Topics of Discussions CLMVT Forum 2016 Day 1 – 16 June 2016 (14.00 – 17.00) Roundtable Discussion : Unlocking CLMVT : Creating a Single, Seamless Region Room 1: Cross Border Trade and Investment for Seamless CLMVT Session 1 : Stepping up Intra-CLMVT and Border Trade : What should be done to reach our potentials on trade ? Lead Discussants : H.E. Mr. Pan Sorasak, Minister of Commerce, Cambodia H.E. Mr. Somchiht Inthamith", Deputy Minister of Industry and Commerce, Lao PDR H.E. Mr. U Kyaw Win, Minister of Planning and Finance, Myanmar H.E. Mr. Nguyen Cam Tu, Deputy Minister of Industry and Trade, Vietnam H.E. Mrs. Apiradi Tantraporn, Minister of Commerce, Thailand Dr. Tan Monivann, Vice President, Mong Reththy Group, Cambodia Ms. Boonheuang Litdang, Vice President, Dao-Heuang Group, Lao PDR Mr. Doan Duy Khuong, Vice President, Vietnam Chamber of Commerce and Industry, Vietnam Mr. Chanitr Charnchainarong, Senior Executive Vice President, Business Development, Central Group and Chairman of Thailand-Cambodia Business Council Moderator: Dr. Duenden Nikomborirak, Research Director, Thailand Development Research Institute (TDRI) At the end of 2015 when the AEC became effective, there were high hopes that our region would catapult into a common platform for trade and production in Asia. While it is true that tariffs have come down to zero on most items, yet challenges such as non-tariff measures, customs procedures and insufficient trade facilitation efforts still remain in realizing the full potentials of our intra-CLMVT trade. So what do the CLMVT countries have to do in order to increase trade between each other and among themselves in the region ? Possible Points for Discussion What do the private sector see as key challenges in CLMVT intra- and border trade ? Are they government measures (eg., non-tariff or customs measures or customs procedures) or other barriers such as lack of proper eco-system for trade flows, insufficient information about each other’s markets, not enough incentives or support from the government ?
Transcript
Topics of Discussions
CLMVT Forum 2016
Day 1 – 16 June 2016 (14.00 – 17.00)
Roundtable Discussion : Unlocking CLMVT : Creating a
Single, Seamless Region
Room 1: Cross Border Trade and Investment for Seamless CLMVT
Session 1 : Stepping up Intra-CLMVT and Border Trade : What should be done
to reach our potentials on trade ?
Lead Discussants :
H.E. Mr. Pan Sorasak, Minister of Commerce, Cambodia
H.E. Mr. Somchiht Inthamith", Deputy Minister of Industry and Commerce, Lao PDR
H.E. Mr. U Kyaw Win, Minister of Planning and Finance, Myanmar
H.E. Mr. Nguyen Cam Tu, Deputy Minister of Industry and Trade, Vietnam
H.E. Mrs. Apiradi Tantraporn, Minister of Commerce, Thailand
Dr. Tan Monivann, Vice President, Mong Reththy Group, Cambodia
Mr. Bunn Kasemsup, Managing Director , SCG Trading Co., Ltd, Thailand
Moderator: Dr. Duenden Nikomborirak, Research Director, Thailand Development Research
Institute (TDRI)
Investment is certainly crucial to all CLMVT countries’ development. Recognising potentials
of CLMVT countries in being a hub for many industries (eg., agriculture, food, textiles,
garments, footwears, electronics, electrical, automobiles, etc.), it is not surprising that CLMVT
attracts a lot of attention from investors from outside the region. The inward investment has
enabled the CLMVT countries to be parts of the global value chain (GVC) that continues to
expand horizontally and vertically at a fast pace.
At the same time, there is a recent trend that intra-regional investment is on the rise. This
offers another opportunity for the private sector of the CLMVT countries, both large ones and
SMEs, to forge ahead their closer trade and investment ties.
Possible Points for Discussion
How can we further harness our links in the global value chain? Could (coordinated)
investment incentives be an instrument to support future regional specialisation?
What do you see as the untapped opportunities in investment in CLMVT? Are
thereany obstacles that should be addressed regarding investment barriers?
