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Dr. Susann Roth Senior Social Development Specialist, Asian Development Bank
Dr. Susann Roth
Senior Social Development Specialist,
Asian Development Bank

The Asian Development Bank is supporting countries across Asia-Pacific in reforming and updating their healthcare systems, which requires proper management and funding. ADB health expert Dr Susann Roth goes into detail.

The following interview was taken from our Healthcare in Innovation report, download the full report for free here: App’ortunities for Everyone

Southeast Asia, as a region, dedicates the lowest percentage of GDP to health care in the world. How does this impact your work in financing healthcare projects?

Every country, regardless of its income status, faces challenges in providing for and financing of health care. Asia Pacific governments spend less than 3% of GDP for health care and rely heavily on the population to pay out-of-pocket for health care. But quality health care requires investments also from the public sector in infrastructure, technology, medical goods, human resources, capacity development, and reforms. As countries prosper, expectations of better health service infrastructure and healthier living conditions rise.

Many governments in Asia Pacific now prioritize reforming and strengthening of health systems toward achieving universal health care (UHC) and recognize that investing in health is important for sustainable and inclusive economic development. Almost all countries in Asia and the Pacific, irrespective of their level of development, have embraced the goal of UHC—providing quality health services to all those in need without undue financial hardship. To achieve these aspirations, the “business-as-usual” attitude needs to make way for innovative and integrated policies and solutions to build, manage, and finance quality supply of health services. Many countries are now exploring different ways to mobilize additional resources and technical expertise to strengthen their health services by moving toward UHC, often within a broader social protection agenda. This presents an opportunity for ADB to provide effective health sector assistance by focusing its support on operations that meet the needs and demands of the developing member countries, which are practical and support implementation of health sector reforms aligned with the strengths of ADB in infrastructure financing, and by carrying the potential to combine lending with knowledge services.

ADB, thanks to these new commitments to UHC, has been presented with avenues to partner with countries on developing responsive and effective health systems that promote inclusion, and good use of public and private resources.

The focus on UHC also offers ADB a means to build a long-term health practice and to usher in assistance beyond health infrastructure. Building knowledge and lines of investment that support countries with different levels of income in achieving UHC will provide a practice that will remain relevant as developing member countries evolve from low- to middle- to high- income levels.

In short, we believe that the trend is changing and that governments will increase their health sector budgets, and will invest in social health insurance or health equity funds and in reforms which make health care of better quality, affordable and accessible. For that, they will seek development assistance from partners like ADB.

How will greater regional cooperation and integration (RCI), one of ADB’s key mandates, help to support the building of healthcare institutions, especially with PPPs?

Regional integration and cooperation are of great importance to the strategic directions of ADB. ADB will continue to seek cofinancing, develop projects, and provide technical assistance to help build and institutionalize capacity to manage Regional Public Goods. This will form part of support of ADB toward strengthening health sector governance. ADB has accumulated impressive experience in health Regional Public Goods. The SARS crisis, avian influenza, and H1N1 events provided ample evidence that DMCs sought ADB support. The involvement of ADB in combatting HIV/AIDS in the region, more recent support to malaria control and elimination through the Asia Pacific Leaders Malaria Alliance (APLMA) and the Regional Malaria and Other Communicable Disease Threats Trust Fund (RMTF), including regulatory convergence of medical goods and pharmaceuticals, and nascent initiatives in the area of climate change and health are proof that the region can benefit from ADB’s convening power, interdisciplinary approaches to regional health governance, and the ability to combine technical knowledge with development and private sector finance.

For Public Private Partnerships, we understand that the experience in the health sector in the Asia Pacific region is still very limited and there are still very few success stories to share if we look only at for-profit PPPs. If we also consider PPPs between the public sector and civil society organizations, we do see many of those in Asia Pacific– and they are quite successful. ADB supports technical assistance projects in selected countries to advance capacity to identify and execute PPPs. For health sector specific PPPs, ADB has provided technical assistance to the governments of the Philippines and Thailand to establish PPP units within Ministries of Health.

At a regional level, specifically for ASEAN countries, there is need to build capacity across countries to identify and execute PPPs. Experience in other countries including the UK and South Africa have demonstrated that PPPs are not the answer for everything and a solution for financing any kind of health care facility. As ASEAN countries move towards UHC and as they acknowledge that they must collaborate with the private sector to provide quality health services for their population, countries will benefit from cross regional knowledge sharing and sharing of best practices. With the ASEAN economic integration, countries will also benefit from establishing standards for PPP project terms of references and bidding documents to attract international investments. For example, the International Infrastructure Support System, a secure, scalable service developed by the Sustainable Infrastructure Foundation (SIF), which was established with the support of the ADB and other multilateral development banks, could develop health infrastructure specific PPP project specific management tools, which help countries to manage PPP project execution. In order to develop sound health PPPs, governments also need to establish standards for construction and management of health care facilities and health care services. This is another area, which ADB can support at the national and regional level.

These days, especially in developed nations, we are hearing a lot about innovation in PPPs that include non-profit collaboration. What innovative partnerships such as this has the ADB been involved in, or is planning to be involved in?

Before giving examples of innovative partnerships, we need to define PPP. For the health sector group at ADB, PPPs are long-term partnerships between a government and a private provider. The partnerships share investment or the asset distribution and the investment risk. The public sector is accountable for providing an enabling environment and financial incentives for PPPs and the private sector has to be made accountable for achieving defined results. Asian countries started only recently to invest in health PPPs. Key lessons learned are:

  • Health PPPs are different from infrastructure PPPs.
  • Public sector needs to provide certainty about the financial risk to attract the private sector (use social insurance to finance PPP services).
  • Public sector needs to invest in streamlined and clear tendering processes (Ministries of health often have no capacity to manage the tendering process) within legal and regulatory frameworks.
  • Defined standards for construction and operation for the private sector have to be in place (the private sector needs incentives to provide a certain service standard, e.g. being accredited, licensed, certified as Center of Excellence).
  • Systems for performance management and M&E have to be established (information systems and results based management capacity need to be strengthened).

More capacity development is needed to increase the often-weak capacity of ministries of health to manage PPPs. This includes: strengthening the weak legal and regulatory environment; developing a better understanding of the financial risks of PPPs; providing technical assistance for the public sector to fund feasibility studies for potential PPP projects; and strengthening accountability mechanisms for the private sector to deliver quality health care infrastructure and services.

ADB is planning to provide such capacity development and technical assistance to address the above listed challenges and foster private and public sector dialogue to define better what the public sector needs from the private sector and what the private sector can realistically deliver and at which cost.

ADB has supported PPPs between public and non-for profit organizations (civil society organizations) in Bangladesh and in Cambodia, where the government contracted out health service delivery to non-government organizations. Key lessons learned are that in the case of service delivery through NGOs, clear definition of service packages, ideally with output and performance-based contracts need to be in place to ensure that the private sector feels accountable for the quality of services provided and that quality assurance measures through standard operating procedures are in place. In addition comprehensive health information system management has to be in place to enable the public sector to lift relevant health information through the non-public sector service providers

The ADB plans to double its assistance of health-related projects to $750 million dollars a year by 2020. What are the largest projects the ADB is currently running, and what ASEAN countries can expect to benefit from this rising tide of funding? 

ADB is currently implementing health sector projects in Mongolia, in countries in the Greater Mekong Subregion, in Bangladesh and in India. In 2015, ADB approved a $300 million health sector program in India to support the National Urban Health Mission. This is one of the largest-ever approved health programs for ADB and marks the beginning of a new era in ADB’s health sector. ASEAN countries can expect ADB’s support for their health sector reforms and investment needs to achieve UHC. This support will prioritize loans, and grant-blended loan products for the public sector and commercial debt and equity investments for the private sector through our private sector department.

As described in ADB’s Operational Plan for Health 2015-2020, ADB’s key priority areas for loans, grants and private sector investments are:

i. Health Infrastructure. Optimize health outcomes and increase the reach of health care from             infrastructure projects such as health facilities and hospitals, and water and sanitation investments. Promote infrastructure investments designed to deliver on concepts such as healthy cities, healthy islands, etc., and ensure that infrastructure is integrated into health systems, managed and staffed efficiently, and properly operated with sustainable financing.

ii. Health Governance. Advance health care through good governance and regional public goods by strengthening institutions, planning, financial management, and health information and regulatory systems.

iii. Health Financing. Expand health care though innovative financing that promotes allocation and technical efficiency.

To fund health care efforts over the next 5 years, ADB will increase health sector investments from 1% to 2% of its total portfolio in 2014 to 3% to 5% (or an annual approval of around $1 billion in health projects) by 2020.

Innovation in healthcare is being realized through telehealth mobile applications. How is the ADB supporting this, and are their lessons elsewhere in Asia/the world that could be applied to ASEAN in this field, especially concerning adoption?

Several telehealth apps are already available in a number of Southeast Asian Countries
Several telehealth apps
are already available in a number of Southeast Asian Countries

Information communications and technology (ICT) will play a crucial role in achieving equitable access to affordable, quality health care and ADB acknowledges that ICT enhanced solutions are a cornerstone for reforming and strengthening health systems to move toward UHC. ADB also acknowledges that meeting these aspirations will require not only stand-alone investments in e- or mhealth including telehealth projects but in innovative and integrated policies and interventions within comprehensive national ehealth frameworks. ADB supports and collaborate with the Asia eHealth Information Network (AeHIN), the largest network of ehealth experts and practitioners globally, and contributes to the organization’s unique peer-to-peer and capacity development support to countries and across regions (e.g. Asia and Africa). AeHIN and a united and growing collaboration with development partners stand ready to work together to address national health priorities and the Sustainable Development Goals in the post-2015 development era, collaborating with private sector ICT providers and ultimately achieving and measuring UHC with ICT.

