SBC: February 2012

Feb 29, 2012

Vietnam - Delta farmers tend paddies in … industrial parks

With the industrial parks’ investors failing to make progress on infrastructure development on the huge areas of paddy land in the Mekong Delta that have been cleared for their numerous establishments, many local farmers are now making use of the deserted sites as paddy fields.

Last December, the National Assembly passed a resolution, stating that the country should preserve the 3.8 million hectares of paddy land by 2020. However, both scientists and local authorities in the Mekong Delta fear that achieving the target will not be easy.

The country’s largest granary, the Mekong Delta accounts for 90 percent of the annual total rice export volumes, but paddy land areas have increasingly decreased over the last few years, with haphazard investments of industrial parks (IP) around the delta.

Local farmers have leased plots of land that have been left abandoned for years inside the IPs to start their crops.

For instance, Nguyen Van Dung, a farmer from Hau Giang Province, said he and many other farmers are now tending dozens of hectares of rice and other crops inside the Song Hau Industrial Park in Chau Thanh District.

The IP completed site clearance in 2007, but no construction has ever begun, leaving most of the 340-ha area covered with grass.

“I have been waiting for so long, but have seen no plants ever be built in the zone,” said Dung.

Although Dung has granted his land plot to the establishment of the IP, and received compensation, he has now returned to the site to start his crops again.

Meanwhile, Ha Van Tuan, another local farmer, said he also wanted to tend his paddy inside the IP.

“But it will require a large sum of money to clear the weeds and grass on the site,” said Tuan.

“In this IP, you can grow as large an area as you wish, as long as you can afford the expense of grass clearing.”

Similarly, local authorities of Soc Trang Province in 2007 also cleared 180-ha of paddy land at Soc Trang city to give place to the An Hiep IP. Despite the considerably developed infrastructure, two thirds of the park area still remains deserted after five years.

Local farmers have thus demanded to lease the plots and restart their agricultural production.

“It was too wasteful leaving such fertile land deserted,” said Nguyen Van Phuoc, a farmer who has been running a 100-ha farm to grow watermelon, rice, and sweet potatoes in An Hiep IP over the last two years.

The largest benefit of growing rice inside the IP is that it can keep local authorities away from the reputation of wasting land, and local farmers whose lands have been reclaimed and cleared can now earn their livelihood by working on his farm, he said.

Around 100 farmers work on his farm, each earning VND100,000 a day.

Other causes for paddy-land loss

Many farmers have also converted the purpose of their land through their own initiative, contributing to the rapid decline of paddy land over the last few years.

Ho Quang Cua, deputy head of Soc Trang Department of Agriculture and Rural Development, said 250,000 hectares of fertile paddy land in the coastal areas in Mekong Delta have been converted into ponds for raising shrimps.

“In the years to come, under the ‘new rural areas’ policy, much land intended for rice crops will also have to give way to the construction of roads, urban areas, and industrial clusters,” said Cua.

In Tien Giang and Dong Thap provinces, farmers have also converted their rice fields into orchards, local authorities said.

Authorities can not prevent or ban farmers from doing so, due to the lack of penalty measures, they said.

Nguyen Van Sanh, head of the Mekong Delta Research and Development Institute, said there is a paradox that any provinces growing rice will be considered a “poor province,” and thus local farmers of that province are also considered poor.

This has lead to the fact that localities have scrambled to industrialize, he said.

“Moreover, rice farmers cannot earn as much of a profitas those cultivating fruits or seafood, so we cannot force them to keep on tending their paddies .”

TUOI TRE

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Vietnam - Hand-foot-and-mouth cases rise sharply in VN

With 1,043 new cases of hand-foot-and-mouth disease recorded in the past week, the country’s total number of patients in the first two months of the year has amounted to more than 7,700, 9 of whom have died, the Health Ministry reported.

Last week's figure was the highest among the first 7 weeks of the year, the ministry reported. Previously, the number of new cases each week only ranged between 900-1,000.

According to the ministry’s statistics, high numbers of HFMD patients in the past 3 weeks have been recorded in 11 provinces and cities, including Hai Phong, Dong Thap, Hau Giang, Khanh Hoa, Kien Giang, CanTho, Ca Mau, Dak Lak, An Giang, and Vinh Long.

Of these provinces, the first three have the highest percentage of patients per 100,000 inhabitants of the country, the ministry said.

The statistics in 2011 showed that 76 percent of patients contracted the disease at home, 23 percent in schools and kindergartens and the rest in other cases.

