 Hello and welcome to this last press conference of the World Economic Forum on ASEAN here in Hanoi, Vietnam. And I'm excited to be talking with two special guests about the report TRAITEC, a new age for trade and supply chain finance. This is a report that's being released right here and right now. As a matter of fact, the press release is being sent out in just a few minutes. And before we do that grant release, we have two guests here to speak about the report. The report talks about a very important topic that concerns also the ASEAN region, which is trade finance. As a matter of fact, one of the observations that it makes is that there is right now a $1.5 trillion gap in trade finance. And to put it in a different way, that means that right now $1.5 trillion in trade cannot happen because of a lack of proper documents or credit for it. And so that gap is big, but it's also growing. It's expected to grow until $2.5 trillion in 2025. This is particularly important in Asia where 80% of these trade finance or this trade either starts from or arrives. And it's particularly also important for SMEs, who I think account for more than half of the trade finance which is rejected. That means that a lot of SME companies are not able to do trade, not able to do shipping, not able to get to clients in global markets because they cannot finance it because it's not the right documentation available. And that is the topic of this report and we'll be talking about a solution for that, a blockchain-based solution for that with two guests. The first guest is Jerry Matios. He's an expert vice president at Bain and Company in Singapore, so right here in the region. And he's also one of the co-authors of the report. Welcome, Jerry. And then, of course, we have my colleague Kimberly Buttride. She's part of the trade team of the World Economic Forum in Geneva. And she'll be talking a little bit more about the context in which this trade finance topic is being discussed. So without further ado, I'd like to start and ask Kimberly, why don't you tell us a little bit more about why this topic is so important and the topic of trade finance and what work is being done to address it. Great. Thank you, Peter. I'm delighted to be here. So I'll just give, as you say, a brief overview of why the forum is working on this. At our annual meeting in Davos in 2018 in January, the stewards of the International Trade and Investment System Initiative, as well as the governors of the supply chain and transport community, encouraged our community to look into this and to really explore how the 4IR is going to impact trade flows and supply chains. 4IR supports industrial revolution. She's also being discussed here. Excuse our acronyms. And this report already gives us a first touch view on why this was so important to do, specifically through the lens of distributed ledger technology, blockchain, and supply chain finance. So what we see through the report is that the 4IR can bring tremendous benefits, but that these are not automatic. We've already seen this through the forum's broader trade work. The forum is working with a wide group of e-commerce platforms on an initiative called Enabling e-commerce, as well as the WTO, driving public-private dialogue on how we can make trade more inclusive for SMEs, particularly using technologies, and what are the policy changes that we need to do to achieve that. And our Centre for the Fourth Industrial Revolution in San Francisco is scoping ways to work with governments to help implement the right rules for applying new technologies to trade. So this report is really right up our street, and SMEs are key to that, as you've said. For this region in particular, SMEs make up, as you alluded, the vast majority of business by numbers and account for about 60 to 70% of employment. But what's really interesting is only about 30 to 35% of exports. So something is sticking here. And what is also interesting is that we have seen trade drive development in this region, particularly for Vietnam. We've seen big companies integrate into value chains, but there's clearly something that we need to do to make trade broader. And particularly for the younger generation with these new technology developments, let's get them connected. Let's use those missing opportunities that you alluded in your introduction. So with that, let me hand over to Derry. How are we going to do this? So first of all, thank you very much for having us here today. And it's been a real pleasure working with the World Come On Forum over the past few years. I have three key messages I want to bring from the report this morning. The first one is something that we have repeated in the past since we started the work on trade facilitation in 2012. Actually, supply chain barriers and the reduction of supply chain barriers such as border administration, market access, infrastructure, can actually increase and grow trade by up to six times more than tariffs. That has a huge impact on GDP. I want to pause right there because that's a major statement. So you say basically because we talk a lot about tariff barriers. As a matter of fact, it's a very hot topic right now, but you say forget tariff barriers. Non-tariff barriers have an impact at six times larger than tariff barriers. And we have proved that since 2012 various times. We've done case studies. We've done extensive reports, modeling. That actually proves the impact it has on GDP, especially in this region in Asia Pacific and Southeast Asia. Now, as you highlighted, Peter, the second