:00:16. > :00:23.Has Abenomics failed? Japan's yearly growth figures came in lower than
:00:24. > :00:28.expected. And the end of wining and dining for businesses. South Korea
:00:29. > :00:33.brings in a new law to crack down on corruption. Good morning, Asia.
:00:34. > :00:38.Hello, world. I'm Sharanjit Leyl in Singapore. Thank you for joining us
:00:39. > :00:41.for Asia Business Report. It's a Monday we will start with the third
:00:42. > :00:45.largest economy in the world, Japan. Growth figures for the three months
:00:46. > :00:51.between April and June came in weaker than expected at .2%. Some
:00:52. > :00:55.economists are questioning whether the Prime Minister's aggressive
:00:56. > :01:05.policies known as Abenomics have failed. Our guest has been lobbying
:01:06. > :01:10.businesses in Japan to use more female workers to boost productivity
:01:11. > :01:14.since the 1990s. I talked to her. It is the first time they have elevated
:01:15. > :01:20.the issue of female participation in the workplace at the national
:01:21. > :01:23.strategic growth level. In the past it has been viewed as something more
:01:24. > :01:30.along the lines of human rights and equality, that clearly this topic,
:01:31. > :01:33.in so far as trying to boost growth nationally, really the only way to
:01:34. > :01:38.do it is to increase participation. One of the areas is female
:01:39. > :01:44.participation. We have seen it chewed up in the last three years to
:01:45. > :01:50.66%. That is higher than the rates in America. Not that we are near
:01:51. > :01:54.where we need to be in Japan, there is still a long way to go, but there
:01:55. > :02:00.has definitely been progress. 66%, you say, in terms of female
:02:01. > :02:04.participation. That seems to be quite a change. Is at helping
:02:05. > :02:12.Japan's economy but we are still seeing and credibly slow growth. The
:02:13. > :02:15.problem is they are not all taking on full-time work, but rather
:02:16. > :02:22.part-time work. Part-time workers get paid about half a full-time
:02:23. > :02:25.worker. So they are not experiencing the gains they would if they were
:02:26. > :02:30.working full-time jobs. The government is aware of this. It is
:02:31. > :02:33.trying to change some of the tax and legal rules which is restricting
:02:34. > :02:37.women from taking on full-time work. It is a work in progress. But the
:02:38. > :02:47.direction is finally going in the right direction. What else can Abe
:02:48. > :02:51.san do to boost the economy? He has introduced a huge stimulus package
:02:52. > :02:54.in the last few weeks. Some people say that he has failed somewhat in
:02:55. > :03:01.the policies we have seen over the last two years. Obviously, if you
:03:02. > :03:06.have looked at the track record since he came into office in 2012
:03:07. > :03:09.you see a mixed picture. On the one hand, you see overall corporate
:03:10. > :03:16.rockets have essentially doubled, the stock market is up about 66%
:03:17. > :03:22.since its level since then. As I said, you have seen more women in
:03:23. > :03:25.the workplace than ever before. But on the other hand, the government
:03:26. > :03:29.has failed to achieve its targets, for example, for inflation
:03:30. > :03:35.expectations. They initially rose but have fallen back down despite
:03:36. > :03:42.incredible easing by the Bank of Japan. Has been some success and
:03:43. > :03:44.some failure. I think on the expectations front the government
:03:45. > :03:51.certainly needs to do more to boost those back up among society. Thank
:03:52. > :03:58.you. That us turn our attention now to Southeast Asia's largest economy,
:03:59. > :04:01.Indonesia. -- let's. It is overhauling its coffers. It is
:04:02. > :04:07.thinking of setting up two islands near Singapore as its own tax havens
:04:08. > :04:12.while corporate tax may be cut to attract multinationals us. It will
:04:13. > :04:16.allow repatriated funds to be invested in assets like gold and
:04:17. > :04:22.property. Will this work? I asked an economist. Indonesia is struggling
:04:23. > :04:27.at the moment with a lack of government revenue caused by low
:04:28. > :04:30.commodity prices. There is an idea that tax amnesty would bring in
:04:31. > :04:36.extra money but it hasn't brought in March to date. That is not a
:04:37. > :04:40.surprise. That is typical of these measures. The reasons people don't
:04:41. > :04:47.want to bring money into Indonesia, the day locals all foreigners, that
:04:48. > :04:50.doesn't have much to do with the tax breaks but the regulatory
:04:51. > :04:56.environment. -- be they. What is wrong with it? They have these
:04:57. > :05:01.enticements to put some of the money into asset. Over the last year also,
:05:02. > :05:04.the direction of economic and business policy in Indonesia has got
:05:05. > :05:10.much better. The business environment is improving. But it is
:05:11. > :05:13.the difficult. Any sectors are closed to foreign investment.
