 Hi, everybody. Good morning, ladies and gentlemen. Let me welcome you all to this session. It's great to have you here and it's great to have, I see a number of familiar faces in the crowd to join this discussion with us to look at basically the financing and our future economy. This is admittedly a fairly broad topic, right? Financing, economy, this can be a lot of things. But I think in the aftermath of the financial crisis that started in 2008 and in the middle of many current economic challenges that are threatening our economic growth of the world, I feel there's no better time actually for us to look at these topics, which is basically how we can invest in growth. To look at what exactly are some of the barriers we face today and also to explore and brainstorm a little bit on some of the solutions. So to have this discussion, we have an exceptional panel here on the stage. To my left, we have Prime Minister Dobrovsky from Latvia. Good morning. And Ms. Wei Kristiansen from Open Stanley, the Co-CEO of Asia-Pacific. And then Minister Bulliff from Morocco. And finally, on the far left-hand side, my good friend Victor Chu, Chairman and CEO of First East Investment Group in Hong Kong. And in addition, we have our global shaper Heather Ma. I don't know where she is with our inside reporter. And my name is Kevin Lu. I run the World Bank's Investment Guarantee Business for Asia-Pacific. So let's get down to a very specific situation on the issue of financing for growth. And let's look at Asia. Let's look at infrastructure. ADB estimated that there are 1.5 billion Asians who have no access to decent sanitation. 640 million people have no access in Asia to clean water. 930 million have no access to electricity. And 7 out of 10 have no access to telephone in this region. So to address these needs during the decade of 2010 and 2020, the estimate is that every year we need $750 billion of investment into this infrastructure needs. But in reality, when I travel in the region to many emerging developing Asian countries, you actually see a lot of unfounded infrastructure demand needs. So there is a problem between the need, a great need on one hand, and the lack of funding on the other hand. But Asia is a region with 37% of savings rate. So the money is there. The capital is there. It's not a region where people have mortgaged out their future for overconsumption today. Why we still have those financing not in place for this crucial need? And what are the barriers? Is it because that investors don't have clarity and they don't have the right information? Is it because the banks are too risk averse because of their own funding structure? How about the capital from the longer term investors such as insurance companies and pension funds? Or is it because on the government side that we don't have strong mechanism to prepare, prioritize, and package these needs into bankable projects that can actually attract financing? What can policymakers do to address this? And how can barriers for domestic and cross-border financing be addressed? So I have all these questions and puzzles in my mind. And with those questions, let me first turn to Prime Minister on my left side. Prime Minister, if you could give us an update about your country, about Latvia in terms of where your economy stands and how do you see the situation? What's a growth trajectory you see? And maybe comment a little bit on the financing side for that growth. Okay, thank you very much. Well, as you all probably know, Latvia was very seriously affected by a global financial and economical crisis in 2008, 2009. And at that time, Latvia has been seen as a travel spot of Europe. Well, now we can say that we have moved on from this situation. Currently, we are fastest growing EU economy. This year, first half, we had a growth rate of 5.9%. Last year, we were growing 5.5%. So really, we can see that we are out of the crisis and seem to be moving towards also a more sustainable developing bus. And so not only were fastest growing EU economy, but also structure of economy is changing with more emphasis on industrial production and exports, where we had on average some 10% of increase in industrial production each year for the last two years and 30% increase in export for each year for the last two years. But I think one of the fundamental factors now moving gradually to this issue of financing, while Latvia was able to achieve this growth, was that we did the necessary adjustment early on and thus we managed to restore the confidence of financial markets. And I think that's very much which was important because if you have the confidence of financial markets, many things starts to happen. Bank starts lending to your citizens and businesses. Your companies start investing again. Citizens start spending. It's possible to attract foreign investment and your economy can move forward. Whereas if you try to delay the adjustment, as also seems to be the strategy in certain countries, just the opposite is happening. Banks are not lending. Companies are not investing. Citizens are not spending. And you are just getting deeper into recession. So I think first and foremost, if we talk about financing, it's about trust between public and private sector. And in some cases there is this trust and there is availability of financing. And in some cases there is no trust and there's no availability of financing. Because it seems that lack of the capital or lack of available financing is probably not the main issue right now. If we look, there are many countries also in Europe, like Germany, like Netherlands, like Finland, paying tribute to the organizers of the forum, also Switzerland, where investors are actually willing to pay those countries to be able to hold their debt. And then there are other countries which just either paying some crazy interest rates and just having their debt