:00:00. > :00:16.Now on BBC News, talking business. The Association of Southeast Asian
:00:17. > :00:21.Nations launch an ambitious new Nations launch an ambitious new
:00:22. > :00:24.economic community but will it work given the immense diversity of this
:00:25. > :00:52.grouping? Find out on talking business.
:00:53. > :01:06.Welcome to the programme. The Asean economic community includes Brunei,
:01:07. > :01:11.Malaysia, Thailand, Myanmar and of course Singapore. It aims to create
:01:12. > :01:15.a single block for goods and services and allow the free movement
:01:16. > :01:19.of people between its borders but there are plenty of challenges ahead
:01:20. > :01:24.in making this vision a reality. Nowhere are the challenges
:01:25. > :01:30.illustrated more than in Jakarta, the capital of the biggest economy
:01:31. > :01:34.in Southeast Asia. Indonesia, the giant economy in Southeast Asia.
:01:35. > :01:40.Home to a quarter of a billion people, it's a country on the move
:01:41. > :01:44.but as China's slowdown hits the region, Indonesian growth rates have
:01:45. > :01:48.stalled and the government is struggling to create jobs for the
:01:49. > :01:52.youth. One way out is for young Indonesians to find work elsewhere.
:01:53. > :02:00.She is keen to get a job in Singapore or Malaysia as a nurse or
:02:01. > :02:08.doctor. I want to change our lives, we come from a poor family. I want
:02:09. > :02:16.to go abroad because I want to be a successful person. I want to improve
:02:17. > :02:21.my economic situation. Her dream would have been unimaginable just a
:02:22. > :02:26.few months ago. But now thanks to the creation of the Asean economic
:02:27. > :02:31.community it is a possibility although frankly a distant one.
:02:32. > :02:36.Under the agreement workers in eight professions will have credentials
:02:37. > :02:41.recognised in other Asean member states, albeit with restrictions.
:02:42. > :02:46.These professions account for just 1.5% of the total workforce. Experts
:02:47. > :02:54.say there won't be a massive Labour movement in the region any time
:02:55. > :02:57.soon. It is a different country, don't think that everybody will just
:02:58. > :03:01.come to one country, it will never happen. It is not the free movement
:03:02. > :03:11.of Labour that is part of the deal alone. Trade in theory will be much
:03:12. > :03:14.freer. This is the most important port in Indonesia and billions of
:03:15. > :03:19.dollars of goods pass through here every day to be shipped across the
:03:20. > :03:23.region. It's easy to see why a country like Indonesia, the largest
:03:24. > :03:28.economy in Southeast Asia, could benefit from the Asean economic
:03:29. > :03:33.community, from a trade and Labour perspective, but even at this port
:03:34. > :03:38.it is evident that there are still barriers to the full formalisation
:03:39. > :03:42.of the agreement. The benefits of the deal are likely to be felt
:03:43. > :03:47.straightaway but some are already preparing for the new Asean me at
:03:48. > :03:51.evil is the this woman started working on this hospital floor two
:03:52. > :03:54.decades ago and she now runs it and she is keenly aware of the
:03:55. > :04:01.challenges of hiring nursing staff in Indonesia. The Asean economic
:04:02. > :04:04.community would be an opportunity to recruit workers from around the
:04:05. > :04:09.region. It is very difficult to find well trained nursing staff here
:04:10. > :04:13.because educational levels aren't as good as elsewhere in Asean. The
:04:14. > :04:18.Indonesian staff may be threatened and will have to work harder to stay
:04:19. > :04:21.competitive. It's unlikely that hiring nurses from the region will
:04:22. > :04:27.get any easier even when the agreement is underway. Although a
:04:28. > :04:30.worthy goal, the economic community is still very much a work in
:04:31. > :04:38.progress. To discuss some of these issues we have the US ambassador to
