Phase I

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 NAF. 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

PROJECT LEADER
Hong Jukhee
CARI, Director of Operations

EDITOR
Tunku Zain Al-‘Abidin Muhriz
CARI, Fellow;
Institute for Democracy and Economic Affairs, Founder

RESEARCH ASSOCIATE
Soley Omarsdottir
CARI, Research Analyst

RESEARCH PROJECT COORDINATORS
Bernard Law
CARI, Research Coordinator

Gokul Radhakrishnan
CARI, Research Support

STRATEGIC ADVISORS
Paolo Borromeo
Ayala Corporation,
Head of Corporate Strategy

Raman Narayanan
AirAsia,
Regional Head of ASEAN Affairs and Government Relations

Dr. Kobsak Pootrakool
Bangkok Bank,
Executive Vice President


Prelim Aviation

AVIATION

The liberalisation of air travel in ASEAN will enhance the mobility of people and goods in the region and accelerate the pace of economic development. Game changing developments such as increased demand for air travel in the region, and low-cost airlines are the main drivers for the implementation of open skies policies in ASEAN. Despite the commitment of the ASEAN member states to open skies policies, there are still barriers to overcome.

Issues for Discussion

  • The aviation industry remains highly regulated despite regional commitment to open skies policies
  • Aviation regulatory framework is currently based largely on national interests, rather than regional
  • Lack of infrastructure in developing ASEAN countries has led to overcapacity of airports

Sector Champion

Co-Conveners
Tony Fernandes,
Group CEO, AirAsia

Emirsyah Satar,
President Director, Garuda Indonesia

Research Partner
National University of Singapore (NUS)

Dr Alan Tan, Director, NYU@NUS Dual Degree Program,
National University of Singapore

Moderator
Dr Alan Tan, Director, NYU@NUS Dual Degree Program,
National University of Singapore


Connectivity

CONNECTIVITY

The efficiency of telecommunications infrastructure and the cost competitiveness of telecommunications services within ASEAN each have room to be strengthened and improved. Improving intra-regional connectivity within ASEAN has the potential to benefit all ASEAN member states through enhanced trade, investment, tourism and development. Recent initiatives, such as the Mutual Recognition Agreement (MRA) for telecommunications, highlight the AEC’s vision of facilitating interconnectivity that leverages existing national networks with a view toward evolving these into a more cohesive regional infrastructure.

Issues for Discussion Key challenges and vision of the industry, such as

  • Development and harmonization of ICT regulations within ASEAN member states in order to accomplish major connectivity projects (e.g. cross border transactions)
  • Liberalization of telecommunications regulations for a more open and competitive market (e.g. local content requirements)
  • Enhancement of intra-region and global connectivity to enable and improve public access to healthcare and education
  • Creating a single ASEAN telecommunications with affordable inter-region connectivity (e.g. reduced or eliminated roaming charges, etc.)
  • Expansion and growth of Over-The-Top Content and new services within the region

The changing role of regulators and industry champions

  • Role and responsibility of regulators and industry champions in shaping the development of the industry
  • Global best practices in addressing connectivity challenges

Sector Champion

Co-Conveners
Alexander Rusli,
President Director & CEO, Indosat

Ernest Lawrence Cu,
President & CEO, Globe Telecom Inc

Research Partner
Bain & Company

Till Vestring, Managing Partner South East Asia, Bain & Company
Kevin Meehan, Partner, Bain & Company
Florian Hoppe, Partner, Bain & Company

Moderator
Kevin Meehan, Partner, Bain & Company


Infrastructure, Power & Utilities

INFRASTRUCTURE, POWER & UTILITIES

The ASEAN Economic Community 2015 envisages an ASEAN that is physically connected. However, many ASEAN countries still lack the key infrastructure to support economic growth and social well-being. Further, the imperative to invest in infrastructure comes at time when many governments are highly indebted and face competing calls on their scarce resources.

This roundtable will discuss the size of the infrastructure gap faced by ASEAN countries and the ways to achieve an improvement in productivity and deliver savings of 40% – through selecting projects more carefully, delivering them more efficiently, and getting more out of the existing assets as an alternative to building new ones. As private sector involvement will be critical to supporting individual ASEAN countries achieve their infrastructure aspirations and the overall AEC goals, focus will be on what additional measures can be undertaken by private sector companies in helping to close this infrastructure gap.