How could intra-regional investment be encouraged, that would make it mutually
beneficial for the host and investing countries? How can the SMEs businesses be
supported to invest more ?
CLMVT Secretariat / Trade Policy and Strategy Office, MOC
10 June 2016
CLMVT Forum 2016
Day 2 – 17 June 2016 (10.45 – 12.30)
Roundtable Discussion: Quality CLMVT : Creating a
Vibrant Business Environment and Good Living
“Startups in CLMVT”
In the last few years, number of startups in Southeast Asia has surged. While their disruptive
innovations provide business support services and capacity building for SMEs in general, some
ASEAN Startups have expanded markets internationally. Startup ecosystem in this region,
however, has to grapple with many issues. Recent studies highlight that the challenges lie in
fostering a startup culture or a new generation of entrepreneurs in our region, and in pooling of
talents together. Meanwhile, it is still difficult for the startups to plug into venture capital to
scale-up their businesses.
Another downside is that our ecosystem is not yet properly connected. We lack region-wide
infrastructures for digital trade, logistics and payment, in addition to disparate languages,
regulation and standards that often vary by country, all of which are critical factors to attract
global startups, as well as foreign venture capital investors.
Local and regional support is thus a must. It is also a good way to create pan-CLMVT
communities for our entrepreneurs to pitch business idea, share competencies, and help startups
to expand regionally which can be a stepping stone to go global. In this forum, apart from
sharing our experiences and inspiration, we will explore collective actions to develop Startup
ecosystems in CLMVT in many ways.
Possible Points for Discussion
How to position CLMVT as a home of startups and how they can benefit from our
diversity and potentials of different economic corridors?
What are infrastructures, incentives, institutions that CLMVT should collectively develop
so as to facilitate the creation of new startups and their development of regional and
global value chains?
What should networking system among private sectors in CLMVT look like so as to
foster collaboration on startup incubation and acceleration, as well as their coordination
with public partners and knowledge institutes?
As discussed in previous sessions, challenges remain in upgrading and linking value
chains for our production, trading, and service sectors, how existing startups in CLMVT
could provide solutions or contribution to filling in the gaps?
CLMVT Secretariat / Trade Policy and Strategy Office, MOC / June 2016
CLMVT Forum 2016
Day 2 – 17 June 2016 (10.45 – 12.30)
Roundtable Discussion: Quality CLMVT: Creating a
Vibrant Business Environment and Good Living
“Human Resource Development”
In this fast-paced, highly competitive, modern business world, innovation and technologies
seem to be everything. New ideas and methodologies have been the driving forces for creation of
new businesses, knowledge based and with more value added. Many jobs done previously by
human have also been replaced by machines and robots. Internet and social networks, on the
other hand, have made the world smaller, blurred the borders, and distinctively shaped the way
of doing business. Generations active in the labour markets nowadays have specific
characteristics and skill sets different from previous generations. Furthermore, dream jobs have
changed from generation to generation; from secured and stable jobs in the public sector for the
baby boomers to fast-paced jobs in the private sector for the generation X, to setting up their own
companies and being their own boss for the generations Y and Z.
In response to this changing trend, it is of the utmost importance that our work forces are well
equipped with tools and knowledge necessary for their current and future occupations.
Opportunities for lifelong learning and retraining will strongly help them, especially the low-
skilled or those with outdated skills at risk of being replaced, become more resilient to sudden
and gradual changes in the labour market.
Possible Points for Discussion
What can we do to prepare our new-generation workforces, both high skilled and low
skilled, to be able to survive in a more competitive and complex business world in the
near future?
What skill sets and abilities will be essential in the coming 5-15 years?
What training and retraining opportunities should be provided for our current and future
generation workforces?
What should we do to encourage better work conditions?
How can we foster and promote entrepreneurship in the CLMVT region?
CLMVT Secretariat / Trade Policy and Strategy Office, MOC / June 2016
CLMVT Forum 2016
Day 2 – 17 June 2016 (10.45 – 12.30)
Roundtable Discussion : Quality CLMVT : Creating a
Vibrant Business Environment and Good Living
“Young Entrepreneur Network Development for more
Intra-CLMVT-Trade”
Young entrepreneurs have enormous potential to be a force for good in the CLMVT region.