:04:39. > :04:47.Singapore. As well as the managing director for Southeast Asia at
:04:48. > :04:53.property giant JLL. I will start with you, ambassador. Economic
:04:54. > :04:59.integration can only be a good thing in this part of the world? Without
:05:00. > :05:02.question. I think our leap into Asia has happened over the past several
:05:03. > :05:08.years and it has happened organically. This Administration has
:05:09. > :05:13.rebalanced to Asia and in some respects it has been more acutely
:05:14. > :05:18.felt in Southeast Asia. It is a trading partner and we are not
:05:19. > :05:22.slowing down. Our fourth largest. We invest more in Asean in the next
:05:23. > :05:27.three countries combined and our future is tied to the success of
:05:28. > :05:36.age. 525 million people in the middle class and it could be 3.2 by
:05:37. > :05:45.20 30. With your experience in the region, I know that you have and
:05:46. > :05:53.Asean wide portfolio. The development of the countries is
:05:54. > :05:56.different, Myanmar, Singapore, and therefore the majority of political
:05:57. > :06:03.leaders is different, whether the governments are as understanding
:06:04. > :06:08.from one country to the none -- to the other. What I like about Asean
:06:09. > :06:12.is that there is the opportunity for them not to follow the leader but at
:06:13. > :06:18.least look where the best practices are in different Asean and trees.
:06:19. > :06:23.Given the nature and size of some of these countries like Indonesia, can
:06:24. > :06:26.we realistically see countries like Indonesia, so much larger than
:06:27. > :06:34.Singapore, having the ambition to turn into that one day? -- different
:06:35. > :06:40.Asean countries. Will they just say that they don't need help? When you
:06:41. > :06:46.have disparate countries they do different things well. There are
:06:47. > :06:51.certain things that you can do in Indonesia that you can't do in
:06:52. > :06:57.Singapore. The same with the Philippines as it relates to Brunei.
:06:58. > :07:09.Indonesia is a great case, 40% of the walk -- the workforce is
:07:10. > :07:13.agrarian. Where is the solution? It allows them to find the best people
:07:14. > :07:18.for the right jobs in the region and also look at the context of what's
:07:19. > :07:22.going on in the rest of the world. Asean is on the right trajectory and
:07:23. > :07:26.they are moving forward and that's a very different position from Latin
:07:27. > :07:30.America or Africa and they are doing it cost you have 2000 years of
:07:31. > :07:34.trading between the countries, this is not an artificial group of
:07:35. > :07:41.countries that have been collected. India on one side and China on the
:07:42. > :07:44.other. To play in that market together, 620 million people, they
:07:45. > :07:51.have better demographics than China and more governance than parts of
:07:52. > :07:55.India. That is why they are the number four market for us. Someone
:07:56. > :07:59.asked me whether the everyday citizen cares about Asean, but
:08:00. > :08:03.that's not the issue, it's about whether the leaders of these
:08:04. > :08:09.countries understand whether each of these citizens is important. To
:08:10. > :08:19.Myanmar, and certainly Singapore. That is the issue. As a member and
:08:20. > :08:22.assessors -- and a citizen of Asean, do you have the sense of this
:08:23. > :08:32.identity or is this a fictional construct? Frankly, I think what is
:08:33. > :08:38.most important is not so much that I feel that I am a citizen of Asean in
:08:39. > :08:43.Singapore, but there is a true belief that Asean is a whole is
:08:44. > :08:49.stronger than individual countries and I think that is really important
:08:50. > :08:52.because coming back to the point that you just mentioned, the
:08:53. > :08:58.economics at the end of the day and this is about economics, we have one
:08:59. > :09:03.common goal and the common goal is really to grow Asean and it is to
