEC). More information can be found in our most recent update here.
• On June 20, Thailand’s National Broadcasting and Telecommunications Commission (NBTC) extended the registration deadline for its 1800-megahertz spectrum auction set for August 4 after the three largest Thai mobile operators declined to register before the initial June 15 deadline, criticizing the NBTC’s conditions for the auction.  More information can be found in our recent update here.
• On June 6, Singapore's Infocomm Media Development Authority released a Consultation Paper on Embedded SIM Technology in an effort to obtain views and comments from industry stakeholders regarding the agency’s preliminary views and assessment of the technology.  More information can be found in our recent update here.
• On June 5, Singapore’s Minister for Communications and Information S. Iswaran announced the establishment of an Advisory Council on the Ethical Use of AI and Data in a policy speech delivered at Innovfest Unbound.  More information can be found in our recent update here.

Advocacy

• On July 2, I met with Indonesian Minister of Communication and Information Technology Rudiantara to discuss the status of the Draft Amendment to Indonesia’s GR 82.  A readout from the meeting can be found here.  The visit followed a planning call with Council members on June 29 (a readout of the call can be found here).  The Council was given a copy of the Draft Amendment in February and submitted a joint industry letter offering input.  Please contact Kim Yaeger (kyaeger@usasean.org) with any questions.
• On June 26, the Council held its first US-ASEAN Digital Policy Consultative Forum in Kuala Lumpur, on the sidelines of the ASEAN Telecommunication Senior Officials Meeting and ASEAN Telecommunication Regulators’ Council Joint Working Group (TELSOM-ATRC JWG) meeting.  For more information on the Forum, please contact Shay Wester at swester@usasean.org or Mario Masaya at mmasaya@usasean.org.
• On June 12, Vietnam’s National Assembly passed its controversial Law on Cybersecurity with an 86 percent majority.  The vague wording of certain provisions leaves significant room for the Council and the Government of Vietnam to negotiate implementing regulations that minimize the burden placed on businesses operating in Vietnam and mitigate other potential impacts.  Members voiced their concerns regarding the Law to Deputy Prime Minister Vuong Dinh Hue when he visited the Council on June 27.  We plan to continue our multifaceted engagement with the Government of Vietnam over the course of the Law’s implementation, and will continue to seek clarity on the Law’s vague provisions.  For more information, please contact Ella Duangkaew (eduangkaew@usasean.org) and Matt Solomon (msolomon@usasean.org).

Looking Ahead

• The Council will host its second roundtable discussion of the ASEAN-US Digital Policy Consultative Forum on August 13, on the sidelines of the 2018 ASEAN TELSOM Leaders’ meeting in Singapore.  The agenda and discussion topics for the second Forum are currently being formulated.  For more information about the Forum, please contact Shay Wester at swester@usasean.org or Mario Masaya at mmasaya@usasean.org.
• On June 6, the Council hosted the first meeting of the Singapore Joint Cyber Security Working Group (JCSWG).  Stakeholders discussed capacity-building initiatives and potential partnership opportunities as well as opportunities for engagement with the upcoming ASEAN Cybersecurity Ministerial (AMCC) in September (click to access the agenda and meeting notes from the first Singapore JCSWG).  The second Singapore JCSWG on August 15 will further discuss strategies for engaging the AMCC, among other topics (click here to access the proposed concept note for AMCC engagement).  For more information, please contact Shay Wester at swester@usasean.org.

View the Council's latest ICT updates

Infrastructure

Major Developments

A consortium comprising the Sy and Tieng families has formed a consortium called the Sangley Airport Infrastructure Group, Inc., for the construction of a new airport, the “Philippine Sangley International Airport (PSIA)” in Cavite, Philippines.  This is the newest initiative in the Philippine government’s multi-airport strategy, as part of President Duterte’s ambitious “Build, Build, Build” infrastructure agenda.  The PSIA is planned to be a regional airport hub that has the capacity to accommodate 120 million passengers annually.  The Sy-Tieng consortium has valued the developed cost of the airport at US$ 12 billion (PHP 623 billion) and will reclaim close to 2,500 hectares of land north of the Sangley peninsula for the construction of the airport and a commercial establishment next door.  The PSIA will have two parallel independent runways, ensuring adequate airside and terminal capacity to accommodate the future domestic, international and transfer traffic at the airport.  The consortium also has plans to develop the airside and landside facilities and transportation infrastructure, to ensure smooth access to PSIA facilities.  To facilitate the project, the Danilo Atienza Air Base will be rehabilitated to be used as a general aviation airport in the meantime, complete with service buildings, office towers, hotels and conference halls.  The airport is expected to substantially reduce restrictions on land in Metro Manila and function with a lot less noise impact, compared to the Ninoy Aquino International Airport, the current main gateway in Manila. With no cost to the Philippines government, the proposed project will not only boost tourism, but will also be a hotspot for the inflow of foreign direct investment into the country.  The new airport is also envisioned to challenge other airports in the region, such as the ones in Bangkok and Singapore, and elevate Philippines closer to the level of other developed countries in the region. The Sy-Tieng consortium is yet to receive a response from the Philippine government.  If accepted and approved, it will undergo a competitive bidding process, alongside challengers like the San Miguel Corporation that is also vying for the bid.