To mitigate project investment risk and to stimulate public and private sector innovation in health ICT, ADB plans to support together with AeHIN the establishment of a regional m/eHealth Development & Innovation Center. Such a center will be modeled after similar labs in Canada and South Africa. The mandate of the lab will be to provide expertise and services in four key areas: training, tooling, teaming, and testing of ICT applications for the health sector.

To answer your question in more concrete terms, ADB doesn’t see its role in supporting stand-alone telehealth projects but to support countries in comprehensive health sector reforms, which include development of ehealth plans, which cover the legislative, the governance and the implementation aspects of ehealth. (Please note: ehealth or digital health includes mhealth and telehealth). What is important is to work with countries on the business case of ehealth investments and to assist countries in advancing and investing in the best ICT tools at the right time of their health sector reform. Telehealth might be one of the tools. For more information and country examples see ADB AND WHO POLICY BRIEF Universal Health Coverage by Design: ICT-enabled solutions are the future of equitable, quality health care and resilient health systems

The Philippines is said to spend the least on healthcare of the large ASEAN economies. Why is this and how do you believe telemedicine will offset this lag?

Poverty and inequality in the Philippines remains a challenge © Investvine
Poverty and inequality in the Philippines remains a challenge © Investvine

Philippines public health care spending is definitely at the lower end of ASEAN countries but overall health care spending is pretty similar to other ASEAN countries, which reflects the still high out-of pocket spending. Public health services are still weak and not able to provide the population with full coverage of quality health services. However, overall spending is expected to grow and the Philippine government has promised to respond to the growing need to improve health care coverage, and this promise came one step closer to reality with the 2013 passage into law of the Universal Healthcare Bill, which promises health insurance for all Filipinos, especially the very poor.

The health insurance, Philhealth, was able to increase its membership base over the last 20 years to more that 80% of the population, however, the benefit packages remain very small. To increase the benefit packages, to implement standard operating procedures for health service and define service packages as well as improve quality control and accountability mechanisms are now the challenge and the top agenda items for the government.

In order to leverage the potential of telemedicine to improve access to quality health services, the government will need to approve the proposed bill on telemedicine which calls for a comprehensive national telehealth system and governance framework. The framework includes licensing of telehealth providers and facilities, quality control, patient safety and privacy and accountability mechanisms. Beside the necessary legal andvgovernance framework, the Philippines as well as other ASEAN countries still need more investment in internet and mobile phone coverage. The fact is that the coverage is still low in remote areas and these areas are the ones which need access to telehealth services the most.

To enable better coverage, the public and private sectors need to collaborate and the public sector needs to create incentives for the private sector to expand internet and mobile phone networks in less profitable geographic areas.

What are some of the key Millennium Development Goals the region has been able to meet? Which goals have they struggled with?

The Millennium Development Goals are a UN initiative. The Millennium Development Goals (MDGs) are the eight international development goals that were established following the Millennium Summit of the United Nations in 2000
The Millennium Development Goals are a UN initiative. The Millennium Development Goals (MDGs) are the eight international development goals that were established following the Millennium Summit of the United Nations in 2000

The region demonstrated great success in halving extreme poverty ahead of 2015.

While no country will fail of all goals, none will achieve all goals either. Achievements of Asia Pacific countries on most MDG indicators lag behind Latin America and the Caribbean, though are generally higher than sub-Saharan Africa. The size of the poverty challenge remains large and underestimated. Basic non-income deficits – food insecurity, undernutrition, poor sanitation, maternal and child deaths – remain huge concerns. The region shows good progress on access to basic education but quality issues are serious. Aspects of the environment show progress, but pressure on natural resources is mounting with globalization and quest for growth.

New development challenges are emerging. The quality of GDP growth is becoming an issue: the vulnerability of the near-poor to extreme poverty, rising inequality, the working poor and jobless growth. Lifestyle changes are contributing to a rising incidence of non-communicable diseases. As people live longer, aging and the bulge in the youth population are simultaneously increasing the need for pensions and jobs; and health promotion and prevention of diseases. Unplanned urbanization is stretching municipal capacities including urban health services. Growing exposure to environmental stresses, disasters, and the threat of climate change could reverse long-term development gains and require investment to establish resilient health systems.


Susann Roth ADBSusann is currently the Officer-in-Charge Technical Advisor, of the Asian Development Bank’s (ADB) health sector group secretariat. She co-led the preparation of ADB’s new Operational Plan for Health 2015-2020, a plan that aims to double ADB’s health sector operations by 2020. Besides the strategic work, one of her focus areas is to increase ADB private sector health investments, which includes developing sustainable public–private partnership solutions for health service delivery. Susann believes in the need for close dialogue between the public and private sector to find innovative solutions for the changing health needs of Asia Pacific’s population.

One of the innovative health sector solutions Susann promotes is digital health and she coordinates, from ADB side, the collaboration with the Asia ehealth Information Network (AeHIN).

Susann holds a Medical Doctor degree and a PhD in medical science from the University of Heidelberg in Germany, and a Master of Public Health degree from the University of the Philippines.

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From Cogswell Polytechnical College in San Jose, California, Dr. Deborah Snyder and John Duhring, authors of a new higher education series in advance of their upcoming book, tentatively titled “Old School, New School, No School,” provide a new perspective on what higher education means and how it can be more effectively experienced across the globe. This column also appears in “View from the US.”

This segment focuses on the range of students that arrive at college, many of which may fail and drop out without discovering the true meaning of higher education.

By Deborah Snyder, PhD and John Duhring, Cogswell Polytechnical College, San Jose, California



The interplay between students and how they adapt with each other within their physical environment forms the basis for higher education. Think of it as a cultural petri dish where all manner of things are being tried, new perceptions are being explored with colleagues and new endeavors are being put into play. What survives and flourishes, what takes off, brings with it growth. New life forms are generated, of only temporarily. Learning is a byproduct. Students become adapt at playing new roles, working with new colleagues and new tools to affect some outcome together. As entrepreneurship programs take hold around the world, one experienced teacher even describes the accelerated startup as the new business school. 

Peers And Playing With Identity

Long gone are the days of farm children growing up in one room school houses, which were the norm in the late 1800s. Taken in context of industrialization, rural families sought to prepare their children for life beyond the farm, which in those days meant “behind a desk”. The best students would become managers, processing forms and directives. The less academically inclined students would work with their hands.

In the days of the one room school, all ages and skill levels sat together behind desks in rows designed to simulate the working environments they could now aspire to. They were taught manners, how to behave for the new world that was taking shape. They were introduced to books that conveyed information and inspired bright minds.

In those days, there was plenty of free time to play, to pursue interests outside of lessons. Students could associate with each other as they saw fit. They gained their identity within the school, along with their peers. Their goal was not to go to college. The purpose of their education was to be equipped to pursue their careers and interests outside of the school environment.

The one-room school example illustrates a primary pre-requisite for higher education to take place: seeing the world directly. As with Plato’s allegory of the cave and John Seely Brown’s metaphor of white water kayaking, on an individual level, adaptation requires direct observation and a point of view.

Unfortunately, this aspect of education has faded in most school systems. What was once called “show and tell”, in which students are encouraged to speak to their classmates of their experiences, takes so much time away from other activities, the practice hardly exists. Without such direct and public feedback from peers at school, students increasingly measure themselves by the tests, grades and other merit badges that are given out by authority figures. The resulting loss of personal identity is one unintended consequence of so much authoritative oversight without the free play needed to support natural adaptation.

And, this lack of perspective in not limited to the US. As more international students fill class rosters, colleges find many countries rely even more heavily on testing in their school systems. With fewer extra-curricular opportunities to develop real-world observational skills and feedback, students approach higher education without a strong foundation built on years of experience.

Hidden Lives, Hidden Paths

man-person-school-headFor illustration purposes only, let’s develop the character of two vastly different kinds of students who have graduated from high school and are entering college. These personas are intended only to simulate actual behaviors and their consequences when it comes to higher education. There are many others types of students, but the overall message is that students in the lower grades adopt a wide variety of facades in school that can hinder their progress in the future.

On the one hand are the “stars” who can point to their merit badges of test scores, grades and extra-curricular activities. The elite colleges, of course, select mostly star students.  For this persona, let’s call him “Sal”, confidence and spirit make him seem college-ready.

Sal is like the old ideal of a college-bound student, the “well rounded student”. Recently, this kind of student has been replaced by a new ideal for admissions offices: a well-rounded student body. If the college band needs a great piccolo player, the band leader will recruit for that position.  The same goes for the physics department, the football team, etc. The result: star students are sought after to star at the same thing in college that they did in high school.

The Invincibility Cloak

Sal and others like him often cloak their own true personalities with a cloak of invincibility. They can’t show weakness. Students like Sal are the example that have been pointed out to their peers throughout their lives.

Much as they might think otherwise, while Sal might have a clue what he wants out of college, many like him don’t. These students have met the expectations of others, which is admirable. Meeting their own expectations, however, is something new. Students like Sal attack college like they have done at high school, but even with extra-curricular activities and AP courses taught in high schools, higher education doesn’t doesn’t really start until students take a hard look at themselves in the world beyond school.

