 The focus of this session will be very much about looking at the prospects for the ASEAN economic community in 2015 and how can greater liberalization manage to enhance the region's economic development. With that, let me introduce our very distinguished panel. We're so lucky to have today five ASEAN ministers with us and of course the Chairman of Mitsubishi Corporation. Let me introduce one by one our panel members, starting with Secretary Domingo, the Secretary of Trade and Industry in the Philippines. Let me say how delighted we are to be in the Philippines and for such a warm welcome from your government. I must say I feel so welcome here and all the arrangements your government has made for this wonderful event. Then we have Minister Mustafa Mohammed, the Minister of International Trade and Industry of Malaysia. Thank you Minister for joining us today. And also representing the private sector of Asia, we have the Chairman Kojima-san, Chairman of Mitsubishi Corporation. So he has a heavy responsibility to represent the entire private sector views with one person. I thought Mitsubishi is the government. And then Minister Lutfi, who is very well known to all of you, I'm sure the Minister of Trade of Indonesia. Thank you Minister because I know how hard you had to travel to get here this morning. I think you arrived very, very early this morning. So thank you so much for the effort you made to join our session. And then may I introduce Senior Minister Chanto, who's the Senior Minister and Minister of Commerce of Cambodia. And then Senior Minister Tio, who's the Senior Minister of State in the Ministry of Finance and the Ministry of Transport in Singapore. So perfectly aligned to our topics today. So let me begin the discussion by asking some questions. I will allow time towards the end for the audience to also ask questions. But let me begin by asking some questions to our panel. So first, if I may turn to you, Secretary Domingo, to give an initial overview of how you see from the Philippines perspective the progress on the ASEAN economic community and the likelihood of implementation in 2015. What is the Philippines perspective of where we are to date and the benefits that will accrue to the Philippines economy from the AEC? Yes, well, from the trade minister's perspective, we look at, there are many components to AEC 2015, but from the trade minister's perspective, we're looking at trade in goods, trade in services, trade in the investments section. Trade in goods has basically been accomplished four years ago, January 1, 2010, where in ASEAN, as a whole, reduced its tariffs on over 99% of goods for the ASEAN 6, the original 6, to 0%, while for the rest, the CLMV countries, Cambodia, Laos, Myanmar, Vietnam, they already have 98% of their tariff lines reduced to 0, as of January 1, 2010. So come next year, December 31, 2015, there are really very few items left to reduce. So from a trade in goods perspective, we have basically accomplished it already. We are already here competing with goods from ASEAN in the Philippines. We already imported zero duty. The only remaining thing there is really the non-tariff barriers. These are rules and regulations that block trade that are perceived, okay? We shouldn't judge prematurely, but are perceived to be blocking trade. So ASEAN is working on removing those non-tariff barriers. The bulk of the work that's being done now by ASEAN, I mean like maybe the other ASEAN ministers can confirm, is really on the trade in services side. When we're working on 10 packages, we've basically completed eight. We're working on the ninth and trying to finish the 10th by the end of next year. These are liberalization in terms of the services area. And the particular focus there is on allowing certain minimum equity to come in to those services sectors that have been identified, which are over 150 service sectors. As of now, I think 104 of the 158 services sectors have been completed. So we will continue to work on the rest of those. And then on the investments side, actually the trade in services already tackled the investments side. But on the investment side, it talks more about the promotions efforts, et cetera. So that's really where we stand. Of course, a lot of other things are happening on the transport side, where liberalization of air services. You're on the financial services side where you're talking about insurance and banking regulations that have to be harmonized as well as liberalized. Thank you. And now, if I may turn to Minister Lutfi, the biggest economy in ASEAN. What is the perspective of Indonesia on the progress to date with the AEC? And how do you see the changes in the Indonesian economy that will accrue as a result of implementation of the AEC? Thank you, Rajiv. I thought it was a sequence, so, from sequence. Well, do we Indonesia see it? Is there a problem? Huge problem. Why? Study shows about 80% of Indonesian understand ASEAN, but only less than 5% knows about AEC. So is there a problem? Yeah, when there is less than 5%, of course, there's a problem. But what is going to happen? Like Secretary Domingo says, what happened by January 1st, 2015, nothing, because 99.6% of the tariff is zero. So what does Indonesia see about this? Well, this is my personal opinion, does not reflect probably my opinion of my colleague ministers here on the stage. Indonesia sees that the robust growth of middle class where the number says the people that earn about $3,000 to $5,000 by Nomura security reach $140 million. This is three times the size of middle class in the Philippines, five times the size of middle class in Thailand, about six times the class of middle class in Malaysia. Why 3,000 and 5,000 is important? $3,000 combined with the wife around 5,000 means second televisions in the household. $5,000 means a first car in the household. And because of that, you look at the number. If you look at Japan, every thousand numbers, 582 cars. In Thailand, which is we are going to be like Thailand, it's 169 cars per thousand people. Do you know how many cars in Indonesia? 40 cars in a thousand. What does that mean? We're going to grow four times just to reach Thailand. What does that mean? That means Jakarta traffic will be much worse than what it is today. So by the way, what does that mean for companies like Mitsubishi, like Toyota, like Daihatsu, like Suzuki? They double the number. So Mitsubishi cars double the number, Toyota double the number, Daihatsu the capacity of Daihatsu in Indonesia by 2017 is bigger than Japan. Honda double the capacity, Suzuki more than double the capacity. The one that is not investing in the country is Mazda. It's their fault, it's not my fault. So this is the way I see it. So Japan, in the first wave of industrialization in the 70s, 80s, and 90s, is they come to Indonesia to get cheap labor. Take the goods for developed market. Today, Japanese come to Indonesia for survival to take our robust middle class. So this is what I'm going to see. So what happened with ASEAN? So now, Indonesia right now seems like giving its market. But we've been doing this for the last four or five years. But I see this as a change because the investment is heavy. Well, before this, this is a good friend because I was an Indonesian ambassador in Tokyo. When I came to Tokyo, the realizations of Japanese investment $715 million. When I left $4.7 billion, not because of the ambassador, but this is survival. Because of that, Indonesia transitions now from market coming in