Media Release: Intra-ASEAN and open trade is vital to ASEAN’s post-COVID-19 recovery – the EU experience may offer a path forward for boosting the growth of intra-regional trade

Intra-ASEAN and open trade is vital to ASEAN’s post-COVID-19 recovery – the EU experience may offer a path forward for boosting the growth of intra-regional trade

From top: Paolo R. Vergano, Senior Fellow of CIMB ASEAN Research Institute and Partner at FratiniVergano – European Lawyers; and Tan Sri Dr. Munir Majid, Chairman of CIMB ASEAN Research Institute.


Kuala Lumpur, 23 June 2020 – CIMB ASEAN Research Institute (CARI) hosted a CARI Briefings webinar under its COVID-19 Economic Recovery Plan Series, titled ‘How Can ASEAN Bounce Back: An EU Perspective’. The session featured Paolo R. Vergano, Senior Fellow of CARI and Partner at FratiniVergano – European Lawyers, and key expert for trade facilitation in the ARISE Plus project of the ASEAN Regional Integration Support by the EU.

Moderated by Tan Sri Dr. Munir Majid, Chairman of CARI, the discussion centred on ASEAN’s post-COVID-19 economic recovery through a trade and institutional perspective, and how ASEAN can draw lessons from the EU’s experience in fostering internal trade.

1. ASEAN cannot depend as much on external exports post-COVID-19, greater intra-regional trade is vital to its recovery

Paolo observed that even before many ASEAN countries underwent lockdowns to combat the spread of COVID-19, many already suffered from supply chain disruptions caused by China’s earlier lockdown in January 2020. According to IHS Markit’s PMI data, the disruption of raw materials, labour, and sub-assembly components caused ASEAN manufacturers to see their worst month on record in March 2020, with the headline PMI falling from 50.2 in February to a record low of 43.4 in March. Paolo cited April 2020 data from the World Trade Organization which projected world merchandise trade would drop by between 13% and 32% in 2020 due to COVID-19.1

Paolo argues that for the open economies of ASEAN, a significant drop in global trade may provide the impetus for policymakers to re-evaluate the bloc’s current over-reliance on external export markets. Paolo stresses there is much room for improvement with intra-ASEAN merchandise trade constituting 23% of total trade in the region in 2018, and points out that intra-regional trade could provide a hedge against future external trade shocks. Paolo draws comparisons with the European Union, observing that intra-European trade accounted for 69% of their total trade in 2018.2

2. Regulatory transparency is a key factor in facilitating greater regional economic integration

Noting that EU and ASEAN are structurally different, there are certain EU practices that are in line with those that ASEAN has already committed. As an example, EU’s trade policies and Preferential Trade Agreements, generally take transparency, enforcement mechanisms and stakeholder engagement (primarily from the private sector and non-governmental organisations) into stronger account.

“Regulatory transparency, for example, will be one of the key factors in facilitating greater regional economic integration, just as it has been for the EU,” observes Paolo. “Traders wishing to engage in cross-border trade must first be aware of the existing rules and opportunities, and understand their rights”.

There are also existing mechanisms that require greater utilisation to boost intra-ASEAN trade. For instance, as part of their efforts to foster greater intra-regional trade through regulatory transparency, Paolo notes that ASEAN states have promoted the ASEAN Solutions for Investments, Services and Trade (ASSIST). Paolo explains that ASSIST is one of the mechanisms through which ASEAN policymakers hope to elicit the support of the private sector in removing non-tariff barriers (NTBs) and streamlining non-tariff measures (NTMs), expediting solutions for specific intra-ASEAN cross-border trading problems encountered by ASEAN’s based small-and-medium enterprises.

3. Free and open trade remains vital for both ASEAN and EU economies

Contrary to recent narratives of the death of globalisation, Paolo stresses that the global response to COVID-19 by many countries was a combination of both restricting certain trade while maintaining or facilitating others. While public lockdowns and travel restrictions have inevitably caused downward pressures on international trade, maintaining free and open trade has been vital for both ASEAN and EU economies to remain afloat and ensure continued access to vital goods.

Paolo observes that for both blocs, preserving supply chain connectivity (particularly internally) has been identified by both ASEAN and the EU as key goals in their larger response to COVID-19. During the Special ASEAN Summit held on 14 April, 2020, ASEAN Economic Ministers (AEMs) and Senior Economic Officials (SEOMs) were tasked with finding ways to preserve trade connectivity, particularly in relation to the smooth flow of essential goods such as medicine, food, and essential supplies. After the initial shock, the European Commission worked well and fast with EU Member States to establish priority lanes for the transport of goods, to ensure the continued flow of essential goods and services.3


Tan Sri Munir, in his closing remarks, concurred that the real lessons to heed from COVID-19, especially for middle-powers like the EU and ASEAN, should be the continuing relevance of global openness and free trade. These will be particularly pertinent as countries struggle to return to pre-COVID-19 growth numbers while having to respond to increasing public skepticism over the benefits of globalisation. The pandemic has exacerbated geo-economic tensions between great powers, with regional blocs like the EU and ASEAN being increasingly pressured to choose sides at the expense of their own internal cohesion.

“COVID-19 should ultimately serve as a wake-up call for ASEAN that greater regional integration is not some faraway luxury to consider, but increasingly a strategic necessity for a region that wants to preserve its economic vitality and geostrategic independence,” concludes Tan Sri Munir.

“Notwithstanding our different internal dynamics and histories, the trade and institutional experiences of the EU can impart lessons which ASEAN must pay attention to.”

1 IHS Markit, ‘IHS Markit ASEAN Manufacturing PMI: PMI tumbles to record low in March amid global COVID-19 pandemic’, April 2020; World Trade Organization, ‘Trade set to plunge as COVID-19 pandemic upends global economy’, April 2020.
2 ASEAN, ‘ASEAN Key Figures 2019, EUROStat
3 CIMB ASEAN Research Institute, ‘Special Update: ASEAN Summit and ASEAN+3 Summit On COVID-19’, April 2020, European Union; ‘The common EU response to COVID-19’

CARI Captures 459: Global competitiveness ranking shows Singapore retaining the top spot



Global competitiveness ranking shows Singapore retaining the top spot
(16 June 2020) Singapore has retained the number one spot in the Institute for Management Development’s (IMD) 2020 World Competitiveness Ranking. The ranking covers 63 economies and results are determined using hard data and responses from business executives’ perception of their respective country’s economy. According to IMD, Singapore’s strong economic performance from robust international trade and investment, employment, and labour market measures played key roles in determining the country’s score. Other ASEAN countries, on the other hand, fell in their rankings. Indonesia dropped eight places to 40 while the Philippines dropped one spot to 46. Although Malaysia and Thailand saw a drop in rankings as well, they remain in the top 30. Rounding up the top five competitive markets after Singapore are Denmark, Switzerland, the Netherlands, and Hong Kong.


Malaysia’s economy expected to recover starting from end-2020
(17 June 2020) Indonesia is seeking to double down on peatland fire prevention and law enforcement following the massive fires that ravaged much of Indonesia’s forests in 2019. The country’s Meteorology, Climatology and Geophysics Agency (BMKG) estimates that the 2020 drought season will start in June and peak in August, warning that dry conditions will typically induce hot spots. As the country enters the dry season, the Environment and Forestry Ministry has been creating artificial rain to prevent peatland fires in several fire-prone areas, with the help of the Agency for the Assessment and Application of Technology (BPPT) and BMKG. Ministry data showed that 1.65 million ha of forest and land burned in 2019, second only to the 2.61 million ha that burned during the 2015 massive fires while the 2020 figure currently stands at 38,772ha.


All public transport and flights allowed to operate at full capacity
(18 June 2020) Indonesia’s central bank is expected to resume lowering interest rates after a two-month pause as the economy continues to slow down due to COVID-19. Out of 22 economists surveyed by Bloomberg, 15 of them believe that Bank Indonesia will cut its benchmark rate by 25 basis points on 18 June to 4.25%, adding to the 50 basis points of cuts made in the beginning of 2020. The country’s GDP is expected to contract 3.1% in the second quarter of 2020, while the government has lowered its growth projections for 2020 to between 0% and 1%. Meanwhile, Indonesia’s rupiah has gained more than 5% over the past month to be the best performer in Asia.


Myanmar lays out three-phase recovery plan to reinvigorate tourism industry
(18 June 2020) The central bank of Thailand will prototype a new payment system for businesses based on the digital currency system it is developing called Project Inthanon. First announced in 2018, the project is a collaboration between the Bank of Thailand and eight of Thailand’s financial institutions and is aimed at developing a wholescale central bank digital currency (CBDC). The goals of the new payment systems for businesses are to study the feasibility of the CBDC and develop a process of integrating it with Thailand’s business platforms. As part of the project, the CBDC prototype will be integrated with the procurement and financial management system of the Siam Cement Public Company, beginning in July and set to conclude by the end of 2020.


