23/01/2016 Talking Business


23/01/2016

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Now on BBC News, talking business. The Association of Southeast Asian

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Nations launch an ambitious new Nations launch an ambitious new

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economic community but will it work given the immense diversity of this

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grouping? Find out on talking business.

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Welcome to the programme. The Asean economic community includes Brunei,

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Malaysia, Thailand, Myanmar and of course Singapore. It aims to create

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a single block for goods and services and allow the free movement

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of people between its borders but there are plenty of challenges ahead

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in making this vision a reality. Nowhere are the challenges

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illustrated more than in Jakarta, the capital of the biggest economy

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in Southeast Asia. Indonesia, the giant economy in Southeast Asia.

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Home to a quarter of a billion people, it's a country on the move

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but as China's slowdown hits the region, Indonesian growth rates have

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stalled and the government is struggling to create jobs for the

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youth. One way out is for young Indonesians to find work elsewhere.

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She is keen to get a job in Singapore or Malaysia as a nurse or

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doctor. I want to change our lives, we come from a poor family. I want

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to go abroad because I want to be a successful person. I want to improve

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my economic situation. Her dream would have been unimaginable just a

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few months ago. But now thanks to the creation of the Asean economic

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community it is a possibility although frankly a distant one.

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Under the agreement workers in eight professions will have credentials

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recognised in other Asean member states, albeit with restrictions.

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These professions account for just 1.5% of the total workforce. Experts

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say there won't be a massive Labour movement in the region any time

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soon. It is a different country, don't think that everybody will just

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come to one country, it will never happen. It is not the free movement

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of Labour that is part of the deal alone. Trade in theory will be much

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freer. This is the most important port in Indonesia and billions of

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dollars of goods pass through here every day to be shipped across the

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region. It's easy to see why a country like Indonesia, the largest

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economy in Southeast Asia, could benefit from the Asean economic

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community, from a trade and Labour perspective, but even at this port

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it is evident that there are still barriers to the full formalisation

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of the agreement. The benefits of the deal are likely to be felt

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straightaway but some are already preparing for the new Asean me at

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evil is the this woman started working on this hospital floor two

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decades ago and she now runs it and she is keenly aware of the

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challenges of hiring nursing staff in Indonesia. The Asean economic

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community would be an opportunity to recruit workers from around the

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region. It is very difficult to find well trained nursing staff here

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because educational levels aren't as good as elsewhere in Asean. The

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Indonesian staff may be threatened and will have to work harder to stay

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competitive. It's unlikely that hiring nurses from the region will

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get any easier even when the agreement is underway. Although a

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worthy goal, the economic community is still very much a work in

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progress. To discuss some of these issues we have the US ambassador to

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Singapore. As well as the managing director for Southeast Asia at

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property giant JLL. I will start with you, ambassador. Economic

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integration can only be a good thing in this part of the world? Without

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question. I think our leap into Asia has happened over the past several

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years and it has happened organically. This Administration has

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rebalanced to Asia and in some respects it has been more acutely

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felt in Southeast Asia. It is a trading partner and we are not

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slowing down. Our fourth largest. We invest more in Asean in the next

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three countries combined and our future is tied to the success of

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age. 525 million people in the middle class and it could be 3.2 by

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20 30. With your experience in the region, I know that you have and

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Asean wide portfolio. The development of the countries is

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different, Myanmar, Singapore, and therefore the majority of political

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leaders is different, whether the governments are as understanding

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from one country to the none -- to the other. What I like about Asean

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is that there is the opportunity for them not to follow the leader but at

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least look where the best practices are in different Asean and trees.

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Given the nature and size of some of these countries like Indonesia, can

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we realistically see countries like Indonesia, so much larger than

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Singapore, having the ambition to turn into that one day? -- different

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Asean countries. Will they just say that they don't need help? When you

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have disparate countries they do different things well. There are

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certain things that you can do in Indonesia that you can't do in

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Singapore. The same with the Philippines as it relates to Brunei.