financing unsustainable or private sector would not lend to those countries at all. So it's really very important if a country can house a trust of financial markets and from then how the country then can finance itself. And just on general sorts, if we look to compare Europe and USA, another difference now moving more to the company financing what we see. Now the real bottleneck is really bank financing. Banks for some reasons are not willing to lend to the real economy. And again, not that banks don't have the money. They're willing to lend to each other really cheap if you look at the interbank rates. They are willing to store money in central banks even cheaper, almost for free. And yet they are not willing to lend to the real economy. So what we need to look is also, especially in Europe, on alternative sources of financing and one alternative source of financing which seems to be underutilized is equity financing. If you look at the capital markets or equity markets in US and if you look at the same markets in Europe, you'll see that Europe is certainly underutilizing these possibilities. And for companies which now have difficulties to raise their money in a debt market from bank financing, really I think it's worth exploring those possibilities for equity market and actually going for IPOs or trading extra shares or actually trying to raise the capital instead of debt. So those are probably just some introductory remarks, but really the general thought would be that there is not necessary lack of financing, but it's a lack of trust to bring this financing to place where it's needed. Thank you Prime Minister. That's an excellent point. I think, again, as you summarized, it may not be the lack of capital, but the lack of trust in the global system. And in a sense, it's also related to the issue of equity financing. In a sense, equity financing is a financing where you're taking more risk, you trust the others a little bit more than just demanding a fixed coupon. So these are some of the aspects of the global financial system. But what about the, this is a question for Minister Bulliff. What about some of the, we'll talk about the opportunities in the financial side. What about some of the opportunities and particular deficiencies of the global economic system in your view? Yes, indeed, it is like what you have described. But let me first touch upon some other points. Well, everybody is aware of the ongoing conditions of the market, the monetary conditions of our economies. In many schools and colleges and campuses, we have learned a lot about the need to drive rational behavior. The choices by economies should be optimal once. However, given the current state of the economies and the financial market, there is the lack of rationality. We have our financial market in which from time to time there's a big bubble and the real economy is sliding while a financial bubble is building out. And there's a lack of financing channels and availabilities to fuel the economy because of lack of trust. So I think the behavior by many economies is suboptimal, is unreasonable and irrational. Take a look at the sports economy, a soccer player or golf player. If participating in a match or winning a match can earn 100 times more than a professor. So is there an effort worth the pain? And many of us would like our children to join colleges, but is it a better future if they become messy of Argentina or some other sports stars who will be at hundreds or even thousands of times more an engineer. So do you want to send your children to colleges or to football fields or golf courses? So that's irrational. And also let me talk about IPO, the public market, the listed market, many companies have gone public. So IPOs, the global economy, we have over 1,000 employees, but how could they market doing very bad our products? One of the companies listed is of late, and it's an internet company and it provides social media platforms. I would not name the company, it has asked me a question. Is that company that valuable? Isn't the valuation too high? So I want to say our behavior is irrational at this stage. That's my first point. And for my second point, I want to talk about the global economy. I'd like to emphasize that the value growth has been different in our global economy. So right now we've seen new forms of MAUX, that is one of the big problems of the current economy, the speculation. We speculate on prices, we speculate on indexes, we speculate on the speculation that we had before, and therefore the laws of the market, we can be as liberal as we want, the laws of the market no longer apply at the current economic level, but also at the financial level. So suppose for us to deliver all those rules, if everything becomes speculated on, when supply exceeds demand, the price should go down. And if the demand is higher than supply, then the price should be able to go up. But if we look at our current economy, especially the price for energy and oil and other commodities, there has been an over-supply. However, the price still goes up. And therefore, for price exceeds 100 U.S. dollars, therefore the market room, in my view, is still important. We need to have rational behaviors to keep the fundamentals intact in this market. But nobody can really predict the trend of the price. Nobody is really aware about the growing trend of the economy and the market. That's why we need to do both the things from the perspective of the financial sector. If we are to reposition our economic choices, then our next step, I'd like to give you an example about oil prices. The average price for petunary should be around 60 to 80 U.S. dollars per barrel. But right now, the price is around 20 to 130 U.S. dollars. In other words, every day we have to be at 10 to 30 billion U.S. dollars. In Greece, it's around 100 billion U.S. dollars. In other