:09:04. > :09:07.see all of these ten countries working together to form an economic
:09:08. > :09:13.region that actually does better than us alone. That is what is
:09:14. > :09:18.motivating these countries to move in the right trajectory. How do
:09:19. > :09:23.businesses benefit from this? It's one thing to say that everyone
:09:24. > :09:27.should work together for a common market, but already we are seeing
:09:28. > :09:30.countries raising barriers to trade and barriers to the free movement of
:09:31. > :09:36.Labour. How does a business navigate this? I think there are already
:09:37. > :09:40.benefits in place regarding manufacturing and we can see there
:09:41. > :09:46.is a big influx of manufacturing into Asean after the financial
:09:47. > :09:52.crisis. And also since China has become more expensive to manufacture
:09:53. > :09:56.in, manufacturing has been coming in, tariff free for almost all goods
:09:57. > :10:02.to be moved around the region and that is a benefit. Logistics will
:10:03. > :10:09.benefit from that and we will see that build-up. I think it is a
:10:10. > :10:13.little bit softer than that, it's about strategy. People have a
:10:14. > :10:20.strategy for China, strategy for Europe and India, but in the past,
:10:21. > :10:23.before the momentum of Asean and it has been particularly strong over
:10:24. > :10:27.the past five years, maybe businesses did not have a strategy
:10:28. > :10:35.but now they do. They are looking at these ten countries as one market,
:10:36. > :10:37.albeit it will be a relatively slow movement to a completely unified
:10:38. > :10:43.market because there are barriers around Labour, but it's about having
:10:44. > :10:47.a strategy about making investments in the Asean region. That is where
:10:48. > :10:53.the benefits will be. Making investments for the future of the
:10:54. > :10:58.economic community, the vision that the community has. We will continue
:10:59. > :11:02.the discussion later. But first let's hear some quick comments from
:11:03. > :11:08.regional businesses and economic leaders that we spoke to about the
:11:09. > :11:19.economic community. It has been hanging together for a few decades
:11:20. > :11:25.now. It may not be as efficient and fast as an organisation like the EU,
:11:26. > :11:30.but hopefully we can avoid some problems. On balance I think it is a
:11:31. > :11:37.good thing and I think it will help the Asean countries to develop. The
:11:38. > :11:43.economic community is likely to be a success. I think countries will work
:11:44. > :11:48.on lowering trade barriers and working parties will actually figure
:11:49. > :11:54.out ways to do that. There is some renewed nationalism that encourages
:11:55. > :11:59.barriers but I don't think it will be dominant in Asean, partly because
:12:00. > :12:02.to the extent that people have anxieties, it's not about the other
:12:03. > :12:09.Asean members but about powers outside Asean. The advantages to the
:12:10. > :12:13.economic or operation are very considerable and we have felt that
:12:14. > :12:24.pretty quickly. To the extent and integration makes the pie bigger,
:12:25. > :12:30.policies can be decided to make sure that there is a transfer from the
:12:31. > :12:35.bigger pie to disadvantaged individuals, so the definition of a
:12:36. > :12:38.bigger pie means that you should be able to compensate every group and
:12:39. > :12:48.still have something left to enjoy. That is the key. Talking about the
:12:49. > :12:53.new economic bloc in the region. The common market concept isn't new,
:12:54. > :12:57.Europe famously adopted it 13 years ago, but events of recent years make
:12:58. > :13:02.it clear how difficult it is to keep such unions together. Our comedy
:13:03. > :13:08.consultant takes a look at the nature and function of such regional
:13:09. > :13:14.communities. I'm at Asia house in central London and this week my
:13:15. > :13:18.talking point is communities, specifically a community of nations.