As the epidemic has spread to 60 of the country’s 63 provinces and cities and has become more complicated than before, the ministry said it was reviewing the manual for HMFD diagnosis and treatment and would set up 5 training centers at the Central Tropical Disease Hospital, the Central Pediatrics Hospital, the Pediatrics Hospitals I and II in Ho Chi Minh City, and the HCMC Tropical Disease Hospital.

Training is aimed at improving the efficiency of diagnosis, treatment and patient care to prevent the spread of the disease and the risk of death, the ministry said.

The ministry requested that local health authorities re-check their medical equipment, medicines and other facilities that serve the fight against the disease to ensure they are always available and in good condition.

This year’s epidemic may be more severe than last year’s, since it has broken out sooner - in January-February instead of April or May as in 2011, Tran Thanh Duong, deputy head of the Health Ministry’s Preventive Health Department, warned.

Epidemic hygiene a must

Hand, foot and mouth disease is a common viral illness among infants and children that causes a fever and blister-like eruptions around the mouth and/or a skin rash.

There are no vaccines or even specific drugs for this highly contagious disease, but certain precautions can help reduce its spread, the ministry said.

People should wash their children’s hands frequently and thoroughly, especially after they use the toilet and before they eat. They should also keep their children’s toys clean and restrict them from putting any toys or other tools into their mouth.

When patients contract the disease, their secreted fluids, including saliva and nasal discharge, are one of the sources from which the disease spreads, said Dr Ngo Thi Kim Yen, deputy director of the health department of Da Nang City, where 152 HFMD cases have been recorded so far this year, 7 times higher than the previous year.

Children should be hospitalized for examination and treatment after developing symptoms such as a high fever; mouth ulcers; red rash, without itching but sometimes with blistering, on the palms, soles and sometimes the buttocks; and painful, red, blister-like lesions on the tongue, gums and inside of the cheeks, medical experts said.

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Singapore - MPs emphasise collective responsibility in building inclusive society

SINGAPORE: Many MPs spoke on the theme of building an inclusive society on the second day of the Budget debate in Parliament on Wednesday.

The debate saw more than 30 MPs state their views as they emphasised that everyone must do their part.

Dr Amy Khor, Minister of State for Health and MP for Hong Kah North, said there is a role for everyone in building an inclusive society.

She said while the government implements policies to redistribute resources to help the vulnerable, an inclusive society is also about individuals wanting to be helped and to help themselves.

Dr Khor said: "This is the social partnership Singapore needs to forge and strengthen even as we face a period of greater economic uncertainty. But, while the government has done more, and no doubt, will continue to do so in the years ahead, the problems have to be collectively owned and comprehensively tackled. They will require a total response from everyone.

"Likewise, we need to pursue a social partnership that leverages off the strengths of each party - the government's resources, the community's local networks, the neighbour's alertness to specific people in need.

"The community must look out for one another, and the able must stoop to help the less able. In this way, the holes are plugged and more sustainable solutions can be proffered.

Dr Janil Puthucheary, MP for Pasir Ris-Punggol GRC, said help must not be at the expense of fiscal prudence.

He said: "Fiscal prudence, good advice for an individual, good advice for a household, good advice for a nation. This fundamental part of our policy approach should be given more prominence. It's importance in getting us to this point in our nation's story and cannot be over emphasized. We spend within our means.

"In a time of global economic uncertainty, where parliamentarians in other nations, First World and otherwise, are arguing over which austerity measures to effect, which reductions in spending to push through and which increases in revenue to risk, we are instead going to debate how best to increase our expenditure.

"How fortunate a position to be in, how remarkable that we have the luxury to ask and ask and ask for more? But one question I would like to ask is what is at the heart of our values? What in the budget do we feel so strongly about that it defines us and the ideology of our society? What are the choices we make that can help illustrate our beliefs?

"There are many things that we need to spend on. There are also things that we choose to spend on, but sometimes we don't even see it as a choice, but simply as a given, part of the backdrop, because we believe them to be non-negotiable, when in truth they are. If we examine these choices we can begin to better define ourselves."

Mr Gerald Giam, Non-Constituency MP, said: "While I share the Government's concern about uncontrolled spending or unsustainable social entitlements, this should not be a convenient excuse to hold back much needed social investments."

MP for Aljunied GRC Chen Show Mao's views on Tuesday were challenged.

Mr Vikram Nair, MP for Sembawang GRC, said: "He starts off by saying the government has heeded the call for inclusive growth. That is our long-held belief.The insinuation from this is that the government did not care previously about inclusive growth but something he had personally believed all the time. And he says let's do more, let's do more, let's do more. Let's do more is a wonderful rallying cry because it does two things.