Thailand’s property market strengthening
(17 June 2020) Malaysia’s Islamic finance sector is projected to sustain double-digit growth to reach almost US$700 billion (RM3 trillion) in 2020 under the second Capital Market Masterplan, according to Bursa Malaysia chairman Abdul Wahid Omar. As of March 2020, Shariah funds valued at US$39.8 billion (RM170 billion) represented 23% of total industry asset under management (AUM) while Shariah unit trust fund’s net asset value (NAV) of US$23.1 billion (RM99 billion) represented about 23% of the overall industry NAV. “Continued promotion by the asset management industry can help contribute to a greater awareness of Shariah investing to a broader group of investors,” Wahid said during his keynote address at the Shariah Investing Virtual Conference 2020 on 17 June. Malaysia is the third-largest market for global Islamic finance products and the world’s largest sukuk issuer. In 2019, the country ranked first in terms of Islamic funds AUM with 34% of the global share.


Philippine-Japan trade fall by more than half in April 2020
(15 June 2020) South Korea plans to launch negotiations for a free trade agreement with Cambodia in July, top officials announced on 15 June. Trade between South Korea and Cambodia has been increasing in recent years. Exports from South Korea saw a 5.5% increase to US$6969 million in 2019, while its imports from Cambodia increased 6.8%. The main trading items between the two countries consist of textiles and apparel. According to Deputy Prime Minister and Finance Minister Hong Nam-ki, the proposal for an FTA with Cambodia was raised in March 2019 as part of South Korea’s New Southern Policy while a joint feasibility study and related public hearing were completed in late May and 12 June, respectively. In May 2020, the country’s exports slipped for a third consecutive month, showing a drop of 23.7%, weighed down by risks stemming from the COVID-19 pandemic.


Japan Credit Rating Agency upgrades Philippine credit rating to A-
(18 June 2020) The public bus industry in Singapore is looking to increase the hiring of local workers, with the aim of hiring 1,200 bus drivers in 2020. Some 300 Singaporeans have been recruited as bus drivers so far this year. The 10,000 bus drivers currently in the workforce are made up of a “healthy mix” of both local and foreign bus drivers. The industry is also looking to hire about 200 permanent residents. This would result in a 14% increase in the bus driver workforce. According to Minister for Transport Khaw Boon Wan, the COVID-19 pandemic reportedly provides a “golden opportunity” to increase hiring among Singaporeans whose jobs have been impacted by the COVID-19 pandemic. National Transport Workers’ Union executive secretary Melvin Yong said that between 2016 and 2019, more than 600 locals joined the public bus industry.


Pertamina signs deal with Taiwan’s CPC to develop petrochemical complex
(18 June 2020) Over the last week, Vietnam approved a US$9.3 billion tourist resort project in the coastal Can Gio district 50 km south of Ho Chi Minh City and slated for completion in 2031. It is Vietnam’s biggest commercial project so far in 2020, and is led by Vingroup, Vietnam’s largest conglomerate. Vietnam hopes to maintain a record pace of public and private investment since January 2020. The project had to wait years for government approval due to civil society groups and environmental activists warning of the environmental risks associated with it. The IMF has cut its economic growth projections for Vietnam to 2.7% in 2020, although Vietnam hopes to achieve an expansion of more than 5.0%.


Government unveils digital economy masterplan
(18 June 2020) Even as the country recorded no new confirmed COVID-19 cases for 67 consecutive days, the Lao government continues to implement preventive measures and monitor people entering the country to avoid a second wave of COVID-19 outbreak. Those entering Laos, especially returning workers, will be sent to quarantine centres for 14 days, while the temperature of each person entering Laos will be checked. On 17 June, a total of 1,930 people entered Laos through international border checkpoints and from this number, 1,348 people crossed the border with Thailand. A total of 49 people entered Laos from China, while 527 people entered Laos from Vietnam, according to the Lao Ministry of Health. Laos announced its first two COVID-19 confirmed cases on 24 March, and the last patient was discharged on 9 June.


Singapore facing its most severe economic recession due to COVID-19
(18 June 2020 Indonesia will receive US$4.2 million from Australia in support of its COVID-19 response and recovery. The money will go towards strengthening Indonesia’s laboratories, improving the way it collects and uses health information, and protecting patients and health workers. Australia’s ambassador to Indonesia stated that both countries are well-positioned to overcome these challenges together, and that Australia intends to support Indonesia’s immediate critical health security efforts in collaboration with the World Health Organization. Other parties have also pledged to aid Indonesia in its fight to contain the pandemic. Last week, the United Nations announced that it would contribute US$2 million to support Indonesia in its COVID-19 Multi-Partner Trust Fund while New Zealand announced in May that it would contribute US$3 million to Indonesia’s COVID-19 preparedness, response and recovery efforts through the UN’s Children’s Fund Indonesia.

Mekong Monitor: Thai government approves five investment projects worth US$1.34 billion

Photo credit: Pixabay





Thai government approves five investment projects worth US$1.34 billion
(17 June 2020) Thailand’s government has approved five investment projects worth US$1.34 billion, as well as measures to strengthen the agricultural sector. According to a statement by the Board of Investment, the projects included a pledge by Thai Oil to invest US$773.6 million to produce 250 megawatts of electricity using oil waste, and a pledge by B Grimm Power to spend US$192.6 million on a natural gas-fired power plant. Summitr Group will invest US$176.5 million to produce 30,000 electric battery-powered vehicles a year. Furthermore, Envico will invest US$79.3 million to produce recycled plastic pellets, while Bangkok Arena will spend US$120.4 million to build a convention hall. The state investment agency also stated that they had also adjusted investment promotion terms and benefits for the agricultural sector to encourage the usage of technology and innovation.
Read more>>


Thai government plans to sell US$6.42 million worth of blockchain-based bonds
(17 June 2020) Thailand’s Public Debt Management Office (PDMO), which comes under Thailand’s Ministry of Finance, announced plans to sell US$6.42 million worth of savings bonds through a blockchain-based e-wallet issued by state-owned Krung Thai Bank. According to a Ministry of Finance statement released on 16 June, distributing the bonds through a blockchain e-wallet was about improving the efficiency of the government system and an investment in a true digital economy. Using blockchain technology also allowed the debt office to reduce the face value of the bonds. The bond issuance is a pilot project by the government to improve financial inclusion by making it easier for people to subscribe to government-issued bonds.
Read more>>


Myanmar expects worst of economic impact from COVID-19 starting September 2020
(16 June 2020) Myanmar’s de-facto leader Aung San Suu Kyi stated that the most severe economic impact of the COVID-19 pandemic would occur in the final four months of 2020. She also said that the government is “well prepared” to address the impact through inclusive cooperation, during a panel discussion via video conference on 16 June. Myanmar is also expected to receive US$1.25 billion in emergency loans from international organisations such as the International Monetary Fund, the Japan International Cooperation Agency, the World Bank and the Asian Development Bank, said Myanmar’s investment and foreign economic relations minister Thaung Tun, during the same panel. According to the government, further loans may be approved in the future, taking the total to US$2 billion.
Read more>>


KKR-led consortium pays US$650 million for 6% stake in Vinhomes
(16 June 2020) A consortium led by US global investment firm KKR has paid US$650 million for a 6% stake in Vinhomes, the property arm of Vietnamese conglomerate Vingroup, making it Vietnam’s largest private equity investment yet. The consortium included Singapore state investment fund Temasek, and underscored Vietnam’s attraction as an investment destination. Vinhomes largely constructs high-rise and villa developments for middle-class and wealthy buyers. Property projects have stalled in Vietnam in the wake of COVID-19 and the subsequent slowdown in planning approvals in Hanoi and Ho Chi Minh City.
Read more>>


Vietnam hopes to attract manufacturing from China through EU-Vietnam Free Trade Agreement
(17 June 2020) Vietnam’s National Assembly approved a free trade agreement with the European Union (EU) on 8 June, and hopes to leverage upon it to attract manufacturing relocation from China. The trade agreement will take effect by August 2020, after having already been ratified by the EU. Vietnam’s National Assembly stated that interest in the trade agreement was influenced by its desire to secure customers in the European market after the COVID-19 pandemic. Vietnam’s exports to the EU market reached US$42 billion in 2019, while imports from the EU totalled US$15 billion in the same year. Vietnam’s export revenues to the EU is expected to rise by 42.7% by 2025 and 44.4% by 2030 compared with a no-deal scenario. The World Bank forecasts that Vietnam’s GDP will rise by 2.4% and lift exports by 12% by 2030 through the free trade agreement.
Read more>>



About Greater Mekong Subregion (GMS)

The Greater Mekong Subregion (GMS) Economic Programme was launched by the Asian Development Bank in 1992 connecting five developing ASEAN countries, namely Cambodia, Laos, Myanmar, Vietnam and Thailand, and Chinese provinces of Yunnan and Guangxi Zhuang Autonomous region. The region has some of the most robust economies sharing the Mekong River Basin thanks to its reform and liberalisation. The subregion is growing at a faster pace than the whole of East Asia and the Asia Pacific as the GDP growth rate for 2017 was at 6.4 percent, according to the World Bank. The population at the subregion as of 2016 is at 340 million while the GDP at PPP is at US$3.1 trillion in 2016. In 2015, trading within the region was at US$444 billion.