To achieve long-lasting progress in economic development, we must nurture and learn from the
next generation of business leaders. The CLMVT region is home to numerous business rising
stars, some of who are already ahead of the curve, especially in the way they incorporate their
entrepreneurial skills with their passions to contribute to society. In this regard, the government
should do more to encourage and support young business leaders who are not afraid to start
companies and see how their products and services can make a difference in the world.
In response to this concern, the Young Entrepreneurs Network Development (YEN-D)
programme has been initiated by the Ministry of Commerce of Thailand to bring together young
entrepreneurs throughout the CLMVT region to help boost future trade and investment. Apart
from networking and creating trust among the participants, the YEN-D programme also features
special training courses for young business people in the five countries in the CLMVT region to
help them understand each other's culture and business regulations better.
Possible Points for Discussion
Could similar programmes to YEN-D be introduced on a CLMVT-wide basis?
What eco-system do young entrepreneurs need to thrive in the new business
environment?
What support from the governments and business associations is needed for young
entrepreneurs?
CLMVT Secretariat / Trade Policy and Strategy Office, MOC
June 2016
CLMVT Forum 2016
Day 1 – 16 June 2016 (14.00 – 17.00)
Discussion Paper for
Unlocking CLMVT: Creating a Single, Seamless Region
“CLMVT Connectivity”
Background and Overview
Cambodia, Laos, Myanmar, Vietnam and Thailand are all geographically interconnected on
the mainland Asia. For the region to strengthen and expand its regional supply chain networks as
well as to achieve inclusive and sustainable growth, strong and inclusive connectivity in the
region is one of the most important factors.
Achieving the comprehensive, well-integrated and seamless region not only benefits
businesses in the region, but also the societies and the peoples as a whole. Through the three
pillars; Physical Connectivity, Institutional Connectivity, and People-to-people Connectivity,
countries implement various strategies and carry out plans to bring countries in the region closer
together.
1. Physical Connectivity
To connect with countries in the region, physical or hard infrastructure is one of the
indispensable bases. Physical connectivity refers to transports, information and communication
technology (ICT) as well as energy infrastructure, which plays an important role as it supports
flows of goods, information and people. Better physical connectivity will lead to reduction in
transport cost and time as well as efficient and reliable flows of goods.
Various action plans and projects have been carried out to improve supply chain performance
by connecting and integrating logistics, transport (land, maritime, and air), energy, and
telecommunications infrastructure in the region. Projects implemented to enhance transport and
communication links between the CLMVT countries are, for instance, the Southern Economic
Corridor (SEC), the North-South Economic Corridor (NSEC), and friendship bridges.
Even though the CLMVT region is now better connected with each other, challenges such as
poor quality of roads, missing railway links, and inadequate maritime and port infrastructure still
remain. These issues require the construction and upgrade of the new and existing infrastructure
and logistics facilities, the promotion of innovation, as well as the harmonisation of regulatory
framework. Enhancing the public-private partnerships (PPP) as financial resources should also
be addressed.
2. Institutional Connectivity
Institutional Connectivity or soft infrastructure refers to trade and investment policies,
agreements, and institutional links to support regional cooperation. To achieve better institutional
connectivity, countries need to cooperate to harmonise standards and assessment procedures,
implement trade facilitation agreements, and facilitate intra-regional trade and investment.
Regarding supply chain connectivity, a research by the World Bank shows that logistics
performance matters for trade in parts and components in the supply chains more than for trade
in final goods. Moreover, chokepoints in regional supply chains, where public and private sector
can cooperate to ensure that supply chains operate more quickly, efficiently, and reliably, have
also been identified. Thus, the CLMVT region, with its expanding regional supply chain
networks, will significantly benefit from improved logistics system.
For financial integration, the CLMVT region has shown a significant progress in supporting the financial connectivity in the past years. Nevertheless, areas to be improved still remain such
as enhancing financial market development, strengthening banking and secured payment
networks, and stimulating financial cooperation.
Moreover, as countries are at different stages of institutional development and have different
regulations and capacities, harmonising standards and procedures is crucial but could be
complicated. To integrate all five countries in this pillar will require suitable domestic strategies
for each country and strong international cooperation among countries.