because the robust middle class suddenly changing to be a source of production in the region. So now, listen Cambodia, listen Malaysia and Philippines. I'm exporting the traffic jams from Jakarta, voila. That's my take, Rajiv. Thank you. If I could turn to you, senior minister Chantel, and get the Cambodian perspective. In particular, I want to ask about the ASEAN free trade area implementation in Cambodia. And what is the impact on your country? And what are the positives? What are the negatives? What is the reaction of stakeholders in Cambodia to the Aftar? Thank you very much, sir. I think one of the sets, I think the main goals are set up to 99% of the tariff lines are to remove from zero for Al-Yat-6 and put it on a new member, the CLMB, which is 98.7% reduced to zero or to 5%, but by 2050 it's all zero. So for Cambodia, I'm a small open economy, we will benefit from this BSE. Because if we look for the single production base, we are located in the heart of ASEAN. We are the center of gravity for ASEAN. So you want to set up an operation to Cambodia, we're there, we're ready. Our investment law is very generous. We provide the most generous incentive investments to investors. Very friendly government, so we definitely benefit from EAC. Now, the issue here is that, oh, you've got to lose all the job. People have come to the free movement of labor from ASEAN to Cambodia. I doubt it, because we're not going to get the doctor that can pay well in Singapore to go pay $1,000, but you get $10,000 in Singapore, for example. The problem for us may be reverse brain drain, that our people, the skill level might migrate to work in Singapore or to work in Thailand. So that's the issue that we have to be aware of in Cambodia. So as a result of that, we continue to upgrade our education, we're going to move to a more vocational training, more and more, because there's a mismatch between the skill labor that demand by a private sector and the people that we produce from our university. Everyone wants to be a Ph.D., master degree, and then the culture of ASEAN. The parents do not want their kid to go to vocational school. They want their kid to have a bachelor degree. So never had to keep the mindset that that is the issue that Cambodia is facing today, short of skill labor. But overall, I think we've grown in benefit from the single production base, people by our location and our openness and our investment law that we provide to the investor. And again, we do not restrict any ownership. We talk about services, Secretary Mankhan talked about the violence of banking, telecom, Cambodia, a law of order to own 100% banking license, 100% telecom sector, insurance, other culture. Every economic sector in Cambodia is open to the same. There's no alien business law in Cambodia, that this has been changed between a foreign investor and an over-investor. You ought to be equal. Thank you, great. May I turn to Malaysia next minister, Mustafa Mohamed. If you could give the Malaysian perspective on the AEC progress to date, and what are the remaining challenges from the perspective of Malaysia? Firstly, we look forward to hearing from our private sector colleagues. There's five of us here. We are half of ASEAN in this room. That goes to show how powerful this WF in Manila is. Or how powerful Secretary Dominguez. Thank you for bringing us together. I think I would like to look at the domestic and the external perspective. Domestic will be in each individual country, how far we've gone, and what more needs to be done. As I said in an earlier session this morning, there are two perspectives. One is the private sector, the other is government. From the government side, we've been pushing hard, there's been some progress. But of course there are gaps. But if you talk to people in the private sector, they would tell us, ah, you've got a long way to go. We are facing so many problems. So there is this issue that we need to grapple with. One, the government, all of us are saying we have made progress in terms of good services. Of course we recognise we've got some way to go. But as you talk to the private sector, by and large they're quite negative. So there's a lot of work to be done in each individual economies and also at the ASEAN level. For us, we have benefited a great deal. We have a number of Malaysian companies which have, I'm talking about intra-ASEAN and intra-ASEAN investments. Put it this way, Malaysia, Philippines, Indonesia, Singapore, Cambodia, without ASEAN, where would we be? I think that's one useful way of analysing this issue. It goes to Myanmar. I think it's very telling what you see in Myanmar. If Myanmar would not be part of ASEAN, Myanmar will remain a close society. But when you go to Myanmar, you can see how exciting things there are. The airport is growing and tourism booming. FDIs, 4.1 billion last year, 2 billion or 1.4 billion previous year. So Myanmar is a good place to study with and without ASEAN. So that goes to show how important ASEAN has been in increasing the potential of various ASEAN economies. So that's where we are. And for us, I'm going back to intra-ASEAN trade and intra-ASEAN investment. We started with 15 years ago. 15% of trade is within ASEAN. Now it's 25. And I believe in the next five years, you go to 30. Probably will not go beyond that because you have China, a very big country. All of us, for all of us, China is the biggest trading partner. So there's been an increase in intra-ASEAN trade with the Philippines. I had the pleasure of reviewing our progress this morning with Second Dog, Domingo. We decided to go line by line. And this demonstrates a commitment to further increase intra-ASEAN trade. So there's good progress there. Number two, there's probably more progress in the era of intra-ASEAN investments. Sian Miguel from Philippines is in Malaysia. A quiet ExxonMobil. And our banks are here, CIMB and Maybank. ASEAN, of course, is throughout the region. We have Saim Dabi. We have in health care, we have in Singapore. And we have Singapore Company in Iskanda. We have Malaysian companies in plantations in Indonesia. We have Indonesia owning a few major hotels. In a big way in Malaysia. A number of top Indonesian corporates have bought Malaysian hotels. So this is something that... As I say, we have to look at where we are now, say 30 years ago. So in my view, there's been a lot of progress in respect of intra-ASEAN investments and intra-ASEAN trade. Having said that, of course, as I mentioned, I would like to repeat our private sector friends are telling us we've got some way to go. That's the domestic perspective. The other is the global perspective. How people look at us? We want to be... We have four pillars. Single production base, comparative economic region. We want to promote equitable economic development. We want to integrate into the global economy. So those are the four pillars of ASEAN. So it is important also to look at that perspective. Let me just talk only about one, which is making ASEAN as a single market and production base. And that's happening. Many of you here have got operations in... Mitsubishi has got operations in a few ASEAN countries. And there is this supply chain. Some companies are in Malaysia. We had what we call the ASEAN Economic Minister's Roadshow last year in the States, LA and San Francisco. And we were given an example of Mattel. Mattel is a toy company, American company. This company has got operations in Thailand, Indonesia and Malaysia, and they