words, if you look at France, France is high during its fiscal deficit. So, France already has a deficit of 7 billion U.S. dollars. Imagine every day we use the 30 billion U.S. dollars to do this. Then the fiscal deficit is true across Europe. We'll be in the mines. I'll get to the details later. All of those issues are very important to me. I think that we can have regular analysis. We can also look at... Thank you minister. That's an excellent series of remarks. My take is that the key words here are rationality versus irrationality and the role of markets. I think that's key. When you look at the financing for economic growth, you have capital on one side. You have the demand on the other side. What's in the middle is the market. If the market can be rational, then that will facilitate the flow from capital to need. So let me turn to Wei. Maybe Wei, if you can comment on the financial markets in China, the capital markets in China, what do you see? What is needed in order for these markets in the middle to play a bigger role to channel capital to the need of the economic economy? Certainly. Historically, banks have played a very important role in financing investment over the past several decades. The role of the banks have been increasingly shared by various different other kinds of forms of financing, such as equity markets, bond markets, private equities, and more. However, in many economies, including in China, these other forms of financing are still at its very early stage and they are facing a lot of challenges. If you look at China, we know that the banking assets accounts for 92% of the total aggregate assets of financial institutions in China, whereas securities, insurances, and mutual funds companies in total accounts only 8%. So this shows that the capital market is really at its early stage despite its 20 years of glorious development and achieved tremendous track records, including becoming the number three largest stock exchange in the world in terms of market capitalization. Because this market, as we all know, the first bottleneck, in my view, is that this market is still very much a retailer market and really likes the institution participation. We know this market actually is, the composition is 80% retail, 20% institution, and it's plagued with short-term speculative trading. So I think no matter the initiatives of the regulators to introduce more sophisticated products and to further broaden and deepen this market without the institution base that cannot happen. Therefore, I think it's very important as the regulators under the Chairman Guo's leadership at CSRC has been focusing on to introduce a fair and also efficient platforms so that you can effectively attract corporate new duties and pension funds, social security funds, housing accumulation funds. These funds, if you know down right, they actually can provide very well-balanced and structured portfolios and with low portfolio turnover. And of course, as a foreign participant, we absolutely believe it's important that the Chinese market will provide access to firms like us. And we are very grateful for the new initiatives to allow the increase of QV, because that's how we really participate in this market other than obtaining an Azure license for the foreign investors to have a flavor and access to this market is largely through QV. The QV quotas, as you know, have been increased from 50 billion to 80 billion, and we think that is a great initiative. In all these different methods, I think in combination over time will hopefully create more depth and also stability to this current market. The other issue that is often talked about and to reflect the deficiency of this market is the lack of funding for SMEs. I'm sure you heard the speech from Premier Wen Jiabao yesterday. The government is actually very focused on that. I think no one now makes a mistake about the robust force that how big a force that SME has become. They account for 60% of China's GDP, 80% of China's employment, and 50% of tax revenue of China. But at the same time, alarmingly, most of these SMEs, total number roughly about 10 million, only 3% have access to banking capital. So that's obviously something seriously wrong here. I think over the years, starting 2004, China set up this SME board in Shenzhen and five years later they set up the second board called Chinnax Board in Shenzhen, which obviously helped. However, I think by and large, these SME sectors is underserved. But if you look at the other side of a coin, why do banks stay away from SMEs? It's not only the fault of the financial institutions because these SMEs, we heard a lot of horror stories, we read about them. And unlike SOEs, the financing cannot be collateralized. There is no government guarantee. So what is critical about the financing is credit. However, in China, the current system is very difficult to evaluate the credit of SME. Even though in China, we have quite agencies that are being created and they are very active, but they are very stretched and busy, and I'm sure most of them are not focused on SME. And more importantly, sources for really variable informations in China is getting more and more difficult. It's very difficult to even check the balance, cash balance of the company or debt level of the company or record of litigation. And these kind of things or corporate documents, corporate filings as AIC, are very difficult to obtain. So therefore, we can't simply blame the banks for backing at lending to SMEs. I think in order for the high quality SMEs to have a fair access to the financing, I think government needs to mandate a system for better ability to access information of SME. For instance, we need to establish a registration for lawsuits. And maybe government should give more license for private rating agencies. And the government needs to provide more access to corporate