CARI Analysis: Healthtech investment in Asia Pacific more than halved due to COVID-19 but opportunities remain

CARI Analysis: Healthtech investment in Asia Pacific
more than halved due to COVID-19 but opportunities remain

Author: Aznita Ahmad Pharmy | Research Editor: Eleen Ooi Yi Ling
Webmaster: Nor Amirah Mohd Aminuddin | Supervisor: Hong Jukhee

"CARI Analysis: Healthtech investment in Asia Pacific more than halved by COVID-19 but opportunities remain” looks at how the COVID-19 pandemic has affected investment trends in healthtech in the region, startups that have performed well and what the remaining months of 2020 could potentially hold for this sector.

(This article contains 5 charts and best viewed on a desktop or horizontally on your mobile.)


a) Healthtech was the third-largest sub-sector in global healthcare private equity investment in 2019, with Asia Pacific in third place in terms of healthcare investment raised.
b) Healthtech investment in Asia Pacific in the first quarter of 2020 fell 56% year-on-year to US$703 million. This is in contrast to the US, which had yet to feel the effects of COVID-19 and saw its healthtech investment rise 1.5 times to US$3.1 billion during the same period.
c) Among the sub-regions, Southeast Asia saw its healthtech investment decline by 68% while China saw a 78% drop. Only India and North East Asia saw an increase in investments. Out of the ASEAN countries, only Singapore made it into the top six countries to receive funding in the first quarter of 2020.
d) Healthtech firms in Asia Pacific that provide patient-centric solutions such as telemedicine were able to attract larger investments during the first quarter of 2020.
e) Healthtech investment outlook from the US and Asia Pacific for the remainder of 2020 suggests that private investment will continue and highly sought after healthtech subcategories include telemedicine.
f) To ensure a strong post-pandemic recovery for ASEAN, healthtech solutions, such as a regional tracking app, should be included in regional measures to mitigate the pandemic. To better prepare ASEAN against future health crises, a proper framework for the development of healthtech in the region must be included in the succeeding roadmap to the ASEAN Post-2015 Health Development Agenda for 2016 to 2020, and proposed Consolidated Strategy on the Fourth Industrial Revolution (4IR).

1. 2019 saw an upward trend in global healthcare private equity investment with healthtech taking the third-largest subsector spot

The global healthcare sector saw increased private equity investment in 2019, with the value of total deals closed increasing by 14% to US$78.9 billion.1 There were a total of 313 healthcare deals in 2019, with the average deal value showing an increase of 25% and a total of 27 deals in which the deal value exceeded US$1 billion.2 A large portion of global investments went to healthcare providers, and biopharma, followed by healthtech.3

Across all the regions covered, healthtech4 was the third largest healthcare subsector. Described mainly as the convergence between healthcare and technology,5 examples of health technology (healthtech) include telemedicine, electronic medical record (EMR), remote monitoring and wellness apps.6 Total deal value in healthtech globally dropped to US$4.3 billion in 2019 from US$10.5 billion in 2018 but investment in healthtech tends to fluctuate over the long-term.7

a. North America remains the largest market in healthcare in 2019

  • North America captured the biggest share of private equity activities worth US$46.7 billion (Figure 1).
  • Intense competition for assets took place between many different entities, including large buyout funds, European funds, tech-focused funds and corporates.
  • There were no mega-deals or large public take-overs.
  • The provider sector remained the most active with deals 96 deals, equivalent to 60% of all deals in 2019.

b. Investors in Europe look for scaling opportunities as deal values increases

  • Total disclosed deal value in 2019 increased 10.7% to reach a new high of US$19.7 billion.
  • Some investors pursued scale across nearly all verticals in retail health while many smaller provider assets in non-traditional retail health verticals are building scale and are expected to reach a size that appeals to private equity funds.
  • The increase in total deal value was partially due to a US$10.1 billion carve-out7 of Nestlé Skin Health.
  • The region continues to show the trend of biopharma assets making up most of the deal values in Europe.

c. Healthcare investment in the Asia Pacific region was geographically more diverse, with investment in digital platforms as one of the emerging trends

  • Private equity investment in the healthcare sector in Asia Pacific in 2019 fell 29% to US$11.5 billion but when viewed over the long-term, the region continues to display a growth trajectory.
  • Investment in 2019 was more geographically diverse than before:
    • China, India and Australia represented 51% of the deals closed, compared with 90% in 2018.
    • Southeast Asia showed an increase of 21% in deals closed.8
  • The healthcare provider sector saw the most activity, with 29 deals closed, worth US$4.4 billion.
  • The three major emerging trends were:
    • the consolidation of healthcare providers to execute buy-and-build strategies and achieve scale.
    • investment in health-related digital platforms.
    • innovative solutions that would allow the region to close its healthcare gap.

d. Outside of Asia Pacific, healthcare investment deals centred on South America and the Middle East

  • The South American and the Middle East regions saw a total of six deals.
  • The only disclosed deal value in 2019 was the US$1 billion acquisition of Lumenis, an energy-based medical solutions provider, by Baring Private Equity Asia.

Even before the onset of the COVID-19 pandemic, private equity investors were concerned of a global recession in the near term, followed by geopolitical conditions.9 The global private equity investment of the healthcare sector provides a bigger picture of which the healthtech sector makes up a small but steadily growing portion. In the Asia Pacific region, investment in digital platforms was one of the trends observed in healthcare private equity in 2019.

2. Healthtech investment in Asia Pacific hit by COVID-19

a. All subregions saw a decline in investment except for India and North East Asia

With the COVID-19 pandemic causing repercussions on economies around the globe, investment in healthtech in the region has been affected as well.

  • Healthtech investment in Asia Pacific declined in Q1 2020, a sharp contrast to the US which saw a strong start to 2020:
    • Asia Pacific’s healthtech investment in Q1 2020 fell 56% to US$703 million while its peers in the US saw its investment triple to US$3 billion (Figure 2). This was due to the region feeling the effects of the COVID-19 pandemic before the US.10
    • Although the impact from COVID-19 is beginning to be felt across healthtech’s investment landscape in the Asia Pacific region, the full impact has yet to be seen, and it would be difficult to ascertain the full extent of capital flight.11

  • China and Southeast Asia saw a sharp drop in healthtech investment:
    • China saw a 78% drop in healthtech investment in Q1 2020, followed by Southeast Asia, which saw its investment decline by 66%.
  • India and North East Asia’s healthtech investment showed moderate growth:
    • The only regions which saw an increase were India and North East Asia which saw its investments increase 3.35 times and 30% respectively (Figure 3).

b. Two mega deals closed while share of total funding fell by more than half

The investments garnered in Asia Pacific in Q1 2020 were mainly generated by two mega deals, which exceeded US$100 million each. One of the deals was struck in China, the other in India and together, the two deals represented 36% of total funding, which was down 4% compared to the same period a year ago.

The share of total funding excluding the mega deals in Q1 2020 also shrunk to 53% year-on-year. Meanwhile, the average deal value decreased by 31% to US$10.6 million, most likely reflecting a global downward trend in valuations.

c. China captured the largest total deal value in the region, with regional investment focused mainly on agnostic disease ventures

In terms of total deal value, China leads the Asia Pacific region with US$280 million, followed by India (US$251 million) and South Korea (US$66 million).

Out of the ASEAN countries, only Singapore made it into the top six countries in receiving funding in Q1 2020 with US$41 million.

  • Healthtech investment in the Asia Pacific region mainly targeted agnostic disease ventures (32%). Agnostic disease ventures are those that do not focus on specific diseases.
  • Under disease-specific solutions, investments poured into chronic diseases (cardiovascular (9%), diabetes (8%)), oncology (11%) and preventive health (8%) (Figure 4).
  • In Q1 2020, a total of 141 individual investors participated across 68 deals compared with the 182 individual investors that participated in 99 deals12 in Q1 2019.

3. Healthtech investment trends in Asia Pacific show bright spots for startups that address COVID-19 needs

a. Patient-centric solutions among those that outperformed the market

The COVID-19 outbreak is expected to have a substantial economic impact and accelerate the creation of new business models. It has already affected healthtech firms’ revenues and patients, making the development and adoption of patient-centric digital health solutions a priority for both public and private health sectors. The impact is expected to be felt across all the healthcare industry for 6 to 12 months and potentially beyond.15

Digital health solutions that address issues posed by the pandemic saw large increases in investments in Q1 2020; telemedicine’s deal value increased 8.47 times compared to Q1 2019, the largest increase among all healthtech services.16 The other two sub-sectors that saw an increase were health insurtech (42%) and patient solutions (18%).17 Other services such as remote monitoring, medical diagnostics and health management solutions saw an increase in investments.18

b. The emergence of tracking applications in response to COVID-19

The pandemic has also led to the creation of a new category of health solution: contact tracing or tracking apps. Governments are introducing applications to track and trace contamination and adapt privacy laws. Table 1 shows some of the applications that have been rolled out in Asia Pacific.