complement each other. So we are being seen as a single market, the production base. And this external dimension I think will be further enhanced as we achieve a closer economic integration. ASEAN, in my view, will become an even more attractive production base for many multinational companies. Thank you. Thank you. If I could turn next to Senior Minister Chihiro. Could you kindly give your perspective from the Singapore point of view about the progress of AEC and the benefits that Singapore sees coming from the AEC agreement? Certainly, Rajiv. But first let me say that I was particularly attracted to Minister Lutfi's comments. And I scanned the room, especially when he talked about exporting traffic congestion to other parts of ASEAN. And I could see all my Singapore compatriots looking very worried. But I think the larger point that Minister Lutfi was trying to make, and especially when he made the declaration that comes 2015, what is going to happen? Nothing. It really suggests an important perspective, which is that I think the ASEAN member states have come together and made tremendous efforts to ensure that we are able to realize the vision of a single market, single production base, which Minister Mustafa also talked about. But there is one area of challenge that I think is an area that is also an opportunity if we are to fully realize the idea of ASEAN economic community. And it relates to the whole topic of ASEAN connectivity. When you talk about making sure that there is really free flow of goods and services, ASEAN connectivity is central to this. And single market production base is only one of the pillars of the ASEAN economic community. There are three other very important pillars. For example, we would also like to see equitable development across the whole of ASEAN. And you need connectivity to achieve that. We would also like to see the region becoming very, very competitive. In order to achieve that, we need connectivity. And another very important pillar of the ASEAN economic community vision is the idea that we want to be a globally plugged in region. To achieve that, again, we need connectivity. So I thought I would perhaps spend a little bit of time talking about the importance of ASEAN connectivity and what are some of the ways in which we can try and achieve this because it is so central to the vision of a successful, effective ASEAN economic community. In fact, there is a master plan for ASEAN connectivity that has three key priority areas. One is we need land connectivity. It's OK to have more cars and more vehicles, provided we have the roads to service them. And this is one aspect. Another very important aspect is that we also need rail connectivity. And so land connectivity as part of ASEAN connectivity is one area that has got challenges. But I also think tremendous opportunities, which I will say a little bit more later. Very important aspect of connectivity is air connectivity. And I think later on, Rajiv, I think we can expand a little bit more on that. But let's not go too deep into that. A third aspect, I think in today's world, given the kind of technological advances that we are seeing, broadband, cyber connectivity is another very important area. So I think three major pieces in this whole issue and topic on connectivity. What I think it means for businesses is that when you think about the large scale and scope of investments that will be needed to achieve that connectivity, it spells to me opportunity. We would like to be able to bring in the resources and expertise of the dialogue partners and also, of course, the international financial institutions. I think yesterday, in the private sessions, we had a very useful discussion on what it means to crowd in private investments because of the tremendous amount of liquidity that is available. And at the same time, the infrastructure development needs are so vast in our region. So that is another area of opportunity. If I may just sum up this part of it by saying that where the ASEAN connectivity is concerned, I think there are some low hanging fruits which have already been achieved. There is, in fact, in this master plan, a specific set of measures. And if you look at the number of measures that have been completed or implemented, I think we've gotten to about 70%. But those are really the low hanging fruits. There are the more challenging ones, which I think we can spend a bit more time talking about later. Thank you. Thank you so much. That's very, very helpful input. Now we've now heard from the five ASEAN ministers. So I think it's time now to get a private sector perspective. So we'll turn to our private sector champion on our panel today and ask you to represent all the private sector views. But of course, you're representing the views, particularly of Japan, one of Asia's two big economic superpowers. And since Prime Minister Abe came to office, we've seen that he's very much engaged with the ASEAN region. He's managed to visit all the ASEAN countries in the short time that he's already been in office. So it's really a signal of the great commitment of Japan to ASEAN. And we also see a lot of investment flows coming from Japanese companies to the ASEAN region. So I wonder if we could get your perspective as the chairman of Mitsubishi Corporation, which has evolved more from a trading house, now much more into an investment focus in terms of your activities, and get your perspective on ASEAN. How do you, as a Japanese business leader and chairman of Mitsubishi Corporation, see that ASEAN looks, in terms of attractiveness of investment, compared to other emerging market regions? So if you could give your comments on how you see the opportunities from your company's perspective in the region. Rajiv-san, thank you very much for your introduction. And I personally feel it's a very tough work to speak. Besides, my position is the center of the schools. And I myself am a personal businessman. And frankly speaking, ASEAN is a very, very important region for Japan. As Rajiv-san explained, recently other administrations has focused on the partnership with ASEAN. And he visited all of ASEAN countries in 10 countries within one year, and ending up with ASEAN Summit in Tokyo. And he had a very good meeting with the ASEAN prime minister and president in Japan. And that's very good, good for our businessmen and to encourage our business in Asian countries. And maybe you know, say, in ASEAN, our company Mitsubishi Corporation has 24 offices in 10 countries. And already, $10 billion US dollars we have committed for the investment. That's a very, very big investment. And as Rajiv-san explained, it used to be Mitsubishi Corporation is a trading company. Trading, as of the time, and all this, we are the so-called trading company. And however, now, trading profit is 20% to 30%. 