View the Council's latest Infrastructure updates

Country Highlights

Brunei

Major Developments

The Monetary Authority of Brunei Darussalam (AMBD) and the Monetary Authority of Singapore (MAS) recently entered into a FinTech cooperation agreement to foster innovation in financial services between the two countries.  AMBD and MAS will share information on the developments and trends of financial technologies in their respective countries and promote joint innovation projects between Brunei and Singapore.  The cooperation agreement is also expected to establish a framework for both AMBD and MAS to provide support for FinTech to better understand the regulatory regime and opportunities in each jurisdiction.  In addition, the two authorities will also work together to enhance the retail payment ecosystem between Brunei Darussalam and Singapore.  The agreement was signed during Singapore President Halimah Yacob’s visit to Brunei on her first state visit since taking office in September 2017.  AMBD Managing Director Yusof bin Haji Abdul Rahman and MAS Deputy Managing Director Jacqueline Loh signed on behalf of their respective agencies.  Brunei is looking to develop its FinTech sector, leveraging its highly-skilled workforce.  The launch of a FinTech regulatory sandbox in 2017 demonstrated Brunei’s commitment to advance financial innovation and digital finance.  These are all part of Brunei’s Wawasan 2035, a nationwide plan that sets out the economic vision over the next two decades.  It is centered on developing a diversified, dynamic and sustainable economy, moving away from oil and gas.  In addition, Brunei has also released its Financial Sector Blueprint, which lays out the roadmap of how Brunei aims to establish a supportive FinTech ecosystem, and develop competitive and innovative financial institutions and services to become one of Asia’s most competitive hubs by 2025.

View the Council's latest Brunei updates

Cambodia

Major Developments

• On July 29, Cambodia will hold its general elections to elect members of the sixth National Assembly. As it stands, a CPP victory led by Prime Minister Hun Sen in the upcoming general election seems predestined. Because no credible opposition exists, the government will have to rely upon voter turnout statistics to bolster the legitimacy of the election in the eyes of the international community. Nevertheless, Western powers may condemn the election results and impose additional sanctions on high-ranking officials and/or take aim at Cambodia’s lucrative garment industry. Should public protests against the electoral outcome occur, the government may impose public controls to prevent an uprising. However, a lack of opposition leaders present on the ground significantly reduces the likelihood of a large-scale movement emerging and mobilizing.
• On June 12, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) imposed economic sanctions on Cambodian General Hing Bun Heang, the head of Prime Minister Hun Sen’s Bodyguard Unit, under the Global Magnitsky Human Rights Accountability Act.  The sanctions will freeze Gen. Heang’s assets in the United States and prohibit all transactions with U.S. citizens.  The Cambodian Government has responded to this set of sanctions and prior condemnations by the United States with increasingly negative rhetoric as bilateral relations continue to sour. After condemning the sanctions against Gen. Heang, Hun Sen’s cabinet caustically referenced the U.S. bombing of Cambodia during the Vietnam War as a violation of human rights.  Gen. Heang asserted he was unfazed by the sanctions as he claims to have no financial stake or interests in the United States.  While this set of sanctions against Gen. Heang may be more symbolic than impactful, the U.S. Government may introduce further sanctions against Cambodia’s officials and their affiliates in the near future (click here to access our previous update regarding the Cambodia Democracy Act of 2018).  As the international community’s calls for increased transparency and fair competition in the upcoming Cambodian elections on July 29 grow louder, the political and business risks for U.S. companies in Cambodia also increase.