Sometimes students like Sal make it through college and even find a job without lifting their invincibility cloak. Without a true understanding of what higher education entails, their potential for success is lower simply because they haven’t taken responsibility for their own identity, much like in the famous “Peaked in High School” videos:

The Invisibility Cloak

On the other hand, there is “Mel”. Students like Mel (or their parents) are disappointed by their achievements, or lack thereof. In many cases, the disappointment is not warranted by lack of talent or desire. For Mel, the practical side of doing what is needed to attain something has not been practiced outside of a very constrained set of high school activities. Mel is painfully aware that he seems unable to express himself in a genuine way. Regardless of the compositions he has been submitting for grades over the years, Mel feels hidden, unseen. He sits in the back of the room. He doesn’t volunteer. Something is missing. Students like Mel have donned an invisibility cloak.

Mel knows how to not draw attention to himself. He is skilled at getting “good enough” grades without standing out. Mel is something of a mystery to even friends and family. Yet, he can make it to college with the hopes that his life might improve, or at least his parents may be happy with him if he earns a degree.

Higher Education As A Process, Not A Place

It’s something of a shock to many that overall graduation rates in the US hover around 55%. This means almost half of all students drop out within 6 years. Sal and Mel are both at risk.

Parents and counselors encourage students to “find the right fit” when it comes to choosing where to pursue their college career. The right place might make all the difference. In reality, if a student is recruited for a specific project or joins a team, this might become the lifeline that propels them forward. Peers and play form the basis of identity and change, not mere instruction. The best counselors encourage students to go where their curiosity awakens and they can feel change happening.

Increasingly, colleges are looking more deeply at high rates of attrition. In particular, well over half of first year students drop out. With an average student lifetime of just over two years in many colleges, the efforts to keep the Sals and the Mels in college warrants major efforts in school spirit, housing and food services, along with tutoring, mentoring and counseling assistance. Unfortunately, such enticements do not represent higher education. They do not educe. Treating students as consumers and knowledge as a product has run its course.

Students want to do things, make things and be known for things. To illustrate this clearly, consider that many smaller colleges now field dozens of athletic teams knowing they can attract students who want to play their sport in college but would not make the team at an elite school. The process of dropping the cloak and stepping into the future ends up being what higher education is all about, whether in college or throughout life.

Playing On A Big Stage

nature-person-red-womanThe adaptation required by the college experience, and repeated throughout life, is rooted in each participant’s desire to change, to make a difference and to learn along the way. When the goal is to improve, to perform as a pro, outcomes become tangible. They can be measured. They have consequences. Students who might have developed intricate cloaking techniques must develop new approaches to put themselves in the game. Gaining alignment is no small task for students who have never stepped outside of their self-constructed shell. It’s not enough to talk about it. The famous Nike slogan, “Just Do It”, resonates because it applies to what is often neglected in what we now think of as higher education.

In most colleges today, the “doing” often happens outside the classroom and the academic curriculum. The student has been relegated to “consumer” status. Knowledge is passed along and tested, but not put into play in any meaningful way so as to get real-world feedback.

To activate higher education across a broad population, students must discover things they want to do together. They must play with new identities and find new roles in which they contribute to something that is larger than themselves. What they make of these things, how they bring their knowledge and skills to play on what is in front of them as teams, sets the stage for their adaptation and their success as individuals as well.

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Indonesia maidThe decision of the Indonesian government to stop allowing maids and other low-skilled labourers to take on jobs in the Middle East and North Africa and call them back home is putting annual remittances of up to $2 billion at stake.

The ban, which came into full effect in May this year after a three-month transition period ended, covers all Gulf Cooperation Council (GCC) countries, all North African countries, as well as Jordan, Iraq, Iran, Lebanon, Palestine, Pakistan, Syria, Yemen, Mauretania and South Sudan, bringing the total number of banned countries to 21. Since May, close to 70,000 Indonesian women were held back from leaving for the Middle East to work.

Indonesia will now additionally recall around 700,000 workers, mostly housemaids and drivers, from Saudi Arabia over a period of 15 months. Maids and low-skilled workers in the rest of the GCC, namely Qatar, Oman, Kuwait, Bahrain and the UAE, are allowed to finish their contracts but are then also expected to return to Indonesia where the government is promising “to increase employment opportunities so women won’t feel compelled to go abroad for money,” according to Indonesia’s Manpower and Transmigration Minister Hanif Dhakiri.

However, the Indonesian national budget will have to bear the brunt of missing out on up to an estimated $2 billion in remittances these workers used to send home every year. Latest available government data of 2013 shows that – officially – around 1.33 million Indonesian migrant workers based in the Middle East, most of whom are actually maids and low-skilled workers such as drivers and janitors, sent home $2.18 billion, almost one third of total remittances of $7.42 billion Indonesia received from its global expat workforce over that year. And these are just official figures, with an unknown amount of additional cash finding its way back home through off-the-book channels mainly from an estimated additional 500,000 Indonesian working illegally or without proper documentation in the Middle East.

Most of the money came from Saudi Arabia, with the second largest group, or around 90,000, of Indonesians, working in the UAE. Some 19,000 maids have already been called back from the UAE, sources close to the Indonesian embassy in Abu Dhabi said. In Qatar, there are around 39,000 Indonesian expats of which around 20,000 are employed as domestic helpers, according to census data.

The preference in the Middle East for Indonesian household helpers, drivers and other domestic workers such as gardeners, janitors or doormen, are mostly based on cultural factors, as many Indonesians speak at least basic Arabic, are also of Muslim faith and have experience in their work. There were, however, instances of labour regulation violations and cases of domestic violence that prompted Indonesian president Joko Widodo to announce that he wanted to put an end to the export of the country’s low-skilled workers to “restore their – and Indonesia’s – pride and dignity.”

Indonesia will continue to allow women to work as maids in Taiwan, Hong Kong, Japan, South Korea, Malaysia, Singapore and Brunei, where more than 700,000 Indonesians work as domestic helpers and although there have also been cases of abuse. To improve the female workers’ skills, the Indonesian government wants to teach them specialised skills, such as caring for babies or cooking, rather than serving all purposes. There will also audit and accredit centers be set up to ensure migrant workers know their rights before going abroad.

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Bandar Malaysia1MDB Real Estate Sdn Bhd, a subsidiary of scandal-shaken Malaysian sovereign investment fund 1Malaysia Development Berhad led by embattled Prime Minister Najib Razak, has received “in principle” the planning approval for its Bandar Malaysia development from Kuala Lumpur City Hall.

Bandar Malaysia is an urban development in a southern suburb of Kuala Lumpur whose master plan shows a mixed-used development and a transport gateway across a 197 hectare-site.

“With this planning approval, the value proposition of Bandar Malaysia is now clear and we are another step closer to realising our vision of making Bandar Malaysia the country’s leading transit-oriented development,” 1MDB RE chief executive officer Azmar Talib said.

Having previously shortlisted four bidders, 1MDB RE, the master developer of Bandar Malaysia, said “the reputable domestic and international property specialists” were currently conducting detailed due diligence to become development partners in project.

“We are confident to receive final and binding proposals within the next two weeks, select preferred bidders and execute definitive documentation, before the end of the year,” Azmar said.

Bandar Malaysia is planned to be the gateway for the new high speed rail-line to Singapore and become a central transport hub for Greater Kuala Lumpur. The development also includes plans for “establishing a business and creative enterprise hub and becoming a retail, lifestyle and tourism destination.”

Meanwhile, the political noise surrounding 1MDB continues, with an domestic probe into the fund ongoing and more countries looking into business relations with Malaysia, namely Australia where the Australian Securities and Investments Commission has launched investigations into local companies connected to 1MDB via offshore firms.

Furthermore, Bank of America Merrill Lynch’s head of Asean economics Chua Hak Bin said that the ringgit risks further depreciation until the uncertainties surrounding the troubled 1MDB are resolved.

“The current political crisis is something which a lot of foreign investors are constantly asking about because it is difficult for them to fully understand what is going on,” Chua said.

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HCM City skyline
Ho Chi Minh City skyline with the Bitexco Financial Tower in the center, the country’s tallest structure

Foreign real estate buyers are starting to take greater interest in the Vietnamese property market after a slew of legislative changes has given them a freer hand there, property group CBRE says.

In particular, a long-awaited and unprecedented change to Vietnam’s foreign ownership regulations, which came into force on July 1, 2015, revived the country’s property market. Most of the investors now attracted are from Singapore, Malaysia, Thailand, South Korea, Hong Kong and Japan.

“The relaxation of foreign ownership restrictions is more significant than previously anticipated and marks a strong step towards the opening up of Vietnam’s real estate market to overseas investment,” Marc Townsend, CBRE Vietnam’s Managing Director, said.

These positive factors created advantages for the real estate markets nationwide during the third quarter.

In Hanoi, a total of 9,160 new units were launched by 26 projects, doubling the figure from the same period last year. High-end apartments continued to account for a larger share of the new launch stock. For the first nine months of the year, the supply of high-end apartments accounted for 25 per cent of the total new supply, up from 20 per cent in the first half of the year, including about 2,900 high-end units were launched in the third quarter alone.

In Ho Chi Minh City, a total of 10,114 new units were launched in 26 projects as well, triple the number seen a year earlier, according to CBRE Vietnam.

Overall, the market sentiment remains relatively positive with good cash inflows. An estimated 7,862 units were sold during the quarter, up 88 per cent year-on-year. Continuing the trend from last quarter, high-end apartments still accounted for an increasing share of units sold. In the first nine months of 2015, high-end apartment sales accounted for 35 per cent, up from the 32 per cent reported last year.

The primary price in Vietnamese dong was on the rise in most segments, especially in high-end projects, by an average of 5.5 per cent year-on-year.