:13:19. > :13:22.What is an economic community actually like? Is it like a town 's
:13:23. > :13:26.committee where a few people are enthusiastic and do all of the work
:13:27. > :13:32.and another group weight to see what happens? And others who secretly
:13:33. > :13:39.hate one another? That perception may be coloured by our experience in
:13:40. > :13:44.Europe. Is an economic community more like a family? All of these
:13:45. > :13:49.summits are like dysfunctional weddings where everyone gets
:13:50. > :13:52.together. The court pause for a family photograph, everybody worries
:13:53. > :13:57.about their body language and they want to project an air of unity but
:13:58. > :14:01.under the surface are their divisions? Is Germany like the
:14:02. > :14:07.overzealous wedding planner wanting to get everybody coordinated for the
:14:08. > :14:11.perfect photo? Is Asean gets together over the next few days,
:14:12. > :14:20.what can they learn from the EU? The good and the bad. One of the major
:14:21. > :14:27.differences between Asean and the EU is that Asean makes decisions
:14:28. > :14:32.entirely by consensus and the Asean secretary at sets the agenda for the
:14:33. > :14:37.meetings and it is far less resort than the European Commission so they
:14:38. > :14:41.have to rely a lot more on being able to get together and sit around
:14:42. > :14:46.the table and get the talking done. -- it has less resources. The word
:14:47. > :14:56.at the moment is a mesh of trading blocs, the EU, Africa union... I
:14:57. > :15:01.should get a BAFTA for this performance. And that is only some
:15:02. > :15:09.of the unions. My favourite... It sounds like an epic trading block of
:15:10. > :15:12.gladiators and rebels but it is in fact the South Pacific trade
:15:13. > :15:16.agreement. Is it still fashionable? We need as many of these kinds of
:15:17. > :15:23.regional collaborations as we can possibly get. We live in an age
:15:24. > :15:29.which is characterised by increasing gigantic global challenges which are
:15:30. > :15:33.becoming more common and persistent and numerous, from climate change to
:15:34. > :15:37.human rights to economic chaos and pandemics. You name it and we've got
:15:38. > :15:41.it, this is the age of the continuing crisis and all of those
:15:42. > :15:44.problems are now way beyond the capability of any individual
:15:45. > :15:50.country. The operation and collaboration has got to be the day.
:15:51. > :15:55.Whether an economic community is a town 's committee or an awkward
:15:56. > :15:59.family wedding, is Asean it's down over the next while, the question
:16:00. > :16:07.emerges, what is the picture that develops at the end of the summit?
:16:08. > :16:12.Is it a harmonious group photo with choreographed body language or is it
:16:13. > :16:19.a more discarded affair with everybody taking selfies for
:16:20. > :16:22.consumption back home? His take on economic communities. You can see
:16:23. > :16:32.more of his short films on the website. Let's continue our
:16:33. > :16:37.discussion. We are joined by the CEO of ethics base, a global provider of
:16:38. > :16:43.anti-corruption solutions. Still with us, the US ambassador to
:16:44. > :16:48.Singapore. What advice would you give to a company that has to deal
:16:49. > :16:51.with both operating in Singapore and perhaps other parts of the region
:16:52. > :16:57.that aren't so transparent, what would you tell than? What would
:16:58. > :17:04.drive the success of an organisation in Asean in particular is the
:17:05. > :17:07.strength and the resilience of their compliance programme. You need to
:17:08. > :17:11.make sure that you have a compliance programme which doesn't just add
:17:12. > :17:17.here to a particular country but that can be transported and you need
:17:18. > :17:20.to perhaps spend more educating your staff, employees, including board
:17:21. > :17:27.members and suppliers, differently than in a sophisticated country when
:17:28. > :17:30.it comes to the regulatory framework. What we have seen in the
:17:31. > :17:38.last three years since launching ethics base is international firms
:17:39. > :17:43.come in with the spirit of innovating when it comes to
:17:44. > :17:47.implementing compliance frameworks. If you go to the highest standard
:17:48. > :17:52.and apply across the board out companies have to do that, and we
:17:53. > :17:58.have seen in some countries where transparency is an issue, people
:17:59. > :18:02.know that when they do business with an American firm, the foreign
:18:03. > :18:08.corrupt practices act is a seal of approval and no one will go to jail
:18:09. > :18:12.on our end for one business deal. I do agree with you that the education
:18:13. > :18:16.level all the way down may be different but if you hit the higher
:18:17. > :18:21.standard like ours and Singapore 's which are similar, you don't get
:18:22. > :18:29.into trouble, and I think it is a competitive advantage. We were
:18:30. > :18:32.talking earlier in the report, looking at the lessons and
:18:33. > :18:38.experiences that a union like the European Union can possibly offer to
:18:39. > :18:42.Asean. They are very different, but what would your thoughts be on that?