"First of all, by highlighting the vulnerable groups, he shows that he understands their plight. Second, by suggesting let's do more, he is suggesting the government isn't doing enough. Many of us here have been working year-in, year-out, helping the vulnerable groups.

"And it is pretty hurtful coming from Mr Chen, he might have held his belief for a long time but he only came back quite recently to help in this and I certainly hope he will not make further insinuations against the character or heart of our Party because we certainly share the belief that these vulnerable groups should be helped. In that sense, it is a wonderful way to score political points which is fair game."

Speaking in Mandarin, Workers' Party chief Low Thia Khiang said the 2012 Budget was a direct response to the results of the 2011 General Election.

In his speech in both Mandarin and English, NTUC Secretary-General Lim Swee Say said that the GE results have not affected the challenges facing Singapore, like transforming the economy, reducing dependence on foreign workers and enhancing productivity levels.

Mr Lim said: "For the SMEs out there, we realise, we know that life is tough for them especially at the pace of rapid restructuring. However we want to assure them, it is important for the tripartite partners to assure them, that we will not neglect them, in this economic restructuring.

"We are going to go the extra mile to support them and reach out to them. Why? Because their interests is also the interests of the labour movement, they are the largest employers in Singapore as a group.

"Will we succeed today with a good policy? We have a good debate in this parliament. The question is will we have good implementation after all this debate is over. I believe as we go through this process of change there will be pain. Some workers will feel the pain as they have to go for retraining, some SMEs will feel the pain because they have to go for the repositioning, some clusters will feel the pain because they have to regroup themselves. There certainly will be pain with change.

"But we must always remember, there will be bigger and longer pain without change. So therefore as we go through this process, let us not try for a painless process, it won't happen. Let us as Singapore unite, let us go through the pain together, let us go through the change together so that at the end of the day, there is gain to share together."

Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam will reply to the various issues raised on Thursday.

After the debate on the Budget Statement, Parliament will begin debating the Budget allocations for the various Ministries and Organs of State, starting off with the Prime Minister's Office.

- CNA/fa/de

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Singapore - Public raises concerns over S$1.1b bus expenditure

SINGAPORE: Singapore government feedback portal REACH has received more than 600 views on Budget 2012 since 17 February, the day the Budget was announced.

REACH chairperson and Minister of State for Health Amy Khor said many contributors like the Budget.

Kicking off the second day of debate on the Budget speech, she added there are some concerns the government can address.

One area is that the Budget has set aside funds to acquire 550 buses, and keep them running for 10 years.

Dr Khor revealed there is significant resentment that public funds are being used to boost bus capacity even though doing so to improve service level is welcomed.

She noted the government had always maintained the privatisation model is the best way to ensure that the public transport system operates effectively and efficiently.

And given their size and credit standing, the publicly-listed bus companies can quite easily raise funds via bond or share issues to buy the buses.

However, Member of Parliament (MP) for Pasir Ris-Punggol Group Representation Constituency (GRC) Janil Puthucheary said Singapore should either fully nationalise or privatise its public transport services.

Dr Puthucheary wanted to know how the spending would ensure a return of investment that would benefit citizens and not shareholders.

Wondering if the move is "a creeping nationalisation" of Singapore's transport services, Dr Puthucheary said a hybrid transport model may not be the best way forward, as public transport companies have to operate under significant constraints while having to make profits.

He argued full nationalisation would benefit commuters, with lower fares and better availability of services, but may be expensive and inefficient

On the other hand, privatisation by deregulating the market would allow for true consumer choice and competition.

"We are neither properly privatised nor adequately nationalised. In the past, this hybrid model has been held up as an exemplar of what was possible with good governance," Dr Puthucheary said.

"It may represent the best of both worlds, but has recently been interpreted as the worst of both models. Can the House and the public be assured that this hybridisation continues to be the best way forward for Singapore?"

Dr Khor said many people cannot fathom the logic for the direct use of public funds to ramp up bus capacity.

Dr Khor said: "Moreover, it is argued that these companies have been making substantial profits over the years even though their bus business may be running operating losses."

Dr Khor stressed if the S$1.1 billion subsidy is inevitable, then the government must have strict oversight over these operators and impose conditions to ensure Singapore achieves the desired service level improvements and the extra money does not go toward boosting dividends or share prices.

And these conditions should be made known to the public.

Opposition MP Pritam Singh raised concerns that shareholders of publicly-listed bus operators SBS Transit and SMRT are benefiting from the Bus Services Enhancement Fund.