Details to Vietnam’s reformed Law on Residential Housing (LRH), in effect since July 1, 2015

  1. Foreign individuals who are granted a visa to Vietnam are allowed to buy residential properties in the country.
  2. All foreign investment funds, banks, Vietnamese branches and representative offices of overseas companies are eligible to buy.
  3. All types of residential sector including condominiums and landed property such as villa and townhouses – previously only applicable to condominiums.
  4. There is no limit on the number of dwelling units a foreigner can buy, but the total number of dwelling units owned by foreigners must not exceed 30 per cent of the total units in one condominium complex, or not exceed 250 landed property units in one particular administrative (or the equivalent of) ward – previously an eligible foreigner could buy only one condominium in Vietnam.
  5. The properties owned by foreigners can be sub-leased, inherited and collateralised – previously only for owner occupying purpose.
  6. The tenure allowed to foreign individuals buying homes is a 50-year leasehold with renewal possibility upon expiration, which remains unchanged compared to previously stipulated. Foreign individuals married to Vietnamese citizens are entitled to freehold tenure.

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Najib Razak Budget 2016Embattled Malaysian Prime Minister Najib Razak unveiled a proposed 2016 national budget on October 23 that delivers benefits for the poor while raising taxes on the rich in a balancing act aimed at trimming a fiscal deficit.

Najib, who is fighting for public support amid a financial scandal, announced $1.4 billion in cash handouts to more than 7 million low-income families and individuals, up 17 per cent from this year. He also raised minimum wages by 11 per cent to $238 per month in peninsula Malaysia, along with salaries for civil servants.

At the same time, he said tax rates will be raised from 25 per cent to 26 per cent for individuals earning more than $143,000 a year and to 28 per cent for those making more than $238,000.

Najib said Malaysia’s economy is expected to grow 4-5 per cent next year, compared to 4.5-5.5 per cent in the current year, despite being hit by lower commodity and oil revenues, as well as sharp falls in its currency, the ringgit.

“This budget and future budgets will be premised on striking a balance between the capital economy and people economy. We need to achieve an inclusive and sustainable growth as well as build a competitive, progressive and a morally strong nation, with a society that is united,” he said in a speech to lawmakers.

Najib has come under intense pressure to resign, with massive street rallies in August, after documents leaked in July showed that about $700 million was deposited in his private bank accounts from entities linked to indebted state investment fund 1MDB. Najib has denied any wrongdoing and said the money was a donation from the Middle East.

Critics slammed the proposed budget as short of substance and aimed at wooing support. Opposition lawmaker Tony Pua said it failed to deal with the 1MDB debts, which have ballooned to more than $10 billion in six years, and that the $700 million in Najib’s accounts had hurt confidence in his leadership.

Singapore-based Mizuho Bank said the budget was in line with the government’s fiscal consolidation efforts while trying to address concerns from the rising cost of living. The government’s fiscal deficit is expected to slide to 3.1 per cent of gross domestic product next year from 3.2 per cent this year.

Najib said the government will make 39 billion ringgit ($9.2 billion) next year from an unpopular new goods and services tax, which will help make up for a drop in oil revenues amid weak oil prices. He pledged to continue efforts to improve public welfare and slammed critics, including “enemies within,” for trying to tarnish the country’s image.

At the end of Najib’s speech, opposition lawmakers stood up holding placards saying, “Where is the 2.6 billion ringgit?” in a reference to the $700 million in his bank accounts, based on an earlier exchange rate.

The budget is likely to be approved by Parliament since Najib’s ruling coalition holds a majority of the seats.

Malaysia 2016 budget highlights
($1 = 4.22 ringgit)


2016 budget allocates total 267.2 billion ringgit ($63.32 billion), an increase from a revised allocation of 260.7 billion for 2015. The initial allocation for 2015 was 273.9 billion.

For 2016, federal government revenue collection is projected at 225.7 billion ringgit, up 3.2 billion ringgit from 2015


Income tax increased from 25 per cent to 26 per cent for people earning between 600,000 ringgit and 1 million ringgit. Increased to 28 per cent for those earning above 1 million ringgit. Some tax relief measures to help middle income wage earners.

Goods and services tax to increase government revenue by 39 billion ringgit, versus 27 billion ringgit in the first eight months of 2015. Some basic goods to be zero-rated, including over-the-counter drugs, baby milk, nuts based food, noodles.

Inside Malaysia 2013/14
Inside Malaysia 2013/14
A 32 page report covering numerous sectors


41.3 billion ringgit allocated to improve education

Defense Ministry allocated 17.1 billion ringgit

Allocation of 30.1 billion for development projects, 5.2 billion for security, social development gets 13.1 billion

Government allocates 1.2 billion ringgit to the tourism industry

Majlis Amanah Rakyat, an agency to facilitate the development of ethnic Malays and other indigenous Malaysians, allocated 3.7 billion ringgit


Spending allocation for Bantuan Rakyat 1Malaysia (BR1M), a programme providing cash assistance for low income households, will be raised to 5.9 billion ringgit in 2016, up from an estimated 4.9 billion in 2015.


Affordable housing projects allocated 1.6 billion ringgit, to be spent building 175,000 houses

900 million ringgit allocated to resolve Kuala Lumpur traffic congestion

Telecommunications infrastructure allocated 1.2 billion ringgit

1.4 billion ringgit earmarked for development of rural roads nationwide. An-Borneo highway to be toll free.

Government to improve improve infrastructure in rural areas, including building houses and water supply

5.3 billion ringgit allocated to modernize agricultural sector

515 million ringgit allocated to improve electricity supply in Sabah state


Pengerang oil project to receive 18 bln ringgit in 2016


Increased from 900 ringgit per month to 1,000 ringgit in peninsular Malaysia


Current account surplus in 2016 to be down more than half to 11.3 billion ringgit from 23.4 billion ringgit this year and 47.3 billion ringgit in 2014

Economic growth forecasts at 4.0-5.0 per cent for 2016, compared with 4.5-5.0 per cent this year

Fiscal deficit for 2016 reduced to 3.1 per cent of gross domestic product, down from 3.2 per cent in 2015 and 3.4 per cent last year

Exports forecast to rebound 1.4 per cent in 2016 after a 0.7 per cent fall this year

Inflation seen at 2.0-3.0 per cent in 2016, against 2.0-2.5 per cent this year

Government debt limit to remain at 55 per cent of GDP in 2016, forecasting a ratio of 54.0 per cent this year and slightly up from 52.7 per cent in 2014

Oil and gas related revenues seen at 14.1 per cent of total revenue in 2016, down from 19.7 per cent in 2015

Goods and Services Tax (GST) expected to raise 39 billion next year, against 27 billion ringgit collected in the first eight months of 2015

Subsidy allocations seen falling slightly to 26.1 billion ringgit from 26.2 billion ringgit this year

Reading Time: 3 minutes

Jade reportA new report by UK-based non-governmental organisation Global Witness reveals that Myanmar’s illicit jade trade is controlled by networks of military officials and their business allies, and had a value of up to a whopping $31 billion last year alone, equivalent to nearly half the GDP for the whole of Myanmar.

Oil and gas, long thought to be the resource-rich country’s key source of income, raked in just $4.3 billion last year. Income from jade was also 46 times annual national spending on health.

The 12-month investigation (multimedia version here, full report here) found an industry far bigger than previously thought, controlled by officials from the military, drug lords and crony companies associated with the darkest days of junta rule.

The highly lucrative industry of jade mining is complicating Myanmar’s democracy process because of a lack of transparency and the involvement of key players closely associated with the former junta government, the report said.

“Since 2011, a rebranded government has told the world it is turning the page on the ruthless military rule, cronyism and human rights abuses of the past. But jade – the country’s most valuable natural resource and a gemstone synonymous with glitz and glamour – reveals a very different reality,” Global Witness analyst and researcher Juman Kubba said.

If this vast wealth was fairly distributed among the residents of Kachin, where the mines are located, it could pull the region out of poverty and drive development of the entire country, she suggested.

“The numbers are staggering,” said Kubba, adding the country’s jade trade “may be the biggest natural resource heist in modern history”.

She also noticed that there has been a “massive escalation” in jade extraction ahead of the November 8 elections since large-scale mining resumed last September.

The sector and its players have received very little attention, partly because a web of obscure companies and proxy owners make it difficult to work out who is making money, said Kubba.

However, after extensive research Global Witness claims that “those involved in the jade trade today reads like a who’s who from the darkest days of junta rule in Myanmar”.

The families of heavyweights in the former military regime are among the biggest beneficiaries, as well as at least one Union government minister, a Union Solidarity and Development Party power broker and serving parliamentarians.

Jade network
The Jade network, including US firm Caterpillar (Click to enlarge)

Companies including Asia World, Htoo Group and KBZ are among the other players in the jade industry – in some cases through front companies – the report said. A number of Chinese individuals also reportedly play a role – either as backers for local companies, or by taking Myanmar identities – and much financing comes from within China.

Chinese import data indicates gemstone imports from Myanmar were worth $12.3 billion last year, though Global Witness believes that 50 to 80 per cent of jade is smuggled across the border. Myanmar official figures for 2013-14 put the trade at barely $1 billion.

The report also names the Coca-Cola Company, which reportedly spent more than $1 million on due diligence but failed to spot its local partner’s interests in the jade industry. Caterpillar, too, reportedly has business relations with the front man for a group of jade companies that Global Witness claims is controlled by drug lord Wei Hsueh Kang, a commander in the United Wa State Army who is wanted by US authorities.