View the Council's latest Cambodia updates

Indonesia

Major Developments

• On June 27, Indonesia held its 2018 simultaneous regional elections. Indonesia’s General Elections Committee reported over 150 million Indonesians cast their votes during the regional elections and this can be used as a barometer of what to expect in the 2019 presidential and legislative elections. Five of Indonesia’s most populous provinces (North Sumatra, West Java, Central Java, East Java and South Sulawesi) elected new governors. These provinces alone represent almost 54 percent of the 575 House of Representatives seats were and these seats are up for grabs in the 2019 legislative elections. Ridwan Kamil prevailed in West Java.  In Central Java, incumbent Ganjar Pranowo won the mandate for his second term. In East Java, the election was won by Khofifah Indar Parawansa. Meanwhile Edy Rahmayadi won North Sumatra and Nurdin Abdullah won South Sulawesi. West Java is arguably one of the most important regions in the context of next year’s presidential race. It is home to approximately 46.7 million people, the biggest electorate in the country. West Java is also the province where Jokowi struggled the most during the 2014 elections; in the end Prabowo Subianto beat Jokowi in West Java. President Jokowi himself used the regional elections as a platform for his political career. Jokowi jumped into politics and was elected the mayor of Solo, Central Java, in 2005. While serving his second term as mayor, Jokowi ran for the Jakarta governorship only to claim the number-one position in the country’s capital city in 2012 before he was nominated by PDI-P to contest and eventually won the 2014 presidential election.
• On July 9, Indonesia launched its Online Single Submission (OSS), a web-based licensing system aimed to ease bureaucracy in obtaining business permits in the country.  OSS is an effort based on Presidential Regulation No. 24/2018 which was passed by President Joko Widodo on June 21 to help boost investment in Indonesia.  Only two sectors lie outside the system, the financial and mining sectors which are still being handled by the Financial Services Authority (OJK) and Energy and Mineral Resources Ministry (ESDM), respectively.  The Coordinating Ministry of Economic Affairs (CMEA) is temporarily operating the OSS system, and had stated that it will eventually be handled by Indonesia’s Coordinating Investment Board (BKPM) (currently predicted to be in six months), although this might change.  As a result, BKPM is currently not processing or issuing licenses.  Licensing is now handled by the CMEA.  In addition, the implementation of OSS also pulls the authority to issue hundreds of licenses from 17 other ministries and agencies throughout 530 cities and regencies in Indonesia. Coordinating Minister Darmin Nasution stated that the implementation of the OSS system will simplify licensing for investment purposes.

Advocacy

On July 9, the Council held a members’ meeting in Jakarta to strategize and coordinate advocacy plans on the latest halal implementing regulation draft in Indonesia.  Click here for the meeting notes.

View the Council's latest Indonesia updates

Laos

Major Developments

• On June 19, members of the Laos National Assembly gathered to debate the duties and structure of the Bank of Lao PDR's Executive Board.  The debate centered around a proposed amendment to restructure the Executive Board after Assembly members raised concerns about who should be the Governor of the Bank of Lao PDR.  Along with other structural adjustments, the amendment under consideration covers the entire content of the Law of the Bank of Lao PDR, which has 78 articles.  More information can be found in our recent update here.
• On June 5, at the 5th Ordinary Session of the National Assembly, Lao PDR Prime Minister Thongloun Sisoulith announced that Lao PDR’s economic growth is forecasted to reach 6.7 percent and a GDP of 152,436 billion kip (US$18 billion).  Agriculture is expected to rise by 2.9 percent, while manufacturing and services are expected to climb by 7 percent and 7.9 percent respectively for the first half of 2018.  More information can be found in our recent update here.

Looking Ahead

• August 23-24 Laos Business Mission:  Please save the date for the Council's annual Business Mission to Laos.  Please contact Ella Duangkaew at eduangkaew@usasean.org with any questions.