3. People-to-people Connectivity
Better people-to-people connectivity will enhance interaction and mobility of people as well as
exchange of innovative ideas and knowledge across borders. For example, cross-border
education cooperation will stimulate innovative growth as students and researchers build
scientific communities. It will also promote people-to-people connectivity through improved
understanding between people. On the other hand, tourism facilitation, which refers to the
development of policies and institutions that reduce the non-logistical costs and uncertainties
associated with tourism such as visa restrictions and uncertainty about consumer protection
regulations, will enhance tourism and businesses related to tourism among countries.
Action plans on people-to-people connectivity already implemented in the region are, for
instance, the relaxation of visa requirements and the development of mutual recognition
arrangements (MRAs). The challenges are, however, the trade-offs between facilitating the
people-to-people connectivity and maintaining the countries’ stability and security.
Potential gains from improved connectivity in the region
The WEF 2013’s estimates show that potential gains are significant if countries can reduce
border administration procedures and improve relevant infrastructure. The World Bank’s
research also shows that logistics performance affects trade in the supply chains more than trade
in final goods. Therefore, as the CLMVT region aims to establish and expand strong regional
networks of supply chains, especially for parts and components, the improved performance of
logistics and connectivity among countries will increase efficiency and reliability of supplied
goods and significantly enhance international trade potential.
Hence, it is very crucial that the CLMVT countries cooperate hand-in-hand to improve and
strengthen the region’s connectivity through the three pillars in order to achieve the inclusive and
sustainable development as well as a shared prosperity for all of us.
CLMVT Secretariat / Trade Policy and Strategy Office, MOC
June 2016
CLMVT Forum 2016
Day 1 – 16 June 2016 (14.00 – 17.00)
Discussion Paper for
Discussion Paper for Unlocking CLMVT : Creating a Single,
Seamless Region
“CLMVT’s Link in Global Value Chain”
Background and Overview
Globalization has provided impetus for the spread of production networks in different regions,
and presented market opportunities for enterprises. The future of economic growth should thus
be viewed within the prism of regional value chains and competitiveness of the region – not a
nation. In this context, a critical issue for policymakers is to ensure that our connected economies
can fully participate and agilely respond to changes in global demand. This requires strategic
partnership among CLMVT to leverage strengths in agricultural and manufacturing production,
as well as in tourism sectors.
Issues that CLMVT Forum 2016 could discuss include trend and challenges arising from the
globalized trade, and how to cope with them through complementarities in CLMVT. It could also
highlight the importance of greater integration of small enterprises in the value chains so as to
encourage inclusive growth and well-being of the peoples throughout the region.
1. Agricultural Value Chain: From Agriculture to Agri-Business
Agriculture is a backbone of the CLMVT countries. However, agricultural sector in the
CLMVT countries has long been characterized by low productivity and low value creation. The
region has to move up the value chain of the agricultural sector. In other words, it has to upgrade
the hitherto simple agricultural farming to the more modern and profitable agricultural business
(aka, Agribusiness), which denotes the collective business activities that are performed from
farm to fork. It covers the supply of agricultural inputs, the production and transformation of
agricultural products and their distribution to final consumers. If carried out successfully,
agribusiness will be one of the main generators of employment and income of the whole region.
However, major challenges remain. For one thing, agribusiness is characterized by raw
materials that are subject to price fluctuation. More importantly, agribusiness products are
subject to stringent regulatory controls on consumer safety, product quality and environmental
protection. Furthermore, a successful agribusiness must rely on better coordination and planned
linkages between agribusiness firms, farmers, retailers and others in the supply chains to replace
the traditional production and distribution methods.
CLMVT economies are mainly linked as regional value chains, especially in agricultural
sector. The sector now employs between 32 percent and 70 percent of workforce in the Greater
Mekong Sub-region (GMS), but contributes only between 11 percent and 30 percent of the
region’s GDP due to lack of modern agricultural technologies. Local households and small-scale
farming enterprises should have better income and livelihood if their production and post-harvest
processing are improved. To achieve that, policy makers in CLMVT needs to not only
simplifying cross-border procedures but also upgrading local infrastructure and agro-logistics
services in order to provide better storage and delivery of perishable goods throughout the region
towards destination markets. This agro-logistics development could also reduce the dependency
of farmers on middlemen in the value chain, and provide more direct market channel towards
consumers. To foster cooperation among CLMVT regarding logistics services and trade
infrastructure will be mutual benefits in terms of reduction of cost and time, and opportunity to
fully reap benefits from their agricultural products.