Table 1: Tracking apps used by selected countries in Asia Pacific19





Existing App

The government has used existing applications, including Alipay, WeChat and Tencent
Healthcare to track people’s interactions and perform contact tracing.


Aarogya Setu

Developed by the government of India, the mobile application uses Bluetooth technology to connect essential health services with the people in its fight against COVID-19.



Developed by the Government Technology Agency (GovTech) in collaboration with the Ministry of Health (MOH), the app works by exchanging short-distance Bluetooth signals between mobile phones that have the app installed.


MyTrace and

Developed by the Ministry of Science, Technology and Information (MOSTI), the app uses Bluetooth to measure how long a user’s phone has been in proximity with other MyTrace users.
If a user is diagnosed with COVID-19, this would allow the authorities to track and contact those who might have contracted it from them.20



Created by the Ministry of Communication and Information Technology, the app cross-references the data stored on its users’ mobile devices through Bluetooth connection.



Created by technology firm Bkav, the app uses Bluetooth to link with smartphones within a two-meter distance and will notify its users if they came within two meters of a COVID-19 patient in the past 14 days.21

The Philippines

Created by the National Task Force (NTF) COVID-19 and information technology company Multisys Technologies Corporation.22 The online platform consisting of a website and a mobile application will generate a heat map for infections using self-reported information.23

c. Prominent healthtech deals in Asia Pacific in Q1 2020 shine a spotlight on telemedicine and diagnostics

The decline in year-on-year healthtech funding did not stop the following startups from capturing a healthy dose of investment. Healthtech firms that are patient-centric managed to bring in larger investments (Table 2).

Table 2: Major healthtech investments in Asia Pacific in Q1 2020







Patient-centric Investments

ZY Health


US$143 million

Series D

Patient solutions

Tasly Holding Group, LBInvestment



US$27 million

Series B


Square Peg, EDBI, IHH

R&D and Diagnostics Investments

3D Medicine


US$40 million

Series F1

Medical diagnostics

China Resources
Pharmaceutical Industry
Investment Fund


South Korea

US$25.9 million

Series C


IMM Investment, InterVest,
Kakao Ventures


  • Early stage: all deals up to and including Pre-A stage
  • Growth stage: Series A, B & C stages
  • Late stage: Series D & beyond stages
  • Exit stage: all IPO and M&A deals

d. Healthtech firms in Asia Pacific that are performing well during the COVID-19 pandemic

(Patient-centric solution)


Photo credit: DoctorAnywhere

Singapore’s Doctor Anywhere received US$27 million in Series B funding:

  • The company intends to use it for extensive expansion to augment the region’s healthcare landscape through digital transformation, with the support of strong local and regional partners. 24
  • Apart from Singapore, the telehealth company operates in Thailand and Vietnam.

In April 2020, it announced the launch of the COVID-19 Medical Advisory Clinic. 25

  • Without having to physically go to a clinic, patients can have a video consultation and speak to a doctor within five minutes.
  • The CEO and founder of Doctor Anywhere, Lim Wai Mun, said the business has seen a two-to-threefold jump in growth since the COVID-19 outbreak started. 26



Photo credit: Lunit

  • South Korea’s Lunit received US$25.9 million in Series C funding in Q1 2020, the largest funding it has received since its US$15 million Series B funding in 2019.
  • The firm develops AI-powered analysis of lung diseases via chest x-ray images and will use the latest round of funding to bankroll the global expansion of its chest X-ray and mammography products, and its other AI solutions. 27
  • With shortages and delays in standard COVID-19 tests, chest x-rays have become one of the fastest and most affordable ways for doctors to triage patients (the sorting of patients based on urgency of care).
  • Lunit’s AI-powered software recently helped a teleradiology firm in France scan patients and calculate a probability of COVID-19 infection within 10 minutes. 28
  • In March 2020, the firm announced the release of its software online, free of charge, to help healthcare professionals manage COVID-19. 29

Looking at the progress of healthtech firms like Doctor Anywhere and Lunit, there are ways for healthtech firms to not only stay afloat during this time of uncertainty, but also pursue opportunities to improve patients’ quality of living and ultimately, save lives.

As mentioned before, the Q1 2020 results do not truly reflect the impact of COVID-19 on healthtech investments in Asia Pacific and therefore, we will look at more recent data obtained in the US since it is the largest healthcare market globally, to have some insight into what the future could portend for healthtech investments in Asia Pacific.

4. Outlook for the remainder of 2020 shows investment will continue with telemedicine anticipated to be a favoured asset

a. Healthtech investment outlook in the US expected to be poor but undeployed funds factors may buffer overall impact

The US had its strongest start ever in healthtech investment in 2020 by bringing in US$3.1 billion during the first quarter, according to Rock Health data.

The COVID-19 pandemic hit the US in February 2019 and the twin crises of a global pandemic and massive economic shifts are expected to rapidly impact all market sectors, including healthtech.

A survey of 12 leading healthcare investors conducted between 16-20 March by Rock Health30 provides an early indication of healthtech31 investment trends in the US going forward:32

  • i. Access to capital will be limited

    Two thirds of the respondents felt that healthtech startups will have a “much harder time” raising capital in 2020 than they did in 2019. Sequoia Capital noted that COVID-19 has and will cause supply chain disruptions, reductions in growth forecasts and changes in hiring plans.

  • ii. Access to private capital won’t contract as rapidly as public capital

    Most of the investors surveyed will not be reducing the amount of capital they intend to invest in 2020; only three “somewhat agreed” to the statement that said they would deploy less capital than anticipated at the beginning of 2020.

    The advantage of several years of heightened VC and private equity (PE) fundraising is that firms collectively possess a large amount of dry powder (funds that have been raised but not yet deployed). This may, to some extent, help alleviate the near-term market shock on the availability of capital to entrepreneurs.

  • iii. Healthtech is in a unique position to expand the capacity of a strained healthcare system

    According to Rock Health, the acute mismatch between supply and demand is the most significant problem facing healthcare today, particularly the human capital (medical doctors and nurses) mismatch during the pandemic. Healthtech firms offer technologies that support the delivery of virtual healthcare, scaling the medical workforce, and the acceleration of R&D for diagnostics and treatments.

    Investors surveyed anticipate growth in remote monitoring, symptom checkers and triage tools (Figure 5). Telemedicine, in particular, has been deployed at the front lines of the pandemic. Rock Health’s annual Digital Health Consumer Adoption Survey found the use of live video telemedicine has increased 4.5 times in 2019 from 2015.

  • iv. A dim outlook for IPOs and M&As in 2020

    An impending recession would no doubt diminish public investor appetite for initial public offerings (IPOs). All but one of the investors surveyed felt that the healthtech IPO window is shut for 2020. However, those same investors were slightly less aligned in their predictions about the M&A market. Two thirds of the respondents believe “market volatility will significantly slow down digital health M&A activity.”33

b. Healthtech investment outlook in Asia Pacific – gloomy prospects ahead but providers of critical products and services expected to perform well

The above findings provide a snapshot of how the COVID-19 pandemic has affected healthtech investment in the US and how it will affect future investments. In Asia Pacific, the following insights emerged:34

  • i. Digital healthcare businesses have become a hidden gem

    Private equity investors and venture capitalists are seeking under-the-radar picks that include digital healthcare businesses. Healthtech is expected to remain a key focus of investors even after the pandemic subsides. According to Lip Kian Ang, a partner at a Singapore-based law firm, the healthcare, medical R&D and pharmaceutical industries will likely be high on the list of priorities for private equity companies for the next five-year plan.

  • ii. The rise of specific sub-sectors – telemedicine and online pharmacies

    Private investment firm Fundnel has seen a surge in investors enquiring about investing in healthtech. Telemedicine and online pharmacies have become especially popular for sector-focused venture capital funds that allow investors to diversify their allocations into specific themes.

  • iii. The necessity of tech-based value-chain businesses

    The recent health crisis has highlighted the importance of keeping the supply chain going especially for vital industries such as healthcare. One venture capitalist said that COVID-19 had helped to “open up opportunities in weakened offline value chains” in any sector which continues to rely on traditional methods, and this may push the adoption of tech-enabled solutions.35 Vynn Capital foresees the tech industry working more closely with traditional sectors as corporates will need to invest in improving the supply chain.

From observing the healthtech investment outlook for 2020 for the US and Asia Pacific, two similar points emerge:

  • i. Private investment into the healthtech sector will continue although with a few differences:

    • Investment in the healthtech sector in the US will be from venture capital and private equity funds that have already raised funds but have yet to deploy them.
    • In Asia, venture capitalists and private equity investors are looking to invest in under-the-radar picks such as digital healthcare businesses.

  • ii. Telemedicine has become particularly popular among investors:

    • It was among the sub-sectors anticipated to see growth in 2020 according to investors surveyed in the US
    • Singaporean telemedicine firm Doctor Anywhere raised US$27 million in Series B funding in the first quarter of 2020.