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Indonesia is a great case, 40% of the walk -- the workforce is

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agrarian. Where is the solution? It allows them to find the best people

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for the right jobs in the region and also look at the context of what's

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going on in the rest of the world. Asean is on the right trajectory and

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they are moving forward and that's a very different position from Latin

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America or Africa and they are doing it cost you have 2000 years of

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trading between the countries, this is not an artificial group of

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countries that have been collected. India on one side and China on the

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other. To play in that market together, 620 million people, they

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have better demographics than China and more governance than parts of

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India. That is why they are the number four market for us. Someone

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asked me whether the everyday citizen cares about Asean, but

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that's not the issue, it's about whether the leaders of these

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countries understand whether each of these citizens is important. To

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Myanmar, and certainly Singapore. That is the issue. As a member and

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assessors -- and a citizen of Asean, do you have the sense of this

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identity or is this a fictional construct? Frankly, I think what is

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most important is not so much that I feel that I am a citizen of Asean in

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Singapore, but there is a true belief that Asean is a whole is

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stronger than individual countries and I think that is really important

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because coming back to the point that you just mentioned, the

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economics at the end of the day and this is about economics, we have one

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common goal and the common goal is really to grow Asean and it is to

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see all of these ten countries working together to form an economic

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region that actually does better than us alone. That is what is

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motivating these countries to move in the right trajectory. How do

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businesses benefit from this? It's one thing to say that everyone

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should work together for a common market, but already we are seeing

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countries raising barriers to trade and barriers to the free movement of

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Labour. How does a business navigate this? I think there are already

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benefits in place regarding manufacturing and we can see there

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is a big influx of manufacturing into Asean after the financial

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crisis. And also since China has become more expensive to manufacture

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in, manufacturing has been coming in, tariff free for almost all goods

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to be moved around the region and that is a benefit. Logistics will

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benefit from that and we will see that build-up. I think it is a

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little bit softer than that, it's about strategy. People have a

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strategy for China, strategy for Europe and India, but in the past,

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before the momentum of Asean and it has been particularly strong over

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the past five years, maybe businesses did not have a strategy

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but now they do. They are looking at these ten countries as one market,

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albeit it will be a relatively slow movement to a completely unified

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market because there are barriers around Labour, but it's about having

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a strategy about making investments in the Asean region. That is where

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the benefits will be. Making investments for the future of the

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economic community, the vision that the community has. We will continue

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the discussion later. But first let's hear some quick comments from

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regional businesses and economic leaders that we spoke to about the

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economic community. It has been hanging together for a few decades

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now. It may not be as efficient and fast as an organisation like the EU,

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but hopefully we can avoid some problems. On balance I think it is a

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good thing and I think it will help the Asean countries to develop. The

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economic community is likely to be a success. I think countries will work

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on lowering trade barriers and working parties will actually figure

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out ways to do that. There is some renewed nationalism that encourages

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barriers but I don't think it will be dominant in Asean, partly because

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to the extent that people have anxieties, it's not about the other

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Asean members but about powers outside Asean. The advantages to the

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economic or operation are very considerable and we have felt that

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pretty quickly. To the extent and integration makes the pie bigger,

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policies can be decided to make sure that there is a transfer from the

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bigger pie to disadvantaged individuals, so the definition of a

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bigger pie means that you should be able to compensate every group and

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still have something left to enjoy. That is the key. Talking about the

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new economic bloc in the region. The common market concept isn't new,

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Europe famously adopted it 13 years ago, but events of recent years make

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it clear how difficult it is to keep such unions together. Our comedy

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consultant takes a look at the nature and function of such regional

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communities. I'm at Asia house in central London and this week my

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talking point is communities, specifically a community of nations.

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What is an economic community actually like? Is it like a town 's

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committee where a few people are enthusiastic and do all of the work

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and another group weight to see what happens? And others who secretly

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hate one another? That perception may be coloured by our experience in

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Europe. Is an economic community more like a family? All of these

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summits are like dysfunctional weddings where everyone gets

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together. The court pause for a family photograph, everybody worries

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about their body language and they want to project an air of unity but

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under the surface are their divisions? Is Germany like the

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overzealous wedding planner wanting to get everybody coordinated for the

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perfect photo? Is Asean gets together over the next few days,

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what can they learn from the EU? The good and the bad. One of the major

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differences between Asean and the EU is that Asean makes decisions

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entirely by consensus and the Asean secretary at sets the agenda for the

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meetings and it is far less resort than the European Commission so they

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have to rely a lot more on being able to get together and sit around

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the table and get the talking done. -- it has less resources. The word

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at the moment is a mesh of trading blocs, the EU, Africa union... I

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should get a BAFTA for this performance. And that is only some

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of the unions. My favourite... It sounds like an epic trading block of

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gladiators and rebels but it is in fact the South Pacific trade

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agreement. Is it still fashionable? We need as many of these kinds of

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regional collaborations as we can possibly get. We live in an age

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which is characterised by increasing gigantic global challenges which are

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becoming more common and persistent and numerous, from climate change to

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human rights to economic chaos and pandemics. You name it and we've got

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it, this is the age of the continuing crisis and all of those

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problems are now way beyond the capability of any individual

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country. The operation and collaboration has got to be the day.