70% to 80% are coming from the investment. And everybody said, now you are changing your business model from the trading company to the investment banker. No, no, no. We invest not only money, but also human resources. We send more than 200 CEO to the 600 subsidiary companies throughout the world. And how to add the value for the investment companies, that's very important. And not only in Japan, but also, say, maybe now there's so many investment in ASEAN countries. And therefore, there are so many people. Japanese Mitsubishi Corporation people are working in the ASEAN countries. Therefore, it's good for me to visit ASEAN countries to have a meeting with our staff working in those countries to communicate to each other. Talking about our Mitsubishi Group companies, Mitsubishi Motors or Mitsubishi Electrics, Mitsubishi Bank, so many Mitsubishi Group companies, then everybody here now, Mitsubishi Corporation is the holding company of the total Mitsubishi Group companies. No, only one independent trading company is to be. But of course, we are communicating to each other. But in total, 28 Mitsubishi Group companies. However, we are working sometimes with other groups and sometimes other countries. And that is very important, particularly from now on. And the business is getting more global and global. And we have 200 offices in 90 countries throughout the world. And that's very, very important. Therefore, we can collect the information throughout the world what is changing of the policies or the changing of the economies and so forth. And also, we need a very reliable partner country by country to communicate to each other. In that sense, in Asian countries, we have so many intimate, reliable partners country by country. And that's the reason why I'm very happy to be here this time and to have opportunity to communicate to each other. This is the basis of our investment and under such circumstances. And ASEAN is very, very important, particularly for future. And particularly next year, 2015, AEC will be concluded. This is a very, very good trigger or opportunity to strengthen the relationship connectivity. That is very, very important. ASEAN's economy is maybe the number one in the world right now. Latin America, particularly West Coast, is also good. And I myself as chairman of the Japan-Columbia Economic Committee, and I heard from them, they have so-called Pacific federations and the Chile, Peru, Colombia, Mexico. Those four countries are seriously watching the ASEAN countries, how to develop the business together. And quite recently, this is one example, we established some companies in Malaysia and together with Colombian companies. Japanese and Colombian companies established one company, joint venture in Malaysia. This kind of business model will be increasing. Therefore, our position is how to give those global information to ASEAN countries. And that's very important. Besides, our role is particularly financial support and also investment business and establishing new business joint ventures, country by country. But for that purpose, the important issue is the government and government, those ASEAN countries in Japan, should intimate. In that sense, our Prime Minister Abe's policy is very good for us. And under such circumstances, ASEAN is good. And also, companies, government and government discuss how to change the regulation and rules each other. This kind of concept is very, very good for us. We are very much prepared to give any suggestion and any idea to the government and also to our partner countries. Therefore, under such circumstances, I do hope ASEAN countries' economy is now going up. We are very much prepared to support from the financial viewpoint, from the technology viewpoint, or from the environmental viewpoint. And those are very important in the global. Thank you very much. Thank you so much for that private perspective. So we've heard from Chairman Kojima-san about the importance of the implementation of the AEC. If I could again turn to Secretary Domingo and get your sense of the benefits of the AEC in terms of the liberalization of cross-border investment flows from the Philippines' perspective, there is a sense of, I guess, anticipation, at least from Japan, that this liberalization will help investment flows. Are there concerns in the Philippines about the liberalization of the investment barriers? Yeah, there's always concern, in particular, the SMEs. But I would say that, in general, liberalization has worked very well for the Philippines. It's definitely made many of our sectors very competitive, not only regionally, but globally. And it has allowed us to outperform in many sectors. Many of our industries still have to be improved, but many of our industries are already globally competitive. In particular, electronics are ICT. We are a very big ICT center with over a million people now doing that outsourcing work for the world. We are competitive in high-end garments. We are competitive in many other things, furniture, et cetera. Now, so we welcome, actually, the continued liberalization. In fact, in the enabling trade survey of, I think, the World Economic Forum, we ranked very high. I'm not mistaken, eighth globally, in terms of the barriers. We are one of the countries with the least barriers to trade. We will continue to take that position. But we really need to address the concern of the SMEs. As mentioned earlier, there's very little awareness of ASEAN at the ground roots level. And since we're now tackling the more difficult portions of the free trade agreements, not only for ASEAN, but also in WTO and other bilateral arrangements, they're becoming more ambitious in their objective. So as you get into the more sensitive parts, you really need much broader support from the population, and in particular, the business population. And the bulk of that support will be from the SMEs. So without the political support from the SMEs, it will be difficult to master the political will to move very aggressively on the free trade agenda. And that's why we have to make a lot of changes in the way we do free trade agreements so that a lot of the benefits can be felt by the SMEs. Because right now, if I'm a small company in the Philippines, one thing to export to Thailand or to Indonesia or to any of our neighbors, to avail of the free trade agreements, there's voluminous work involved, including the rules of origin, proving the rules of origin that you comply with them, et cetera. So the rules and regulations are really meant for big companies. They're not designed for small companies. And so we need to kind of make changes to ensure that the SMEs can participate in an easy manner. We have to make the rules very simple for small companies so that they can feel the effect of the benefits of a free trade agreement. Without that, I think it's very hard to push very aggressively on the free trade agenda. Thank you. If I could turn now to Minister Lutfi again about this issue of investment. Indonesia has been seeing large increases in foreign direct investment flows in the last three or four years. But how do you see the AEC is going to change the landscape? And what are the challenges you're facing politically, domestically, in terms of liberalizing the investment landscape further? Well, as used to be the chair of the investment board, so I have this experience. I left for Japan for three. So I left Jakarta after the investment board, went to Japan, came back. I look at it, and I go like, oh my god, this is like a bad dreams. Whatever I did in 2009, I'm doing it again in 2014. So the question, do we have a problem with investment coming from foreign countries, OK? The number shows we don't have a problem. But then my Japanese investor is very detailed. How come in the past negative list looks like this, and this one doesn't look like that, OK? So to be honest, this is the largest democracy in the world. People say India is the largest democracy. But Prime Minister Modi will be elected by 500 people in the parliament. The second largest, they said, the United States. Obama was elected by 58 million people. So Silo Bambang Yudhoyono was elected by 73 