documents and top corporate filings at agencies like AIC because these kinds of measures are necessary for lenders and also for investors to feel more comfortable. And also, as we know, because this is China, even though China has changed a lot, still contractual rights of the investors and also lenders sometimes get negatively impacted at the local level by political organizations or sometimes just because of the cultural effect. People simply do not like to see a corporation enter into a phase of bankruptcy. So therefore, I think it's very important for government really to empower the investors, also the lenders, to give them the power to cost effectively punish the dishonest SOEs and also negligent auditors or intermediaries. Thank you, Wei. I think you have a very valid point that in order for SMEs to actually have access to financing or maybe even more broadly, for other parts of the economy to have the access to adequate value, we need number one credible systems, procedures, and policies in place. Number two, fair and balanced platforms such as the fund you mentioned. And number three, responsible and possibly institutional investors particularly. So while we're talking about the investor, Victor, you are a very active investor in the region. So how do you see the opportunities and risk related to infrastructure space, for example? What can you do as a private investor in that space? Thank you very much. Good morning, ladies and gentlemen. I think we are talking really a very crucial area of the economy because everybody is looking for growth and infrastructure projects and particularly as Wei mentioned, SME financing are key to long-term sustainable growth and indeed innovation. I think not just in China but globally, financing for small and medium-sized businesses are problematic. Wei has already articulated the problems in China but internationally we do have a problem about risk weighting of bank financing to small and medium-sized enterprises. That's, you know, Basel III, you know, allocate the risk of lending to unlisted SMEs almost at the same risk of lending to hedge funds and high-risk instruments. So certainly that is not very thoughtful and not very helpful. And when you have a massive deleveraging on a global basis, the people who have suffered really are accepted the people, the backbone of industrial economy worldwide that we need to support. So I think we need to look at this very seriously. I'm very intrigued to read your article, Kevin, at the FT that you circulate to us. I think one of the issues is we need to look at the problem on a holistic approach, not just looking at bank regulation. We need to make sure that we provide more liquidity to these longer-term projects and we need to look at, for example, the rating agencies, whether we can persuade them, not necessarily rating a, for example, an SME but look at the project because a SME, because of the lack of very full information, as we mentioned, a lack of transparency, or maybe the governance standard may not be as good as a multinational, but the project may be good. So we may be able to look at projects rather than the company itself. And in terms of liquidity, asset banks, securities, putting a bundle of medium-sized PPP projects, infrastructural projects, into a portfolio and then securitize them. Now that's happening in China, which is very, very encouraging. Nanjing and four other municipalities in China are already putting together a portfolio of smaller infrastructural projects, which are already income producing, no construction risk producing income, put them together in a pool, securitize them and they have complete liquidity. Now these are the kind of innovation we need to push more, but the other area which I'd like to suggest more is the PFI, the private finance initiative that was quite successful during the Thatcher era in the UK. Small infrastructural projects belonging to local government does not always need government funding and government management, government design all the way. For example, if you're building a school or a local hospital or a local police station, these are public projects, but they can really bring the private sector to design, to finance, to manage. The government commit to use the facility on a rental basis, let's say for 20 years after 20 years is transferred back to government. Because of local government backing, they enjoy a much higher rating than they would otherwise enjoy as a pure private project and therefore banks are encouraged to look at them because they is almost a sovereign risk. These projects somehow has not really been promoted very well in this part of the world and partly is because you need a legislative framework, you need a statutory framework, but it's worth looking at because that's also providing opportunities for the private sector, particularly for the small and medium-sized private sector to engage in PPP projects with government backing to use the facility long term. And finally, it's very interesting, talking to friends around in the summer doubles and indeed in the winter doubles, I think big corporates on the whole are flooded with liquidity. I think the top 1,000 companies in the world are sitting on a cash pie of over 2 trillion US dollars and we're all looking for quality long-term sustainable return. So definitely for good projects, they are people looking for safe long-term return. Also in China now with insurance companies beginning to become more active, people are taking on long-term savings products, they will be looking for investment products that will create long-term recurrent return because investment institution, particularly the life insurance companies, they really should be investing not for maximizing return, they should be investing to meet the long-term liabilities. So these long-term infrastructural projects big and small