Change is urgently needed, said Kubba. Reformers within the government have already signed Myanmar up to the Extractive Industries Transparency Initiative (EITI) – an international scheme aimed at halting corruption and abuse in the oil, gas and mining sectors.

The jade industry is also an important test of US foreign policy in Myanmar, said Kubba. The US supports EITI and has sanctions on the jade sector “imposed during the Than Shwe dictatorship to deny money and power to abusive members of the military junta”.

However, in many cases, these sanctioned individuals continue to rake in billions of dollars – as do others who are under US sanctions for their roles in the drugs trade.

A spokesperson at the US embassy in Myanmar said he had read the report, and that remaining sanctions are carefully targeted, including investment with the military, as well as a general prohibition on importing jadeite and rubies mined or extracted from Myanmar into the US, including jewellery containing such gems.

Reading Time: 7 minutes
Jomari Mercado_IBPAP_1
Jomari Mercado, President and CEO of the IT and Business Process Association of the Philippines (IBPAP)

Investvine sat down with President and CEO of the IT and Business Process Association of the Philippines (IBPAP) Jomari Mercado to receive an update on the business process outsourcing (BPO) industry’s tremendous growth, the development of more complex work beyond call centers, and strategies for attracting overseas Filipino workers back home.

Overall, since I had an interview with former IBPAP Senior Executive Director Gigi Virata two years ago, how has the industry changed? Well, last year, we actually exceeded the one-million-person mark, closing 2014 with 1.07 million Filipinos working in this industry. Moreover, for every job we create, we generate another 2.5 auxiliary jobs: the baristas in the coffee shops, the people in the convenience stores, tricycle and taxi drivers and so on.

The BPO industry, then, remains a significant contributor to GDP? We closed last year with $18.9 billion in revenue, contributing 6.2 per cent to the Philippines’ gross domestic product; two years ago, we accounted for about 5 per cent. The central bank actually made a statement about two months ago, saying that BPO revenues are coming close to remittances from overseas workers, which are the biggest contributors to the Philippines’ foreign exchange economy. Remittances stood at $24 billion at the end of 2014 and they are growing at about 5 to 8 per cent per year. Our industry has been growing at about 15 to 18 per cent, and the central bank says if both growth rates continue on the same path, by 2017 we will actually overtake the Overseas Filipino Workers’ (OFW) segment in terms of contribution to the Philippine economy.

What is the likelihood of overtaking the OFW segment? Next year, our target is $25 billion and 1.3 million people in direct employment. The OFW segment is targeting $26 billion, but there are 11 million Filipinos contributing to that $26 billion.

So what is propelling this growth? Thirty per cent of the work done in the industry is now being done outside of Metro Manila, accounting for more than 300,000 jobs. Increasingly, young Filipinos don’t even have to leave their hometown. Changes in tier-three cities have been the most dramatic. And I’m proud to say that we were one of the biggest reasons for those changes.

That’s a profound shift. Has there been a shift in clients as well? We had a lot of trade shows to promote the Philippines in the Australia-New Zealand markets, and the result is that this region now represents 9 per cent of our revenue. Overall, presently 77 per cent of revenue comes from North America, namely the US and Canada. Another 9 per cent comes from the European market, predominantly from the UK. And, finally, 5 per cent comes from Japan – mainly from the IT industry there.

Besides English, what other languages are in highest demand in the BPO industry? The biggest demand nowadays would be for Japanese, Mandarin and Spanish.

Mandarin and Spanish: Which one is growing faster, do you think? Definitely Spanish. IBM has said that by 2020 there will be more Spanish-speaking Americans than English-speaking Americans. The challenge is that we don’t speak as much Spanish in the Philippines as we did before. And, unfortunately, most of our students don’t take up Spanish in college.

I think that may be a part of the challenge, like IBPAP has mentioned, of a skill set mismatch. What are other challenges that you are facing with the next generation of workers? When we conduct an actual check on which competencies are missing, we find that they are not technical competencies but soft skills, for example Business Communication, as well as critical thinking. Unfortunately, our students today have so much technology at their fingertips and google everything. If you ask them a question they don’t retain it anymore. But when they are in a customer service scenario – when they are dealing with a person from another country – and customers start asking questions, they don’t necessarily have the luxury of googling it – they have to think on their own.

Are there any other barriers to grooming the perfect BPO worker? We found one missing core competency is multi-tasking. You might say, “Wait, kids today can do things simultaneously.” Well, the challenge is when you put them in a business environment they lack attention to detail. They can do multiple things at the same time, but fail to pay attention to the details.

What is being done to address these shortcomings? The good news is that we were able to identify the gaps. We now have empirical data from a mass survey that I can use to write back to every school that participated to address the gaps. But we also found that the schools cannot change their curriculum overnight. So, we started working together and we developed the Service Management Programme. It’s a 21-unit specialisation track that has been accredited by the government to be offered in the last two years of college for IT, computer science, business administration and accounting.

And how many students are currently in this programme? We are now in the final stages of rolling it out across 17 state colleges and universities across the country – from La Union all the way down to Davao. We have about 8,000 students now enrolled in the most vital subjects and the last six units of that course work is actually a 600-hour internship with a BPO company. We had the first branch of 686 come out of the pipeline in the first quarter of this year. And we asked the 12 BPO companies that participated: Before you take them in, make them go through the recruitment process, we just want to see what the hit rate is. Well, the graduates from one school came up with a hit rate of 33 per cent, up from 10 per cent. Another school came out with about a 52 per cent hit rate. So, are we actually multiplying the size of our qualified candidate pool in the process.

What has been the best experience in the initial trial run of the programme? Previously, the experience with the University of the Philippines Open University (UPOU) for online courses is that their completion rate was anywhere between 10 to 25 per cent. But the 800 people who signed up for the two courses of the Service Management Programme were hitting 45 to 50 per cent completion rates. Part of the reason, we believe, is because they think there’s a potential job waiting for them at the end of the course. It’s a more solid value proposition. The second thing that came out of that test, which is an exciting point, is that half of the people who signed up are OFWs based in Dubai, London and Singapore.

Wow, that’s indicative of a trend that everyone wants to hear. “Do you want to come home?” I’d ask prospective BPO workers from overseas. And before you come home, take this online course so that you can be sure that your competencies are at the level that this industry requires. Bringing Filipinos back home and adding 150,000 jobs this year – that’s what keeps us excited.

But, of those 150,000 jobs, how much is voice work? Right now, about 60 per cent is still voice work. But, let me clarify: voice work is not necessarily simple work. In fact, the bulk of voice work requires a complex style of work. Ten years ago, for example, when you got a call center job, everything was scripted. Today, the only thing that’s scripted is the opening and closing sections.

So then, the other 40 per cent represent more value-added services. Which one of those do you see as the stars? The two stars right now are IT and healthcare. Healthcare posted a growth rate of over 50 per cent at the end of last year primarily because of Obamacare. We’re talking about a huge amount of medical records that had to be converted to digital. And we’re talking about a shift from ICD -9 to ICD -10 in medical coding. And then, most notably, we have a lot of nurses in the Philippines that are US-registered nurses. They’re able to seamlessly provide clinical assistance and medical care out of the Philippines for patients in the US.

This will certainly allow for the Philippines to establish itself as a healthcare specialist hub, yes? Absolutely. Our nurses are practicing their craft, which is actually the best part – they’re practicing what they are trained to do.

Are there any investors looking to develop this nascent industry? There’s an Australian company here that is currently setting up shop and is looking for 300 radiologists. The business model is that magnetic resonance images and X-rays taken in Australia are sent to radiologists here who look at it, file a report and email it back for a fraction of the price of a radiologist practice in Australia.

What tools are needed to maintain this niche growth? Software, it goes without saying, is in big demand. There is no way that we will overtake India when it comes to IT and software; they have scale. But we’re benefiting from the fact that a lot of companies are saying, “I need to find a second location, where is that second location?” Or, a lot of these companies looking at IT now are starting out by putting call center operations in the Philippines and they’re saying, “Okay, you’re doing such a good job. Can you also do this?”

There seems to be a perception in developed countries that outsourcing only sucks away jobs. Can both developing and developed economies find sustainable and mutual benefits? First of all, let’s clarify the term outsourcing because there are several different types of outsourcing. The bulk of the jobs that have left the US were not in the knowledge space, they were in the manufacturing space. And in the knowledge space, there are two aspects about outsourcing: Number one is that a lot of these jobs that are being outsourced to the Philippines, or India, or even Budapest, for example. These are jobs for which they cannot find enough people in the US. And secondly, yes, costs are a big factor. But over the last 10 to 15 years companies have realised that cost savings are not the be-all-end-all of it. The quality of the work is more important and if the quality is not there, it can result in rework, thus increasing the cost. Actually, by doing the math, some companies find it as expensive overseas as back in the US. Most importantly, companies are finding out today that there are types of work where face-to-face interactions remain very important, but then there is another type of work where chat is important. The chat work they can send somewhere else because it is location-neutral.

Where do you see the BPO industry in five years? Consulting group Tholons predicts that the global outsourcing market will be worth $250 billion by 2020. In the Philippines, we will quickly reach $25 billion; so there is still a huge market to tap into. I think the challenge in the Philippines is that the size of the market share that we could grab is completely dependent on how much we can step up the industry, and it boils down to the availability of a sufficient talent pool.

Reading Time: 2 minutes

Investvine+2015+Dubai+Smart+CityNo stranger to pioneering firsts, the government of Dubai has embarked on a mission to create the “smartest city in the world.”