5. Conclusion

Most ASEAN-level discussions at the moment are understandably focused on the containment of the COVID-19 pandemic but ASEAN must also plan for the future to be better prepared should a similar crisis occur again.

a. Healthtech can advance inclusive and affordable healthcare in ASEAN

Healthtech has the potential to meet the evolving and varying healthcare needs of Southeast Asia.36 The onset of COVID-19 amplified this point even further. A Deloitte report released in April 2020 anticipates the pause in healthtech investments in the US to be temporary37 and this may also be the case in Asia and by extension, Southeast Asia. The COVID-19 pandemic has helped to highlight the importance of healthtech, which is now front and centre economically, politically, and socially. Under the current situation, emphasis on healthtech, particularly virtual health is expected to continue.

b. Healthtech should be included in ASEAN’s future frameworks and strategies

Intra-ASEAN COVID-19 tracking system

Outside of ASEAN’s official frameworks and strategies, the inclusion of healthtech in any regional measures whether to fight the pandemic or support a post-pandemic recovery plan could be beneficial. For example, the use of an intra-ASEAN tracking system would allow regional travel to safely resume while insurtech could expand coverage in a time of rising healthcare expenses.

ASEAN Health Sector Cooperation

As a regional bloc, ASEAN has several regional health mechanisms put in place by the ASEAN Health Sector Cooperation that covers areas including public health emergencies, epidemiology training network, big data analytics and visualisation, and public health laboratories network. 38

ASEAN Economic Community Blueprint 2015 and 2025

The ASEAN Economic Community (AEC) Blueprint 2015 lists healthcare services as one of four prioritised sectors to be liberalised by 2010 and the subsequent AEC Blueprint 2025 focuses on strategic measures that would promote the development of a strong healthcare industry. 39 In both the AEC Blueprint 2025 and AEC 2025 Consolidated Strategic Action Plan (CSAP), the promotion of potential high growth sectors such as health tourism and e-healthcare services is mentioned.

ASEAN Post-2015 Health Development Agenda 2016-2020

The ASEAN Post-2015 Health Development Agenda for 2016 to 2020 covers the shared goals, strategies, priorities and programmes of the health sector between 2016-2020.40 For the succeeding health development agenda, it is recommended that healthtech is added to clusters related to healthcare system resilience and accessibility.

Recommendations for succeeding ASEAN frameworks

To include healthtech in future ASEAN frameworks, the following will need to be considered:

  • The definition of “healthtech” needs to be properly defined in all ASEAN documentation going forward. The current definition of “healthtech” varies amongst member states, and the alignment will ensure that all parties share the same understanding of the definition of “healthtech” . This is crucial to prevent healthtech being left out of master plans or having duplicate entries.
  • As healthtech covers a relatively large scope, prioritisation of relevant categories under the sector such as telemedicine, online pharmacies and remote monitoring should be done to ensure a more targeted and effective approach.
  • The concept note on the promotion of health tourism and e-healthcare services developed under the CSAP should be developed further and include healthtech.
  • The promotion of public-private partnership (PPP) investments for the provision of universal healthcare41 under the CSAP should be extended to specifically include healthtech as this can spur PPP investment in healthtech areas beneficial for the region.

Inclusion in the Consolidated Strategy on the Fourth Industrial Revolution (4IR)

It would be prudent to include healthtech in the proposed Consolidated Strategy on the Fourth Industrial Revolution (4IR) as well. ASEAN needs a proper framework for the development of its healthtech sector so as to not squander the progress that has already been made and to ensure the region is able to harness 4IR technologies to provide quality and affordable healthcare for its people.


1 Bain & Company, “Global Healthcare Private Equity and Corporate M&A Report 2020,” March 2020.
2 Ibid.
3 Ibid.
4 The original Bain & Company report used the term “medtech and related services.” For consistency in this report, “medtech and related services” is used as an approximation of healthtech.
5 Deloitte Insights, “Health tech investment trends: How are investors positioning for the future of health?” March 12, 2020.
6 Galen Growth, “Asia Pac Healthtech Investment Landscape Q1 2020 COVID-19 Special,” January 2020.
7 Bain & Company, “Global Healthcare Private Equity and Corporate M&A Report 2020,” March 2020.
8 According to Investopedia, a carve-out is the partial divestiture of a business unit in which a parent company sells minority interest of a child company to outside investors.
9 Bain & Company, “Global Healthcare Private Equity and Corporate M&A Report 2020,” March 2020.
10 Based on a Preqin survey.
11 Galen Growth, “Asia Pac Healthtech Investment Landscape Q1 2020 COVID-19 Special,” January 2020.
12 Galen Growth, “Asia Pac Healthtech Investment Landscape Q1 2020 COVID-19 Special,” January 2020.
13 Agnostic disease ventures are those that do not focus on specific diseases.
14 Galen Growth, “Asia Pac Healthtech Investment Landscape Year-end 2019.”
15 Galen Growth, “Asia Pac Healthtech Investment Landscape Q1 2020 COVID-19 Special,” January 2020.
16 Ibid.
17 Ibid.
18 Ibid.
19 Ibid.
20 Malay Mail, “Gerak Malaysia, MySejahtera, MyTrace: Apps to get you through the MCO,” May 5, 2020.
21 VnExpress, “Vietnam develops coronavirus contact tracing app,” April 21, 2020.
22 Rappler, “PH launches online platform for virus contact tracing,” April 10, 2020.
23 Rappler, “LIST: Coronavirus contact tracing apps in the Philippines,” April 14, 2020.
24 MobiHealthNews, “Doctor Anywhere scores $27M in Series B funding round,” March 31, 2020.
25 MobiHealthNews, “Doctor Anywhere to launch COVID-19 Medical Advisory Clinic,” April 14, 2020.
26 ASEAN Today, “COVID-19 pushes healthcare technology transformation in Asia,” May 9, 2020.
27 Korea Tech Desk, “Korean Medical AI startup Lunit secures $26 million funding for global expansion,” January 14, 2020.
28 MIT Technology Review, “Doctors are using AI to triage covid-19 patients. The tools may be here to stay,” April 23, 2020.
29 Imaging Technology News, “Lunit Releases AI Online to Support Healthcare Professionals Manage COVID-19,” March 30, 2020.
30 Rock Health Investor Survey Q1 2020.
31 Healthtech is used in this article but the term “digital health” is used by Rock Health. The two terms have similar meanings. For consistency, this article will use the term “healthtech” throughout.
32 Rock Health, “Amidst a record $3.1B funding in Q1 2020, digital health braces for COVID-19 impact,” March, 2020.
33 Rock Health Investor Survey Q1 2020.
34 DealStreetAsia, “Asia’s private equity hunts for gems in the time of coronavirus,” March 25, 2020.
35 Ibid.
36 Monk’s Hill Ventures, “How Tech Will Meet Evolving Healthcare Needs in Southeast Asia,” November 12, 2019.
37 Deloitte, “COVID-19 could alter and even accelerate health-tech investment strategies,” April 10, 2020.
38 ASEAN, “ASEAN Plus Three senior health officials reaffirm cooperation to stop spread of 2019-nCoV,” February 4, 2020.
39 CARI, “AEC 2025 Blueprint Analysis on Healthcare,” May 19, 2017.
40 ASEAN, “ASEAN Health Ministers Meeting (AHMM) – Overview.”
41 ASEAN, “ASEAN Economic Community 2025 Consolidated Strategic Action Plan,” August 14, 2018.

China-ASEAN Monitor: Cambodia seeks China’s assistance to boost e-commerce

Photo Credit: The Phnom Penh Post


Economy, Investment and Trade


ASEAN and China to enhance digital economy cooperation in 2020
(14 June 2020) China and the Association of Southeast Asian Nations (ASEAN) are expected to carry out cooperation in the digital economy in 2020. The enhanced cooperation measures will cover areas including 5G, internet of things (IoT), artificial intelligence, industrial internet, as well as digital epidemic prevention, Minister of Industry and Information Technology Miao Wei said at the virtual opening ceremony held on 12 June. ASEAN Secretary-General Lim Jock Hoi said that China is a valuable partner of ASEAN in promoting the development of the digital economy in the region as it is at the forefront of the development of digital infrastructure.
Read more>>

Singtel in consortium to build high-performance data cable connecting Southeast Asia with East Asia
(11 June 2020) A consortium of companies that includes Singapore Telecommunications are building a high-performance submarine cable connecting the country with China (Hong Kong and Guangdong province), Japan, the Philippines, Thailand and Vietnam. Other members of the consortium called the Asia Direct Cable Consortium, include China Telecom, SoftBank, Tata Communications, and Viettel. At 9,400 kilometres long, the cable is designed to carry more than 140 terabits per second of traffic, enabling high-capacity transmission of data across Southeast and East Asia. Construction of the cable is scheduled for completion in the fourth quarter of 2022.
Read more>>

Myanmar banana export to China slowly recovers
(10 June 2020) The conditions of Myanmar banana export to the Chinese market has gradually improved in recent weeks as the number of trucks that cross the border at Houqiao in Yunnan continues to grow. According to He Zhongpu of Yunnan Jinxin Agriculture Co., Ltd. (Jinxin), the import volume has increased compared to a few months ago. He revealed that distribution was almost impossible in March and April due to the restrictions imposed by the provincial government of Yunnan and the sales of Myanmar bananas to the Chinese market fell 62% in the first five months in 2020. Although Jinxin has imported around 10 truck-loads of bananas per day in the last few weeks, He said the import volume has not returned to the 2019 level seen in 2019.
Read more>>