Issues for Discussion

  • The existing power grid is still far from being a regional one since the interconnection systems in operation are largely bilateral, and there are gaps since some interconnections are not commercially attractive
  • ASEAN might need to reconsider the goal of the TAGP as the region lacks a major gas supplier

Sector Champion

Co-Conveners
Jaime Augusto Zobel De Ayala, Chairman & CEO,
Ayala Corporation

Francis Yeoh,
Managing Director, YTL Corporation

Research Partner
McKinsey & Company

Lin Diaan-Yi, Partner, McKinsey Singapore
Koh Ee Huei, Project Manager, Infrastructure and Electric Power & Natural Gas Practice
Sathya Sriram, Manager, Asia’s Public Sector, Social Sector and Infrastructure Practices

Moderator
Lin Diaan-Yi, Partner, McKinsey Singapore


Capital Markets

CAPITAL MARKETS

One of the goals of the AEC is freer flow of capital within the region. To develop and integrate the ASEAN capital market ASEAN needs to harmonise the capital market standards in the region such as the offering rules for debt securities, disclosure requirements and distribution rules. By developing and enhancing the efficiency of its capital markets, ASEAN will be better able to channel funds into investments.

Issues for Discussion

  • Integration of capital markets has been limited by the different levels of development between ASEAN member states, lack of infrastructure, and capital controls
  • Conformity of existing regulatory standards is lacking in some member countries and ASEAN is lacking functioning coordination and monitoring mechanisms
  • ASEAN needs to address the trade off between the benefits of risk sharing and the risk of financial contagion that comes with increased integration in regional capital markets

Sector Champion

Co-Conveners
Nazir Razak,
Group Chief Executive, CIMB

Cezar P. Consing,
President & CEO, Bank of Philippine Islands

Research Partner
Oliver Wyman

Toby Pittaway, Partner, Corporate & Institutional Banking APR Practice head
Dr. Christian Pedersen, Partner, Head of Finance & Risk Practice, Asia-Pacific
John Law, Senior Advisor, Asia Pacific Region

Moderator
Patrick Walujo, Managing Partner, Northstar Pacific Group


Financial Services

FINANCIAL SERVICES

The AEC Blueprint envisages a regionally integrated capital market where capital can move freely, issuers are free to raise capital and investors can invest anywhere within the region. The maintenance of financial and socioeconomic stability is a priority and liberalisation of financial services should be done with respect for national policy objectives and not disrupt national financial sector development. Progress in liberating the financial services sector has until now been modest but the degree of ASEAN economic integration is highly dependent on the degree of liberalisation of the financial sector. ASEAN has adopted an ASEAN minus X formula for the financial sector, so that countries that are ready to liberalise can proceed first and those not ready can join later.

Issues for Discussion

  • Level of commitment among ASEAN countries varies, due to individual national policy objectives and different level of financial sector development of members countries
  • Recognition of professional qualifications for the financial services industry needed to allow for the movement of human capital

Sector Champion

Co-Conveners
Chartsiri Sophonpanich,
President, Bangkok Bank PCL

Budi Sadikin,
CEO, Bank Mandiri Indonesia

Research Partner
Boston Consulting Group

Vincent Chin, Senior Partner of BCG & Managing Director of BCG South East Asia
Jens Lottner, Senior Partner, BCG
Ken Timsit, Partner, BCG Jakarta
Ong Ching-Fong, Partner, BCG KL
Deepak Ravindran, Financial Services Practice
Boriwat Pinpradab, Financial Services, Insurance and Strategy Practice
Ernest Saudjana, Financial Services and Telecommunications
Bosky Subramaniam, Knowledge Team of Financial Institutions for Asia Pacific & Knowledge Expert for Retail Banking

Moderator
Vincent Chin, Senior Partner of BCG & Managing Director of BCG South East Asia


Healthcare

HEALTHCARE

Healthcare is one of the 12 priority sectors identified to drive ASEAN integration. Regional cooperation in healthcare issues is crucial due to the disparity of healthcare sectors among ASEAN countries and the emergence of highly infectious diseases that can easily spread around the region. Initiatives needed for an integrated healthcare sector include; harmonising standards, making mutual recognition agreements (MRA), and creating joint post marketing surveillance mechanisms. ASEAN has already made some progress towards healthcare integration such as an MRA for nursing services was signed in 2006 and for medical and dental practitioners in 2009.

Issues for Discussion

  • The presence of SMEs in the healthcare sector across ASEAN countries can be problematic as many SMEs object to healthcare integration because of the increased competition it brings.
  • Establishing regional quality control laboratories for premarket testing of drugs, evaluation and market licensing would lower cost and could facilitate regional trade.

Sector Champion

Co-Conveners
Dr. Lim Cheok Peng,
Managing Director, IHH Healthcare

Kenneth Mays,
Senior Director of Marketing, Bumrungrad International Limited

Research Partner
Accenture

Dr. Julian Sham, Senior Manager and Clinical Lead, Accenture’s Health & Public Service practice
Dr. Penny O’Hara, Partner, Health Analytics (Asia Pacific), Accenture

Moderator
Dr. Penny O’Hara, Partner, Health Analytics (Asia Pacific), Accenture