by definition should be of interest. And finally, I want to again say something about the role of Miga where Kevin, he may be too shy to talk about Miga. Miga, multi-electro credit guarantee corporation, part of the World Bank system, provides political risk insurance for these infrastructural projects big and small on a worldwide basis and particularly when one is investing in emerging market, if there's a Miga guarantee on top of it, it will make financing a lot easier. So I think the, your, your, your reach, your pride, grinding out for holistic approach really is the key to unlock the backdrop of a global deleveraging scenario that we have. Thank you, Victor. I think that's a very interesting take on the, on the holistic approach in terms of some of the critical elements we need in that approach, including the role of government backing to provide credit enhancement, including the role of multilaterals like us to use our balance sheet to actually credit enhance some of the projects, for example, as Victor mentioned by offering the risk guarantees. And Victor, let me, let me, while we're talking about the role of government and what we're talking about the long-term investors, let me, let me switch gear a little bit and what do you think should be the role of sovereign investors? You know, we, in this, in this region, particularly, you have a lot of government-backed funds, government-backed pension funds, sovereign wealth funds, central bank pool of capital. How do you, how do you see, what are their roles in terms of, you talk about the government's role on the project side to provide credit enhancement. How about the government role on the investor side? Yeah. I think here we need to define, what are we talking about? Because sovereign wealth fund is a, you know, is like private equity. It's a big description. You know, are we talking about sovereign wealth fund, like the Norwegian fund, the CICs of the world, or are we talking about, you know, time and sex of the world? They're slightly different. If you're talking about the sovereign wealth funds that invest the foreign reserves of a country, the CICs of the world, then I think they, for them, liquidity is key. You know, they, they will need absolute liquidity because the vast, vast majority of, of the portfolio is invested in, you know, high-grade fixed income instrument. So you need, what we need to do is do the packaging. We need to create a product which, at least on paper, will satisfy the liquidity requirement and also on paper will provide the right investment rating for the sovereign wealth fund to invest. So they can invest in the fund which has been, you know, investment-graded. So now there I think what we can do is to try to persuade them to provide a larger allocation on their alternate investment portfolio, which in the CICs case could be relatively small, but in terms of absolute numbers, these are huge, you know, and if, if that will help on, on this kind of infrastructure projects. Yeah, Mr, let me, let me just challenge you a little bit on the issue of liquidity. I think, I think I agree with you, liquidity is very important to, to a lot of investors because they may need their cash tomorrow to, to fulfill their liability obligations. Do you think there are also certain type of investors out there, whether they are sovereign investors or institution investors, where actually because their liability structure is not that specifically defined, they actually have the luxury of going very long term. Therefore they may be able to involve in, in projects which give them higher return, but less liquidity. Absolutely. As I mentioned, the life insurance companies and some of the major investment institutions, they will be looking for long-term quality, sustainable return, but high risk, higher, not high risk, but higher risk, you know, they can, because they can structure the risk property, but not sovereign well funds. I mean, not sovereign well funds in the, in the traditional sense of the word, right, but life insurance company, yes, and investment institutions like, you know, Thomas said, they can allocate a portion that can take a high risk. Yeah. Thank you, Victor. While we're talking about liquidity, obviously one of the most liquid investment is the public market. If you're investing in public equity, you can liquidate your, your, your, your holdings very quickly. So I have a question for Wei on that. And how do you look at the equity markets in China, particularly the IPO process? Is there anything we should do more in that space in terms of promoting a really a deep equity market in China? That's a very good question. You know, I'm sure a lot of you, the audiences, all market participants, and you have a firsthand experience of interacting with the market place, players as well with regulators and with issuers, et cetera. I think this market actually is very robust and has a lot of energy and achieved amazing results. 2,400 companies has been listed. However, if we're looking forward, there are barriers for more effective financing. For instance, you know, wearing my hat as an investment banker, we look at the IPO process which the process itself is actually rather unique in the sense of the roles played by the government, the regulators. I think in the early days, we understand the regulatory rationale because China is so inexperienced in the sense of having a lot of green market participants without much experience also have 90% or 80% retail investors. So government needs to hold more hands, if it will, than the regulators elsewhere. So therefore, historically, that's the case. So even now, I think the regulators continue to play a very paternalistic kind of role in supervising and regulating the market. I think it's time that the regulators started to think about the change, and as Chairman Guo has said many times, that