He said: "Many Singaporeans are asking why the shareholders of our publicly-listed bus operators are being extended this unusual generosity by the government?"

Mr Pritam Singh, who is an MP for Aljunied GRC, urged the government to "claw back" the $1.1 billion over a fixed period of time after consultation with SBS Transit and SMRT.

He also called for a step-by-step breakdown of how the money in the fund will be used.

Mr Pritam Singh said: "Taking into account inflation over the last two years, I hope this government gives the public a detailed breakdown of the operating cost and the salary component that was set aside for the Bus Services Enhancement Fund, in addition to all other components that may not have been publicly revealed so far.

"Too much of this dispensation of taxpayer dollar to these two profit-generating monopolies, quasi monopolies, I beg your pardon, is currently unknown to the public beyond the big figure and some transparency would be very helpful."

Turning to the move to increase CPF contributions for workers aged 50 to 65 years to encourage them to continue working, Dr Khor said feedback contributors have welcomed this announcement.

However, it can be argued that since people are becoming more educated and skilled, living longer and healthier, the CPF contribution rates should be similar for all workers, regardless of age and should be extended beyond 65 years old.

Otherwise, the signal would still be that older workers are less valued.

For businesses, Dr Khor said the criticisms to Budget 2012 have been sharper.

There are few objections towards the statement that Singapore needs to reduce its reliance on foreign workers and steer its economy toward higher productivity.

But, businesses feel growing productivity takes time and replacing foreign workers with more locals in a tight labour market will be extremely challenging in the short to medium term.

Hence, there are concerns the shortage of foreign labour may hurt small businesses and eventually increase costs for everyone.

Dr Khor said: "Besides the measures announced in Budget 2012 to incentivise companies to improve productivity, the government will need to work closely with the various industry sectors to change mindsets and more aggressively drive productivity initiatives.

"Employers will also have to make concerted effort to adapt their work processes to include more flexible work hours and better HR policies and pay structures to accommodate older workers and other untapped labour pools such as back-to-work women.

"Here, the government could take the lead by employing older workers and back- to-work women across all ministries and agencies."

Dr Khor, who is also mayor of the South West CDC, explained that from the point of view of depicting priorities, Budget 2012 indicated a stepped-up response to realities that have asserted themselves more and more forcefully.

She said the opposition would like to think that Budget 2012 is a reaction to the General Election last year.

But Dr Khor believed deeper forces are at work.

She said while Singapore has one of the highest percentage of millionaires in the world, the lower segments of the population find it difficult to pull themselves out of their difficulties.

Dr Khor said: "It will be foolish to jettison the dogma of globalisation and free markets because it has brought enormous benefits to Singapore.

"Millions have been uplifted from their poverty in many countries that have embraced market reforms and plugged their economies into the global trading system.

But, we need to address the inequalities which plague dense cities like Singapore."

And the government's decision to raise the social allocation even further in this year's Budget was a responsive move to emerging social trends although some opposition members would label it a populist move.

Dr Khor said this is not a course correction as suggested by the MP for Aljunied GRC Sylvia Lim, on Tuesday.

Dr Khor said it is the reinforcement of an existing policy and what Budget 2012 implied was a further loosening of the purse strings to help the most vulnerable segments of the population, with full awareness that the help they receive may be prolonged over many budget cycles.

Dr Khor said: "Indeed, Budget 2012 signals in my view, a fresh approach the government has taken in cognizance of these social realities.

"It is a fresh approach because the government has brought to bear substantially more funds than hitherto to try and decisively tackle the income gap. Hence, we have a permanent GST voucher scheme."

38 Members of Parliament are due to make their speeches on the Budget on Wednesday with Deputy Prime Minister and Minister for Finance Tharman Shanmugaratnam replying to MPs' concerns on Thursday.

- CNA/ck/wk

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Singapore - Changi's Budget Terminal to make way for new and improved terminal

SINGAPORE: Airlines operating from Singapore's Budget Terminal will soon operate from the main terminals at Changi Airport.

That's because the Budget Terminal will be closed later this year to make way for a new and improved terminal.

Travelling the no-frills way has become more popular.

Last year, one in four passengers at Changi Airport travelled on a low-cost carrier (LCC), compared to about one in five in 2010.

In fact, low-cost carriers accounted for 28.6 percent of all flights at Changi Airport.

And the outlook is bright.

