 Hello and welcome. Thank you for joining us for this session. The IMF says Asia will surpass the U.S. and European economies combined within the next two decades. Note, it is expected, it is not guaranteed. It all depends on how Asia secures its growth, how it contains the inevitable risks. The thing as well, Asia's policy makes is important because it sends the right signals to investors. But what we have to also note is that it is an integrated global economy. Asia is susceptible to the changing events, changing fortunes of regions elsewhere. Take, for example, the expected Fed rate hike. Many here expect some Asian economies to be sent into a tailspin. Never mind that the region is more resilient. They are serious concerns. So the question really is, what can be done to inject confidence in Asian economies, in Asian markets? And more importantly, what can governments and industry leaders do to stop the fires of sustainable growth? Well, you know what, we have a very distinguished panel of speakers. Please join me in welcoming Lito Kamacho, credits with Asia Pegg vice chairman, Sofia Angelil, Indonesia's coordinating economic affairs minister, Akadi Djokovic, Russian deputy prime minister, Mari Kivinyemi, OECD deputy secretary general, and, not least of all, John Riyadi, lipo group executive director. Now, when we talk about growth in Asia, we really have to talk about China. When China is growing, there's so much optimism. Now that China is slowing, there seems to be a dent in confidence. China is still growing at 7% growth. To many countries, that's fantastic. The U.S. would love to have that. But we are concerned. You're not, though, John. Are you concerned about this line, China? Well, I think I'm cautiously optimistic. I think you rightly point out some of the big challenges and changes that are going on in our world today. And we're going through some challenging times economically. The countries that provided, the BRIC countries that provided the growth out of the 2008 crisis are now in a much more defensive position. And yet the countries in Europe and the U.S. have not been able to fully recover from that. So the question is China. I think a lot of people are now very skeptical on China's ability to transition its economy from an investment export-led economy to a consumption more domestic-led economy. But I think we're not giving China enough credit for the government's commitment and the reforms that they're taking. They're taking reforms across the board, reforms in financial deregulation, capital accounts in land reforms, social reforms. And I think these will have huge implications in boosting internal demand, but also moving them more and more down the road towards a full market economy. And Lito, you're also a China bull, one of the few remaining China bulls. You know what? It's great that China is growing at 7%, but do you believe the figure coming out of China when you take a look at first quarter numbers? Yes, it is 7% growth, but industrial production is down. All the other data are pretty negative. I think, as Linda, I join and I would echo what John said. I think the problem with markets, the problem with analysts and so on is sometimes we lose perspective. Every bad news comes a fall in markets, a fall in confidence. I think we lose sight of the fundamentals that has allowed China to grow as fast as it has the last three decades. Trends like the growth in consumption and certainly the government's doing everything it can to transition the government to a domestic consumption driven economy with their policies in labor, policies in improving the safety nets that will allow Chinese to be more confident about spending and not saving. I think we lose sight of the continuing pace of urbanization that's still going to happen in China. Chinese government's been very successful in the last four years. I think they've created some 50 million urban jobs and this year they're expected to create another 10 million jobs in urban cities. Urbanization by itself has also become, it's an engine of continuing growth in China. The third is infrastructure while for sure there's been a lot of infrastructure building in China. In many parts of China, it's still underbuilt and infrastructure will continue to be a growth driver. Prosperity has also created a lot of rich Chinese. The ones who traveled to New York, Europe and many other cities around the world, Hong Kong, driving consumption for lifestyle products and services, whether it's gaming, it's travel and so on and so forth. I think these are mega trends that will continue to happen. When you put that in the context of an improving external sector, with the US economy continuing to show signs of sustainable growth with oil prices having dropped as slow as it has, creating less pressure, inflationary pressure, giving policymakers, including the Chinese Central Bank, to do what they need to do. China, as in my mind, has shown competent management of the economy for decades and it's an economy that has a very deep toolbox as such. If I may use the analogy of a toolbox, not only do they have more tools in their box, they're also much more effective in using those tools and they've shown that. I mean, last night's announcement about the reduction in reserve requirement, I think it's just Chinese Central Bank showing that they do understand how markets work, how economies work. Although having said that, some people are questioning if additional stimulus can still work. Well, we will see, but it has worked. I mean, let's not forget 2008, when the US government was introducing tarp, China came up with a similar $600 billion stimulus program and it did work because when they declared that they were going to have a stimulus program starting tomorrow, they're able to implement it, unlike many other economies around the world. They're so much more effective in using the tools. But, Sophia, and you share the view, Indonesia, pretty reliant on China, it's a very important market. A slowdown must hurt Indonesia. Yes, of course, Indonesia relies much on China, but also, you know, Indonesia's economy is more diversified in terms of export market or something like that, right? But I think, you know, I share the vision of the view of China and Lithu that China, you know, we have to have a cost of optimism. I do believe that China is a very effective government when they have, in the past, it shows that they are able to adopt a good policy and then not only adopting good policy, but they have the capacity to implement it. They have a very big deep pocket and then they can use that resource actually to stimulate the economy. I think at the concern of China, not only concern of us, but I think President Li Jinping even more concerned than us. Therefore, I think, you know, quite optimistic with, of course, just optimistic about China economy. Therefore, you know, that if the economy of China is growing, it's faster than we, more than 7% for instance, it will benefit all of us. Marie, your