he's exactly now focusing on this. One of the things that I think they need to focus on is instead of looking at the profitability, the business model of the company, they should focus more on things like protection of the interest of the investors and how to let information flow more openly and more accurately. So this current regime needs to be somehow reformed to become more information disclosure-oriented rather than regulator making all the judgments on major elements of the process, including pricing. I mean, that way, not only a regulator shoulders a huge burden that is typically done and shared by the market participants, they get blamed if the company gets listed and don't perform well. So I think this reform is really necessary, and I'm glad that regulators are thinking about it. I think this will change the dynamic rapidly because the long queues that are waited for the companies to be vetted by the regulators will be shortened, and also the supply and demand of the IPOs will be more market-oriented rather than artificially adjusted by the speed of the approval process of the regulator. Thank you, Wei. I think clearly we will need some reforms and improvements for the Chinese equity markets, particularly the IPO process. While we're talking about reforms, Mr. Bulliff, can you share with us a little bit the significant economic reforms your government has been undertaking in your country, particularly think of from an angle of, we have talked about a lot of domestic financing, but the other interesting part is overseas investor, right? If I were an investor here sitting here looking at Morocco, what can you tell me in terms of your economic reforms and the improvements you have made recently? I would like to address this question in this way. Politically, socially and economically speaking, Morocco is a very important country. It's a unique country as well. It is in between the Mediterranean and Atlantic. It's an Arab country. It's part of the Arab world in northern Africa, and at the same time, it's an African country. We're only 14 kilometers away from Europe, so we are a bridge between Europe and Asia, and also we are a country of Muslims. For the Arab world, we have 1.5 billion people in the Arab world, and we assume a central location in the Arab world. Last year, we had the Arab Spring, which also affected Morocco. But Morocco was the only country to have achieved a smooth transition into democracy without any violence, bloodshed or casualties that other countries sustained in their transition. So that's a very important boost for investor confidence. We hope our socioeconomic and political stability will be unrivaled and affected to attract investment from the outside. Indicators of our economic performance or competitiveness is quite high. Last week, Morocco was ranked three places to number 70 around the world, and in the Arab world, it was also moved out of our place. In addition, in terms of our investment environment, our investment environment in Tartu has also increased. The quality of ranking in Tartu of Morocco has been ranking by around 12. In addition, our economic system and our economic economy is very stable. Our financial system and our banking system have remained to be very robust to now north of the European Union and to the North America, United States or some places in the United States. However, it is also expanding in terms of profitability. We are also expanding our private banks, but also, in terms of impetus to our economic growth. The government demonstrates the stability of our banking sector. Our new government is in office for 7 to 8 years. The government has done a lot of things in infrastructure and new energy. It is also playing out to do lots of things. We are trying to do the number one country in so-and-so a part of our private energy country. All of these objectives can deliver a benefit. In Morocco, 96% of our energy are imported. However, our fundamentals and the statistics of our macroeconomy is the problem of the Arabic world. Our economic growth rate in the past of 3 years has amounted to 4.8% that shows the positive picture in our economic fundamentals. In the future, for our future economy, we are forwarding that out, specifically in the future policies in manufacturing sectors and structures, logistics industries, financial sector, etc. We are looking forward to working closely with our European partners and, of course, our partners from Asia and China and Turkey now. This is because China has been increasingly engaged in Morocco's development. Many sovereign wealth funds are in Morocco. Thank you minister. That's a very comprehensive and useful overview. And I have the same question for the prime minister. Can you give us a two minutes update on Latvia economy? Thank you. Well, as regards the situation in Latvia, I already gave this general perspective as regards possibilities for investment in Latvia. Certainly, we are now concentrating on more attracting foreign direct investment, especially in the production sector. And I must say there are some good reasons now to invest in Latvia. I think Latvia is now a good place to invest first of all. We have, during the last years, achieved macroeconomic stability, financial stability. So our budget deficits this year is 1.9% of GDP. Next year we are moving down to 1.4%. So we have both economic growth and financial stability. Then, of course, there are a number of other factors which matters. So while we are doing our adjustment, we also did many structural reforms to reduce administrative burden, to cut red tape, to improve business environment, to improve access to infrastructure, to improve access to different connections and so on. And it all seems to be working. Our colleague already spoke on corresponding indexes in Morocco, so I can just outline the same in Latvia. So this year we moved 10 