View the Council's latest Laos updates

Malaysia

Major Developments

• Malaysian Prime Minister Mahathir’s cabinet is coming together with one deputy prime minister, 26 ministers and 23 deputy ministers now sworn in, as well as the appointment of Nor Shamsiah as the new Bank Negara Governor.  Three more ministers are expected to be named after their appointments as members of Parliament.  More information on the latest cabinet members can be viewed in this analytical update and more on the first round of ministers sworn in can be found here.
• Prime Minister Mahathir has raised the possibility of extending tax incentives for foreign investment if companies pledge to create better-paid jobs for Malaysians. Mahathir hinted the government could extend tax breaks beyond ten years to attract investments. The extension of tax breaks would offer reassurance to companies that Malaysia remains committed to being open to foreign investment.
• Prime Minister Mahathir’s administration plans to amend anti-graft laws so that even the prime minister and deputy prime minister must declare the receipt of gifts.  All Members of Parliament and members of the administration will have to declare any gifts worth more than RM500 (US$124) to the prime minister with a copy given directly to the Malaysian Anti-Corruption Commission.  This comes as former Prime Minister Najib Razak was charged last week with corruption-related offenses and millions of dollars worth of goods, including gifts were seized.

Advocacy

Call for Input on the Reintroduction of Sales and Services Tax (SST):  On June 1, the six percent goods and services tax (GST) was zero-rated and is expected to be replaced by the sales and services tax (SST) as early as September.  With the new SST rate expected to be reintroduced, but not yet revealed, the Council is collecting feedback from members to offer recommendations to the new Malaysian government on the SST reintroduction (both rate and process).  Please provide input to Kim Yaeger at kyaeger@usasean.org and Tina Jamaluddin at tjamaluddin@usasean.org.

View the Council's latest Malaysia updates

Myanmar

Major Developments

• Effective July 2, Dr. Mya Lay Sein has been appointed Deputy Minister of Health and Sports.  Prior to this role, she led the Sport Medicine Department in the Ministry and served as President of the Sport Medicine Committee of Myanmar.  Dr. Mya Lay Sein served as Vice President of the Myanmar Badminton Federation and was a competitive badminton player.  She studied at the Yangon Institute of Medicine (1) and graduated with an MBBS in 1982.  She holds a certificate of the Postgraduate Training Sports Medicine (Singapore Sports Council, Singapore) and also received the degrees of MSpMed (Master of Sports Medicine) and a PhD (Sports Medicine & Shoulder) from the University of New South Wales, Australia. She has lectured medical students, doctors, MSc students, PhD students, medical personnel, and physiotherapists from the Ministry of Health, Defense Service Medical Academy, Ministry of Sports, Ministry of Education, Dagon University, Yangon and Yadanarbon University Mandalay, National Sports Federations and International Sports Federations.
• On June 25, the European Union and Canada announced sanctions against seven Myanmar military and police officials due to their involvement or association with violence against the Rohingya population.  All seven members are subjected to asset freezes in both the EU and Canada, travel bans in the EU, and cut off to financial or related services in Canada.  A few hours after the sanctions were announced, Major General Maung Maung Soe was pronounced discharged and Lieutenant General Aung Kyaw Zaw was “allowed to resign.”  Neither termination had any reference made in relation to the sanctions.  The United States has not expressed intentions of imposing economic sanctions against Myanmar.  However, it is floating the possibility of narrow sanctions.

Looking Ahead

On August 1, the Myanmar Companies Law 2017 and its full implementing rules will take effect. As it currently stands per the Myanmar Companies Act of 1914, foreign companies cannot own a single share in locally owned Myanmar companies. Furthermore, foreigners also cannot buy stocks in companies listed on the Yangon Stock Exchange. The Myanmar Companies Act is much anticipated as it will allow foreign investors to acquire up to 35% of shares in a locally owned Myanmar company and complete the entire company registration process online. With the emergence of the new Myanmar Companies Act, it is expected that foreign mergers and acquisitions in Myanmar will increase substantially. To access the Myanmar Companies Law, please click here. To access the implementing rules to the Myanmar Companies Law, please click here.  To access an op-ed co-authored by Myanmar Investment Commission (MIC) Secretary U Aung Naing Oo on the purpose of the new law, please click here.