Mr Shukor Yusof, Aviation Analyst at Standard & Poor's, said: "Our understanding is that there are moves to review the operations at the Budget Terminal because of the increasing traffic, because of the expectation that there will be more and more budget airlines that will ply into Singapore.

"I think there is no chronic shortage of facilities or any acute problems that we are having at the LCCT (low-cost carrier terminal). The numbers are increasing so fast that I think in the next few years, issues concerning the comfort of passengers, the issue of more aircraft, if you look at the budget airlines in the region, everyone is buying new aircraft, every single one of them are expanding. So within the next three to four to five years, you will have more aircraft, more passengers.

"Indeed, more passengers are flying to Singapore by budget airline, so what we have today in Changi in terms of the Budget Terminal, is good for now. But within the next few years, it would struggle to cope with the numbers."

Opened in 2006, the Budget Terminal can handle up to seven million passengers annually.

And sources say the authorities are now looking at building a new terminal to cater to future demand.

Many workers at the Budget Terminal are aware of the impending closure. Shop owners have also been informed and some say it's no surprise, as the lease for most concessions there will expire in a few months.

The Budget Terminal currently serves Berjaya Air, Firefly, SEair, Cebu Pacific and Tiger Airways.

MediaCorp understands the decision to move the carriers to the main terminals was reached a few weeks ago.

It is understood that Tiger Airways will operate from Terminal 2, possibly by June.

Provisions have been made for them to operate from Row 12 close to sister airlines - Singapore Airlines, Silk Air and the new Scoot airline.

Berjaya Air and SEAir will also operate from Terminal 2, with Berjaya making the shift as early as April.

When contacted, Firefly says it is aware of the move, but declined to give details.

Analysts say the expected change should benefit carriers and passengers.

Mr Shukor said: "I think it is going to be quite good for these carriers because that would mean seamless connectivity for passengers who want to hop onto another carrier at Terminal 2. For Tiger Airways, the parent company is SIA which is operating out of Terminal 2, the connectivity is there, it would act as a feeder service to the main airline.

"In terms of people who are flying from Australia onwards to Europe, for example, instead of being transported from the LCCT to Terminal 2, they can just walk a short distance and go onto the next flight and that's clearly an advantage for Tiger."

Observers say when the budget carriers begin operations from the main terminals, they could be faced with higher costs.

But it is understood that authorities are working on a special arrangement with the airlines to help them address the issue.

Changes have also been made to aero-bridges at Terminal 2 to accommodate the additional flights.

Observers say it should not take more than two years for the new terminal to be ready.

- CNA/de

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Japan - Why Japan should join TPP

Japan needs to establish a more open free trade system and strengthen its relationship with other economies

JAPAN needs to take a long-term view of the prospective gains to be had from membership of the Trans-Pacific Partnership (TPP) instead of 'insisting on short-term benefits' and Japanese business needs to take a similar long-term view in adapting to the strong yen, says Yasuchika Hasegawa chairman of the Japan Association of Corporate Executives or Keizai Doyukai.

Less well known outside of Japan perhaps than the Federation of Business Organisations (Keidanren), the Keizai Doyukai nevertheless speaks with the considerable authority of some 1,300 top executives from 900 leading Japanese corporations that make up its membership. Membership is individual rather than corporate.

In a recent interview with The Business Times, Mr Hasegawa also stressed the need for Japan to adapt its business model in the light of supply-chain interruptions caused by natural disasters in Japan and elsewhere, and by electric power shortages in Japan.

As president and CEO of Takeda Chemical Industries and of Takeda Pharmaceutical - both of which are globally active corporations - Mr Hasegawa has had long and first-hand experience of a range of issues that affect not only Japan and rest of Asia but also the wider world of business.

Q: Why are Japanese businessmen lobbying so hard for Japan to join the Trans-Pacific Partnership (TPP)?

A: 'Japan developed its own economy through productivity improvement and strong trade through its international competitive edge,' Mr Hasegawa responds. 'However, the world is undergoing a massive transformation and the rules are rapidly changing as the world economy becomes more borderless.'

Furthermore, while the global population continues to grow (and will continue to do so until around 2080), the world population is ageing, especially in developed countries, and in this respect Japan is a global leader. For Japan to realise sustainable economic growth, it needs to establish a more open free trade system and strengthen its relationship with other economies, such as emerging market countries, and to show a new model for ageing countries.

'The Japanese government hopes to realise the FTAAP (Free Trade Area of the Asia-Pacific) by 2020, and participation in the TPP could be the first step to toward this goal. Moreover, if the FTAAP and the Japan-EU EIA (Economy Integration Agreement) could be realised, that would cover 80-90 per cent of total Japanese trade, and would become a strong platform to sustain 2-3 per cent (annual) economic growth in Japan.