million people. So this is the largest democracy. And with that, like in Japan, things move very slowly. And I do not want to be lectured at parliament of what do I need to do to protect the country. But it's a small times that they realize right away. And the time leaps is getting closer and closer. For example, 10 years ago, 2005, only 15 million people flies in Indonesia, OK? Five years ago, that number tripled to 45. Now, 90 million people fly. So what happened? Making Jakarta Sukarnohatta Airport with the capacity of 16 million people now is bigger than Changi Airport with 60.8 million people traveling to Jakarta International Airport. Making Jakarta International Airport the scariest airport in the world, OK? So what happened? Last five years, between Lion Air, Garuda, and this local scarier, bought probably 600 aircraft. Two years ago, my predecessor, Gita Wiriawan, had a problem with a trade deficit. Why? Because we bought so many airplanes. And this is deemed to be part of the consumption. So then, we have to hire international pilots. These pilots come from European, southern European. So if you go with Lion Air, you can hear. The English is different. The Indonesian is completely different. So five, 10 years ago, we have a problem hiring international pilots. Today, we don't. Why? Because we have more airplanes and pilots. So this is what's happening in the country. Like my colleague from Cambodia also happened. The services is an issue. So the first part, I took this job Valentine's Day. It's Valentine's Day. So the third day, the doctor association came to my office. And I said, by 2015 January, a lot of doctors from Singapore, Malaysia, and Thailand will come and swamp the Indonesian. The number of doctors and patient in the country is one to 1,000. The number of specialists is like one to exponentially 1,000. So this is crazy. So I asked, professor, where are you coming from? From the city of Makassar in Sulawesi. So he took four patients at one point. So they just sat and put the recipe for five medicine. So one of those might get the disease. So I said, how much do you got paid? He says, $300,000, roughly by $30 bucks. Specialists in Singapore cost $300 Singapore to $500. So I told the professor, would it be reasonable for Singapore doctors to learn how to speak Indonesian and will go to city of Makassar and left the house in Singapore? I'm afraid you're going to learn how to speak English and start practicing in Malaysia and Singapore. So I'm going to swamp that with that, too, minister Theo. So it's just a small realization. So do I have a problem with cross-border investment? We may retract more likely in the services. But trust me, this is a democratic country. It takes 15 years to clear Rappongi Hills, right? Kacau sama. That also happening in the country. But the realization is getting sooner and faster. So like I said before, nothing is easy in Indonesia. But then again, nothing is impossible. So we have no issue. There is issue, but the issue will become solved frequently and faster. Thank you. Minister Theo, if I can turn back to you now. We heard a little bit about the rapid growth of aviation in Indonesia. So I think it's a good point to drill down a little bit into some of the detail on the ASEAN Open Skies Agreement that's due to be implemented next year. How do you see the challenges around that and the benefits as well, particularly given Singapore is such a major global aviation hub? I was just reflecting what it would mean when the congestion is exported to Singapore, as well as medical professionals from all over the region start practicing in Singapore. It's a lot to chew on. Perhaps turning to a topic that you wanted a specific comment on on air connectivity. Earlier on, my colleagues had highlighted that the demand for air travel in our part of the world and air transport in our part of the world is going to grow very, very rapidly. And this is really driven by the fact that the growing middle class in Asia is going to exceed the size of the middle class in North America and Europe combined. And it's not going to take a very long time for this to be realized. The estimate is 2030. I would say plus, minus, three to five years. And when you think about 2030, it may sound like a very long way off, but a child that is being born today will not even be eligible to vote in any country by the time we get to 2030. So that just sort of gives you a sense of how, and those of us who have children know how the children grow very quickly. That's actually not a very far timeline at all. And there's one thing to share. And if you think about just 2014 specifically of the estimated 800 million new passengers on air travel this year, about half of them will originate from Asia. So that's very significant growth potential for aviation in our part of the region. And if we look at ASEAN specifically, the middle class population by 2030 is, again, going to be about 50%. And we're talking about 2 thirds of them living in cities. So in an urban setting, and in other words, interested to travel and probably able to afford air travel. And so that's the kind of backdrop that we're operating again. And the ASEAN urban skies, which is coming about in 2015, which Secretary Domingo also talked about, if we want to have a sense of what that's going to mean for ASEAN, the EU single aviation market is possibly a reference point. If you recall, the EU single aviation market came about in the 80s and in the 90s. And if that's anything to go by, we can expect in ASEAN a multi-fold increase in the number of flights and direct city links. Minister Lutfi talked about the very large number of airplanes that Lyon has ordered. Today, I mean, if we are very honest about it, there is a fair bit of overcapacity, especially in the low-cost sector. But I think it is a matter of timing. It causes some pressure on the business's concern. But the demand is likely to grow. And in order to satisfy the traveling preferences of the public, as well as for business needs. So again, back to the EU single aviation market, multi-fold increase in number of flights, direct city links. And of course, with that, I think you can also look forward to reduce cost of air transport, whether it is for passenger travel or whether it is for freight. And I think it goes beyond just this idea of a single aviation market being all about demand for air travel. It is also that there has been tremendous effort made in harmonizing the technical regulatory requirements of our region. And I would say, therefore, it then begs the question, what would be the challenges and what would be the opportunities standing in the way of the growth? I think challenges, a very simple challenge that we all face is airport capacity is really up to this. And this is true of many airports in our part of the world. So there is a lot of need as well as opportunity to invest in airport infrastructure in order to grow the capacity. I would also say that beyond just investing in airport infrastructure and making the slots available for air travel, another very important area of opportunity, which I think deserves greater attention, is how air transport agreement can be further liberalized. As a bloc, I think ASEAN has made tremendous progress. We have an air transport agreement with China. I think that is a very significant development. It would have been a bit harder for each one of us to get all those air transport agreements done. But as a bloc, we've been able to do it