views, there seems to be a lot of optimism. I think I've, I stand corrected. They're more bold than our bears. What do you see as some risks of a China slowdown on Asia? Actually, when I look at our figures, so we are assessing that this year 6.9% growth and next year 7% and I'm personally also an optimist. But actually, when it's the key question is not what is the actual figure of GDP growth? The key question is, is China able to design and implement structural reforms which will make its growth more sustainable, more also greener and more inclusive? So that is a key question. And actually, when it comes to our answer would be when it comes, yes, I'm, as I said, I'm optimist. And of course, China has already implemented some structural reforms, but more needs to be done. And when I think about our recommendations, we have always a lot of recommendations to all the countries. And I want to deliver our message. So in our recent economic outlook, there were kind of three key areas. First, China should give the market to play a bigger role in allocation of resources. The state-owned enterprises are playing a too big role now, also in sectors where they really don't have a role like restaurants, hotels, constructions. And also the liberalization of services market is essential in China. The second point is that China should put more effort in education, and especially vocational educations, because there is lack of people who have that kind of skills. There are enough those who have the university decrease, but vocational education that is needed. And also go into the path where you can guarantee kind of lifelong learning and retraining and training possibilities for those who are at work. And the third sector point actually was already mentioned here. They should further reform and increase the productivity of the agriculture sector and make sure that your urbanization happens smoothly. Deputy Prime Minister Dukovic, it does seem like Russia now has an Asia pivot. You're increasingly looking towards China that's been extended to Thailand, Vietnam. What are you hoping to get out of your relationship with the region? Is it a marriage or convenience given the sanctions that you're experiencing, which is a lot about the U.S.? Thank you for the question, and I'm happy to be here with you today. But can I just add a couple of words about our feelings about China? I generally agree with what has been said by my colleagues. I think it's important to understand that it's not very rational to give any recommendations to China. They will decide on their own. You can share best experiences, you can share views, and they have their own long-term vision, of course, and they're efficient in the short term. So we all hope that they will do what is needed and they know how to do that. Structural transformations are difficult, but they are following this step-by-step. And there are three aspects of this. The short term is energy prices are low, and China should be a net winner of this low oil and gas price situation, given the structure of the Chinese economy. The second is that they're shifting to the higher value-added products, both goods and services. And this is the kind of structural transformation that is really difficult, but with the wage level going up, it is inevitable, and they will have to do that. And the third thing is that they're going global with capital liberalization that they're conducting step-by-step as well. Yuan is getting more and more global currency, currency of exchanges and investment. And Chinese investments into the world are much higher now than before. So those three things will gradually change the Chinese economy, and we hope that those changes will make growth path sustainable. As far as Russia is concerned, we look at Asian markets with great interest. And it's not just interest. We were participating in the Asian development for a long time, but not actively enough. As we had Europe as a key market, as a key partner market with huge trade, and we were enjoying good external conditions. But growth in Asian Pacific region is a sufficient reason for us to look at opportunities in Asia. And we did that. We did that not yesterday, not the day before yesterday. We did that starting five, seven years ago. And now we enjoy some first results. Our trade with China is $100 billion in growing. With new contracts and gas and oil and some other fields, nuclear energy in particular, we expect that our trade will double in the next five to seven years. Sorry, it involves big numbers already. But China is not the only country that we work with. So you mentioned Vietnam, Thailand, Indonesia, Laos, other countries. We believe that new opportunities are mostly in those countries and with companies in those countries. And we were able to understand how to do business with our friends. We have mutual trust now, so we can move forward on the base. It's always China directly or indirectly. We seem to have a preoccupation with it, despite the fact that there are other opportunities in the rest of Asia. Shouldn't we be looking more at India, which is poised to surpass China this year for the first time since 1999? That seems to be a preoccupation. Yes, Lita? Thank you very much for saying that. We're sitting in Jakarta at the heart of Southeast Asia. And sometimes paying too much attention to China takes away attention from other fast-growing subregions in Asia, including Southeast Asia, including Indonesia, Philippines, and many others. And as you mentioned, India. So yes, I think the same fundamentals that we've seen in China over the last three decades have been happening in Southeast Asia and will happen in India. I don't want to repeat myself, but the growth in consumption, urbanization, infrastructure and so on are stories that you will also hear, that you are hearing in Southeast Asia, and we will be hearing a lot more in India in the subcontinent. I think it's also some of the political changes that we've seen also bodes well for the structural reforms that will be necessary so that these subregions would be able to enjoy the kind of growth that it has a potential for. I think here in Indonesia, we see the leadership change in India and many other places where the focus on governance, the focus on structural reforms are there. And I think these bodes well for continuing growth. But why haven't these countries been able to change the perception of investors? Why is it that when we talk about a slowdown in China, people are not taking into account the growth we're seeing elsewhere? It has to meet somewhere, John. Well, I think it's not that investors don't count Indonesia and all the other countries. I think the fact of the matter is, China is a $10 trillion economy, and China is by far the largest economy in Asia. So I think to your question and also the issue of our panel, it comes down to the question of institutions. And I think we live in an Asia, we live in a Southeast Asia, and we live in a world where the institutions