In the report Dubai’s Next Ace: Becoming the scholar of smart cities, Investvine takes a comprehensive look at this ambitious vision through interviews with the leaders spearheading its founding strategic initiatives, as well as renowned experts in the revolutionary technology necessary to make such bold urban transformation possible, such as Big Data, open data platforms, Internet of Things, self-driving vehicles and intellectual infrastructure conducive to entrepreneurialism.

“The smart city project helps immensely shape a knowledge-based economy through facilitating innovation, research and development, while also encouraging the growth of various value-added sectors that will strengthen the country’s reputation as an enabling business environment,” says H.E. Sultan bin Saeed Al Mansouri, the UAE’s Minister of Economy, in the report.

An across-the-board look at the guiding themes that the Dubai Smart Government (DSG) is using to propel transformation of the emirate’s first phase of transformation, which leads up to 2017, is outlined. “In essence, the Dubai government aims to become a world-class smart government for the 21st century through a smart transformation strategy, known as SG21, with four main strategic themes, namely smart connected services, lean administration, open government and enabling the urban environment,” says the DSG’s Director-General, His Excellency Ahmad bin Humaidan.

The report includes articles with commentary from David McClure, founder and CEO of 500 Startups; Andreas Weigend, former Chief Scientist at Amazon (open data expert); Mickey McManus, principal of MAYA Design and co-author of Trillions (Internet of Things expert); Dr. Ryan Chin, Managing Director of the City Science Initiative at MIT Media Lab (self-driving vehicle and urban mobility expert); and Ken Singer, Managing Director of the Center of Entrepreneurship at UC Berkeley (entrepreneurial mindset expert); Nina Curley, Managing Director of Flat6Labs Abu Dhabi (startup accelerator expert).

Through an alchemy of these leaders of government and technology and innovation, Investvine’s report on Dubai’s citizen-led smart city vision is hitherto one of the most systematic works on what it truly means to be a “smart” city.

You may download the report on our eStand for $29.99

Reading Time: 5 minutes

Investvine+App+RevolutionSoftware applications have not only become an integral part of our personal lives, they are also becoming increasingly important for business planning. Companies like Anaplan are providing innovative tools that have a lot of advantages over conventional business software systems and their enterprise planning add-ons. To learn more about these solutions, Investvine met Robert Bergstrom, partner and co-founder of Executit, a Stockholm, Sweden-based management consulting and business solutions company with a subsidiary in Singapore. Focusing on solutions for enterprise performance management and business planning, Bergstrom is working closely with Anaplan and its cloud-based business modeling and planning platform for sales, operations and finance, using five Anaplan core apps.

When did you start working with Anaplan? I got interested in Anaplan and met Samir Neji [Managing Director at Anaplan Asia-Pacific] for the first time back in 2012. Later, when I left Accenture in February this year and launched my own company in March, I reconnected with him.

Why have you chosen to exclusively work with Anaplan as a software provider? Given that Executit is a management consultancy, and also a business solution company, our focus is on key challenges for companies that cannot solve their problems in a satisfactory way, for example in enterprise performance management. We have found that Anaplan is probably the only software product we can use to implement quick solutions to solve business planning problems. Conventional solutions would take months to implement and that wouldn’t fit for many. As a business consultancy, we understand the core problems of companies and can solve their key challenges. And with Anaplan, we can do that in a very quick way. That’s why we chose to work with them and their solutions.

Executit operates a subsidiary in Singapore. What brought you to open a base there? We think the region is very interesting and growing strongly. It’s also a good base to expand into the rest of Asia. Apart from that, I was based there before, and the relationship with Anaplan also started in Singapore.

In your experience, what is the biggest challenge in improving Enterprise Performance Management in Asia? The core challenge is that companies mostly rely on IT consultants when they have business planning problems to solve. However, we find that many problems are lying outside IT and are business management-related, so they also need business consultancy. IT and business management need to be combined, that is our model. Apart from that, other challenges that need to be addressed are, for example, in finance and controlling when it comes to management reporting and defining key performance indicators, or in the supply chain. We believe that companies need to take a more holistic view, look at their business as a whole and at issues that should be prioritised. That’s where Anaplan comes in.

What is the issue with IT consultants? Many companies think that IT can solve everything, and they put all their effort into IT implementation. However, that resolves probably only 20 to 30 per cent of their issues, while the rest has in fact to be solved outside an IT system. But many companies simply don’t have the time to do that.

In Asia, companies seem to have a different mindset when it comes to Enterprise Performance Management. What would they need to adopt in order to change? They will need to understand the challenges in the business environment from a global context. The complexity today lies in global supply chains, and companies need to be very agile in managing and planning their business. They cannot continue working with their old annual static planning processes – that will leave them way behind. They need to reallocate their resources and start planning on a much shorter, monthly basis.

For which of your services do you see the highest demand in Southeast Asia? Definitely business management in terms of setting targets, developing forecasts and allocating resources in the sense of investing money. Connecting the targets in sales forecasts, supply chain, finance and controlling and see how all this ends up in the financial statements.

What issues do executives in the region have with sales targets? That could be a number of things. Setting targets needs to be based on a top-down as well with a bottom-up perspective. The top-down perspective might be – for a publicly listed company – looking at the expectations of the market, the future value of the company, on margins etc. to define where there is need for growth. It’s the view from outside. From the inside, they need to look at sales targets from a bottom–up perspective in order to create realistic targets. For a sales person, it’s about realistic key performance indicators, about manageability and sensitivity.

How would you encourage business executives in Southeast Asia to use such business planning applications that you are advocating? Speaking from my personal perspective, back in 2006, applications were not all that common. But this has completely changed today in a sense that many actually can’t live anymore without apps. And this notion has also become true for companies. As a business leader today, for instance as a chief financial officer with a responsibility to have solutions in place, why would they spend ten months to install IT add-ons when there are apps available – for example from Anaplan – that are instantly useable? Of course these apps need to be tailor-made for a particular company, but this can be done in 10 per cent of the time necessary to get a conventional IT add-on fully running. So, why would a company spend time and money on new individual IT solutions when they can buy a pre-built app that takes only a few days or at most a week to get it up and running? I am absolutely convinced that this will be the future of business planning – just look at how apps have been integrated in our daily lives: this will happen in companies too. It just a matter of time, and a mindset change will come starting with an executive’s perception that an app is not something unsophisticated anymore.

Could you give me an example what your apps can do? They deal with how a company can manage its business much more effectively and cost-efficiently. One core app is about strategy execution on the leadership level where they can monitor strategy execution and measure costs and targets of implementing action plans. Another app is the management business scorecard app, which has the same logic but is meant for the rest of the organisation, e.g. a sales director, who can use it for forecasts and targets and a strategic action plan to close possible gaps. Other apps are about economic modelling and simulation, business case development, as well as tracking and controlling. For example, the economic modelling app can be connected in hours to a company’s system, and it can model things such as what happens if they decrease their warehouse inventory by two days or what the value creation metrics in terms of return on investment are. The app can simulate that, and that’s quite sophisticated in my view. If you look at the Anaplan homepage, you can see a video on that. (Video below)


Which companies have adopted your solutions out of Singapore? I cannot give company names yet, but I can say that we have been working with a real estate company, a sports fashion retailer, as well as a technology company in a high-tech area so far.


Robert Bergstrom, Partner and Co-founder, Executit

Robert B PhotoRobert has 17 years of experience in management consulting and Enterprise Performance Management (EPM). Until February 2015, Robert was a Managing Director at Accenture and the global lead for EPM within Accenture Strategy Capability Network. Robert was based in Singapore during 2011-2013 and was during those years leading Accenture´s Finance & Enterprise Performance practice in Southeast Asia and Accenture´s EPM offering in Asia Pacific.


Reading Time: 3 minutes
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Myanmar-Thai border at Tachileik, a town in the Shan State of eastern Myanmar © Arno Maierbrugger

Flows of illicit money in and out of Myanmar increased heavily since the country started to open its economy to the outside world, a new study released shortly ahead of Myanmar’s crucial general elections on November 8 shows.

The so-called “shadow economy” soared alongside large legit investments made by telecom, oil, trading and manufacturing companies and a general economic upswing after the junta established a quasi-civilian government in 2011, placing Myanmar on the list of countries with the largest informal economies in the world, according to US-based non-profit organisation Global Financial Integrity (GFI).

GFI looked at illicit money flows through Myanmar from the early 1960s, when a military government in the country took over, up to 2013, and found that nearly $100 billion were funneled illegally through Myanmar, whereby the flows swelled massively over the past few years. In 2013 alone, unregulated financial inflows totaled some $10 billion, more than 20 per cent of Myanmar’s official GDP.

The report, entitled “Flight Capital and Illicit Financial Flows to and from Myanmar: 1960-2013” and released on September 10, does not even include the smuggling of drugs, timber, precious stones and other goods, as these deals are of course settled off-the-books in cash and are beyond the scope of a serious analysis.

Instead, the report used a methodology based on multi-equation economic models highlighting the interactions between illicit flows and the underground economy and came to the conclusion that fraudulent over- and under-invoicing of trade transactions accounted for the majority of the country’s illicit financial outflows and inflows over the 54-year period, at 59.6 per cent and 89.2 per cent, respectively.

“Myanmar has a very serious problem with illicit financial flows, and curtailing them should be a priority for the government that will form following the forthcoming elections,” said GFI President Raymond Baker, adding that such illicit flows “have drained billions of dollars from Myanmar’s official economy – this money could have otherwise been used to help the nation’s economy grow. But beyond the direct loss to the economy, these flows are driving the underground economy, fueling crime and corruption and costing the government significant revenue.”