with China. In the works, air transport agreements with Japan, Korea, and possibly also India and developments in India are particularly encouraging from that perspective. We hope that we will be able to secure further momentum on the air transport agreement. And something that is also possibly a very exciting development. Today, when you think of air transport agreements, very often it's between countries. As a region, we have been able to achieve agreement with China and then some other, perhaps along the way. But there is potential for a region to region, a world first, region to region air transport agreement. And that is between ASEAN and the European Union. Just a few months ago when Singapore held the aviation summit, this topic was raised. There is definitely interest on the part of ASEAN member states. And we also see growing interest amongst EU states. It's not easy. It will take some time to materialize. But that, again, is potentially something that could be a game changer and air transport agreement between EU and ASEAN. So that's something that is worth paying attention to. Thank you very much. If I could turn to you, Senior Minister Chantel, to talk about other aspects of connectivity from the Cambodian perspective in terms of other forms of infrastructure. Where do you see the priorities in terms of Cambodia's priorities for connectivity? Thank you very much. Just a little mention about connectivity. It's important for ASEAN if you want to EAC to be successful. And in ASEAN's Connective Investor Plan, there's one major project in Cambodia, a flagship project called Singapore Kunming Railing Project, that connects the train from Singapore, Malaysia, to Thailand, to Cambodia, and to Vietnam, and then to come in China. So we're doing our part right now to connect first, to connect Cambodia Railway to the state railway of Thailand. So at least good. And people can travel from Singapore, Malaysia, Thailand, and to Cambodia. That's the first part. The second part would be the second missing link, that connects Cambodia to Vietnam. Now, the ASEAN leaders agree, committed in 1995, to get this missing link done by 2015. But today, we have not realized that project, because of funding. So Cambodia will not, obviously, cannot invest alone, $700 million for that missing link. And if they only want to train per day, so economically, it's not good for Cambodia to invest in the $700 million projects. But as an ASEAN, we should look into, look, who will benefit from all this? All the way from Singapore to China. So maybe each country that benefit from this, will have to work together with Cambodia to contribute to build this missing link, so that they can ship good all the way to China. But for Cambodia, we also upgrade our deep sea port in St. Louisville. We just built a new container port along the Mekong River. So both the deep sea port of St. Louisville and the Mekong River port has been built. We invest heavily in the road that connecting Cambodia with Vietnam, Cambodia with Thailand, Cambodia with Laos, is part of ASEAN highway network system. So we're doing a lot, but still not enough. So we need the private sector to participate in major infrastructure, i.e. build the major highway, linking economic pole of Phnom Penh, two single pole of four lane highway, for example, to our deep sea port. So we encourage the private sector to participate in this PPP project and infrastructure in Cambodia. Power plan. We also invest heavily in power plan on hydro, but again, it's based on the participation of private sector. We do not have enough funding to do our soul. So we rely on the private sector to participate in infrastructure in Cambodia. Now the issues, not only the physical infrastructure, in the master plan, we talk about institution connectivity, the legal framework, you have a road, you have a railway, but if we do not agree on the cross-border agreement, we still cannot establish as of today the ASEAN single window. I don't think we can get it done by 2015, and we try, but I think we're gonna get it done. So we gotta start with a national single window first, or cannot get it done. For example, let's take one issue with custom. We can send our custom from Cambodia to sit on the Vietnamese side to work there for single window, single stop. But the Vietnamese custom cannot come to Cambodia because the law in Vietnam does not allow them to come to work in Cambodia, okay? So unless that change, you're gonna have a problem. The bottleneck is the software, not the hardware. Hardware is one side, but the software is a major issue that ASEAN leaders need to work together to improve that institution connectivity, or else all the good highways and the ports will not work. Thank you very much for those comments. I'm gonna open this up in a moment to questions from the floor. So if you have a question, if you could raise your hand. But while you're thinking of your questions, let me ask minister Mustafa Muhammad to give some thoughts on the linkages between the AEC and other trade liberalization initiatives in the Asia Pacific. There's been obviously a lot of focus on the Trans-Pacific Partnership and also the regional comprehensive economic partnership as well. How do you see the links between these initiatives? How important is the AEC as a foundation block for some of these other trade liberalization initiatives? Let me go back to the preceding discussion. Give me a minute or so before I move to the question of AEC. Two points. One is the development of border towns between, say, Thailand and Malaysia, Cambodia and Thailand and Malaysia, Singapore, Malaysia, Brunei, Philippines, Malaysia. This is something that's gaining momentum. And in our experience, border towns are booming. For example, in the north between Malaysia and Thailand, we've got this, we're building a big facility, a bigger facility to facilitate travel and goods and services in Malaysia and Thailand, spending more than 100 million dollars between Malaysia and Singapore, the high speed rail, which would be a game changer. And between Brunei and Malaysia, we just opened a friendship bridge between Philippines and Malaysia. We have been talking about air connectivity and seaports. So that's something that I would like to share with you that border towns are growing and this is getting support from various national governments. Number two, I think there's a change of mindset that there was a time when we were competing with each other, cut through competition. Now more and more it's about collaboration. Say five years ago, aviation, we all want to be hubs, Bangkok, Singapore, Kuala Lumpur, Jakarta, but now we are big, all of Manila, all of us are becoming hubs because growth in air travel, beauty class. So that was a time we were competing. Now because the market is growing so rapidly, we are talking about collaboration, collaboration with the Malaysian Singapore and in various areas. So I think I thought I would like to share a very important point. One is the growth of border towns. Secondly, this ASEAN mindset is coming in strongly in the form of collaboration instead of cut through competition. Next, let me return to your question on ASEAN. This issue of ASEAN centrality which is very important to us. We have five ministers here. Whatever we do, we want to preserve the importance of ASEAN. So when we talk to Japan, we started with what we call ASEAN plus one with Japan, China, and Australian user in India. We've done that. Now we're moving into