View the Council's latest Myanmar updates

Philippines

Major Developments

• On July 23, President Rodrigo Duterte delivered his third State of the Nation Address (SONA) to a joint session of Congress. Unlike during his previous two SONAs, Duterte largely stuck to his prepared remarks, meaning the speech was notable for its relative brevity – coming in at roughly 50 minutes – and lack of extemporaneous expletives. As expected, Duterte’s crackdown on illegal drugs and on corruption took top billing, but he also expressed his continued support for the Tax Reform for Acceleration and Inclusion (TRAIN) law, which has been blamed for contributing to recent increase in inflation, called on Congress to pass the Universal Healthcare Bill, and expressed his support for the Bangsamoro Organic Law and proposed draft Constitution that would move the Philippines from a unitary to a federal system of government.
• President Rodrigo Duterte’s third State of the Nation Address (SONA) was delayed for around an hour on July 23 amid the ousting of Congressman Pantaleon Alvarez as Speaker of the House by supporters of former President and current Congresswoman Gloria Macapagal-Arroyo. Following some confusion earlier in the day, a special session of Congress was convened after the SONA to formally elect and swear in Arroyo as the new Speaker. Alvarez reportedly saw his support in the House of Representatives erode after criticizing Duterte’s daughter and current Davao City Mayor Sarah Duterte Carpio in February for forming her own regional political party. Given that Arroyo is also a staunch supporter of President Duterte, the change in House leadership is unlikely to have a negative impact on his agenda.
• Commencing July 16, the Department of Agriculture (DA) is imposing suggested retail prices (SRPs) for basic agricultural goods in an attempt to counter inflation, which accelerated to a five-year high in May.  The DA has positioned the SRPs as a way to protect consumers from some retailers and traders who are allegedly taking advantage of rising prices to engage in price gouging.  Those found to be violating the SRP regime could be sentenced to five to 15 years in prison and forced to pay fines between P5,000 (US$94) and P1 million (US$18,760).  More information on this topic can be found here.
• A draft policy from the Department of Energy (DOE) aimed at increasing price transparency and curbing alleged profiteering has raised concerns among oil and gas industry stakeholders because it would require oil firms to itemize the costs of petroleum products.  Fuel that would be covered by the draft policy includes gasoline, automotive and industrial diesel, kerosene, jet fuel, bunker fuel oil and household and automotive liquefied petroleum gas.  More information on this topic can be found here.
• The Department of Trade and Industry (DTI) is considering requiring manufacturers to add health warning labels to high-sugar content beverages, citing the need to stem rising rates of diabetes. During a recent Cabinet meeting focusing on the Tax Reform for Acceleration and Inclusion (TRAIN) law, President Rodrigo Duterte reportedly directed Secretary of Trade and Industry Ramon Lopez to look into requiring the warning labels after expressing concern at the sugar content of some beverages.  More information on this topic can be found here.
• On June 26, the Department of Information and Communications Technology (DICT) released the second draft Terms of Reference (TOR) for the selection of the country’s third major telecommunications player.  The revised TOR was crafted with the help of the United Nations’ International Telecommunication Union and will undergo a public consultation for stakeholders.  Earlier this year, President Duterte invited foreign firms to become the third telco player in the Philippines’ wireless communication market to break the duopoly of industry giants PLDT and Globe Telecom and improve overall service.  More information on this topic can be found here.

Advocacy

• On June 21, the Council held a roundtable with Ron Baumgarten, Deputy Assistant U.S. Trade Representative for Southeast Asia and Pacific Affairs, and Marta Prado, Director for Southeast Asia at the Office of the U.S. Trade Representative, on recent visits by USTR officials to Malaysia, the Philippines and Vietnam.  Key points from the discussion on the visit to the Philippines included:
  • Deputy U.S. Trade Representative Jeffrey Gerrish traveled to Philippines May 23
  • Main purpose of Philippines trip was to meet government officials and continue conversation on ongoing Trade & Investment Framework Agreement (TIFA) talks
  • Government of Philippines (GOP) appears interested in addressing outstanding agriculture issues
  • GOP is moving to liberalize economy more alongside Build, Build, Build initiative
  • In terms of a potential FTA between the United States and the Philippines, NAFTA negotiations provide the best guide for USG’s priorities in future trade agreements.

Looking Ahead

• Powertrends 2018, September 4-6:  The 13th International Exhibition and Conference on Directions for Energy, Power and Electricity will take place September 4-6 at SMX Convention Center in Pasay City, Metro Manila, the Philippines.  Co-organized by the Philippine Department of Energy and Leverage International since 1995, Powertrends is the most significant and longest-running energy-focused conference and exhibition in the Philippines.  Each year, the event draws key business leaders, vendors, developers, institutions and principal energy policymakers responsible for the development of the Philippine energy sector.   More information on Powertrends 2018, including how to get a 20 percent discount on exhibition fees as a Council member company, can be found here.
• The Council is helping Leverage International identify speakers for a panel at Powertrends 2018 on renewable energy technologies, especially:
  • Hybrid energy solutions
  • Energy storage and back-up systems for renewables
  • Power conditioning units.