do not adequately reflect the underlying realities of the world. And therefore, what I think needs to happen is a recalibration of these institutions. I'll give you sort of one example, which is, as China is the largest country in Asia, a large economy in Asia, and for many countries, it's the biggest training partner. And yet we do most of our trade and investment in US dollar terms. In a way that I think right now, since the beginning of Huey, $300 billion of capital have flowed into Asia, ex-Japan, Korea, Taiwan, now that's going to flow back, and that will affect us. So I think if we begin to change our institutions to better reflect the realities of Asia, I think investors will begin to have more confidence in Asia, which means China, but also Southeast Asia, and India, Indonesia, and all the other countries as well. But Sir Fenjale, how is Indonesia trying to build the confidence that John is talking about? Yeah, I think that is the biggest challenge, the biggest challenge for this new government. You know, Indonesia is, of course, more complicated than a rich natural resources country. But if you see from a broader perspective, Indonesia is a big country with 250 million population, and about 60, more than 60 percent of the population under 30 years old, you know, there's very big potential market. And then, you know, the rich natural resources, we are going now to improve the added value. That's why, you know, for instance, for the time being, we forbid, we ban the export of raw. By doing so, we expect to bring more investor to come and go and create added value for the country. And just for your information right now, because of that policy, more than 30 smelters being built in Indonesia, in alumina, aluminum, ferronica, stainless steel, something like that, which will use most of our natural resources. And then also we have a substantial manufacturing sector, which even though, in the last 10 years, actually, you know, our manufacturing sector contribution in OGDP is receding, you know, from 28 percent to 24 percent. But now we have a very serious effort to push that manufacturing sector again, because we believe with the increased labor cost in China, you know, there's a very good opportunity for us to capture that opportunity. And then also, surface sector is expanding, consumer spending, you are spending. But the issue really is about trust and building confidence. That's right. That's right. But try, you know, but we have lack of infrastructure, you know, because in the past we didn't pay much attention on infrastructure. But this is a very good opportunity also for investor, for those who trust in Indonesia. First of all, you know, we lack infrastructure. The capacity of our electricity right now is only 35 gigawatt. That is too small, you know, for the size of Indonesian economy. That's why we have a fast-track program. We're going to add 35 more gigawatt power into our system. By, after we creating this 35 gigawatt hour, then by 2019, the total power in Indonesia only 90, while this country actually needs at least 300 gigawatt in the next 15 to 20 years. So there is a very big opportunity for this country, you know. And then we have also lack of port and then the traffic, you know, if we go from the airport to Jakarta, this is a big challenge for us and we are addressing of that, you know. The problem is why you didn't address in before, you know? I will not answer that question, but why we should address this now? Because that is actually the most challenging job for the country, for the government. And the new president of Jokowi, actually the first day in the office, that is his main focus. How to address the infrastructure, you know, building power, building road, port and airport and then we create PPP scheme. The first thing, when I came to the office, actually I saw the regulation on PPP. And PPP in the past, you know, people criticized PPP mean, plan, patient and post-mortem, you know. We changed that, you know, to become really public, private partnership, you know. We're going to tend this over a big project, actually to invite investor to come in because in order to address the issue. And then also you go, you know, on the main boulevard, you know, in Jalan-Tamrit and Sudirman, a lot of traffic because we are creating MRT, LRT and all those things. But, Sofian, we live it there for the moment. I want to tap on the Russian experience because Russia has lost the investor's confidence. It's trying to regain that confidence back and there seems to be some progress in that. The ruble, which lost almost half of its value now climbing, the equity market is one of the best performing in the world today. What do you think Asia can learn about building confidence and trust? Well, first, I would say that we should not oversimplify things. It took China at least 20 years, probably more, to get to where it is right now. It took even a small country of Singapore 25 years, quarter of a century, to grow into a competitive, successful competitive economy. It takes dozens of years to make the real progress in building institutions and developing successful economies with high living standards. Indonesia is 250 million countries, several thousand islands, and more than 1,000 nationalities. It's a really, really difficult task. It's a huge task, huge challenge. Russia is the biggest country in the world with more than 100 nationalities, 85 regions. They have the federal structure. It takes time. And nobody should oversimplify the ways to deal with these situations, not simply just to put the list of reforms on paper, and say, this is what you should do. It's not easy. But the important thing is to have this vision, to have these long-term goals, and to move towards fulfilling your political responsibilities. We had this experience in Russia. We had the 90s when the economy collapsed to 30% relative to 1990 level. Then we had the 1998 crisis. We lost the confidence. We had the default on our external obligations. We recovered with 7% growth per annum during the nine-year period. The economy basically doubled over the first 10 years of the century. Then we had a crisis again related to external conditions. Now we have another crisis. But we're always recovering from that. And the reason for that is that we are fulfilling our promises to people domestically, to investors. We are transparent. We are open to all our partners. And all investors, let's say, 99% of investors who invest money in Russia, I mean foreign direct investments, not portfolio ones. They're happy. They're happy working in Russia. Marie, if you take a look at the strength of the US dollar, it shows the world's still overly reliant on the US economy, despite it not fully recovering economically. There is a need for countries to diversify the sources of growth and also their reliance on specific countries for growth. That is true, but when I think about the Asian countries and especially the emerging ones, so they all actually face same kind of