2. Global Auto & Parts Value Chain: Innovation and Technology in Value Chain
Automotive industry has played an important role in the CLMVT region, especially in
Thailand. Thailand is a manufacturing base for Japanese passenger cars and 1-tonne pickup
trucks, and has strong domestic supply chains of auto parts. However, as the CLMVT economies
steadily develop and grow, foreign firms are taking a holistic approach in considering the
CLMVT region as a single base for manufacturing as well as a single market for automotive.
A Case in Point - Japan’s Comprehensive Industrial Development Support: Preparing
for CLMVT’s Link in Global Supply Chain After decades of developing both a large manufacturing base and large sales in Thailand,
Japanese companies are now increasing their investment in Cambodia, Laos, Myanmar and
Vietnam to take advantage of low labour costs, plentiful natural resources, and new and fast
growing markets. Given the strong and well established manufacturing base in Thailand,
Japanese investment in the CLMV countries will only add to its already large and extensive
supply chain in the region.
Japanese direct investment immensely helps support the economic development of a host
country, not least because it tends to be long-term orientated and stay long in the host countries
despite the occurrence of all sorts of problems. Moreover, Japanese investment usually comes
with generous industrial development supports that, among others, provide on-the-job training
and transfer of knowledge and technology that benefit local employees, partners and suppliers
alike. With the support from the government of the CLMVT countries, more Japanese FDI into the
region will only translate into more cooperation and mutual benefits in terms of information
exchanges, incentives and development of local human resources and infrastructure.
3. Value Chain in Sustainable Tourism Development
Since sustainable tourism development as well as creative and environmental-friendly tourism
has become increasingly popular and receiving much attention nowadays, governments and
private sectors should endeavour to promote sustainable tourism in the CLMVT region.
Sustainable tourism is defined as tourism that responds to tourists and local community’s
needs, while focusing on natural resource management in order to protect ecology, biological
diversity and local identity. The new development in tourism, however, requires rules and
regulations on environmental standards as well as the use of new technology to enhance
sustainable tourism development. In order to understand the new tourism development, it is
necessary to study the entire value chain of the industry.
Value Chain Analysis
Supply chain is the interaction/management process/transport of products and services
from suppliers to consumers. Value chain, on the other hand, involves value creation in
each step of the production. This is in accordance with Michael Porter’s Value Chain
concept, focusing on the interaction and linkages between all players in the supply chain
that create value added (see Figure 1). Value chain analysis can maximize efficiency in
production process and result in sustainable tourism development.
Figure 1: The Value Chain
Source: Michael E. Porter (1980)
Examples of application of the value chain in the tourism industry
Supply chain is the interaction/management process/transport of products and services
from suppliers to consumers. Value chain, on the other hand, involves value creation in
each step of the production. This is in accordance with Michael Porter’s Value Chain
concept, focusing on the interaction and linkages between all players in the supply chain
that create value added (see Figure 1). Value chain analysis can maximize efficiency in
production process and result in sustainable tourism development.
Figure 2: The Tourism Global Value Chain
Source: UNWTO (2011)
Figure 3: Austrian Tourism Value Chain
Source: Prof. Dr. Angelina Njrgus (2011)
CLMVT Secretariat / Trade Policy and Strategy Office, MOC
June 2016
CLMVT Forum 2016
Day 2 – 17 June 2016 (14.00 – 15.30)
Discussion Paper for
Digital CLMVT : Supporting Digital Infrastructure in
CLMVT
“Digital Connection and E-Tourism : SMEs Dimension”
Background and Overview
Accounting for more than 96 per cent of enterprises in ASEAN, SMEs are a significant engine
of growth, and are now entering a new phase of regional expansion. Meanwhile, as purchasing
power in our region increases, and digital infrastructure is spreading, online markets could grow
drastically in the coming years. However, e-Commerce in CLMVT remains relatively
underdeveloped, accounting for less than 1 percent of total retail sales, compared to rates of 6-8
percent in Europe, China, and the US. This implies that, to tap into wider markets and regional
partners, SMEs in CLMVT need to be further equipped with electronic platform and social
media. Despite Governments’ effort on consultancy and training services, SMEs do not always
have the appetite or capital required to invest in these capabilities. Major questions may arise on
why e-Commerce adoption has been slow in the context of CLMVT and how to alleviate the
obstacles through systematic supports by the government and private partners.