key message is that one of the key issues that exist in this region is finance gap, especially for SMEs. So with our report today, we're launching a new journey around the application of DLT. And our message is that if we're applying distributed ledger technology, exactly. An umbrella term for... It's an umbrella term for other sub-technologies like blockchain and so on and so on. So our message is if companies, governments and organizations come together and they start setting the standards for blockchain, they double up on the investment and start scaling up. That can open up the opportunity to up to one trillion dollars of extra trade and impact on GDP. And as you very rightly mentioned, that would be primarily in this region. For Southeast Asia, we believe that it could be up to 100 billion dollars in GDP addition over a number of years. And that will come primarily from SMEs. If you look at SMEs today, we just launched another report earlier this week on digital integration. And we said that up to 50% of SMEs in Southeast Asia have internet access. And less than 30% of SMEs are actually having troubles with overseas payments and cross-border payments. If we can remove that issue with blockchain through increasing security, credibility and the whole processing time, that will open up a very new market. And the third key message I want to pass on is that that cannot happen in isolation. The proof of concept is there. Large banks, large companies, very well-documented have done a lot of pilots on blockchain. They have proved that the concept works. But where we're holding back is on scale. How do we scale? How do we make sure that the organizations that manage trades such as WTO banks, governments come together through private-public partnerships or other types of forums to be able to enable the scaling up of blockchain and become a standard in trade? We believe, as a final point, that that's probably going to take three to five years. We are at the tipping point right now. And it will be a first move advantage either by region, by country or by company. But in the next five years we should start to see blockchain being a major standard in trading, especially for Asia. So it can be a very exciting journey and we certainly recommend and our report goes in a lot more depth on the key steps that governments or companies should be considering if they want to enter the journey to application of blockchain in trade. Thank you, Jerry. And of course everyone will be able to read the report that's made available as of 10 a.m. local time, so in 20 minutes. But let's talk a little bit more about the findings of the report. And you mentioned that one of the key messages that you need to get these solutions to scale. That means that if you want to find solutions for trade finds, if you want to give more companies access to trade finders and allow them to do more trading, that you need to implement a solution which can be used in an entire country, in an entire industry, perhaps in across regions. Now of course with these topics like blockchain, they require not only that you have access to a computer with internet and with the right software, but also that indeed it is compatible with the ones of other companies that you're trading with, with the banks that are giving you the access to the finance, with the shipping companies, et cetera, et cetera. How do you go from the situation where we are right now where probably a lot of trade happens to paper documents, over the counter, very manual, especially if you're in a situation like Vietnam to give one example, where the whole fourth industrial revolution is something that's just about to hit. So that's a great question. And I think the way to do this, so the scaling up is certainly not going to happen in one big bang at a global level. It will have to happen, it could be regional, it could be even domestic. A market as big as China or even Vietnam or the regions and the countries around Vietnam could be the first pilot for that scaling up. Whoever takes that first step to invest in the pilot will start developing standards and those standards could become the industry standards and it could become adopted by other companies and other organizations and governments who come through. Hence why we believe that there needs to be a beginning on the journey of conversations and a dialogue between governments, companies, so all the key players within that ecosystem are really understanding what should those standards be, what's the right level of inclusion, what's the right plan to roll this out, if I may say, and be able to hit the targets. I think countries like Vietnam especially could really benefit from application of blockchain because you're quite right, even though we have single window in Vietnam today which has been going fantastically, it has reached not the full potential yet, it still has some way to go. Very briefly with single window. Single window is basically a system that enables cross-border customs clearance prior to shipment arriving, for example, and it helps customs avoid all the documentation. However, what we see in some countries is that they have single window but they also have a parallel process for the documentation. So you have analog and digital almost running together. Our support is that these countries are great candidates for having this pilot of scale-up for blockchain. And you talk about a $1 trillion opportunity, that's of course a very high number, and I think you broke it down per region and so it comes down to