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Whether an economic community is a town 's committee or an awkward

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family wedding, is Asean it's down over the next while, the question

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emerges, what is the picture that develops at the end of the summit?

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Is it a harmonious group photo with choreographed body language or is it

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a more discarded affair with everybody taking selfies for

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consumption back home? His take on economic communities. You can see

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more of his short films on the website. Let's continue our

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discussion. We are joined by the CEO of ethics base, a global provider of

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anti-corruption solutions. Still with us, the US ambassador to

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Singapore. What advice would you give to a company that has to deal

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with both operating in Singapore and perhaps other parts of the region

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that aren't so transparent, what would you tell than? What would

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drive the success of an organisation in Asean in particular is the

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strength and the resilience of their compliance programme. You need to

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make sure that you have a compliance programme which doesn't just add

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here to a particular country but that can be transported and you need

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to perhaps spend more educating your staff, employees, including board

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members and suppliers, differently than in a sophisticated country when

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it comes to the regulatory framework. What we have seen in the

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last three years since launching ethics base is international firms

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come in with the spirit of innovating when it comes to

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implementing compliance frameworks. If you go to the highest standard

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and apply across the board out companies have to do that, and we

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have seen in some countries where transparency is an issue, people

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know that when they do business with an American firm, the foreign

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corrupt practices act is a seal of approval and no one will go to jail

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on our end for one business deal. I do agree with you that the education

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level all the way down may be different but if you hit the higher

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standard like ours and Singapore 's which are similar, you don't get

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into trouble, and I think it is a competitive advantage. We were

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talking earlier in the report, looking at the lessons and

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experiences that a union like the European Union can possibly offer to

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Asean. They are very different, but what would your thoughts be on that?

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The Asean has been clear that they are not trying to form a union, they

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are trying to form an integrated region. That means that it is not

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one common set of rules that everyone will follow. So that

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obviously has resulted in these difficulties because companies see

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ten different countries and ten different sets of rules for example.

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It has the advantage also on ensuring that the country moves at

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the pace it is comfortable with and when it is ready to implement

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things, things are properly put in place. In terms of what is it that

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can be learned, there has been a lot of talk about whether Asean needs to

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speed up the pace of what has been happening on the integration and how

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can they do that? That is one of the things where there has been a far

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more proactive role taken by the secretariat. You have to acknowledge

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that there are still barriers to this agreement being fully

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formalised? For example on the immigration front, despite the fact

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the spirit of the agreement allows for the free movement of Labour.

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There are still trade barriers. It seems as though they rubber-stamped

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the agreement just for effect? There are a couple of pieces of the

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economic community, you are right, Labour issues and mobility issues,

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that is one of the toughest areas and it remains one of the areas that

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is still significant. The areas that are seeing more results are trade,

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and that area has had quite a bit of success in terms of acknowledging

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that non-tariff areas are coming up and putting together a plan to bring

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together these nontariff barriers. There is an acknowledgement that

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there are some not so nice things that came out in the fermentation

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process. I look at it as needing to acknowledge imperfections and work

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towards resolving them. I want to ask each of you if you are a

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pessimist or optimist about Asean. I think it will happen, the motions

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are there, the work between authorities has already been

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demonstrated and we have seen a lot of interaction with anti-corruption

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commissions and they all talk about looking forward. The one challenge

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they might be looking to try to solve quickly is how to put in place

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a unified regulatory framework from a language perspective, but also

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sharing transparency and information and intelligence and enforcement. I

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am definitely an optimist. One of the key challenges will be how to

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get a lot more businesses that are keen on Asean to participate

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actively, particularly in helping governments to bring through

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implementation so that the benefits flow to the companies. I could not

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be more bullish about Asean. A more fair comparison is not the EU but

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the EC. It was chugging along fairly well for the last 13 years. I think

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it is uneven and it makes sense, but I would ask anyone who wants to

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highlight the things that it is yet to achieve to tell me what other

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region is on a similar trajectory of integration. Thank you for joining

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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.

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