 So, good morning everyone and welcome to this press conference on the presentation of a very interesting McKinsey study from McKinsey Global Institute, the research arm of, of course, the consulting firm that you all know. We are gathered here today with two partners of McKinsey. The first is Anu Madhavkar. She is the author or one of the authors of this study. And the second one is Kaushik Das, the managing partner of McKinsey in South Asia and previously located in the region in Indonesia. We'll be talking about a study that looks at emerging markets from a very interesting angle, which is to say starting from the perspective that emerging markets have brought about, I think, two-thirds of economic growth over the last decade and a half or so, as well as half of the world's consumption, which is huge. But realizing, of course, that this is a very vast group of countries, very diverse group of countries, I believe, 71 of them if you include all of them. And so the question then becomes, if we look at those countries on an individual basis, what are actually the factors that explain their success and which of those countries have done particularly well over the last few decades? So that's what we're going to be looking at today. Again, this is a study by McKinsey Global Institute. It's called Outperformers, High Growth Emerging Economies, and the Companies that Propel Them. I'll ask first, of course, Anu, to give some introductory remarks and tell us a little bit more about this study. Thank you very much, Peter, and a very good morning, and thank you to those of you who are here today. We are delighted, as McKinsey and Company and the McKinsey Global Institute, to be actually doing the global launch of this important report here at the World Economic Forum in Hanoi. This is a very significant report because it takes a global perspective. It looks at 71 different emerging economies, and it also looks back in time. So it looks at which of these economies actually outstripped or outpaced high-income countries in terms of per capita GDP growth over long periods of time. And what we found is that one out of four, which is about 18 economies out of our set of 71, actually managed to deliver sustained and rapid per capita GDP growth. Seven of these did so over 50 years, so they grew at more than 3.5% per year for a 50-year period. These include China, South Korea, Hong Kong, and Singapore, and then four of the ASEAN countries, which is Singapore, of course, and then Indonesia, Malaysia, and Thailand. And then we had another 11 economies that didn't do it over 50 years, but they did it over 20 years because they opened up, did market reforms, and so on more recently. And this group actually achieved more than 5% per capita GDP growth over a 20-year period. And this group includes India, and then Vietnam, Cambodia, Laos, Myanmar, and a set of Central Asian countries like Kazakhstan and Uzbekistan, as well as Ethiopia and Africa, so a little more regionally diverse. What's the sort of binding factor or the commonalities between these countries? Because there are a lot of differences. It is quite a diverse set, but there are a lot of commonalities. And we found that savings and investment, the ability to create an environment in which investments take place and drive up productivity, that was one common feature. The translation of productivity into income growth for households and for companies was the second element of that virtuous cycle. And then tapping into both local consumption as well as, of course, global consumption in the form of exports. So this virtuous cycle was put to work, and there were two primary engines or pillars that made this happen. There was effective government action to engage on these topics around sector strategy and economic strategy to boost capabilities and create competitive conditions. So government enablement was one piece. And then the role that large firms, publicly listed, vibrant globally competitive companies actually played across these economies was the other distinguishing feature. Companies grew very rapidly. They were actually able to sort of compete. They were dislodged, so it wasn't that they could take their place for granted. But they, as a result, became more nimble, more aggressive about investment and more globally oriented. The outlook, of course, will change. We know that things that were true in the past may not be true in future. So the study looks at some of that. But we do think that there are sufficient opportunities even in this new world of the future that can sustain growth for many more emerging economies as well. Very well. And you mentioned, of course, the role of companies in all of this. And I know that your colleague, Kaushik, is indeed focused more on the business element of the group. Kaushik, could you tell us a little bit more about businesses and perhaps also from the region in the perspective? Sure. Good morning. From a Southeast Asia perspective, I get really excited about the performance of many of our economies here. And obviously, most of us know the stories of Thailand and Singapore and Malaysia. What we did not expect is to see the very strong performance from Cambodia, Laos, Myanmar and Vietnam, the country that we are in today, over the last 20 years. That, frankly, took us by surprise. It's also very encouraging that Philippines is starting to come up. And as we look into the future, we see Philippines, hopefully, really emerging and going ahead with much more power than before. There are several things that also struck us. Of course, the role of companies, as Anu mentioned. But beyond