China donates fourth batch of medical supplies to Myanmar to assist fight against COVID-19
(9 June 2020) The Chinese government has donated the fourth batch of medical supplies to Myanmar to assist in combating COVID-19. The supplies were handed over to the Myanmar side on 8 June 2020, and included disposable masks, N95 masks, goggles and personal protective equipment (PPEs). The Chinese Ambassador to Myanmar noted that 8 June is the 70th Anniversary of the establishment of diplomatic ties between China and Myanmar, and that China is willing to strengthen anti-pandemic cooperation with Myanmar.
Read more>>

Thailand to discuss possibility of travel bubbles with China and other countries
(11 June 2020) Thailand has revealed that a number of countries, including China, are interested to pursue discussions on travel bubbles, as it considers standard operating procedures for the eventual return of foreign tourists. According to Bansarn Bunnag, an aide to Thailand’s premier, pacts to make travel easier during the COVID-19 era will be discussed at an ASEAN meeting scheduled to take place on 26 June. Thai Prime Minister Prayut Chan-o-cha is expected to join the meeting via video conference. Bansarn added that some Chinese regions, as well as Japan, South Korea, Vietnam and New Zealand have shown interest in exploring the possibility of travel bubbles. Travel bubbles with countries deemed to have COVID-19 under control will allow visitors to return without being subject to quarantine requirements.
Read more>>

Media Release: China expected to recover in 2021 while ASEAN stands to gain from supply chain diversification if it can act as unified entity

China is expected to recover in 2021 but the recovery speed depends on the opening of other markets while ASEAN stands to gain from supply chain diversification if it can finally act as a unified entity

From top: Pauline Loong, Senior Fellow of CIMB ASEAN Research Institute and Managing Director at Asia-Analytica; and Tan Sri Dr. Munir Majid, Chairman of CIMB ASEAN Research Institute.


Kuala Lumpur, 16 June 2020 – CIMB ASEAN Research Institute (CARI) hosted a CARI Briefings webinar under its COVID-19 Economic Recovery Plan Series, titled ‘How Can ASEAN Bounce Bank: China’s Economic Trajectory and ASEAN: The New Abnormal: Navigating the Post-Pandemic World.’ The session featured Pauline Loong, Senior Fellow of CARI and Managing Director of Hong Kong-based research consultancy Asia-Analytica, an award-winning policy risk analyst specialising in China’s broader political economy. Moderated by Tan Sri Dr. Munir Majid, Chairman of CARI, the discussion centred on China’s economic recovery and how it would shape the new normal, and how ASEAN can embark on a robust economic recovery path.

1. 2021 is a year to watch for businesses – the centenary of the ruling party provides impetus to revive China’s economic growth

Pauline projects that the chances of a meaningful recovery for the Chinese economy in the remaining months of 2020 are slim but 2021 could prove to be the turning point. The year 2021 is particularly important for the country’s leaders as it will be the centenary of the founding of the Chinese Communist Party. It is vital for the leadership to ensure economic recovery is on course and China will have the political determination and policy tools to achieve that goal.

“It is not often appreciated that as a command economy, China is equipped with more than the conventional market tools to boost growth. It can steer bank lending to troubled sectors, impose firewalls to prevent capital flight, and put subtle pressures on corporates to do the right thing by the nation in their commercial dealings,” Pauline said.

2. Globalisation to stay – the speed of China’s recovery hinges on the reopening of other markets

Contrary to some predictions, Pauline believes that despite talks of de-globalisation, world economies will remain highly interconnected. However, the speed of how the world begins to resume trade flows will depend on the reopening of other markets.

“While China has started to unwind its lockdown, when and by how much its economy recovers also depends on what’s happening elsewhere, particularly whether other governments are also winding down their containment measures. Goods may be rolling off China’s newly reopened assembly lines but they will not be leaving the factory gate if potential buyers are sitting at home without an income or if the goods cannot be delivered because of transport shutdowns in other markets,” she remarked.

3. Supply chain diversification puts ASEAN in a sweet spot but the real test is if the bloc is unified

In the first two months of 2020, ASEAN surpassed the EU and became China’s largest trading partner, according to data from the Chinese General Administration of Customs. Trade between ASEAN and China during the period increased 0.5% year-on-year to US$85.3 billion amidst falling trade with most other trading nations as a result of the COVID-19 pandemic.

Pauline noted that ASEAN has hit a sweet spot during this pandemic. “Even before the onset of the US-China trade war, ASEAN member states have already benefited from structural shifts in international trade and commerce, which have been hastened due to the pandemic. The change in risk perceptions worldwide and the accelerating trend in supply chains diversification and regionalisation have put the spotlight on ASEAN as an investment destination,” she explained.

“However, ASEAN’s longer term challenge is in successfully dealing with the tectonic shifts underway in trade, finance and global alliances. Whether it can leverage its strength for more advantages in a multi-polar world ultimately rests on the group’s willingness to act as a truly unified entity,” added Pauline.


Tan Sri Munir echoed Pauline’s insights, particularly on the need for ASEAN unity during this time of economic uncertainty. He noted that the performance of a better integrated regional economy in ASEAN and East Asia has become critical in the recovery process.

“It is important that we are able to distil post-COVID-19 China without the noise and distraction which tend to judge the regime in that country and not the economic activities that are beginning to stir again. There are opportunities of investment relocation out of China of course, but there is also the huge Chinese market.”

Why an ASEAN High Level Special Commission is needed

Why an ASEAN High Level Special Commission is needed

Originally published in TheEdge Malaysia, 15 June – 21 June 2020.

The ASEAN High Level Special Commission (AHLSC), proposed by the ASEAN Business Advisory Council (ASEAN-BAC), the ASEAN Joint Business Councils (JBCs) and their partners, is necessary to fast-track health and economic recovery from the ravages of COVID-19.

It does not replace existing ASEAN bodies, committees, working groups and task forces, but is intended to cut through the layers of processes that take time and would not place ASEAN in a good position for recovery to protect lives and save livelihoods.

It is a fit-for-purpose and ad hoc body that will still source for support and information from existing joint consultative committees and institutions such as the Senior Economic Officials Meetings (SEOM).

The difference is, comprised of the most senior ministers in ASEAN governments closest to the ASEAN leaders, the AHLSC would have the authority to speed up decision-making, not just at the regional level, but also within member states, where often cross-ministerial power and authority cause ASEAN proposals not to move forward as well as ASEAN decisions not to implemented.

The terms of reference proposed for the AHLSC are:

  • To improve ASEAN‘s collective response (to the COVID-19 crisis) by facilitating decision-making and execution of immediate, concrete and practicable measures;
  • To build capacity at the national and regional levels for the comprehensive handling of any future and similar events; and
  • To make recommendations to the leaders for a collective medium- to long-term ASEAN-wide approach for post-pandemic recovery through the development of an Economic Recovery Plan.

It is also part of the AHLSC proposal that a special business advisory board (SBAB) be created to attend and provide inputs to the AHLSC in its deliberations. This board, it is proposed, will comprise representatives from ASEAN-BAC, ASEAN JBCs and other private sector bodies, relevant international organisations and CIMB ASEAN Research Institute (CARI) as the knowledge partner.

ASEAN-BAC, as the apex business organisation in the region, is vacating its central position to the SBAB in the interest of more effective and focused representation of ideas to get urgent decisions made for the people and economy of the region.

As is known, ASEAN-BAC has “exclusive dialogues” with ASEAN leaders, the economic ministers and, now, also finance ministers and central bank governors, where rather agreeable and scripted exchanges take place that do not result in speedy or material outcomes. In the context of serious challenges confronting lives and livelihoods in ASEAN, a way had to be found to get faster and better results.

Neither ASEAN official processes nor ASEAN-BAC centrality is being replaced or duplicated. What is being proposed, if all parties believe an urgent response is necessary to save ASEAN peoples and economies from being knocked out by COVID-19, is just the mechanism for such a response. Delay means death. Delay means suffocated livelihoods.

The people of ASEAN deserves better. Their lives must be saved. Their livelihoods must be secured. The public and private sectors must work together to achieve this at a time of greatest need.

Individual ASEAN states taken extraordinary steps and measures to contain the COVID-19 epidemic and restart their economies. Why should ASEAN not do so at the regional level?

In the statement following its special summit on 14 April, ASEAN leaders emphasised “the critical importance of a coherent, multi-sectoral, multi-stakeholder and whole-of-ASEAN Community approach in ensuring ASEAN’s timely and effective response to pandemic”.

The leaders wanted intensified cooperation for adequate provision of medicines, essential medical supplies and equipment, and specifically encouraged the development of regional reserves of medical supplies as well as utilising relevant ASEAN reserve warehouses to support the needs of ASEAN member states in public health emergencies.