what we call RCEP. And this is, we have finished four rounds. We are going bigger. So this RCEP is an initiative to further enhance the benefits of all the trade agreements we have signed. So we are committed to free trade. All of us, we have benefited a lot, benefited a lot from AFTA, which is ASEAN free trade. We've benefited a lot from what we call ASEAN plus one. Now we're moving one stage further, which is RCEP. And this is an indication how open we are, how important trade is. And finally, four of us are involved in the Trans-Pacific Partnership. We finished a day ago in Singapore, two-day meeting, which is Malaysia, Brunei, Singapore, and Vietnam. And we see this. All these are being seen as complementary to whatever we have. So we have ASEAN free trade agreement. We have ASEAN, Japan, China, what we call ASEAN plus one. We have RCEP. We now have Trans-Pacific Partnership. All of us, out of the view that this will further strengthen ASEAN. I mean, it is very, we are confident that all these initiatives will further strengthen ASEAN, to make ASEAN an even more attractive base for production and also will become more competitive. Thank you. Thank you. And if I could ask Chairman Kojima-san, for Japan, the TPP has now become a very important part of the reform agenda. How do you see the linkages in terms of TPP and the AEC working together in terms of helping your overall access to markets in the Asia-Pacific? Well, TPP is very, very important. I always communicate with the government. We should conclude the TPP as soon as possible. And also, FTA is also very important. And in that sense, AEC is also very important. And this will be very good for the economy for each country and besides globally. That is my idea. Then talking about the investments, I'm just looking for what kind of investment we did and what kind of investment is related to the PPP. And we invested, first of all, resource investment, material resources, and energy resources. Those are very important for Japan. Japan doesn't have resources. That is number one. And then number two is the investment for the manufacturing industries in Thailand and Indonesia and some of the automobile industries we are involved in. And therefore, manufacturing industry is very, very important. And besides, retail industries and super store or convenience store, now we are investing. Not only in Japan, but also the other foreign countries as well. But the very important investment is infrastructure investment. Infrastructure is electric power and water business and also the railway business. And sometimes port of facility we are requested to invest. And so many infrastructure business is now coming out. And however, as far as infrastructure business is concerned, we need support from the government of each countries. And besides that, the Japanese government and those countries' government have to communicate to each other. And the private company cannot resolve every problem about infrastructure. But the investment is still there. And also, from now on, financial investment, business, finance business, and also how to develop the cities and hospitals and so forth. And therefore, from now on, investment is changing. But all those investments are related to the Asian countries. Therefore, what's the best way is the TPP or AEC and so forth. But we have to analyze what kind of risk, what kind of benefit for those countries. This is a very, very important role we have to play. Thank you so much. I'd really like to now have some questions from the floor. You've got this wonderful panel here. You've got access to some of the key ministers in ASEAN. So please do ask questions. We have one question here first. Is there a mic that can come here? Maybe just speak, because it's a small room. I don't know. There doesn't seem to be. I don't want to go and spoke about all the rules are for the big companies. I come from a reasonably large company. We have investments across. However. And therefore, that paperwork to cover issues with dealing with that paperwork, even for the larger corporations, is very, very important. And the third thing is, that should be regulation, because communication on various things which we make in different countries happens to be very different sets of regulations. How do we become to one common standard? And therefore, specialization, for example. That could really unlock the potential of the ASEAN. And I really want to hear your thoughts on that. Does any panel member want to pick that one up? Minister Lutfi, maybe, would you want to comment on that? Well, wisdom. But nevertheless, this is like a company going into a tender. Friends, they know each other. But when they go to a tender for hearing or for clarifications, they sit on different desks and seem like they don't know each other. This is what we're facing. But, like I said, the trend is going to be united. What Minister Teo says about connectivity, I think there is a path. There's a silver lining in it. Right now, Indonesia is the stubborn kid in the system. Why? We have right now about 90 airports. We are opening five. We're building another 143 airports. And by the way, this is all Indonesian-made. It will not be international-made. So we will be the largest constructions of airports. And this is, so next time I'm going to go to Cambodia and start selling airports. But now the issue is very simple. I asked, this is Indonesian versions of Tony Fernandez. But this is very humble. Tony owns a soccer team. This one does not own anything. His name is Ruzdi Kiranada, president of Lion Air. So I asked him, Ruzdi, you ordered 279 from Boeing. You ordered another 250 from Airbus. So where are you going to park the airplane? He looked at me and says, boss, honestly, I have no idea. So now he's going to buy more. My thought is, my immediate thought is, and this is before I took this, I'm a relief driver. I'm supposed to do something else right now, retiring from the government. So after coming back from Tokyo, I asked him that question. My thought, before taking this job as minister of trade, my thought was, why don't instead of having these airports across the country, why don't I get his airplane to stop in Cambodia, in Siam Riyadh, some in Luang Prabang, in Laos, maybe somewhere in Chiang Mai or Chiang Rai, start flying their own routes inside? Because I don't think Ruzdi Kiranada can be beaten by anybody in ASEAN. My truly believe. So one day, one day, I believe minister Thio, we're going to sit down. Instead of having this fifth freedom, fourth freedom, whatever freedom, just erase this. Just say that it is airport, just like a parking lot. So it will be toward that way. It may take a while, but it will go toward that way. And this is will the same with investment also. Right now, Indonesia also the stubborn kid in the system right now, because we are very hesitate to do the FDA and everything like that. For one reason, because we are market right now, our automotive in 2017 will be amounted to be $10 billion. That $10 billion today will be the second largest export from Indonesia after crude palm oil. Can you imagine that? Suddenly, I'm exporting a high value technology with absorptions of developed skilled labor as automotive. Second biggest export. So after this, I want to know why I cannot sell cars at minister Thio's house. Why only police car in the Philippines using Kijang Innova, Toyota Innova. I want him to drive my Toyota too, to make sure trade agreement with this country to be efficient. So now Indonesia from a stubborn kid will be an aggressive kid and maybe abrasive as well. So it's just a matter of time. Watch everybody, stubborn kid to be aggressive kid. Thanks so much. Another question here. Thank you. I just heard about 2030 and all the things on connectivity. I didn't hear anything about talent, about people, the skill development. Because you have a declining population in Japan. You've got a big amount of population in the Philippines, Indonesia. What is the strategy to bring it all together to leverage people and the strength of the talent that we probably have in this region for looking at competing with the rest of the world? And how do you train more of Japanese in the Philippines for supporting Japan in the future for services? And what do you do about leveraging this region for South-South trade, Latin America, which is the market as a strategy? We talked about this air traffic connectivity. 