'Participation in the TPP gives the Japanese export industry a strong competitive advantage through the ability to contribute to rule-making negotiations. Furthermore, it could allow us to send a strong message within Japan and abroad that Japan is willing to open the country and establish a disciplined and sophisticated free-trade system.

'Our association supports this strategy and looks forward to opportunities to cooperate with relevant bodies to realise it. For example, we anticipate the possibility of Japan building a more competitive agriculture industry capable of exporting their products by securing a sufficient transition period until the abolition of tax transfers and taking appropriate countermeasures.

'For a better strategy for economic partnership, we may be able to focus on drawing a blueprint for Japan (covering) 10-20 years while expanding the Japanese free-trade system and without insisting on short-term benefits.'

Q: What about the impact of the strong yen on Japanese business, and what would the Keizai Doyukai like the government to do about it?

A: This is a particular problem, he acknowledges. 'As a result of the survey about currency rate expectations conducted at the Keizai Doyukai in December 2011, about 60 per cent of respondents expect a range of 75-80 yen per dollar as at June 2012, indicating continued challenges for Japanese exports.

'The strong yen works against the Japanese export industry, while also shifting a large amount of manufacturing capacity to emerging markets. The Japanese government and the central bank from time to time intervene with the currency exchange.

'Additional monetary supply could mitigate risks from sharp exchange rate fluctuations, however, it would not be the best solution. Rather, the Japanese government should promote deregulation to transform the mechanisms of existing industry, create new business and create new jobs outside of the export industry - as the strong yen has caused the loss of many job opportunities through the off-shoring of manufacturing plants to other countries.

'In addition, the government is responsible for strengthening Japan's competitiveness and encouraging foreign direct investment for internal job creation.

'I believe a strong yen may be a good chance to globalise many Japanese industries and companies through cross-border M&A. In addition, private sector currency purchases for M&A deals could help offset the higher yen, because recently these deals are quite large. In fact, Japanese companies paid six trillion yen (S$93.5 billion) for cross-border M&A in 2011.'

Q: Given the strong yen, how can Japanese business counter competition from South Korea and elsewhere?

A: 'Korean companies overcame the Asian financial crisis by thoroughly restructuring and terminating non-profitable businesses, making a stronger foundation for domestic business, and expanding their businesses globally. Their success factors are strong leadership of top management and precise marketing research in countries of operation.

'Now, Japanese companies face six major challenges, such as a strong yen and higher corporate taxes, however, we have many advantages and strengths in product development due to numerous advanced industries that have strong development capability for material and product components, as well as for advanced technology.

' We can learn how to face tough challenges from Korean companies, and together with a better free-trade system and new business creation through innovation in collaborating with government, bureaucrats, academia and private sector as one Japan, it is possible to overcome our challenges. This is our best chance to revitalise our competitive edge in business.

'Asia is now the fastest growing region in the world, and China, Korea and Japan are major contributors to the region. We could create a strong partnership with China and Korea to guide further Asian growth through free-trade and collaboration.'

Q: What about supply-chain interruptions and power shortages of the kind Japan has experienced over the past year? How can industry cope with those?

A: 'Supply-chain interruptions and power shortages from the Great East Japan earthquake and additional supply-chain interruptions from the flood in Thailand have presented many business challenges. At the same time, they have caused us to reconsider the risks of over-emphasising the western efficiency-first management style and strict Japan-origin supply-chain management, as well as the risks of over-confidence in the face of limited power supply.

'Every company should regularly share risk management plans for supply chains with their customers and suppliers, and should revisit their business models with consideration for Japanese companies' strengths in customer-orientation, high quality products and manufacturing, in order to prevent further problems in the future.

'Japan overcame the oil crisis in the 1970s and established itself as one of the top energy-efficient countries through our focus on advanced technology. Further development in energy saving and energy generation technologies could be a great driver for future innovation and business productivity in Japan.'

Q: What are the prospects in general for Japan's economy in 2012?

A: 'Japan has had some difficult times in recent years, he said 'but 2012 will clearly be a bounce-back year because of special procurement demand related to recovery and restoration from the March 11, 2011 Great East Japan earthquake and Tsunami. The Japanese government has appropriated a sizable budget focused on revitalising affected regions. Japan's growth rate in the second half of 2012 might be slightly decreased as demand from special procurement becomes more moderate.'