:05:14. > :05:19.Regulation change quite often depending on which of Indonesia's
:05:20. > :05:26.famous vested interests are more powerful at a moment in time. There
:05:27. > :05:31.is no belief that they will persist for a time which is what you need
:05:32. > :05:34.for sustained investment. A sustained regulatory environment is
:05:35. > :05:40.what you are saying. Indonesia are also talking about dropping their
:05:41. > :05:46.corporate tax rate to 70% to match Singapore. -- 17%. They are talking
:05:47. > :05:49.about having tax havens on two islands near Singapore. What could
:05:50. > :05:55.this do to an economy like Singapore which has benefited, to some extent,
:05:56. > :05:59.from this in the last two years? A key part of Singapore's success is
:06:00. > :06:03.that it is the easiest place to do business in all of Southeast Asia.
:06:04. > :06:08.That essentially makes it the headquarters for many in the region.
:06:09. > :06:11.I don't think these moves by Indonesia are going to be
:06:12. > :06:17.game-changers. They will be sensible. It makes sense to take
:06:18. > :06:22.advantage of islands that are nearby. Singapore could get some of
:06:23. > :06:27.the overspill as the cost rises to do business. But I think it is not
:06:28. > :06:31.so much the corporate tax rate that is the big turnoff for companies. I
:06:32. > :06:33.think it is the certainty in the business environment and being able
:06:34. > :06:37.to know that when you make an investment it is going to be
:06:38. > :06:44.profitable for, you know, the 10- 20 years that they will be put to work.
:06:45. > :06:47.In other business news, the International Monetary Fund has
:06:48. > :06:52.urged China to reduce its reliance on credit fuelled investment in its
:06:53. > :06:59.annual review, and they also said that Beijing needs to tackle rising
:07:00. > :07:07.corporate debt. China's richest man will reportedly win backing for a
:07:08. > :07:12.deal with the flagship firm of his empire. If approved, the deal worth
:07:13. > :07:16.nearly $4.5 billion would be Hong Kong's biggest ever privatisation.
:07:17. > :07:24.You might ask, what would business be without entertainment? Is GSS
:07:25. > :07:31.part of dealmaking? -- golf subpoen not in Southeast Asia after next
:07:32. > :07:37.month rules come in on how much can be spent entertaining people. It has
:07:38. > :07:40.been called to Draconian. Steve Evans wanted to know what the
:07:41. > :07:45.consequences might be over a business lunch in South Korea. This
:07:46. > :07:52.is a very, very nice restaurant. It is in the middle of Seoul. Classic
:07:53. > :07:55.business entertainment. But the rules will change at the end of next
:07:56. > :08:00.month. There will be strict limits on this kind of dining in South
:08:01. > :08:06.Korea. I have with me a government official and a is this man. These
:08:07. > :08:11.rules will be much tougher for this kind of entertainment. --
:08:12. > :08:18.businessman. Under the new rules, entertainment will be limited to
:08:19. > :08:29.about $30 a head in restaurants. And you cannot give gifts of more than
:08:30. > :08:34.$50 a head. Cash gifts, which are traditionally given at weddings,
:08:35. > :08:41.cannot be more than $100 a head. Antwon of the intriguing things is
:08:42. > :08:46.that teachers are covered in this. -- and one of the most. Parents give
:08:47. > :08:54.gifts to teachers to get more attention to their children. This
:08:55. > :09:03.country focuses on relationships. If you want to do something you have to
:09:04. > :09:05.build a relationship. If they have been overentertaining people, the
:09:06. > :09:10.government officer cannot be fair enough to do something. For the
:09:11. > :09:17.people and the cities. The loophole is that the law EU's focusing on
:09:18. > :09:25.this law for individual journalists. -- is. The problem is you still have
:09:26. > :09:31.20 odd newspapers in Seoul. The only way they can survive is through some
:09:32. > :09:37.advertising subsidies by the main conglomerates here. And of course,
:09:38. > :09:42.in return for getting the advertising, the newspapers are very
:09:43. > :09:51.careful about writing critical stories about these corporations. Oh
:09:52. > :09:58.dear. The bill has arrived. It is more than $30 a head. But it is like
:09:59. > :10:04.the new law does not come in place or a month, otherwise we would all
:10:05. > :10:10.be in deep trouble. A clever escape for Steve Evans. Let's take a look
:10:11. > :10:15.at the market before we go. Lacklustre markets. No real
:10:16. > :10:19.surprise. We saw GDP numbers coming from Japan at weaker than expected,
:10:20. > :10:24.0.2%. That is ironically the same the market is down. The All
:10:25. > :10:29.Ordinaries Index is low as well. Japan is seeing sharp shares
:10:30. > :10:33.falling. That is after the company said it completed its takeover. That
:10:34. > :10:37.is it for me is edition of Asia Business Report. Thank you for
:10:38. > :10:39.watching.