positions up in a World Bank Doing Business Index from a 31st to 21st place in the world for the first time ahead of both our Baltic neighbors Estonia and Lithuania. And now just above us are Japan and Germany. But well, our intention would be in the coming years to move to the 18th position in terms of these of doing business. And as regards World Economic Forum Global Competitiveness Index, we also moved nine positions up this year. And among other things, we are still probably quite unique now in Europe that we are now working also on reducing taxes. While we had some tax increases during the crisis, now we will be gradually decreasing taxation, especially on labor. We have already flat tax, but we'll be moving on personal income tax down to from 25 percent personal income tax rate to 20 percent personal income tax rate. And basically Latvia in terms of tax burden is one of the countries with the lowest tax burden in EU 27. So I think there are many good reasons to invest in Latvia, stable macroeconomic environment, good economic growth, favorable taxation, good business environment, qualified laborers, so come and invest in Latvia. Thank you. Thank you Prime Minister. It's actually good to hear good news from Europe from time to time. And which is not common these days. Let me open the floor, see whether there are any questions from the audience for the panel. Can I go here first? Let's see. Thank you. My name is Ludves Siddiqui. I look after a business line for UBS in Asia. My question is to you Mr. Chu and maybe anyone else who may want to answer. You alluded to the fact that international bank capital regulations are onerous when it comes to SMEs and access that they might have to capital. I would also contend that Basil III is largely incompatible with the Asian context in many ways. As one group treasurer of a major corporate here told me you bankers and the regulators and your technicians in a moment of extreme guilt have gone into a corner and come up with these rules for the people who have to pay the cost as us, the users. The problem is who should be raising these issues? The banks largely don't have the moral authority to do so. The politicians I don't know if they're technically competent to do so. What's the best way to make sure that the end result which is availability of credit, particularly international lines of credit, remain in place? Victor, can you hold your response? Let me take a question from there as well. I'll take two more questions and we'll answer together. Gentleman in the middle. Be brief. Thank you. I'm Sanjay Gorenka from India. I'm a questioner to Mr. Victor. So you're talking about infrastructure financing. Infrastructure financing in roadways and port is very common but you're talking about infrastructure financing on a beauty basis probably in schools and hospitals. So can you please explain this thing? One more there at the back. Gentleman at the back? At the back? Yeah, one more. I'm from India. I see under newspaper and I see a question is to as you know you've mentioned it's difficult for SMEs to get back financing by your view and you mentioned private rating institutions and you've made a number of other recommendations but it will be still difficult to address the financing issue for SMEs. The government is putting out a number of debt to influence on SME financing. In addition, in terms of equity financing and debt financing, if you compare these two two, is it possible that equity financing is more appropriate? Yeah, I'm very grateful to my learner friend from UBS for raising this. In fact, certain forums such as the G20, APANQ and the International Chamber of Commerce, which represents private sectors around the world, have been working quite hard to push the global banking regulators to take a look at this issue as part of the global redesign of the architecture, you know, financial architecture. But I think in forums like this, if we speak out and here, you know, we two of us already spoken out and people like yourself, that will actually through the power of the media will attract their attention and actually through the good efforts of some of the organization I mentioned, there are revisions going on that will help but I think we could do more and certainly I will encourage whenever you can, we should speak out for SMEs. And for my friend from India, we're talking about the smaller PPP public-private partnership, other than the Big Power project or TOROS, but smaller projects that local government look at as public project and therefore infrastructure, even prisons, hospitals, schools, these doesn't need 100% government involvement. In fact, history shows that if government is involved in everything, the design is not the best, the is mostly will cost overrun and therefore delay and the net result is probably better to leave it to private sector. You create job opportunity for private sector but also private sector through attend the competitive project. We probably get a better project, better delivery on time, within cost but actually a better project at the end of the day. And these will also involve managing the project with facility manager. They'll manage the project for over long term but at the end of the day return to government but government will guarantee to use those projects at a fixed return over a long period and therefore it makes financing easier because the government backing. Thank you Victor. Wei, the question SME. Yes, regarding this issue of SME funding, I think you're absolutely right because even with the proposals we talk about, that's not going to solve all the problems. But what will help is that at least for investors, for instance, I think that will facilitate their understanding and their access to information and to build up the credit worthness of these companies and make it easier. So this is a right step towards the