On the recovery front, the leaders reaffirmed their commitment “to take collective action and coordinate policies in mitigating the economic and social impact from the pandemic, safeguarding the people’s well-being and maintaining socio-economic stability”.

Indeed, this year’s theme under the chairmanship of Vietnam is a “cohesive and responsive” ASEAN.

The AHLSC will be the enabler to execute what the leaders plainly want in a timely manner at this unprecedented time in ASEAN’s history. The private sector has made the proposal to achieve this, working together with existing ASEAN machinery including the ASEAN Coordinating Council and the ASEAN Coordinating Council Working Group on Public Health Emergencies, but with the premium on making things happen fast.

Hence the proposed high level representation of the AHLSC: ASEAN ministers who are the next to the ASEAN leaders. They can of course source for support and information from any institution within ASEAN or in their own countries.

ASEAN-BAC, working together with the ASEAN JBCs from around the world and other business organisations, with CARI as the knowledge partner, has compiled over 300 proposals that are being thematically prioritised in a matrix. It hopes to put forward these proposals to ASEAN leaders when they next meet, we understand on 26 June. These are detailed proposals that will have to be worked through, which only an ad hoc arrangement of the AHLSC with the SBAB, can process.

At the special session with ASEAN Economic Ministers (AEM) on 4 June, I presented ASEAN-BAC’s proposal. There was no opposition to the setting up of the AHLSC.

The Indonesian minister supported it as long as it was understood that it would be ad hoc, which is the case to combat COVID-19. There was strong support from Malaysia, Myanmar, Brunei and Cambodia. The others wanted further discussions to take place to ensure there was no overlap or duplication with existing “work streams”.

ASEAN-BAC will be getting into it with the ASEAN Secretary General, who has undertaken to coordinate the process of consultation. We shall put it to him that time is of the essence.

The AEMs were also given a foretaste of some of the urgent issues to be taken forward. Foremost, the need to protect and save lives – the imperative for an exponential increase in affordable, reliable and accessible mass testing capacity. The private sector can be mobilised to help governments raise funds while governments equally should source support from partners (such as the ASEAN Plus 3) to expand capacity for mass testing. There should also be ASEAN set standards for face masks, personal protective and other medical equipment.

It was also emphasised that ASEAN must prepare now to procure vaccines for its peoples when they became available, as a group comprising 650 million people and not leave the smaller and weaker states behind.

The issue of disrupted supply chains too has come up in the crisis. Systems therefore must be developed to achieve unhampered flows particularly of essential goods and services by identifying choke points and establishing “green zones”.

Leveraging technology to provide many innovative solutions was another point emphasised to the AEMs. It ranges from the most immediate needs such as contact tracing to wider trade-related facilitation such as electronic documentation for customs clearance to minimise physical contact between people.

For the broader economy, it was emphasised to the ministers that as much as two-thirds of global demand has collapsed, and this is on top of continuing US-China trade war, increasing protectionism and near-shoring of supply chains. Globalisation is under attack and in retreat.

ASEAN- the ASEAN Economic Community (AEC) – is a regional proposition that can part-compensate for contracting markets, but the full potential of the aggregated US$2.8 trillion (RM11.9 trillion) economy remains a future prospect and not a current reality because of so many barriers to intra-ASEAN trade and investment.

The Regional Comprehensive Economic Partnership (RCEP) remains unfulfilled. It will create the world’s largest trading bloc and account for a third of the world economy. All private sector groups are in unison that the RCEP must come into being in this most critical year.

ASEAN is under attack from all sides in the short to medium term. It needs to respond cohesively and quickly. The proposed AHLSC is intended to drive this response at this critical time of health and economic emergency.

CARI Captures 458: Vietnam and Malaysia’s COVID-19 response receive strong approval ratings



Vietnam and Malaysia’s COVID-19 response receive strong approval ratings
(8 June 2020) The approval ratings of government handling of COVID-19 around the world shows Vietnam and Malaysia taking the lead among the countries surveyed and among ASEAN countries. In the survey conducted by YouGov, the London-based think tank asked respondents on how well they thought their respective governments addressed the pandemic. As of 2 June, Vietnam led with an approval rating of 97%, followed by Malaysia with 93%. Indonesia’s rating improved from 50% on 25 May to 57% on 1 June following perceptions that things were improving. Singapore’s rating seems to be gradually improving while the Philippines saw its approval ratings plunge from 74% on 18 May to 64% on 25 May and 1 June. Outside the region, approval ratings in the US and UK continue to decline while France and Sweden saw a slight improvement in ratings.


Malaysia’s economy expected to recover starting from end-2020
(3 June 2020) Under the Free Trade Agreement (FTA) and the Investment Agreement (IA) between Hong Kong and ASEAN, the parts relating to Indonesia will enter into force on 4 July, the Hong Kong government announced on 3 June. Under the FTA, Indonesia will progressively reduce and eliminate customs duties on goods originating from Hong Kong while Hong Kong service providers will enjoy better business opportunities and legal certainty in market access for different services sectors in Indonesia. Once the agreements come into force for Indonesia, there will be a total of eight ASEAN member states for which both the FTA and the IA have taken effect. According to a Hong Kong government spokesman, the dates of entry into force for the remaining two ASEAN member states, Brunei and Cambodia, will be announced as soon as they are confirmed.


All public transport and flights allowed to operate at full capacity
(11 June 2020) All public transport and flights, as well as e-hailing services and private vehicles in Malaysia will now be allowed to operate at full capacity as long as they abide by standard operating procedures under the Recovery Movement Control Order (RMCO). E-hailing, taxi and express bus services will now be allowed to operate without any time limit. Drivers and passengers of express buses will be required to wear face masks and have their body temperatures checked before boarding, while cashless payments will be encouraged for e-hailing, taxi and express bus services. Public transport service providers must still ensure passengers can observe social distancing.


Myanmar lays out three-phase recovery plan to reinvigorate tourism industry
(11 June 2020) Myanmar’s Ministry of Hotels and Tourism has laid out a three-phase recovery plan to reinvigorate its tourism sector which has been impacted by COVID-19. The first “Survival” phase will focus on financial aid to hotels and tourism businesses as well as online training for tourism professionals and staff, discussing travel destinations and the tourism market. Phase two, named “Reopening,” will take place in June, July, and August and will focus on promoting domestic travel while businesses have to abide by standard operating procedures for the health and safety of staff and travellers. The third phase will focus on “Re-launching” and will be implemented within six months to a year. This phase will see the rolling out of new marketing campaigns and long-term plans to reinvent the country’s tourism. When the country reopens, the government plans to create “travel bubbles” through bilateral agreements with Thailand, Cambodia, Laos and Vietnam.


Thailand’s property market strengthening
(9 June 2020) Nationwide house prices in Thailand increased by 5.7% year-on-year in the first quarter of 2020 (Q1 2020), an improvement from 2019’s 2.2% increase and the largest increase since the first quarter of 2018. During the fourth quarter of 2019, house prices showed a quarterly increase of 3.1%. According to the Bank of Thailand, the total amount of property credit outstanding also showed an increase in Q1 2020; it went up by 5.0% year-on-year to US$ 99.33 billion (3.15 trillion baht). This was on the back of an annual rise of 5.2% in 2019. Similarly, residential construction activity in the kingdom appears to be rising as well. Nationwide condominium registrations jumped by 47.6% year-on-year to 22,202 units in Q1 2020. In Bangkok Metropolis, condominium registrations surged by 122.3% year-on-year to 15,395 units during the same period.


Philippine-Japan trade fall by more than half in April 2020
(10 June 2020) Trade between the Philippines and Japan have been adversely affected by the COVID-19 pandemic, with both exports and imports falling by more than half in April 2020 compared with the previous year. The value of exports from the Philippines to Japan dropped by 54.0% in April 2020, from US$789.4 million to US$363.4 million, year-on-year, according to data from the Philippine Statistics Authority. Imports from Japan in the same month decreased by 60.1% from US$897 million to US$357.5 million. In terms of exports to Japan, significant decreases were observed in industry-critical commodities such as wiring sets, iron and steel, metal components, and non-metallic mineral manufactures. Noticeable losses were also recorded for agricultural and fishery exports to Japan. The Manila branch of the Japan External Trade Organization (JETRO) cited the global supply chain disruption and world economic slowdown due to COVID-19 as the main reasons for the decline.


Japan Credit Rating Agency upgrades Philippine credit rating to A-
(11 June 2020) The Japan Credit Rating Agency (JRC) has upgraded the Philippines credit rating to A- from BBB+ with stable outlook. According to the JRC, a downturn would be limited given the country’s strengthened economic base, resilient external position, and government’s economic stimulus package totalling more than 9% of GDP. The JRC stated that while the Philippines’ fiscal deficit may widen, its fiscal soundness will not be impaired due to government debt remaining comparatively subdued. The upgrade by the JRC comes after Fitch Ratings lowered its outlook for the Philippines to stable from positive, but retained the country’s BBB rating.