Myanmar-underground economy_GFI

The biggest problem at present are Illicit inflows, which totaled a whopping $77.7 billion over the 54-year period, but nearly half of those inflows (in real US dollar terms) occurred during the last four years of the study, between 2010-2013. On average, Myanmar’s illicit inflows were equivalent to 14.4 per cent of its GDP, the study shows.

A major driver for illicit inflows was the government’s “export first” policy from 1997 to 2012, a period during which import licenses were only awarded to exporters who could bring in enough foreign currency to cover their import costs. This created an incentive to over-invoice exports, the study found. Economic sanctions have further encouraged this by creating excess demand for consumer goods and other items in the domestic market, which had dried up over more than two and a half decades of economic mismanagement during the 1962-to-1988 period of the “Burmese Way To Socialism,” an interesting mix of Buddhist, humanist and Marxist views in theory, but a total failure in economic practice.

After the country’s opening, foreign direct investment initiatives set by the government further lured back money from semi-legal or illegal businesses previously siphoned out of the country back into Myanmar as legit investment by intermediary companies, to a large part into property, a measure with the side effect that the money gets laundered in the process, but also causing real estate prices skyrocketing.

Illustrating the effects of such huge black money flows on Myanmar’s social system, the researchers point out that total illicit money flows were the equivalent of 172 per cent of health expenditure and 73 per cent of education spending in the period. The movement of black money also deprives the government of crucial tax revenue, leaving little leeway to improve Myanmar’s tax collection rates which are among the lowest in the world at 7 per cent of economic output.

Reading Time: 2 minutes
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Old and new in Ho Chi Minh City © Arno Maierbrugger

Vietnam’s economy, which currently ranks 55th globally by GDP, will grow to rank 17 by 2025, predicts US investment house Goldman Sachs in a recently published forecast, saying that the country’s GDP will rise from currently $186 billion to $450 billion in just ten years.

One of the reasons cited for the strong upswing will be Vietnam’s membership in the Trans-Pacific-Partnership (TPP), a trade agreement between 12 Pacific Rim countries which will enable it to export goods with zero tariff rate to a broad market which currently accounts for two fifths of global trade. It is expected that when the TPP takes effect, Vietnam will likely witness a boom in exports of garments and footwear and, in turn, will see an increase in foreign direct investment, particularly from its former arch foe, the US.

Vietnam’s Industry Minister Vu Huy Hoang said that he expects the TPP to increase exports by $68 billion by 2025. Experts peg Vietnam as nation to benefit the most from the TPP.

As of late, Vietnam’s economy received a boost from lower energy costs. The nation’s central bank is also well situated in commencing more easing strategies in the event of an economic downturn. Vietnam’s central bank devalued the dong, strengthening exports and foreign investment.

Vietnam’s economy grew 6.3 per cent from January to September, the fastest rate since 2008, and the Asian Development Bank noted that Vietnam is set to become the fastest growing Southeast Asian country this year. The nation’s economic transformation has also had positive effects on poverty reduction, with extreme poverty seen to fall by 1 per cent by 2017.

Overall, the country is expected to post a 6.5 per cent GDP growth rate this year, the quickest pace in the five-year master plan of 2011-15 for economic development. Vietnam has also managed to achieve low inflation and a stable macro-economy in 2015, and expects GDP to grow by 6.7 per cent in 2016.

There are, however, remaining challenges such as an increasing number of businesses going bankrupt or dissolve, low labour productivity and still many unachieved eco-social development targets.

Ho Chi Minh City_Arno Maierbrugger
Street scene in downtown Ho Chi Minh City © Arno Maierbrugger

Reading Time: 4 minutes

elearningFrom Cogswell Polytechnical College in San Jose, California, Dr. Deborah Snyder and John Duhring, author of a new higher education series in advance of their upcoming book, tentatively titled “Old School, New School, No School,” provide a new perspective on what higher education means and how it can be more effectively experienced across the globe. This column also appears in “View from the US.”

By Deborah Snyder, PhD and John Duhring, Cogswell Polytechnical College, San Jose, California

 The four year college experience sets in place habits that will repeat themselves throughout careers and lives. Technology has widened the range of interactions possible. No longer do only a privileged few know the power of their networks and how to use them effectively. For students with access to virtually all knowledge through the smartphones in their pockets, college takes on new meaning. Rather than pursuing a field of knowledge for its own merits and possibly a career within academics, students today have the resources at their disposal to confront who they are, what they will become and how they fit into the world they live in. They can research any topic they wish. They can associate themselves with teams consisting of others students across campus or in whatever community they choose to join. They can design and run their own experiments. They can build their own equipment. Many opportunities once reserved to only those in elite institutions have been democratized at a fundamental level. Those who make the most of their environment, who learn to adapt with their classmates, who make things happen while they are in college, attract the attention of hiring managers and can create the careers they desire.

learners-technology-archiveCollege represents a four-year opportunity in which to develop skills, knowledge and a professional disposition. From the moment they set foot on campus, today’s students are afforded a unique set of relationships and opportunities regardless of the institution they attend, what books are assigned and the makeup of their classmates. Elite universities have developed the networks and methods for not only selecting the best students for their institution, but also for effectively using the resources at their disposal. All colleges have the potential to facilitate the personal transformations that occur and the cultures that they cultivate.

Ultimately, the college experience presents a mixing function. Students are mixed with others and left to their own wits and ingenuity to adapt to challenging circumstances. It’s a part of the college experience that can’t be taken away. Even as traditional classes have limited flexibility in order to power through standardized curricula, students mix outside of classroom environments. Today’s students can coordinate their activities using a host of social media tools and can choose what activities to pursue in ways that would be unimaginable in earlier generations.

“Baseball is 90% mental and the rest is half physical” – Yogi Berra
10-10-2009: the game between Wisconsin and Ohio State at Ohio Stadium, in Columbus, Ohio
10-10-2009: the game between Wisconsin and Ohio State at Ohio Stadium, in Columbus, Ohio

For their part, colleges have been adapting in their own way. Even small schools have discovered they can attract students who might otherwise go to a top-level institution if they expand their athletic and other performance-based opportunities. In 2007, the athletic association tied to top-tier colleges initiated a highly-successful branding campaign, which positioned athletics as a career service. Its famous tag line activated a culture: “There are over 380,000 student athletes, and most of us go pro in something other than sports.” Since that time, even tiny colleges are building their athletics programs, attracting students who might otherwise go to more prominent schools. The mixing, teamwork, discipline and habits required to compete in athletics has been shown to improve classroom performance and to enhance career options. Of course, only a fraction of those who plays baseball in college goes on to become a baseball player. However, the effort and habits students develop on athletic fields accompany them on the paths they choose and with the people they choose to meet along the way.

Similarly, student makers and entrepreneurs are encouraged by clubs, incubators and involvement with industry. The recent “lean startup” movement encourages student entrepreneurs and with it testimonials of its merits. The intense challenges of running a startup match those of competitive athletics. The terminology of the scrum, the sprint and the pivot evoke the level of commitment and effort required in both arenas. Entrepreneurs must adapt to changing circumstances, which makes learning a required skill with dramatic consequences. It’s not something you can read about, take a test to show you understand what’s going on and move on to something more important. Every detail is important. The habits learned by trial and error are what will serve as a foundation for a career and a lifetime. When students learn to get in the game, to play vital roles in emerging new ecosystems, the sky is the limit.

In both of these examples, students develop skills, take on roles on teams and measure their progress with real-world feedback. Playing vital roles in startups and sports teams informs the pathfinding and career choices that lie ahead. The explosive growth in their popularity might indicate some of what is possible across a growing spectrum of college experiences.

Going Pro 

Never before has such adaptation been supported by free or inexpensive resources. No longer is knowledge the province of a privileged few. Now longer is technology so expensive that the resources required to shape it to individual needs makes it beyond imagining. No longer does intimate contact with global communities require extensive travel and permissions for access. In short, students today already have the tools and resources they need to put their own ideas into play on a world stage. It is all about how we put these to use, and that is what this book is about. This is what higher education is truly all about.

At an individual level, the higher education process repeats itself throughout a lifetime. College represents a first time through the cycle of adaptation and the transformation that comes with it. The process of “learning how to learn” is often cited by graduates as  their most relevant college outcome. As graduates move through their careers, as they evolve as a neophyte trainee, an expert, a master and a mentor, they repeat what they practiced in college and adapt their practices to the situations they face. The tinkering they learned to do is as important as the knowledge they acquired along the way. What they made in school is as important as their degrees. How they employed their own skills and knowledge while in college is what hiring managers are looking for. It’s what VCs are searching for. Ultimately, while desirable career outcomes are often not fashioned by what we now think of as college, but they could be in the future. How students remove their blinders and step into roles will show that new educational processes are well within the capability of any college or university. The legitimacy provided by a college degree will continue to reflect a unique cultural message and to identify its holder as someone worthy of respect and consideration.

Reading Time: 2 minutes

Philippines elections 2016Doors officially closed on October 16 for candidates to submit their Certificate of Candidacy for the 2016 Philippines polls. The result: a historic high of 130 contenders registered to succeed Benigno Aquino as Philippine president in the May 9, 2016 general election by the deadline,

These candidates include four leading contenders: Senator Grace Poe, Vice President Jejomar Binay, former interior secretary Manuel Roxas II and Senator Miriam Defensor Santiago.