right direction and more importantly, I think, as you said, the government is doing many different things. One of them is to allow these SMEs to issue high yield bonds. And we know actually that's already available and they become very popular and also there are other kinds of debt capital market instruments are in the making and according to the press they will be launched soon. So in our view, debt financing is very convincing, you know, in the form of a bond, actually very convenient because as we know, most of the bond holders are institution investors. They are more sophisticated and they have a better way and skills in assessing the risks and also I think in the instance of high yield instruments and that high yield nature reflects the risk that the investors are bearing and is quite fair. And in addition, one thing we didn't talk about is the shadow banking. Shadow banking has gotten a bad name in the press in the western world but in fact, if you look at what the banking sectors has been doing, in fact trillions of renminbi has been put into the private sectors to fuel the void and provide practical solutions to the lack of a funding problem. So all of these measures I think come in will help and to your last question about equity versus debt, we are often of the view that both are viable solutions to a company, no matter how small you are, you need to have really a right balance sheet and you need to have the right debt equity ratio so therefore, you know, for different clients they need to think about different instruments and I think the more these kind of instruments we have in the market and the products we have in the market, the better we are. Wait, thank you. Yeah, what I would do is that in a minute I'm going to ask my panelist to spend 30 seconds each, only 30 seconds each. Think about if you are the master of the universe behind the global financial and economic system, what is one thing you want to change? The one top order you want to change in order to enhance the capital to finance our economic growth but in order to give you some time to think about it, let me take my 30 seconds, the way I see this session is that we're looking at basically three pockets, right? We have the needs on one side, the economic needs for the growth, we have capital on the other side and we have the markets in the middle. I think what we talk about on the needs side, we do need government actions, reforms to make sure people have the confidence in the system, so the investors on this side can come in. On the investor side, we talk about solving wealth fund, we talk about long-term investors such as life insurers or pension funds, we talk about the needs for institutional investors but the key is really in the middle. In the middle, in this middle pocket of financial markets we need, as Victor said, a holistic approach. We need equity markets that is healthy, including good IPO system. As Wei mentioned about we need to complete that market, including the bank project, a project bank market as Victor was talking about. We need innovations such as PPP structure where public private sector can both come in, we need government backing and credit enhancement, we need the right procedures and processes including credit ratings and we need platforms for those capital to flow through. So that's my one minute summary and let me go to Prime Minister, 30 seconds. What's your one change you want to make? Well, if there will be that kind of possibility, I think in a perfect world we should have perfect information. So if anything, I would concentrate on really moving away from those risks of asymmetric information which we have. I was talking in the beginning of the lack of trust between private and public sector. It's the same basically within private sector. You cannot trust each other because you don't exactly know what's going on and it's in a sense something also which Wei was saying that investors need to know more information in order to do right investment decisions. So I would rather go for this maximum transparency and improve information channels between different investors to increase trust and decision-making. Great transparency and information channels. Wei, 30 seconds. For me, operating in China, I like to see Chinese government continue to operate with total efficiency because I think that's a huge differentiating factor that the Chinese government has versus the other governments outside China. Because of this efficiency, the Chinese government can really weather through the difficult 208 and also many other challenges. They have a lot of more challenges ahead but with a efficient government, I think we'll be okay. So even more efficiency with the Chinese government. Minister, one change? Well, talking about the ethics of financial institutions of banks, I'd like to echo with that point very much. I think we should further pursue mutualization and the interactions between the banking sector and the non-financial sectors. The current French government is talking about 75% tax rate for very wealthy people. But if that's the case, the richest people, French people would go to Belgium to become Belgium's citizens. So therefore, between government and the private sector, amongst the triangle of government, private sector and banks, there should be trust. So that there will be a good cycle. Victor, you have the last words. In the ideal world, Asian benchmark currency. That's one thing we have not discussed today. So that the savings in Asia can be plowed back into long-term project in Asia. Unfortunately, the experience that we're facing in the Eurozone and Asia's largest economy, China, its own currency is not yet a free currency. I think that dream is still some years off. So Asia's common currency, that's a radical proposal. Let me thank the panelists for their discussion. Thank you all for being here.