One option to restore long term growth in the Japanese economy, he suggests, 'would be for Japanese corporations to further contribute to emerging market growth through their technology and expertise and then bring back the benefits of their efforts to Japan and stimulate domestic consumption and investment.

However, this requires Japanese companies to take risks and act boldly to face various challenges.'

Q: And the global economy?

A: 'The US economy will continue to grow moderately in 2012, and it will take at least 2-3 years to overcome the European financial crisis,' he says. 'This continuing wave of negative market drivers has also gradually affected investment flows to emerging markets. However, the positive momentum of growth in the emerging markets will remain, and they are still likely to lead global economic growth.'

Q: Finally, what about the impact of the eurozone crisis on Japan?

A: 'With the hyper-connectivity of the global economy, a possible collapse of the euro would have a serious impact on public finance as well as Japanese business. Japan especially shares the same public finance risk, because it has an even larger debt-to-GDP - although it is mostly held by domestic institutional investors and banks. We need to be mindful to improve our public finance situation. For business, a higher yen against the euro hurts exports and decreases investment not only to the EU but also to emerging markets, which in turn could shrink global economic growth as well.'

ANTHONY ROWLEY

TOKYO CORRESPONDENT

The Business Times

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Philippines - US envoy spreads the good word: It’s more fun in Philippines

Here’s a jazz-loving diplomat, who has changed his tune. The change will most likely be music to the ears of Philippine tourism officials.

While the country prepares to roll out its new tourism slogan worldwide, US Ambassador to Manila Harry Thomas Jr. has been doing his part to spread the word that it is more stimulating in the Philippines.

“I can tell you honestly, it’s more fun in the Philippines,” Thomas said at a recent gathering of Filipino-Americans in San Francisco.

The diplomat, who is known to enjoy attending regional festivals throughout the country and to frequent local jazz clubs and concerts, was referring to the energized Philippine-US relations, improved international assessment of the Philippine economy and President Benigno Aquino III’s anticorruption campaign.

Last year, Thomas drew flak after he said that 40 percent of foreign male tourists come to the Philippines for commercial sex. He later apologized for making the statement.

At the gathering of Fil-Ams, Thomas said there were “some great programs and great cooperation going on with the Philippines that promise positive results, and a great team at the embassy (in Manila) to help make it happen.”

He said he would be “coming back to Manila really energized by the opportunities we have, with the Aquino administration particularly, to modernize and mature our relationship.”

Thomas announced that, shortly, US Secretary of State Hillary Clinton and Defense Secretary Leon Panetta “will host their Philippine counterparts (Foreign Secretary Albert del Rosario and Defense Secretary Voltaire Gazmin) for a continuation of the Bilateral Strategic Dialogue in Washington.”

High-level delegations

Thomas recalled that in January, “we hosted two high-level congressional delegations in Manila, a sign of Washington’s increased recognition of the seriousness of President Aquino’s administration.”

In his remarks, he also cited the “dynamism, work ethic and community spirit of the Filipino.”

He praised Fil-Ams for “working to make the ties between the United States and the Philippines stronger and more vibrant.”

“You make my job easier and I appreciate the help,” he said.

6 reasons for optimism

The US ambassador reiterated that he was optimistic.

“First, because Filipinos are optimistic and, after nearly two years in Manila, some of that optimism has rubbed off on me. But I am also optimistic because I believe the current Philippine leadership is prepared to take some hard decisions,” he said.

Earlier, he told the American Chamber of Commerce in Makati City there were at least six reasons for his optimism about his host country.

Thomas said, “President Aquino’s campaign pledge to root out corruption is beginning to take hold through public disclosure of past violations. Second, the economy continues to prosper, showing a resilience many nations could envy.”

“Third, the favorable international assessment of the Philippines’ macroeconomic policies. Fourth, continued Philippine success in global markets. Fifth, the spectrum of Philippine security agencies is increasingly effective in conducting credible law enforcement. And, lastly, the high caliber of leadership across key Cabinet agencies,” he said.

28th Balikatan

At his West Coast speaking engagement early this month, Thomas said that soon after his return to Manila, “we will kick off the Balikatan 2012 military exercise, one of several annual exercises that are incredible feats of organization, communication, planning and goodwill between members of the American and Philippine armed forces.”

“Filipino and American military personnel from all branches of service will work shoulder to shoulder in the heat and the rain, cross-training in military operations such as air rescue, amphibious operations, close air support, small arms training and staging support. They will also build and renovate schools and provide much needed dental, medical and veterinary services at the barangay level,” he said.