If you or your organization would be interested in presenting on any of these topics, or if you have a recommendation for a speaker, please contact Leverage International at leverage@leverageinternational.com.

View the Council's latest Philippines updates

Singapore

Major Developments

• To quicken the shift from cash and checks to digital payments, Singapore has pledged to slash cash withdrawals from automatic teller machines (ATMs) and eliminate the use of checks by 2025, according to a speech by Singapore’s Minister for Education Ong Ye Kung on June 20 at the 45th Annual Dinner of The Association of Banks in Singapore.  Ong, who sits on the Monetary Authority of Singapore’s (MAS) board, said that Singapore will attempt to hasten this shift by expanding the government-endorsed PayNow digital funds transfer system to companies starting August 13.  Ultimately, by accelerating the transition to e-payments, the city-state aims to better position itself as a regional financial hub that can compete with the likes of Hong Kong and London.  More information on this topic can be found here.
• On May 22, Singapore's Health Sciences Authority (HSA) announced regulatory and legislative changes to facilitate faster access for lower-risk medical devices and standalone mobile applications.  Having taken effect on June 1, these changes also aim to provide greater clarity to existing policies regarding telehealth and high-risk devices for anatomy and appearance modifications.  By changing their regulatory framework, the HSA is able to focus more attention on newer and higher risk devices rather than on granting market entry to lower risk devices.  More information on this topic can be found here.

Advocacy

Singapore’s Ministry of Finance (MOF) issued a public consultation for feedback on the draft Goods and Services Tax (GST) (Amendment) Bill 2018, which levies GST on imported services, including digital services such as streaming movies and music, starting January 1, 2020. The public consultation lasted from June 28-July 18.  The draft bill also incorporates feedback received from a previous public consultation on IRAS’ draft e-Tax Guides on Reverse Charge and Overseas Vendor Registration (OVR).  The Council submitted comments for the March 20 public consultation.  Those comments can be found here (B2B imported services) and here (B2C imported services).  For the current public consultation period, the Council solicited input from member companies and prepared a submission to reiterate our points from the previous consultation.

Looking Ahead

• On July 31, the Council will host a breakfast briefing with H.E. Ashok Kumar Mirpuri, Singapore's Ambassador to the United States, at the Embassy of Singapore in Washington, DC.  Ambassador Mirpuri will provide an update on recent political and economic developments in Singapore.  He will also discuss key initiatives of Singapore's 2018 ASEAN Chairmanship.  A question and answer session will follow the briefing.  More information on the breakfast briefing with Ambassador Mirpuri can be found here.  Please contact Riley Smith at rsmith@usasean.org with any questions.
• The Council is registering senior-level executives for its annual Business Mission to Singapore August 20-21.  This year's mission will focus on meeting with Ministers who assumed new roles after the May 2018 Cabinet reshuffle, encouraging the adoption of regulatory frameworks that promote innovation and support new business models and new technologies, working with the Government of Singapore (GOS) to improve the city-state's human capital development and management so that both support their future economy, and learning how the U.S. private sector can help GOS achieve its 2018 ASEAN Chairmanship goals.  The Council has already confirmed meetings with the new Minister for Trade and Industry, the Minister for Education, and the new Managing Director for the Singapore Economic Development Board (EDB).  More information on the 2018 Singapore Business Mission, including a link to register, can be found here.