that, the dynamism of these economies, the dynamism as in these companies are not static. In fact, when we looked at it over a 10-year period, only about 45% of companies stay at the top. So many companies drop out. More companies come in. And there is churn in the economy that points to innovation, that points to growth, that points to dynamism. And that is very encouraging. This is not about sometimes, you know, people think about Southeast Asia, and they think about entrenched old world families, et cetera, et cetera. But that is not the case. Many of these economies are starting to turn really competitive, starting to invest ahead of Western companies in terms of just in the ratio of investment. We see that they make decisions often two times or three times faster than companies in the West. And all of this gives us a lot of hope for our part of the world. Thank you. Excellent. And we'll give you opportunity to some people in the audience also to ask some questions. But before we do, I wanted to ask you again, Anu, you said you looked at two groups of countries that performed well on the one hand, those that did well over the last 20 years, and Vietnam is actually one of those countries. And on the other hand, the countries that did well over the course of 50 years, which is a very long period of time, which include, I believe, if I recall correctly, countries like Singapore. Now, Vietnam is at this point a middle-income country has done a tremendous job in growing from, I think, about $200, $300 in GDP per capita in the mid-1980s, if I'm correct, to about $2,400 and even $6,000 in power purchasing, power parity today. Of course, there's a next step to be taken. And very often you see that countries get stuck in the middle. I believe economists would call the middle-income trap. What are the lessons that countries like Vietnam, those recent high performers, can learn from those countries that have been performing well over 50 years? What are the levers that they should use for their next 30 years of development? It's a really interesting perspective, the notion of the middle-income trap. And actually, as we looked at this wide range of countries, what we found is that there is no such thing only as a middle-income trap. A trap can exist at all levels of income. So you have many countries which are in a trap at low levels of per capita GDP and can't break out. Equally, you do have the South Korea and the Singapore which have relatively high growth, despite having crossed the middle-income threshold. So I would say that the real lessons are to avoid what keeps economies trapped and to adopt the principles that actually promote growth. And these include thinking about openness and thinking about competition as important kind of requirements to establish that thriving base of innovative companies. If your economy is not more open and your economy isn't sort of imposing conditions in a way or expectations that businesses drive up productivity, drive up R&D, drive up market share, whatever your economic targets are, if those conditions aren't implicitly laid out and companies are allowed to survive despite not meeting those, I think that's where we get into trouble and any economy, frankly, at any stage can fall into that kind of trap, which should be avoided. Now, of course, in another panel this morning, I heard people say, well, or it was actually the minister of Vietnam who said, we believe that to succeed going forward, we shouldn't be looking at the past. Your study perhaps suggests that you can learn things from the past, particularly from countries who have done well in the past, with the notion of the Fourth Industrial Revolution and that things are different going forward. To succeed, you need to do different things. What actually are those things that you believe a country should be doing going forward to keep on having that sustained economic growth? I think that's a good question to reflect on in the context of Vietnam, for example, because Vietnam is actually one of those few countries, along with a few others, that over the last 10 to 15 years where we did have a lot of technology innovation, so the Fourth Industrial Revolution is not necessarily a discontinuous new thing, it is also a continuation of trends we've seen. In the last 10 years or so Vietnam is one of those few countries that in the manufacturing sector, for example, has managed to actually increase both manufacturing productivity, manufacturing share of GDP and manufacturing jobs at a very, very healthy rate. So it already has an established record. This notion of what economists call premature deindustrialization. This is a real phenomenon. What it means is that as economies grow in per capita income, the peak level of manufacturing share of employment will be hit at lower and lower levels of income. So earlier it used to be the case that you could grow manufacturing jobs all the way till maybe $12,000 or $15,000 of GDP per capita. Now it's the case that that peak is being hit much, much earlier. By about $5,000 to $5,500 per capita GDP, you actually hit that peak because you don't enjoy labor cost advantages. I think a country like Vietnam is actually well positioned. It still has a relative labor cost advantage. It has the basis of a well-educated workforce. Of course there are big challenges in terms of re-skilling and strengthening the kinds of new skills and new jobs that the fourth industrial revolution will throw up. But it doesn't mean that jobs will vanish. It means that if you are in that sweet spot of labor cost working in your advantage, the ability to retool your