problems. And the recommendations to them are pretty much the same. So they all should improve and increase the productivity. And what is needed, too, is more openness. You should tackle corruption. And you should decrease protectionism. And especially here in Southeast Asia, I think what is needed is more integration. And I really hope that Southeast Asia would look at the European example. I mean, the good parts of it's not the bad ones. So don't try the single currency in the first place. But harmonization of legislation and together making this area business-friendly and investment-friendly area. So that would be kind of one of those issues where Asian countries could look at. And also, of course, developing the capital markets is one of those issues which is in the forefront of those problems which should be tackled. The domestic ones especially. Haslinda, can I just add a comment on your question about trust and confidence and how Asian economies can regain if not sustain the trust and confidence in the economies and in the markets in Asia? And let me just share a private sector point of view here. In most corporations, especially listed corporations, investor relations office is a very important function. I think with all due respect, and I have been in that seat before having been finance minister for the Philippines, I think many government officials and many politicians are not very comfortable with marketing to the money community, to the investment community. They're very comfortable buying votes from their local citizens, but not buying votes from people who vote with their money. And I think many of the good stories, and we heard it from Sofya, many of the good things that are happening in policymaking and implementation. It's not to take away the most important thing, which is have good policies and have good implementation, but you also have to effectively communicate that to the investment, the investor community, whether it's portfolio investors or foreign direct investors. I'd like to see more government leaders like finance ministers, presidents, prime ministers, lead trade and investment delegations so that they can explain their stories directly so that it does not have to be interpreted by media or by smart young analysts and so on and so forth. They should tell their story and be very effective in doing that. And sometimes I think many government meets that. They have good stories to tell, but they're not very effective in telling them. So shout out, say it all. Can I, yeah, first of all, thank you a little, you know. I myself, if I'm a minister, I'm not politician, you know. In Indonesia, politician means, you know, difference. So I'm not a politician. Therefore, you know, and if Joko, of course, politician because he run as president, but the way he make a decision like any other corporate board, before I serve as minister, I serve in many corporate board, you know, I know how the corporation make decision. And the president of Indonesia nowadays actually make decision like an corporate board, you know, an corporate decision. And he used to be a businessman and something like that. So I want to actually a bit about how to gain confidence, you know, to what we are doing. First of all, you see in Indonesia, everybody said in Indonesia has a great potential, right? But the problem with great potential is not a matter at all. But the problem is we can realize that potential. That is what we are doing right now. We believe, you know, I told you before, in Indonesia, you know, from my perspective, it's like, you know, if you watch the movie Django Unchanged, you know, like the Django was changed. This country, it's changed, be it bureaucracy, which, you know, lack of, you know, with a lot of, you know, harder. That is what we are doing right now, to unchange the country, to make the country more agile, to reform bureaucracy, to reform policy, to adopt good policy, you know. And also to open the market. For instance, in the last 10 years, in the last five years, we're going to stop negotiation of opening market to Europe, US, you know, Turkey, Russia, Japan, and Korea. Now we start to regain and negotiate again, because we believe, you know, we have to create access market for Indonesia. So if we have that kind of TA with all, with most of this country, of course, you know, we believe, you know, investors will come to Indonesia and use Indonesia as production base, you know, and then can use and can produce something here, not only for domestic market, but also as a platform for international market. Mari, I want to talk about what's seen as the currency war. RBI governor, Raghuram Rajan, he says that there is a competitive devaluation going on right now. And it's beggar thy neighbor policy being adopted. Your thoughts? I don't see any currency war. And I hope really that all the countries, central banks, politicians, business leaders, learned from the financial crisis that there is really no room for currency war. And as I said, when I think about how central banks have reacted, I think their reactions have been very normal. That is the way they should have been set, their rates. So, and I, when I listen to the messages from political leaders of China, so their message is the same, they are not willing to start the war either. And you have to also remember from this situation, of course, some of the countries, especially those one in this area, which have current account deficits are benefiting, like Indonesia is one of those. So there are kind of good stories coming out of this situation too. I'm an optimist also in this case. But he says that when the elephants fight, the grass gets hurt. And by that he means Asian emerging economies like India. Why would he be concerned if you're not? John, your take? Well, I share Mario's view. I think the currency wars are at this moment at best a risk. And I think we shouldn't, the fact that there has been huge fluctuations and currencies, I think that just reflects economics and different interest rates and capital flowing as to reflect those dynamics. I think countries realize that over the long run, you cannot devalue your currency to growth, to achieve growth. I think over the long run, governments realize that the only way to create growth is through productivity. So in the short term, I think currency adjustments can allow for countries to regain the competitiveness, but in the long run, I don't think that's a risk. Lito? Definitely agree with it. I think calling it a currency war, it's trying to define what it's not. I think as mentioned by Maria and John, it's a reflection of the capital flows, it's a reflection of monetary policies and so on and so forth. It is a consequence. To say it's a war means that people, policy makers are not only using it, but manipulating foreign exchange rates to their benefit. I don't think that's happening. I think for the most part, as mentioned, I think we've seen that it's a race to nowhere. It's a downhill race if you're