Pertamina signs deal with Taiwan’s CPC to develop petrochemical complex
(10 June 2020) Indonesian state oil giant Pertamina has signed a deal with Taiwan’s CPC to jointly develop a US$8 billion petrochemical complex in West Java province. The plant will begin operations in 2026, and will be built at an existing refinery in the area. Both parties have been in talks since 2018 to develop the new plant, and both will contribute 45% of the plant’s costs, with the remainder to be financed by external investors. The plant will produce ethylene, commonly utilised in the manufacture of plastic. Pertamina plans to double its capacity to some 2 million barrels a day by 2026 through the expansion of half a dozen other oil refineries.


Government unveils digital economy masterplan
(5 June 2020) Brunei’s Digital Economy Council has launched its first five-year masterplan, the Digital Economy Masterplan 2025, on 4 June. The masterplan outlines strategies for the country to become a smart nation that has a digital and future-ready society, vibrant and sustainable economy as well as a conducive digital ecosystem. Four strategic thrusts were identified to support the mission and vision of the masterplan: industry digitalisation; government digitalisation; a thriving digital industry, and manpower and talent development. The plan listed 17 projects that are expected to be implemented in the next five years, covering areas that include the public transport information system, national business service platform, school network infrastructure and halal certification system.


Singapore facing its most severe economic recession due to COVID-19
(10 June 2020) Singapore is facing its most severe recession ever, due to supply and demand shocks caused by COVID-19, said Monetary Authority of Singapore (MAS) managing director Ravi Menon. The country’s GDP for 2020 is forecast to contract between 7% and 4%. MAS has eased the Singapore dollar’s rate of appreciation to 0%, starting at a lower prevailing level of the exchange rate in March 2020. The exchange rate is therefore at a lower level against a trade-weighted basket of currencies and has been kept stable, he said. However, MAS is concerned about renewed capital outflows from emerging market economies, as well as the increased deterioration of credit quality.

Mekong Monitor: Cambodian government allocates another US$12 million to help laid-off workers

Photo credit: AFP





Cambodian government allocates another US$12 million to help laid-off workers
(9 June 2020) Cambodia will release another US$12 million in assistance for laid-off workers as factories remain closed due to the COVID-19 pandemic. Around hundreds of thousands of workers in the garment and services sector, particularly tourism and hospitality, have been affected by the outbreak. According to Ministry of Labour and Vocational Training spokesman Heng Sour, around 110,000 workers from 344 factories and firms in Cambodia have received unemployment benefits. A total amount of US$2.4 million have been transferred to qualified recipients’ accounts between 28 May and 3 June, Heng Sour added. The World Bank says that the pandemic is putting at least 1.76 million jobs in Cambodia at risk and driving the country’s unemployment rate to nearly 20%.
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Exports under GSP reaches US$1.3 billion in 2019
(8 June 2020) The value of exports for Laos under the Generalised System of Preferences (GSP) in 2019 reached US$1.3 billion, representing 22.7% of the country’s total exports. According to its Department of Import and Export, Ministry of Industry and Commerce, the figures consist of exports to Thailand worth US$361 million, China worth US$322 million and Vietnam worth US$312 million. The value of imports under the GSP programme in 2019 was around US$665 million, making up 11.6% of the total imports. As with exports, Thailand was the largest import market for Laos, followed by China and Vietnam. Laos imported around US$380 million in goods from Thailand, followed by China (US$98 million) and Vietnam (US$86 million).
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Aung San Suu Kyi and U Win Myint to run in 2020 elections
(9 June 2020) State Counsellor Daw Aung San Suu Kyi will contest in Myanmar’s elections in 2020, according to an announcement made by the ruling National League for Democracy (NLD) on 9 June, in a vote widely seen as a referendum on the NLD’s performance in the past five years. Myanmar President U Win Myint will also contest the polls, said the party’s information committee Monywa Aung Shin. The party, however, had yet to decide where the two NLD leaders will run. The polls, which will run in November, are expected to test the ability of Aung San Suu Kyi to lead the NLD to a convincing victory despite heavy criticism by the international community over her handling of the humanitarian crisis in northern Rakhine State.
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Thailand considers lifting the ban on foreign visitors
(9 June 2020) The Thai government is considering easing entry restrictions for foreign visitors, according to Deputy Prime Minister Somkid Jatusripitak. Entry restrictions could possibly be eased in the third or final quarter of 2020. He said priority would be given to visitors arriving from COVID-19-free areas. The entire country, however, does not necessarily have to be COVID-19 free; the government could allow visitors from towns or provinces which are free from COVID-19. Somkid said the relaxation of inbound travel restrictions is the first step in kick-starting Thailand’s tourism industry. Stimulating local spending and tourism are vital to Thailand’s economic recovery and Somkid hopes the new stimulus package will lure more Thai people to domestic travel and prompt spending that will help the recovery momentum.
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Vietnam plans to resume flights to COVID-19-free countries
(9 June 2020) Vietnam plans to allow a resumption of flights to and from countries that have had no cases of COVID-19 for 30 days, state media cited the prime minister Nguyen Xuan Phuc on 9 June. The prime minister, however, did not specify whether inbound travelers from these places would be subject to a quarantine programme that has been in place since mid-March. The National Steering Committee for COVID-19 Prevention and Control had been asked to draft a list of “safe” countries and while it is not clear if countries or airlines have been consulted, destinations such as Guangzhou in China, Tokyo, Seoul, Taiwan, Laos and Cambodia were among the priority routes to reopen.
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About Greater Mekong Subregion (GMS)

The Greater Mekong Subregion (GMS) Economic Programme was launched by the Asian Development Bank in 1992 connecting five developing ASEAN countries, namely Cambodia, Laos, Myanmar, Vietnam and Thailand, and Chinese provinces of Yunnan and Guangxi Zhuang Autonomous region. The region has some of the most robust economies sharing the Mekong River Basin thanks to its reform and liberalisation. The subregion is growing at a faster pace than the whole of East Asia and the Asia Pacific as the GDP growth rate for 2017 was at 6.4 percent, according to the World Bank. The population at the subregion as of 2016 is at 340 million while the GDP at PPP is at US$3.1 trillion in 2016. In 2015, trading within the region was at US$444 billion.

China-ASEAN Monitor: Malaysian durian exports to China have resumed to almost 80%

Photo Credit: ST File


Economy, Investment and Trade


Malaysia’s durian exports to China have resumed to almost 80%
(10 June 2020) Malaysian durian exports to China have resumed to almost 80% since supply chains were disrupted in early 2020 due to the COVID-19 outbreak, according to Malaysia Food Farmers Association. Durian exports to China in the first quarter of 2020 totalled US$22 million, equivalent to the previous quarter. Sales of Malaysian durians in China increased ten-fold near the end of March 2020 following promotions by Chinese e-commerce fresh fruit platform FreshHema. However, despite the popularity of Malaysian durians in China, Malaysia only holds about 10% of the market share, with their exports popular in the cities of Shanghai, Guangzhou, Guangdong and Beijing. China imported a total of US$1.7 billion worth of durians in 2019.
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Indonesia in talks with US government over relocation of companies from China
(9 June 2020) Indonesia is in talks with the US government over the possible relocation of US companies from China, as businesses worldwide look to diversify their supply chains in the wake of COVID-19. The Indonesian government is offering slots to US businesses in industrial parks, including the Kendal industrial park in Central Java and Brebes industrial park. According to Indonesia’s coordinating minister for maritime affairs and investment, around 20 companies have shown an interest in relocating to Indonesia. The country, however, is expected to struggle to compete with its Southeast Asian neighbours in attracting relocating manufacturers however due to issues such as land permits and labour regulations.
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China sends testing kits and protective equipment to Indonesia
(6 June 2020) Indonesia received hundreds of thousands of health equipment from China, including 100,000 testing kits, 70,000 personal protective equipment, and 1.3 million masks on 5 June. Chinese President Xi Jinping had pledged to support Indonesia mitigate the COVID-19 pandemic during a phone call with Indonesian President Joko Widodo. The packages were sent out gradually since May, and were donated to the National Disaster Mitigation Agency (BNPB) which will distribute them to hospitals and health facilities nationwide.
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China donates fourth batch of medical supplies to Myanmar to assist fight against COVID-19
(9 June 2020) The Chinese government has donated the fourth batch of medical supplies to Myanmar to assist in combating COVID-19. The supplies were handed over to the Myanmar side on 8 June 2020, and included disposable masks, N95 masks, goggles and personal protective equipment (PPEs). The Chinese Ambassador to Myanmar noted that 8 June is the 70th Anniversary of the establishment of diplomatic ties between China and Myanmar, and that China is willing to strengthen anti-pandemic cooperation with Myanmar.
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Cambodia-China Free Trade Agreement expected to be signed by end-2020
10 June 2020) The third round of negotiations between Cambodia and China over a free trade agreement have resolved all remaining issues in the agreement text and approved in principle with regard to market access to goods and services, according to Cambodia’s Ministry of Commerce. The 10 working groups involved will seek the approval of each nation’s leaders with regards to the agreement text and the request for opening market access as well as other chapters in order to have the deal signed by the end of 2020. The implementation of the agreement is projected to increase Cambodian exports by 20% per year, as well as increase investments into the country.
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