I think about $100 billion or so in this region, which is still a very high number, but how do you go from zero to one so to speak, which is often the most important step is to get started. Where do you start? I think the first step to start is about educating SMEs. It's about being able to develop a threshold technology, so SMEs become a threshold technology. So that's access to internet that is educating their staff on digital, because digital is 30% is technology, 70% mindset, and doing business through e-commerce in a digital platform is very different from the traditional ways. So the first step is for each government and organizations, especially in Southeast Asia, to be able to enable the SMEs, to educate the SMEs, to be able to become a threshold of technology advancement. And once that threshold is met, then the next step has to start designing the standards, start designing the technology that should be adopted for blockchain. There needs to be a lot of dialogue around security, because of course we do live in the age of cyber security being a threat. So how do we alleviate those risks? How do we mitigate those risks so the event can take off? And then I think after that, it's application, but what's the role of the banks, what's the role of the governments, what kind of regulations do we have to have in place for blockchain to operate smoothly? Taking those steps will take time for sure, but it's starting to happen. Yeah, very well, and I want to turn now to Kimberly before we go to the audience and open it up to questions. What is the role of an international organization like the World Economic Forum, or indeed other trade organizations in pushing forward these kinds of solutions? So I think the role is to not be afraid of these new technologies, and to engage in as much dialogue as possible with the innovators of these technologies to build bridges between the policy world that's going to be advising and encouraging governments to take certain steps, but also capacity-building programs, and then to really understand what those policy steps are and what the capacity-building programs around them should be. Because if the tech world advances without consulting the policy world, we're just going to be moving on siloed tracks, it's not supportive, and I think the problem we see there is that the tech world advances, it works for the developed economies potentially that have the investments, the bigger companies that can already go and do this, but it's not going to work for those that maybe don't have access to the technologies, have a policy environment that's not as enabling, for example. So I think that's the role, for example, of international organizations, is really to not being afraid of bridging those gaps between them. Actually, a quote here that I heard this week here from actually one of your colleagues, which I really like, I think it summarizes this exact point is, you know, you can go very fast alone, but you can go further together, and I think that really summarizes what happened with distributed leisure technology today in trade and blockchain, and unless we can manage that together, governments, all the players, you're absolutely right to come out of just technology running and then policy having to catch up. Yeah, absolutely. And of course, this is an opportunity also as we've seen here in the last few days for countries like Vietnam who are doing a lot of exports already, and actually as a part of GDP is probably one of the higher in the world in terms of their exports, and the question that is being asked here this week is how can a country like Vietnam keep on growing? Now what we've heard from a few people here is that well maybe actually export is not the way to go because of everything that's happening in the world in terms of trade tensions. Do you believe that it is a good idea to push for these kinds of solutions which are more technical solutions as opposed to being afraid of, let's say, the political decisions that are being made around trade sort of coming back to this idea of tariffs versus non-terrors? So I'm a big believer that focus should be on supply chain barriers and trade facilitation. Since the trade facilitation agreement was voted in about four or five years ago, we saw a tremendous growth on countries adopting trade facilitation, starting up to it, and actually already starting to benefit from the framework of trade facilitation that was driven with WTO. That has kind of slowed down now for the reason you just explained because there is this whole question mark of what we do with tariffs and is that going to hinder economies. But we believe that focus on supply chain barriers will bring sustainable and stable growth, especially for emerging economies that need that more than anybody. So tariffs can really help you maybe in the short term. It could be a tactical approach for three months, for two quarters, three quarters. But it's not a long-term solution. Tariffs don't create jobs. Tariffs don't help GDP long-term growth. And tariffs do not push innovation. But supply chain barriers reduction do all of the above. And that's what our economies here in Asia, especially in Southeast Asia, need to be able to progress. Yeah, very well. I want to open it up to questions now also from the audience. If you do have a question for experts, there is a microphone available. So just raise your hand, identify yourself, and then we'll listen to your question. We'll gladly answer your question. So give the opportunity now to people in the back to