using devaluation for competition. I think it's describing it the wrong way. DPM? Well, basically the same thing. Our central bank has stopped interventions into the exchange rate market almost altogether. We believe that it's not a good time to try to manipulate... Well, we had the managed exchange rate regime before, five years ago even. Now we have almost free regime. The central bank is almost fully out of the market. So the exchange rate... Well, we had huge devaluation. The nominal exchange rate doubled over one month. Then we are down approximately 30% during the last month again. I mean, we re-velled a little bit from the level we went down. And the economy is adjusting. It's about economic signals to economic agents. They're looking for new opportunities given the nominal competions they got in the short run. Whether they will use it, it depends on how efficient they will act, what the productivity level will be, and management practices, ability to attract investments. Those are the things the competitive economic growth will depend on in each particular country. I think more important is what is going on with protectionism, including tariff and non-tariff barriers. And here I think we should be a little bit careful with, again, simple recommendations. Strategically, yes, we should have much lower barriers and much less protectionism. But we should be aware of the effects on domestic SMEs and particular farmers, companies like that. And we should structure our policies in such a way that there are no big losers in this situation. We should have a gradual approach to those measures. Yeah, I just want to add about the initial case. For instance, in Asia, first of all, the idea of using currency as a weapon, as a way to manipulate in order to gain international trade, that isn't a good policy, not a good policy. And I think eventually we'll show you our own foot. In the case of Indonesia, actually, we put the independent central bank who manage monetary in the constitution to guarantee the central bank to run monetary policy independently without government intervention. That is first. The second thing is, actually, the current value of Rupiah is not because of policy that derived by government, but because of the response to international dynamic, especially uncertainty of trade policy. That's why it makes Rupiah weaker. And we don't like that. We believe that the best currency rate is to reflect the capacity, the fundamental of the economy. What we have to do, actually, make the economy more agile, more flexible, more competitive, increased productivity. By doing so, I think the Indonesian economy can compete and can survive in the international market. Passofian touched on Fed policy. Let's take a look at Fed policy. Expectations of the rate hike. Is Asia ready? Because Christine Lagarde of the IMF said that Asia, emerging markets in particular, should get ready for another bout of volatility. Mari? Yes, of course. In this case, I think we all have to be worried. Nobody knows exactly what will happen. So I think everybody is waiting for a new tapered tantrum in one form or another. Lita? For sure, the behavior of US interest rates as influenced by announcements from the Fed would have a big influence on Asian markets. And we saw that last year when they started signaling the possibility of rate hikes, middle of last year, I think, when Asian markets went through a correction. But having said that, I think Asian economies have been preparing for a long, long time for occasions like this. We saw that in 2008 when there was a complete credit freeze. I mean, there was no credit happening around the world. But the Asian economies continued to perform. There were a couple of economies that were more under pressure than others. But generally speaking, I think Asian economies responded quite well. I think for one reason, I think because domestic financial markets have grown to an extent where it's beginning to finance more and more the financing needs of those economies. So when I look at economies like Malaysia or even the Philippines, when we do an IPO, a listing of a private company, not surprisingly, more of the demand is coming from domestic investors. And the price is being influenced or driven by domestic demand, not by international demand. And I think that speaks of the resilience of the financial markets in many parts of Asia. And I think that to some extent that will help deflect the potential outflow that we will surely see when the US dollar interest rate goes up because there will be better investment values in the US just because you will have higher interest rates. So I think that should be expected. And yes, that will create a bump in some of the Asian stock markets. But I think the region is well prepared. And I think the economies will continue to be able to finance themselves. There are views out there that the developed world have rigged the rules of the game in international finance. Can I get you to comment on that, John? Sure. Maybe just a quick point to the discussion before about federalizes. I think rates will rise, whether it's six months from now, nine months from now, nobody will know. But I think what Asia should do is to begin to prepare itself for that new environment. And I think we have begun to do that. And I think what people don't realize is that Asia today is different. The emerging markets today is different from what it was in 1996. We have over 4 and 1 half times the amount of reserves that we had in 1996. If we exclude China, the amount of reserves is still 2 and 1 half times. To Lido's point, the amount of local issuance is much higher. The local issuance in Indonesia in 1996 was 59%. Today, I think it's about 18%. And last but not least, I think the currencies in Indonesia or in Asia in general are floating, as opposed to the fixed currency exchange rates and the managed exchange rates that we had back in 1996. So I think for all these reasons, Asia is in a much better position to be able to manage the reversal of monetary policy in the US. Now to your question about whether the international system is rigged, I wouldn't use those terms. What I would say is that I think the financial institutions, the global financial institutions today do not adequately reflect the realities of the world that has changed. Now this week, Indonesia is also hosting the 60th anniversary of the Asia-Africa conference. In 1955, Indonesia organized a bunch of countries in Asia and Africa to become the non-aligned movement, to not align with the US or Russia. And to give these underdeveloped countries a voice on policies that hitherto was determined by developed countries. But today, Asia and Africa, those same regions, make up for more than 50% of the global economy. That's how much our world has changed. I'm not so sure the institutions have changed that much with it. So that goes back to one of the first points that I brought up in the discussion, which is institutions must change. If they don't