60% of the Emirates' airlines' viability or traffic today is actually people going from India to the rest of the world. Through Dubai, of course, and in transit. So I'm just wondering what is the two areas, one, of course, of the talent, and otherwise, in terms of what are we doing about Asia and strategy to compete with the rest of the world as one entity, and especially Latin America, for example. Secretary Amingo, would you like to comment about the talent? Yes. Actually, I can only talk about the Philippine side. And I think Mr. Kumar is with the ITBPO sector here in the Philippines, a big player. We've actually done a lot of work in terms of making structural change in terms of the education and training of our people. For example, we passed a law that completely restructured the primary and secondary education in the Philippines, where we brought it now to international standard, what we call it K-plus-12 program, kindergarten, plus 12 years of primary and secondary. And that's being implemented through 2017. So by 2017, we'll be fully compliant with that. We've increased the education budget by over 50% over the last three years. We've initiated a lot of new training programs under the government. And they're very nice programs. The TESDA, that's the training organization of the government, is able to train about 1.5 million people every year. And many of the programs, including the training for the ITBPO industry, the curriculum was developed by the industry itself. But it's being funded by the government in terms of training. An example I'll mention is for the electronics industry, we have training programs that are embedded in the actual electronics producers, products producers. So they are trained in a factory that produces electronics products. And the government subsidizes that training. And we train thousands of people every year. And you know that it's a very successful program, because over 90% of those trained, when they get off the program, are immediately hired by the industry. So and then we also do that now for machining. We started for the machining and many other areas. So it's like this thing is telling us we have to stop. So it's a quick, quick, quick, quick. Just in a quick thing. We believe that there is no substitute really for the training and education of the human resources. If we want to bring people out of poverty, then the only way that you can level the playing field is by educating the people properly. Right. Can I just make a quick intervention? It's an extremely important area. And it so happens that I was having a conversation with Secretary Arsenio Balisacan, who is the man in charge of socioeconomic planning in Singapore, sorry, in the Philippines. And he said something that I think resonates with us also in Singapore. He said that the path to poverty reduction really boils down to two things. One, you need to do job creation. And a lot of what we are doing here is really trying to promote job creation. But he said a second thing, which was very insightful. He said, difficulty that we have today is that we don't have enough of a matching of the skills that are needed by industry and what is being produced by the education system. This is the experience of Singapore too. And even today, we challenge ourselves by asking whether our kids in the school system will have the skills that industry will need 10, 15, 20 years from now. And I think this points to one very important contribution that the private sector can make, which is that in the way we structure our education system, in the way in which we design the curriculum, private sector input is very important. You can't have education professionals just thinking about the future and what skills need to be imbibed in the people that are going through the system. You actually need people in industry. You need people who are in touch with the technology developments. You need people who understand what the shape of the economy in future, feeding back that input into the education system so that you can have proper matching of skills needed by industry and what education systems are producing. So I thought I'd just share that. I think that's really fundamental. I think we can squeeze in one more very quick question here and then we will probably have to start. That's very kind of you, thank you. I'm Jeff Lipman and I'm a member of the Global Agenda Council on the Future of Tourism. And listening to all of the discussion, and particularly the comments of Minister Lutfi on the potential for the generalization, as I would put it, of these reforms which are going to lead to larger movements of people. We have been working for five years on the idea of an electronic visa. You have the framework for that in ASEAN. If you don't move the people about, then you won't get the advantage of it. My question is, what prospect do you see for an e-visa-based solution system for moving people around the ASEAN region? That's a great question and relevant for the whole of Asia. Maybe I could ask Minister Mustafa Mohammed to comment on that. Well, it's just a matter of time. Everything has gone electronic now. So the question is, when do you want this to happen? I mean, for you tomorrow or now, yeah? Yeah. Ha, ha, ha, ha. So it's something that's on the cards. Many things, electronic, for example, on customs. We got this pilot project, what we call a national single window. And this is to facilitate movement of goods between ASEAN and Kanti. So electronic initiatives are already in place in ASEAN. And it's just a matter of time. We've been talking about this, I think, in Davos as well, in Jerudicia, about visa, electronic visa, and there are systems in place. In my view, to cut the story short, I think it's just a matter of time that these initiatives are embraced by ASEAN member states. Thank you. I'm sorry that because of the limited time and because we've got a back to back after this, I can't actually take more questions, much as I would love to continue this discussion. But they've been asked to conclude on time. So I'd like to end this session by thanking our really excellent panel. I would particularly like to say how dynamic this panel is. And I'm very encouraged by the enthusiasm that we see with the ASEAN ministers here. And I would like to also present each of you, and I'll only give one, but I'll give the others later, a book about the future of Asia. And I think in your hands, this future of Asia is in very, very capable management. So please thank our wonderful panel for that contribution. Thank you.