:18:43. > :18:46.The Asean has been clear that they are not trying to form a union, they
:18:47. > :18:52.are trying to form an integrated region. That means that it is not
:18:53. > :18:58.one common set of rules that everyone will follow. So that
:18:59. > :19:04.obviously has resulted in these difficulties because companies see
:19:05. > :19:07.ten different countries and ten different sets of rules for example.
:19:08. > :19:13.It has the advantage also on ensuring that the country moves at
:19:14. > :19:18.the pace it is comfortable with and when it is ready to implement
:19:19. > :19:23.things, things are properly put in place. In terms of what is it that
:19:24. > :19:28.can be learned, there has been a lot of talk about whether Asean needs to
:19:29. > :19:34.speed up the pace of what has been happening on the integration and how
:19:35. > :19:37.can they do that? That is one of the things where there has been a far
:19:38. > :19:44.more proactive role taken by the secretariat. You have to acknowledge
:19:45. > :19:47.that there are still barriers to this agreement being fully
:19:48. > :19:52.formalised? For example on the immigration front, despite the fact
:19:53. > :19:57.the spirit of the agreement allows for the free movement of Labour.
:19:58. > :20:01.There are still trade barriers. It seems as though they rubber-stamped
:20:02. > :20:08.the agreement just for effect? There are a couple of pieces of the
:20:09. > :20:11.economic community, you are right, Labour issues and mobility issues,
:20:12. > :20:21.that is one of the toughest areas and it remains one of the areas that
:20:22. > :20:27.is still significant. The areas that are seeing more results are trade,
:20:28. > :20:34.and that area has had quite a bit of success in terms of acknowledging
:20:35. > :20:39.that non-tariff areas are coming up and putting together a plan to bring
:20:40. > :20:43.together these nontariff barriers. There is an acknowledgement that
:20:44. > :20:55.there are some not so nice things that came out in the fermentation
:20:56. > :20:58.process. I look at it as needing to acknowledge imperfections and work
:20:59. > :21:09.towards resolving them. I want to ask each of you if you are a
:21:10. > :21:13.pessimist or optimist about Asean. I think it will happen, the motions
:21:14. > :21:16.are there, the work between authorities has already been
:21:17. > :21:20.demonstrated and we have seen a lot of interaction with anti-corruption
:21:21. > :21:24.commissions and they all talk about looking forward. The one challenge
:21:25. > :21:31.they might be looking to try to solve quickly is how to put in place
:21:32. > :21:35.a unified regulatory framework from a language perspective, but also
:21:36. > :21:41.sharing transparency and information and intelligence and enforcement. I
:21:42. > :21:48.am definitely an optimist. One of the key challenges will be how to
:21:49. > :21:54.get a lot more businesses that are keen on Asean to participate
:21:55. > :21:57.actively, particularly in helping governments to bring through
:21:58. > :22:05.implementation so that the benefits flow to the companies. I could not
:22:06. > :22:12.be more bullish about Asean. A more fair comparison is not the EU but
:22:13. > :22:17.the EC. It was chugging along fairly well for the last 13 years. I think
:22:18. > :22:22.it is uneven and it makes sense, but I would ask anyone who wants to
:22:23. > :22:26.highlight the things that it is yet to achieve to tell me what other
:22:27. > :22:32.region is on a similar trajectory of integration. Thank you for joining
:22:33. > :22:36.us. That's it for this edition. We will be back on the BBC News Channel
:22:37. > :22:40.with a look at the world of advertising from New York.