change, I think they lose credibility. They lose trust in being able to lead our world. And I think we're beginning to see a change. We see, over the last few months, China's establishment of the ASEAN investment... Infrastructure Investment Bank. I think things like this, we're beginning to see the signs that the institutions are recalibrating to reflect what is really our world today, which I think is very welcome. But possibly not fast enough, DPM? I fully agree with what was just said. Institutions have to change. Let's discuss IMF. For instance, the latest meeting of G-25 dance ministers in declarations that they will welcome U.S. certification of new agreement on redistribution of quotas and governance. So the only obstacle for the reform of the IMF is the U.S. Congress, apparently. It's a strange situation, a strange world where powers have changed, but institutions are not changing because of the non-willingness of one of the institutions in one of the really important and big countries. Banking legislation in the United States now hurts banks in Europe and Asia all around the world because of uncertainties created by rules of the game set in one country. And the same is true about many other things. Institutions that have been created for either for other purposes 50 years ago or 20 years ago, or to preserve competitiveness of one country actually hurt the global economic environment and global competition, that's not good. And the sooner we'll have yuan and other big currencies, other currencies in general on the table to be competitive against dollar, the less we will be worried about fed rates, fluctuations, whether it's the higher or the lower end. We had some hopes for Europe. Unfortunately, Europe is not in a good situation right now and Europe is not the strongest currency, but we still hope that we'll have a multi-currency world with more stable conditions. Mari, time to reframe global rules to ensure more fairness, a reflection. I have actually nothing more to comment to this discussion and it seems that we have very much the same views. The Asian countries really have to be prepared and also adjust them to the new situation when Fed is going to raise its rates and when you are prepared, you can better tackle the challenges. Hasn't there perhaps one point about this is the need for further financial integration within the region. I think I talked about the development of local capital markets and that, and now that will sustain the financing needs of the domestic economies, but one of the biggest potential of Asia is being able to finance itself as a region and I think that's the part that hasn't happened yet. I know I've heard that Mari spoke at the session yesterday where she may have spoken about the slow face of integration of the capital markets in the sea and I definitely agree with that. I think we can do a lot more to make sure that excess financial resources in Asia are financing where there are financing needs in the region. I want to touch on political transitions. We talked about how we've been optimistic with the new governments in Indonesia. There was a lot of optimism when Abe came to power, when Modi came to power, but it does seem like change has been very slow. Is gradualism good enough? I think it's important to step by bit achieve results and it's always difficult in all the countries to implement, design and implement structural reforms and after that, win the elections. So when you look at the examples from all over the world, I know that also the Asian leaders know that, but if in this part of the world, you want to make sure that the growth is sustainable so the structural reforms are needed and leadership is needed. And when I think about the announcements and programs of recently elected leaders like here in Indonesia, so I think we just have to encourage them to implement the reform plan because the benefits of that are so obvious. It does seem like the private sector goes ahead anyways, right, John? I mean, you don't wait for policy changes to carry on with the business. We can't wait, we can't wait, but I think to your point about political transitions and gradualism, I would challenge that. I think if you take a look at what Indonesia has achieved over the last 15, 16 years, it's truly remarkable. 15 years ago, people thought we would disintegrate, people thought we would balkanize and today that's no longer a question. 15 years ago, we were ruled by an administration who used the military for political purposes today. The military is a professional military. It no longer has permanent seats in the parliament and it's acted in the best interest of our democracy. You take a look at the challenges of radical Islam and as Indonesia as the largest Muslim population country in the world, what we've been able to do to address those concerns. I think all these changes are, I think if anything, quite transformative. Of course, I think there still remains room for improvement and I think over the coming decades, Indonesia must continue to work towards a more inclusive society where there's mobility, where there's rule of law, where there's economic certainty and I think we're getting there and I think that people see that and if we take a look at the elections in October and the amount of political participation that we saw from all across the country, it's I think great optimism that democracy is alive and kicking and we're making great progress. PM, you were nodding. Well, certainly the greater is the best possible solution. Now, we don't need another Middle East in this region. Nobody wants another region of instability in the today's world. I think everyone agree with that and any revolutionary changes independent how attractive they might look like are not good for the world, the whole and for the region. I think the pace of structural reforms has to take into consideration the political structures of the different economies in Asia. I think it would be naive to think of a homogeneous Asia. It's every country has its own political structure, you know, governance structure and that will dictate the pace of structural reforms. I think what's important is not to look at the pace but to look at the end results. Have we reduced the level of poverty? Have we created more jobs? You know, are we much more integrated with the global economies? I think those are probably more important to look at, not so much the pace because the pace will depend on country's political structures. Yeah, I just want to comment a bit about this, especially, you know, most important is whether the commitment or not, you know, from top leaders, from the political leadership. I think in the case of Indonesia, the commitment for good governance, commitment for bad good policy, commitment to structural reform, especially under Jokowi is there, you know. But it may be gradual or I like to say, you know, I believe President Jokowi likes printer, you know. He will have enough bread, you know, to carry on the objective. You