also ask a question if there is any. Yeah, go ahead. Hello, my name is Ngah, and I'm the journalist from the Vietnam News Agency. I have a question for you. As you said before that the SME, it is very important for the SME to use the advanced in technology, i.e. the blockchain. But some SMEs in Vietnam, they are facing the difficulty of, you know, getting the money. The financial resources is quite tight. So do you have any advice for that? Thank you. Thank you so much. Yeah, that's a great question. Thank you very much, because you're actually quite right. The question is, what do we do with funding? So how do SMEs reach out and achieve to be able to attract the funding they need to make the technological advancements? I think this is a similar type of challenge that all type of startups or SMEs face around the world. There are probably two sets to this answer. There's the good news, and maybe the hard work, let's say. The good news is that right now, if we look at the private equity world, the VC world, there's a lot of funding and money available out there. Investors are looking for the next growth markets and the next growth opportunities. And the other good news is that there's a lot of activity of that funding being channeled towards startups and SMEs. And in this region specifically we actually do have a lot of very good and creative innovation. The hard work part is how do you become the choice of investments? So if I'm an SME, how do I make sure I attract that funding and make that happen? I think that's where governments and trade organizations, for example, come into play where they can help SMEs educate on even just developing basic business plans, being able to have the right, what we call like the investment pitch, but also maybe a roadmap when it comes to digital specifically of how to digitize their business. And as I said earlier, a lot of it has to do with the mindset. So educating the people, educating CEOs and people who work within SMEs to be able to have the right conversations with funds and investments to make that happen. And I believe that governments probably have a role to play to that. And I keep going back to our report because actually this is one of the things we've highlighted in the past as well that for SMEs to be able to increase market access, governments do play a role in that. And they have to be able to take the time and give them the right sort of credits and the right approach to make that happen in internationalized business. Thank you so much. And thank you for that question. If there's any more questions from the audience, we'll be happy to take one more. You know, a follow-up question that I had, Jerry, about this topic, is, you know, funding, of course, you can have funding for your company in general. But what we're talking about in terms of trade finance, of course, is the funding in order to do your shipment. And so as a company, if I'm faced with a rejection by a bank to actually fund my shipment, to finance my shipment, and you come to me, you say, well, you know what? Why don't you invest in blockchain? That might sound at first sight like, okay, that doesn't solve my problem because what I need is the money from the bank. What I don't need is to invest my own money in some new technology. How is that going to help me? I understand, of course, that the two are related. But how are you going to be able to convey that message and make sure that people see that opportunity? So a lot of the financing gap actually exists because of the high number of documentation. A lot of SMEs actually are not even aware what kind of paperwork do they need if they want to ship their products, say, from Vietnam to Europe or even Vietnam into Asia. For example, for a company from Vietnam to Cambodia to Chicago, they will need more than 10 documents to be able to make that shipment and be able to happen. Chicago has a lucrative market potential for products, could provide premiums, but they won't know where to start. What are those 10 documents? What is needed? And banks will be able to provide credit to companies that have shown and have a history of credible trading and knowing in the market because that's the way to minimize the risk. So I agree with you. Again, going back to the point that it's a multi-stage approach. It's not a one solution for all. There is a certain role that banks have to play in being able to provide the technology from their side to help those SMEs, for example, run through what's the documentations require, what's the criteria, and the education part is very important. And then from the SMEs, going back to the basics of meeting the threshold when it comes to technology, even just Internet connectivity, being able to understand the digital ecosystem and leverage that to the best possibilities for the business. Absolutely. Yeah, I think it's clear that this is a huge opportunity for basically companies everywhere, but particularly companies in Asia and SMEs. And we understand this opportunity if we look at it in a positive way is growing. You said the trade finance gap of $1.5 trillion is growing to $2.5 trillion. Exactly. But actually a lot of that can be solved if people apply these solutions, these innovative solutions that are blockchain based. We'll be launching these reports in the next five minutes or so, trade tech, sending this out to everyone. There's some hard copies in the back. For now, I want to thank the speakers for being here today and making it all over to come here. And thank you all for being here. Thank you.