Thomas noted that “this year’s Balikatan will mark the 28th time our militaries shall have conducted this exercise in the spirit of leadership, cooperation and military professionalism that characterize our relationship.”

“Times may change, but our shared values and principles are enduring,” he said.

Thomas called 2011 a “very positive year” during which the two allies “laid the foundation for what I think will be a substantial modernization of our relationship.”

Facebook, Twitter

“First, we stepped up the quality of service we offer to veterans, American citizens and travelers. Second, we stepped up our outreach to connect with more Filipinos than ever before. We are prominent on Facebook and I invite you to ‘friend’ the embassy. You can follow both the embassy and me, personally, on Twitter if you like,” he said.

He also said he was “most proud of the America in 3D road show, which brings the 30 agencies of the US embassy to shopping malls in key areas (of the Philippines) so we can talk to and learn from Filipinos who might never make it past the embassy’s security.”

America in 3D

“These events include sports clinics, medical outreach, cultural presentations, classic American cars and good old American food. They help us tell the story of US-Philippine friendship, build partners with emerging leaders and dynamic institutions, and remind us that American business, as well as the US government, is a key partner in the Philippines,” Thomas said.

America in 3D, which the embassy described as a “celebration of Fil-Am friendship, showcasing US culture, business and embassy services,” will be in Iloilo City on March 2-4.

Launched early in 2011 in Quezon City, the road show has traveled to Baguio and Cebu cities.

Said Thomas: “For anyone interested in joining us, we will be putting our America in 3D road show in Iloilo in early March. You are all cordially invited.”

Jerry E. Esplanada

Philippine Daily Inquirer

Business & Investment Opportunities

Thailand - Thailand Cashes In On Its “World-Class Health Provider” Status

The Thai government is aiming to develop Thailand into the status of a “World-Class Health Provider” by 2014, with total projected earnings of 11.5 billion US dollars over the five-year period of 2010-2014.

The new strategic plan will be a substantial upgrade over the successful project to establish Thailand as “Spa Capital of Asia” which was achieved in 2008. It will involve a holistic collection of curative medical treatments, preventive spa and wellness services, and sales of herbal products and other supplies for the global health and wellness industry.

Broken down further, the earnings projection is for medical treatments to generate 8 billion US dollars over the 2010-2014 period, spa and wellness services 2.23 billion US dollars, and sales of products and supplies 1.3 billion US dollars. According to Mr Apichai Jearadisak, Advisor, Federation of the Thai Spa Association, Thailand already leads the regional spa market.

“With more than 1,200 registered spas, 400 of which are high-end luxury facilities, and all of them together employing some 25,000 professionally trained therapists, Thailand undoubtedly has a claim to call itself the ‘Spa Capital of Asia’,” he said.

He said that there were many factors that make a Thai spa experience unique such as, service-minded spa personnel, traditional Thai massages, spa therapies and recipes, high operational standards, and a broad range of multi-cultural spa concepts. He noted that people came to spas to relieve stress, enhance their personal appearance and well-being, and reduce pain. Much business is also being generated in the form of a spa experience being offered as a “gift” for birthdays and other personal celebrations.

Mr Apichai said that the Thai spas were working to upgrade the standards of their services and products, as well as the hygienic standards in the spas themselves. Efforts were also being made to improve the quality of their communications and marketing. On the medical side, Dr Med. Prapa Wongphaet, President of the Thailand Medical Tourism Cluster said,

“Thailand has more than 30 international accredited hospitals in Bangkok and various tourist destinations; such as, Pattaya, Phuket, Samui, Hua Hin, Chiang Mai, Chiang Rai and more”.

She said that two leading Bangkok hospitals were already well-known for their ability to service medical tourists from the Middle East countries. Dr Prapa, who also chairs the Health Services Business Committee of the Board of Trade said,

“Thailand could offer a complete combination of advanced medical treatments and other health related services, plus a good vacation. The most popular are health vacations, anti-aging vacations, beauty vacations, spa vacations and more mind-body wellness vacations. The most favourite adjacent services are dental treatments and dental cosmetics, medical check ups, aesthetic skin treatments, body shape up treatment, weight management programs and life-style modification programs.”

Dr Prapa said that more than 200 private and public hospitals had received the “Hospital Accreditation Certificate” issued by the Healthcare Accreditation Institute (public organization). She said that since 2010, the “Thailand Medical Tourism Cluster” concept had involved the collaboration of five government agencies and five leading business associations to support all aspects of medical and health and wellness tourism to Thailand.

Nadjib Mohamed

Thailand Business News

Business & Investment Opportunities