know, I just want to share with you the experience of Jokowi. When he was governor, mayor of Solo, you know, there were so many street vendors all over the city. He tried to persuade them to move to a new place. You know, it took him 40 time meeting, 40 meeting, you know, until he was able to persuade all people to move. And then finally, the city is clean from street vendor. And this kind of patient actually needed in politics. But you should not lose your paradigm and your perspective. You know, I like to say, you know, in the case of Indonesia, for instance, now we are embarking on structural reform. This is like a war. Maybe we lose one or two better, but we have to win the war. I seem like there is consensus that gradualism is the way to go. Let's open a discussion to the floor. If there are questions for the panelists, please raise your hand. And a microphone, I believe, will come your way. Anyone? This is impossible. There must be some questions. There you go. Asina, I'm Simon T from Singapore. The panel as a whole has been very confident about China, about adjustments of its currency. The typical question is, what could go wrong? I mean, even if it's only a probable, rather than something you think will happen, what is the sort of thing that keeps you in your business terms up at night? Lito, do you want to take that question? Sure, especially for my good friend Simon. He's one of the most respected opinion leaders in Southeast Asia. No, I think there are, yes, we can be optimistic, but we also have to be mindful of the tail risk that do exist. I mean, you have the external sector. You have Europe to worry about. Europe is a significant trading partner of Asia. If things don't go well in Europe, I think that will certainly affect growth in Asia. I think the growing nationalism in many parts of Asia could also be a hindrance to further, not only integration, but economic growth. I think even the Prime Minister of Singapore has stated as much. And this growing nationalism, which is more, for the most part, economic, but it is also, I think, it's also leading to some of the heightened territorial disputes that we're seeing around the region. And again, I think that's an obstacle to a faster pace of economic integration. So I think there are some risks in the region and we have to be mindful of them. Well, almost anything can go wrong and everything can go wrong. Starting from, yes, nationalism like terrorist attacks following that, or natural disasters, or technological catastrophes, or irresponsible politicians in some countries. Anything can go wrong. But this is why we exist. This is why integration goes forward. This is why ACN, APEC, IMF, and other unions is to fight those things together and to go through the right door in the right way. But at any point in time, something can go wrong. Actually, I'm curious, what would be the OECD's position on it? What could go wrong? So I just want to continue from what you said. So these international rules, so they really are needed. I mean, the more the countries play with the same rules, the better the results in the GDP growth and in the economy. So integration and cooperation in the regional and international level is kind of a prerequisite for sound and stable growth and development in other countries. Any other questions from the floor? Here, please. Could you just hang on for the microphone? Hello. Every time I come from Turkey, we are seeing a divergence from euros and US dollars as a medium of transaction. Russia and Turkey have a bilateral trade in their own currencies, and we're seeing this across the globe. How much of an impact do you see this happening in Asia? Thank you. John, do you want to take that question? Sure. I think the issue of diversifying the currencies with which we use the trade I think is an important question, and it's something that I think we have to work towards. And this goes to my point earlier, which is in Asia, China is the largest economy. It's a $10 trillion economy. For many countries, it's the largest trading partner, and yet we use the US dollar to trade. Why aren't we using more RMB? Obviously, the question there is, the RMB needs to be fully convertible. It needs to continue to internationalize, and I think China is taking steps to get to that point. But I think until we get to that point, we'll have to still rely on the US dollar. But I think, to answer your question, I think the amount of trade conducted in non-US dollar terms is still very small, but we are, and I think many countries are taking concrete actions to diversify the use of the different currencies. Do you want to add anything, Nito? No, I think China has said it all. That's it also. I'm Vineet Mittal from Wellespan Energy in India. My question is, is this a right time to start an Asian currency than having multiple currencies in the neighboring countries to promote trade in the Asian region? I'll take that. Well, if you were to look at the European experience with the euro, I think we would say that in Asia, let's take our time to think about that. I think it requires more integration in so many aspects, whether it's fiscal integration, monetary integration, banking integration, to have a really credible Asian currency. Yes, actually, I already said that don't, at the first place, try to come on currency in this area. So it really took time also in the European Union, the integration process and the harmonization of legislation, what was needed before the single currency was adopted. And so as you have seen, there were and are still a lot of problems because the countries weren't at the same level when it comes to economy, productivity, and so on. Are there any questions from the floor? Please. Thank you. I'm Ian Grandi from the ADECO Group in Singapore. In instilling confidence, could I ask the panel what they think about the labor challenges that are going on in many of our economies in the region? We've got very low unemployment rates. We've got mismatch in skills in many markets. What does the panel think, from a confidence perspective, that we need to be doing in the private sector to get support for employment and labor in the countries in which you operate? Anyone? Let me take a crack, just to get the discussion started. But I think that's probably one of the biggest challenges in Asia. It's part of the structural reform. It's liberalizing labor markets, not only labor within country, but also labor markets across countries in the region. Let's take an example of Japan. I mean, I think one of the biggest challenges for this government is that third arrow of Prime Minister Abe, it's a structural reform. So how do you get more women into the workforce? Around the region, even here in Southeast Asia, how do we get labor from markets which have excess labor to markets which are short of labor? I think this is where a lot of politicking sovereignty issues get in the way. I think it's frustrating. And I think in the private sector, we'd rather see more pores in