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Phase I of the LTB Initiative involves core research and compilation of qualitative and quantitative responses as surveyed from within each of the six business sectors. The outcome of Phase I are the six sector-based Preliminary Papers, intended to spark discussion at the LTB roundtables during the ABC Forum. CARI’s Research Working Committee and its Strategic Advisors worked closely with each of the six nominated Research Partners in generating the necessary material for these reports. This collaboration, led by CARI, represented the top management consulting firms, academic institutions and regional business sector leaders to provide insight for this effort.

LIFTING-THE-BARRIERS INITIATIVE: RESEARCH

Research Working Committee

RESEARCH DIRECTOR

Hong Jukhee, CARI, Director of Operations

RESEARCH & CONTENT DEVELOPMENT

Bernard Law, CARI, Research Coordinator

Gokul Radhakrishnan, CARI, Research Executive

Soley Omarsdottir, CARI, Analyst


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LEGAL & TAX

Elements of the AEC include the development of a single market region with easy free flow trading of goods, services, investment and transfer of skilled labour, becoming a competitive economic region and achieving integration into the global economy. Hence, strengthening key institutions to ensure good governance is also vital in ensuring an inclusive and sustainable economic development with AEC coming into in effect in 2015. With this in mind, there is therefore a pressing need for legal harmonisation and improvements in tax-related matters. Harmonisation of legal rules is the way forward as it can help to remove uncertainty, reduce cost, generate greater business confidence, and ultimately advance ASEAN community-building goals.

Issues discussed:

  • Creation of an AEC Tax agenda
  • Enhancement of transparency and certainty in the area of tax
  • Ways to facilitate legal harmonisation
  • Ways to bridge the gap between ASEAN countries amidst existence of different laws

Sector Champion

Co-Conveners:
Chew Seng Kok, Regional Managing Partner, ZICOlaw
Adrian Ball, Managing Partner – Tax, EY

Research Partner: ZICOlaw, EY

Moderator: Hanim Hamzah, Senior Partner, Roosdino & Parners (a member of ZICOlaw)


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FINANCIAL SERVICES & CAPITAL MARKETS

ASEAN needs an efficient integrated capital market in order to sustain its economic growth as it moves closer toward integration in 2015. However, it also faces challenges such as policy and regulation alignment, supervision and dispute resolution that threaten to derail such aspiration. It is therefore imperative that policy makers to come together in building adequate safeguards while ensuring the benefits are shared by all parties involved. The intention is to achieve significant progress in building a regionally integrated market where companies or governments can raise capital across ASEAN markets, investors are able to invest freely across borders, and banks can enter and operate across the region. On the surface these stated goals are an excellent objective, though the actual implementation is difficult considering complexities such as a multi-currency environment, significant disparity in development standards, and disparate fiscal & monetary policies among the ASEAN nations.

Issues discussed:

  • The need for a monetary union in creating an efficient integrated capital market
  • Creation of an industry-led utility

Sector Champion

Co-Conveners:
Nazir Razak, Chairman, CIMB Group
Piyush Gupta, CEO, DBS

Research Partner: Accenture

Moderator: Chin Wei Min, Asia Pacific Managing Director, Capital Markets, Accenture


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MINERALS, OIL & GAS

As a region that is undergoing rapid economic growth, energy security has emerged as one of the key drivers to achieve sustainable development in ASEAN. Today, resource-producing nations in this region are facing challenges in the areas of mineral, oil and gas due to a maturing resource base that affects their ability to reinvest in their businesses. As a result, striking the right balance between attracting foreign investment and promoting local champions has raised a key challenge for all stakeholders concerned.

Issues discussed:

  • Skills or expertise needed to successfully transition to a mature resource base
  • Role of government in ensuring a vibrant oil and gas sector
  • Achieving the right balance between domestic workforces and expatriate employees
  • Information sharing among industry players

Sector Champion

Co-Conveners:
Shahril Shamsuddin, President & Group CEO, SapuraKencana
Dr. Ilham Akbar Habibie, President Director, PT Ilthabi Rekatama

Research Partner: Bain & Company

Moderator: Dale Hardcastle, Partner, Bain & Company


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FOOD & BEVERAGE INDUSTRY

Food trade plays a significant role in the economies of all ten ASEAN Member States. Research shows that the removal of regulatory and technical barriers to trade would enable countries to ensure greater access to sufficient, safe and nutritious food and to address food security concerns across the region. With a growing middle class, rising incomes, and greater economic prosperity, the region is faced with increased consumption and demand. Harmonisation of food standards will accelerate the completion of ASEAN integration and help Member States to achieve their full economic potential. Many of the AEC targets have already been reached but the agri-food sector is lagging behind. By focussing on the ‘best buys’ and reducing trade barriers, the food industry believes there are many opportunities for short and long term success.

Issues discussed:

  • Challenges in the food & beverage sector
  • Mutual Recognition Agreements (MRAs) to reduce regulatory and Technical Barriers to Trade (TBTs)
  • Public-Private Partnerships

Sector Champion

Co-Conveners:
Pushpanathan Sundram, Managing Director, EAS and Principal Advisor, AFBA
Hendro Harijogi Poedjono, Director, Public and Regulatory Affairs, FrieslandCampina ASIA

Research Partner: Food Industry Asia (FIA), ASEAN Food And Beverage Alliance (AFBA)

Moderator: Dr. Bev Postma, Executive Director, FIA


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RETAIL

E-commerce would play an important role to integrate the ASEAN retail sector. High E-commerce growth rate in major ASEAN members indicates that more consumers are adapting to E-commerce. As E-commerce grows its share to the overall economy, its impact to the economic growth and job creation will be substantial.

However, the borderless nature of e-commerce creates a unique set of challenges. As a region with different economic developments, political systems, languages and cultures, there are significant obstacles in realising its potential. The inability to address these obstacles may prevent optimal economic growth, job creation and the integration of a strong AEC.

We frame our discussion on barriers such as gaps in technology infrastructure, implementation of law and taxation regulation and underdeveloped financial infrastructure for payment systems and data security.

Issues discussed:

  • Challenges of E-commerce in ASEAN
  • Technology infrastructure in facilitating growth of E-commerce
  • E-commerce law implementation and taxation laws
  • Logistics capability of ASEAN members

Sector Champion

Co-Conveners:
Dr. James T. Riady, CEO, Lippo Group
Arthur Tan, CEO, IMI

Research Partner: A.T. Kearney

Moderator: Geir Olsen, Partner, A.T. Kearney


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AUTOMOTIVE & MANUFACTURING

The economic integration of ASEAN through AEC 2015 is expected to enhance the regions’ competitiveness, create a level playing field and boost its role as a global supplier and market in the automotive industry. Other than natural market growth, government policy has also been, and will likely continue being a major driver of demand in the region. This has manifested into two distinct forces that are shaping the automotive landscape in ASEAN – (1) The Evolution of the ASEAN Economic Community (AEC) and (2) The Impact of Free Trade Agreements (FTAs).Despite these aspirations, there are still many hurdles that prevent players to enjoy the full fledged benefits of such integration.

Issues discussed:

  • Harmonisation of automotive technical regulations
  • Streamlining of customs procedure and distribution systems
  • Fostering of supporting industries and human resources

Sector Champion

Co-Conveners:
Alex Newbigging, Group Managing Director, Jardine Cycle & Carriage Ltd
Yeap Swee Chuan, President & CEO, AAPICO

Research Partner: Frost & Sullivan

Moderator: Vivek Vaidya, Vice President of Automotive, Frost & Sullivan


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