workforce, you can actually continue growing. Excellent. I want to give the opportunity now also to journalists in the audience to weigh in with questions. If you do have a question, please raise your hand. We have a question over there and we'll bring you the microphone. Identify yourself and then please ask your question. One second. So my name is Phan. I'm from VTV, the National Report Station of Vietnam. So my question is there's some statistics saying that the rate as the workforce in Vietnam getting old is very fast. So that would be a problem for the motivation or the driving force of the economic growth. So how would this be resolved in your suggestion about how Vietnam is moving forward? It's certainly true that growth in the workforce, which has come about in the past due to population growth as well as rising workforce participation, historically has been an important driver of growth in Vietnam. And it's also true that like the rest of the region, the demographic force of aging is playing out by 2030. We think that Vietnam and many other ASEAN countries will have roughly 10% of their workforce or their population rather in the 65 and over bucket. So what has been historically a positive force can become a drag. But that said, I think there is actually a lot of structural upsides still to play out in a country like Vietnam. So in addition to aging, the other big demographic force is actually urbanization. Because urbanization means that people move from relatively low productivity, low pay occupations and sectors into higher paying ones and higher more productive ones. That differential is four to six times. So if you compare a manufacturing or a services sector job, that's four to six times as productive. And we know that urbanization is only about 35%. There is a long way to grow for Vietnam as well as other ASEAN countries in terms of just this important demographic lever. So we don't think that aging should be viewed in isolation, but in the context of other structural and demographic changes which are very positive. Very well. Thank you for that. And then another question over there. I'm Ken from Malaysia. So this report looks at emerging countries and the big companies that propel them. My question is, apart from Singapore in Southeast Asia, the rest are still struggling to get out of the developing nation status and into the developed world. I think Singapore achieved that way back then with different fundamentals and global ecosystem. So from the report, can you point to the answers that maybe can solve this issue, middle income trap or not? Because we do understand looking at the state now. The secret of all is not working now so much anymore. The changes of government in Malaysia, for example, underlined that facts. 3.5% and above doesn't mean anything for the people if they can get quality jobs and number of employment and better supply chains, for example. So where in the report can we look at to find answers to move forward into the next phase of development, which is to be a developed nation? So our report doesn't set a benchmark or a target, which is that that's not the way the research is framed, right? We don't set a benchmark that says that within five years or within 10 years, which countries can actually reach a high income status. We focus more on dynamism or rate of growth. We set our thresholds based on rates of growth that would allow a lower middle income country to become an upper middle income country over a certain period of time, or a low income country to move up one notch in the income bands. It's about the rate of advancement not necessarily getting to some particular target. So that's just the way we frame it. In terms of what it would take, the research does look at this forward-looking perspective to say what's changing going forward and what are some of the new challenges and opportunities? Trade is definitely one important question mark. The global landscape of trade is changing. We know since the global financial crisis, there's been a deceleration of certain kinds of trade, namely on the goods side, goods exports. But equally, there is a lot of dynamism in terms of services trade as well as digital information exchanges. So flows in terms of digital products and services. Equally, I think on the trade side, the fact that emerging economies like Malaysia and others like China, they are increasingly trading amongst themselves as well. So this whole notion of South-South trade is another kind of sub-structure trend that we're seeing unfold. And it really depends on whether economies can position themselves well to take advantage of these and be parts of global value chains that actually capitalize on things like growth in services, growth in digital, new opportunities for South-South trade and engagement with each other just as much as with the rest of the world. Very well. Thank you. Over here. Good morning. My name is Mohan. I'm from Khmer Times, Cambodia. You mentioned about a lot of progress in Cambodia. Would you mind elaborating on this? Secondly, Cambodia is not on par with Vietnam and some of the other Asian countries. So what can it do to catch up? Thank you. So, you know, in the research, we don't deep dive into individual countries, but we do establish this filter or threshold that says, you know, did a country grow sustainably or not? Cambodia starts off at a per capita income point, which is lower than many of its peers, but it actually managed to show that momentum over the years, though it looks certainly different from a Vietnam or an India for that matter. I think in terms of what these countries can