a more open labor markets across the region so that we can manage our businesses as efficiently and as effectively as we can. We can grow because we have labor available. And sometimes it's not available in your local community. There's labor in other parts of the region. And I think Asian leaders really have to start thinking about how we can open up the labor markets. Yes, to add to that, I do agree with you that there's a lot to do. And when it comes to gender equality, actually the G20 countries set together a target that they will decrease the gender labor gap by 25% until the year 2025. And that will mean altogether more than 100 million more women in the market. And that is actually needed not only in Japan, but also because of the aging populations in many other countries, too. And another point is that what the Asian countries should do is to guarantee retraining and training possibilities and, of course, a good basic education and vocational education, too. But this lifelong learning, and you have to test, this has to come true. And then you just have to be aware of the fact that you have to change your job or career many times or at least two, three times in your lifetime. So we have to be able to give to employees the skills that they are able to then change jobs, too. Joan, you wanted to add? Sure. And I think Asia is going through unprecedented amount of change. Politically, socially, technologically, environmentally, and certainly economically. And I think all these changes, what it's doing is I think it is putting pressure on our institutions that I think are obsolete at our risk of paralysis. So what I think, at the root of your question, I think is the ability of businesses and markets to allocate human capital. And I think the solution to that, I think, is deregulation. I think we need to deregulate markets to allow for a freer movement of labor. When people talk about trade, they often talk about the free movement of goods and services, but I think arguably the most important is people. And I think on this point of people, I think in the last three to five years, if anything, we have backtracked. And there's a huge undercurrent of nationalism and protectionism. And I'll use an example of Indonesia. There has been some talks about requiring foreigners who are applying for work permits to be able to speak Bahasa Indonesia. So I think things like this is very dangerous and needs to be avoided. I think precisely in this time of change, we need to allow for more mobility. Also, I think another factor to think about is technology. As the technology revolution sweeps through Asia, it's going to cause massive dislocation. And I think unless you allow for this deregulation, unless educational institutions retool themselves to be able to train a new workforce, I think we have challenges ahead. I'd like to wrap up the whole conversation with the final thoughts from our panelists if we can start with Lito. What do you think are the key moves that need to be taken by governments and industry leaders to inject confidence in Asia? As I mentioned earlier, I think one of the things that we're losing in markets is perspective. And I think it's incumbent upon governments to be able to communicate their stories much more effectively and more aggressively. So I would just focus on, there are many, many things we can do, my own take would be communicate better, know who your constituencies are. It's not just your voters. There are people whose votes you need because they vote you their money. And I think it's, you need to find more opportunities to tell your story. Sofian? Yeah, before I answer this question, I want to respond a bit to what John said about requiring a requirement or the discussion to require expatriate who want to work in Asia to understand Bahasa. Actually, this is just the discourse and that kind of policy will never be implemented, believe me. Can we call you on that? Let us say OK. And then, actually, there are a lot of anecdotal, evident anecdotal case that is something strange that happened in the Lubbock market in Indonesia. For instance, last time we went to Japan and a lot of investors from Japan who invest in Indonesia complained that, you know, those experts who come to Indonesia should have a university degree, you know? That kind of policy, actually, there's a foolish policy. And then, President said, just right now, from now, we're going to abolish that kind of policy. So a lot of, what you call it, foolish policy, actually, not well thought, I cannot say, I will not say foolish. But not a well thought policy, actually, has been run and discussed or, you know, become a discourse. Regarding the injecting confidence, I do agree with Lito that, you know, we have what we have to do is to do a good policy, structurally form, but the most important is to communicate. Indonesia is very weak in this sector. And now, compared to India and Indonesia, India is very good in communicating the policy, you know, and while Indonesia, we did a lot of great job here, but we like, we communicate less. I think, you know, we have to do this kind of, effectively, that's why I met Dr. Rosler this morning, you know, to thank him, to organize the World Economic Forum here in Jakarta, because for some of you, there have never been Jakarta, you'll see Indonesia is not, you know, what you believe, what you thought before. Seeing is believing, you know, hearing is believing. Thank you. Thank you, Pasufiam. Just to reiterate, having long term vision, keeping up to promises that we all are making and communicating what we are doing exactly, and cooperating internationally on all difficult issues, but also in an open way and preserving the rule of law, both domestically and internationally, is really important so that all countries should follow the same rules of the game. Mari, I think that governments should create investment and business-friendly environments, but also they should be reliable partners to the business sector, but also to citizens. So every government should be able to be as open as possible, as reliable as possible, and as inclusive as possible. And I want to add one more thing to the themes which have discussed, and that is tackling the inequality. And I think all the countries should take more efforts in getting rid of excessive inequality because it harms growth. John, final thoughts? I think the key to restoring confidence, I think, is a renewed sense of stewardship. I think in our own ways we all need to be better stewards of our resources. Governments need to be better stewards of the mandate that has been placed by them of the constituents. Businesses need to be better stewards of the resources that they have. And I think in all of our parts, if we all do our own small little part, I think we will be able to restore the confidence needed to make this world a better place. John Mari, DPM, Djokovic, Sofjan, Lito, thank you so much for your insights today. Ladies and gentlemen, thank you for being here.