1. Digital CLMVT
The digital economy is all around us and offers opportunities for SMEs to internationalize
their business into global value chains, thereby fostering more inclusive growth. To enhance
SMEs’ participation in digital trade, some initiatives have already been launched across CLMVT
region, but further consideration and collective actions are required to spur the digital economy
in the region. This may include issues related to enhancing cross-border online connectivity,
reinforcing online security through information sharing and harmonizing existing legislative
frameworks, creating a regional online dispute resolution system, and encouraging the
development of online retail logistics services.
What are institutional framework that CLMVT should develop in the future
so as to govern digital trade system, for example, the Cross-Border Privacy Rules,
APEC Privacy Framework, and the Digital Prosperity Checklist?
What other measures for SMEs that could be devised to assist them in better utilizing
digital trade and connection?
2. E-Commerce in CLMVT
As middle classes in our economies grow, they consume more products and services and live
their lives increasingly using the Internet. Today, one of the trend that help accelerate cross-
border e-Commerce is the opening of AEC that stimulates trade across Southeast Asia.
Companies like Amazon, Alibaba and JD.com have already counted AEC as their potential
markets. However, the literature in SMEs engagement with IT indicated slow adoption of e-
Commerce among SMEs in AEC, and this was mainly explained by limited awareness by
business-owners and managers. It also highlights the need to convince owner/ managers of the
cost-benefits of investing in e-Commerce, as well as the need to provide them with capacity
building program.
What approach should we take for enabling our SMEs in CLMVT to embrace e-
commerce and social media?
In what way that social media could be used as a tool for networking of CLMVT
entrepreneurs and for co-creation of global demand?
3. E-Transaction in CLMVT
With an increasing role of electronic commerce (e-commerce) in facilitating trade and
investment in the CLMVT region, it is necessary to develop, promote, and synchronize an
electronic transaction system in among the CLMVT countries. To achieve that, three important
challenges have to be addressed.
To begin with,IT infrastructure–both hardware and software – must be provided and regularly
enhanced in order to facilitate and create secure electronic transactions. Secondly, human
resources must be developed to serve the increasing demand for skilled workers in the IT
industry as well as to familiarize consumers with the tools and computer skills in making electronic transactions. Lastly, the design of policies and regulations should be carried out in
such a way that supports the mutual development of the electronic transactions in the CLMVT
region.
How can these 3 challenges be dealt with in an effective, proper, and timely manner?
4. E-Tourism in CLMVT
What is E-Tourism?
E-Tourism is the digitisation of the processes and value chains in the tourism, travel,
hospitality and catering industries that enable organisations to maximise their efficiency
and effectiveness (Buhalis, 2003). In the CLMVT context, the objective of E-tourism is
to bring the “Multiple Countries One Destination” slogan into being.
Possible discussion points
The development and implementation of E-Tourism in the CLMVT has to cover entire
tourism value chain and involves collaboration among the CLMVT countries, notably in
the following dimensions.
The setup of CLMVT E-Tourism Development Framework
Development of Human Resource, Infrastructure and Technology supporting E-
Tourism
Development of common marketing strategy to promote “Multiple Countries One
Destination” and product and services development, e.g. international standards of
products and services, development of international travel routes.
Data management and application to develop products that suit personal needs of each
traveller, especially specific tourist groups such as female tourists, senior tourists, and
green and adventure tourism
Harmonization of laws, regulations and common agreements in E-Tourism development;
e.g. Single Visa, money transfer, tax harmonization, standards of products and services,
pricing, online security, as well as investment promotion scheme and E-Tourism related
activities.
CLMVT Secretariat Trade Policy and Strategy Office, MOC / Ministry of Tourism