do, that is a really important question. And even our findings about the recipes for success in the past, as we mentioned, one of the big components of that success is to create a vibrant base of businesses and firms in your economy that are investing, that are innovating, that are tapping into global as well as domestic opportunities. And to do that in a way that promotes competition because that's what promotes efficiency and, you know, global competitiveness at the end of the day. This is, I think, still a work in process for many countries, including some of our recent outperformers of which Cambodia, Vietnam and India form part of that cluster. We can do more to have reforms that actually, you know, open up sectors, more establish what the vision is, but at the same time ensure that only companies that are increasingly competitive, relative to their peers or the rest of the region are the ones that attract them. They are the ones that attract the capital, attract the incentives and then grow and flourish. A lot of countries in the region, including some of the recent outperformers, do have, you know, work to do on this front and we would think that that's an important part of what they need to do. Very well. Thank you so much for that question also. And I think we have one more question from a gentleman over there from VTV. This time, hopefully, you get the right. I'd like to have another question about trade war. So I'd like to ask China, is it the country that Vietnam is exporting to the most? And the US is the country that Vietnam is importing the most. And so how should Vietnam and other emerging countries should position themselves in face of the trade war? And because we don't know where it's going right now, we are unsure of that. So the question for both speakers. Let me take a stab at that. I think it's fair to say that the future is uncertain. We are probably in a very, very one of the most uncertain periods in recent history, right? And certainly the outlook for trade is therefore not something one can be clear about. Currently, what's already been announced accounts for a relatively small proportion actually of the total trade, but there are already pronouncements that that's going to increase. That said, I think it goes back to the fundamentals. And the fundamentals really are that if you create the base of innovation and of the core productivity in terms of what you're exporting and look to newer and newer opportunities in which to do this. So think about growing markets which perhaps are not obviously on the radar today. There may be scope and need to diversify trade more, for example, across sectors as well as across countries. That's certainly something that should be looked at. And I think equally there is a big relatively missed opportunity which is not about exports. I think a lot of countries have been very export oriented. It has worked in their favor. But there are domestic, not less tradable or non-tradable sectors and opportunities which are crying out for reforms to make them more productive. And growth can come by addressing such sectors like construction, retail trade at home. And many of these services sectors also present themselves as opportunities. The one other thing I might add is we were also taken aback by the growth in South-South trade. And a significant amount of that also driven by just domestic consumption in the emerging countries themselves. I think that factor of trade has also grown. So while, yes, there are bigger uncertainties with the U.S. and China and so on. But there is optimism for trade within these countries. Excellent. And a final question from a gentleman here in the front. I'd like to follow up on the trade issue. Cambodia always faces the possibility of trade and politics being intermixed, interrelated. The biggest export markets for Cambodia, the U.S. and the EU, and both are always putting Cambodia under pressure on the trade issue by using politics. How would you react to that? Our work has actually quite focused very strongly on economic growth and the economic policies or the effectiveness of governments or the role of governments in terms of their economic policies and the way they engage with stakeholders. We didn't actually look at either international geopolitics or differences that arise because of different types of government regimes or political differences across countries. That simply was not the focus. And I think it's also fair to say that there are countries of all types in both the outperformers and the non-outperformers bucket. So there are common challenges. I don't think it's an area that necessarily differentiates one from the other and was not the focus of our work. The one thing I might add is one of the reasons for the long sweep of time we have looked at, 50 years and 20 years, is that they span changes in political situations and therefore I think some of the learnings that we get on the countries actually span different volatilities in politics. They actually work, if you take a longer view, they actually work no matter what and therefore our optimism actually stands. Very well. I believe that's all we have time for. I want to thank both of the panelists today, Kaushik Das and Anumat Vakar for enlightening us on this study. I believe it is also being sent out to journalists right now. This is the full study which you can, I think, get also a hard copy off but otherwise it will be sent to you by e-mail with the press release that's being sent out right now. Thank you so much everyone for coming and thank you for the panelists for being here. Thank you very much. Thank you.