View the Council's latest Singapore updates

Thailand

Major Developments

• The Council’s annual Thailand Business Mission took place in Bangkok June 26-28.  The delegation was composed of more than 80 senior executives, representing 38 leading U.S. companies, from a cross-section of industries. Over the course of the mission, the delegation met with Prime Minister Prayut Chan-o-cha, key members of the Cabinet and other senior government officials, as well as business and thought leaders.  More information can be found in our press release here.
• On June 7, the Government of Thailand showcased its proposed “20-year national strategy.”  Minister Kobsak Pootrakool, Minister attached to the Prime Minister’s Office, announced that the long-term strategy will lay the necessary framework for future governments to follow to foster economic development and prevent inconsistency in governmental policy.  The concept of the strategy was included in the government’s Constitution, laying the groundwork for the administration’s continued influence even following proposed elections.  The strategy has yet to be debated and approved by the National Legislative Assembly (NLA). More information can be found in our recent update here.
• On June 6, the Cabinet of Thailand approved a royal decree to terminate a 10 percent exemption from corporate tax for international banking facilities (IBF).  The termination is based on a recommendation by the Organization for Economic Cooperation and Development (OECD) for countries looking to adopt the inclusive framework for base erosion and profit-shifting (BEPS). The Finance Ministry estimates that the government will receive an additional 30-60 million baht (US$ 930k–1.8m) a year from scrapping the corporate tax exemption.  In addition, Nathporn Chatusripitak, an advisor to the Prime Minister's Office, stated that compliance with the OECD suggestion will create a better image for Thailand in terms of transparency of tax collection and avoiding hostile trading policies from other countries.  More information can be found in our recent update here.
• On June 7, Deputy Prime Minister Somkid Jatusripitak announced that Thailand has committed to developing the necessary telecommunications infrastructure to fully adopt fifth-generation (5G) wireless systems by 2020.  The development of the appropriate digital infrastructure could potentially lead to a huge leap in e-commerce, as the current trade value for e-commerce already reaches US$ 80 billion (2.55 trillion baht).  Thailand’s digital development will help accelerate economic growth for the reduction of income disparity and stronger rural development.  The NBTC plans to allocate a total of 380 MHz of downlink and uplink slots through four spectrum ranges by 2020.  More information can be found in our recent update here.
• On June 16, leaders from Cambodia, Laos, Myanmar, Thailand and Vietnam convened in Bangkok for the 2018 Ayeyawady-Chao Phraya-Mekong financial Cooperation Strategy (ACMECS) Summit.  Thai Prime Minister Prayuth Chan-o-cha announced a new “ACMECS fund,” which will serve as a financing mechanism for cooperative infrastructure and development endeavors.  Thailand will manage the fund, which will draw funding from the five-member states present at the Summit, with the goal of diminishing reliance on funding from larger, wealthier regional leaders.  The project’s size and budget is to be determined later this year by financial officials from each of the member countries.  More information can be found in our recent update here.
• On June 18, Kulanee Issadisai, the Director-General of the Business Development Department of the Ministry of Commerce, announced that the Commerce Ministry plans to remove five services on List Three of the Foreign Business Act (FBA).  The FBA originally limits foreign equity ownership in these areas to 49 percent and includes three categories of activity where foreign participation may be prohibited or restricted. More information can be found in our recent update here.

View the Council's latest Thailand updates

Vietnam

Major Developments

On July 8-9, U.S. Secretary of State Mike Pompeo visited Vietnam and met with General Secretary of the Communist Party of Vietnam Nguyen Phu Trong, Prime Minister Nguyen Xuan Phuc, and Deputy Prime Minister Pham Binh Minh.  During Secretary Pompeo's meeting with DPM Minh and General Secretary Trong, the U.S. and Vietnamese officials affirmed their shared interest to uphold the freedom of navigation in the South China Sea and stated their mutual concerns over the militarization and reclamation currently taking place in the area, which run counter to existing international maritime law. To further promote peace, security and prosperity in the Indo-Pacific region, Pompeo also stressed the importance of strengthening the U.S.-Vietnam Comprehensive Partnership.  These discussions of U.S.-Vietnam working-cooperation follow the State Department's fifth U.S.-Vietnam Dialogue on Maritime Issues and the Law of the Sea on June 19-20, which affirmed the joint commitment on maritime cooperation at the regional and international level.  During this meeting, the parties also discussed the two countries' strategic partnership in other areas, including politics and diplomacy, increasing mutual trade and investment, defense and security issues, and further relief for legacy of war issues.

Advocacy

The Vietnam Ministry of Health has published a draft of Decree 36 on Medical Device Management (see here for English version and here for Vietnamese version) and is inviting the industry to provide feedback.  The Council understands that the Department of Medical Equipment and Construction is unable to complete registration of Classes B, C and D medical devices by this year.  We have drafted a letter requesting an extension of the registration timeline.  For more information, please contact Ying Hui Tng at yhtng@usasean.org.

Looking Ahead

On July 31, the Council will host a welcome luncheon in honor of H.E. Ha Kim Ngoc, Ambassador of Vietnam to the United States.  Previously the Vice Minister of Foreign Affairs, Ambassador Ngoc has been tremendously supportive of U.S. businesses and is considered a good friend of the Council.  We are excited to welcome him to Washington on behalf of the U.S. business community.  For more information, please contact Hai Pham at hpham@usasean.org.

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