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