Among others who registered were a man who gave his name as Archangel Lucifer, a woman who heard voices from heaven and commanded her to run for public office and another who claimed to be an extraterrestrial ambassadors, as well as a twice-disqualified former presidential candidate, a tricycle driver, two pastors, two retired military officers, a land caretaker and a 76-year-old taxi driver. Another says he wants to legalise the four seasons of winter, spring, summer and fall in tropical Philippines.

“This is a symbol or a representative of a vibrant democracy, where more people feel empowered to cast their vote, and to put themselves forward as candidates,” said James Jimenez, spokesman for the Commission on Elections.

“We are giving people the opportunity to file their candidacies, but we reserve the right to really cut (the number) down to those with a reasonable expectation of victory,” he added.

However, candidates with no serious intentions running in the polls have been defined by election observes as “nuisance bets.”  The election code defines a nuisance candidate as someone who files for presidency “to put the election process in mockery or disrepute or to cause confusion among the voters by the similarity of the names of the registered candidates or by other circumstances or acts which clearly demonstrate that the candidate has no bona fide intention to run for the office for which the certificate of candidacy has been filed, and thus prevent a faithful determination of the true will of the electorate.”

Election reform advocates want stricter requirements to run for president, such as having a college degree, but their proposals were not picked up.

In the 2010 presidential election, 99 people registered to run for president but only 10 people were allowed to compete. Aquino, only son of democracy icons Benigno Aquino Sr and Corazon Aquino, won with 42 per cent of the votes.

One who runs for vice president is Ferdinand “Bongbong” Marcos Jr., son of late dictator Ferdinand Marcos. Interestingly, his running mate will be Senator Miriam Defensor Santiago, leader of the center-left People’s Reform Party. She defended her candidacy to her followers saying that what happened under martial law before was “not made by the Marcos family but by President Marcos and his advisers. I do not think that on a family basis, the Marcoses as a family owe us an apology.”

Santiago is popular among the youth for her strong stance against graft and corruption.

Boxing icon Manny Pacquiao, as expected, registered to run for Senate. He announced he would “push for free, quality public education” to give other people a better chance than what he had when he was forced to drop out of school because his family could not afford to pay. He also vowed to put an end to the abuses of overseas Filipino workers and said he would be an advocate for farmers. He also said he would make peace a priority in Mindanao.

“On this day, allow me to expand my horizon where I am called as a ‘Champion of the Philippines.’ Allow me to be your ‘fist’ to overcome your problems concerning poverty,” said Pacquiao.

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thailand-internet-great-firewallThailand’s ruling junta has scrapped a single gateway Internet initiative that critics termed “The Great Firewall” after negative feedback and activist protest from net users across the country.
Deputy Prime Minister Somkid Jatusripituk told reporters on October 15 that the government has decided to abandon the initiative, claiming that the project has just been under consideration and has never been finalised.

The plan, approved by Thailand’s Prime Minister Prayut Chan-ocha in August, was to consolidate Thailand’s current ten Internet gateways into one central government-controlled point. It has been one of the government’s least popular ideas since it came to power following a coup d’etat last year.

Critics had warned that uniting all Internet services under a single gateway would allow the military government to monitor and spy on content as well as blocking websites it deems subversive. Some also feared the proposal would destroy competition and was reminiscent of the most authoritarian measures to stifle free speech.

The plan also triggered concern that Internet speeds would plummet, which would almost certainly hurt online business and anger Internet users.

The government, meanwhile, had argued that the plan was necessary to “protect Thailand against unwanted content” and to restrict Thai youth from accessing unwanted material.

However, earlier this month, thousands of Internet users were reported to have flooded government websites in an effort to force the pages to crash by exceeding their bandwidth capacity. Websites belonging to the Ministry for Information and Communication Technology, the Ministry of Defense and of Government House were overloaded and left unavailable by the sheer numbers of users trying to access them.

“We will not talk about this any more. If we say we won’t do it, we won’t do it,” Somkid said.

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YSX YangonThe Yangon Stock Exchange (YSX) will begin trading in early December, Myanmar’s deputy finance minister Maung Maung Thein said on October 13. Initially slated to launch this October, the decision was made to open the trading floor only after the country’s general elections on November 8.

A few months after the YSX opening, which is expected in the first or second week of December, Myanmar will make the exchange accessible to foreign investors, the deputy finance minister added.

The country is also in the process of getting a credit rating from international rating agencies which will enable foreign investors to assess the country’s credit-worthiness and pave the way for potential bond deals.

Despite the political uncertainty, the deputy minister said he is confident the launch of the stock exchange won’t be derailed.

“Whoever wins in the elections, it will not demolish the free-market economy that we’re practicing now; whoever wins will not destroy the democratic institutions,” he said.

The election date has been at stake as of late because of severe flooding in the country. But also on October 13, state-run television announced that the polls will go ahead as scheduled.

Meanwhile, Myanmar’s economy seem to be doing well. Aung Tun Thet, economic adviser to Myanmar’s President, in a recent interview with CNBC said GDP may grow by 10 per cent in the financial year through March 2016 as Myanmar revamps its infrastructure and tourist inflow picks up. The Asian Development Bank estimates that the economy grew by 7.7 per cent in calendar year 2014.

Foreign direct investments are likely to climb 25 per cent from a year earlier to $10 billion, Thet said, giving a much-needed boost to the economy that remains one of the poorest countries in the region. Despite rapid growth, Myanmar’s infrastructure remains creaky, as does the healthcare and education system, and a quarter of the population keeps living below the poverty line, the Asian Development Bank estimates.

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MH17 and BukInvestigators probing the downing of Malaysia Airlines Flight MH17 concluded that a Russia-made antiaircraft missile, Buk, struck the Boeing 777 jetliner, causing it to break apart in midair before the wreckage plummeted for up to a minute and a half to the ground.

According to Tjibbe Joustra, chairman of the Dutch Safety Board, which on October 13 published its final report into the 2014 disaster that killed all 298 people on board, the crash was caused by “the detonation of a warhead” to the left of the cockpit.

Giving what was the most detailed description of the jet’s final moments to date, Joustra said the explosion killed the plane’s three crew members in the cockpit instantly and that investigators had found “high energy fragments” in their bodies.

The blast — less than one meter from the plane’s fuselage — also caused “structural damage,” which resulted in the jet’s “forward part” tearing off. The plane broke up in midair and scattered over a 52-square-kilometer area, he said. Why some passengers might have been conscious up to one and a half minute after the crash during the fast descent of the plane, the impact on the ground was “unsurvivable,” the report concluded.

The board, however, did not assign blame for the deadly crash.

But it critisied air traffic authorities for not recognising the risks in flying over the conflict zone in the east of Ukraine. Two military aircraft were shot down in the three days before MH17’s crash, the report said, adding that this should have “provided sufficient reason for closing the airspace above the eastern part of Ukraine as a precaution.”

“The aviation parties involved did not adequately recognise the risks of the armed conflict,” the report said.

(Short version of the report here. Long version here.)

Reading Time: 3 minutes
Al Serkal Mosque_Phnom Penh
Al Serkal Mosque in Phnom Penh is Cambodia’s largest mosque. It was donated by Al Serkal family from the United Arab Emirates after the fall of the Khmer Rouge and refurbished and reopened in March 2015. Picture: Cambodia Islamic Association (CIA)

Cambodia, a country whose official religion is Buddhism, but which has a sizeable Muslim minority, is thinking about the possibility to include Islamic finance in its country-wide microfinance initiatives as an alternative to conventional loans. This idea was discussed at a roundtable session organised by the World Islamic Economic Forum (WIEF) Foundation that took place in Phnom Penh earlier this year, an event acting as a precursor to the 11th World Islamic Economic Forum to be staged in Malaysia in November.

The discussion was held between renowned industry experts, namely Syed Othman Alhabshi, Deputy President Academic of the International Center for Education in Islamic Finance, or INCEIF, in Malaysia, Kunrat Wirasubrata, Acting Director of the Islamic Development Bank’s group regional office in Kuala Lumpur, Tarek M. Genema, Consultant at Phnom Penh-based financial consultancy firm VTrust Appraisal, and Muhd Ramadhan Fitri bin Ellias, Executive Vice President and Head of Shariah Management with Maybank Islamic Berhad, Malaysia.

The penalists acknowledged that Islamic microfinance can be seen as a “hybrid solution” that combines social and ethical principles of Islamic finance with microfinance’s efficiency in reaching out to the poor. Even more, under Shariah-compliant finance, financing is interest-free and actually aimed at the welfare of the participants rather than just at accumulation of wealth for those who provide the financing. In other words, one of the major objectives of Islam – to support the most vulnerable – is identical with the general mission of microfinance. On a broader scope, the idea is also to financially assist Cambodian people who are excluded from the banking system, to enable more charitable projects and, in general, help develop the economy of the country.

“It may be useful for Cambodia to examine the viability of deploying Islamic microfinance,” said Tun Musa Hitam, chairman of the WIEF Foundation, in a speech at the event, adding that microfinance institutions “are key to the functioning of an economy like Cambodia’s.”

For INCEIF’s Alhabsi, the main difference between Islamic and conventional microfinance in technical terms is the cost of capital. While conventional microfinance loans carry relatively high interest rates and are provided by risky venture investments, the interest-free model of Islamic microfinance covers financing mainly through endowment funds to which people contribute out of charity.

“Therefore there is no cost of capital,” Alhabshi said, “and cost of operations can be very low.”

There is also the notion that Islamic microfinance could open a window for mainstream Islamic finance services in Cambodia. So far, there are no Islamic banking services available at all in the country, whose Muslims account for more than 2 per cent of the population, or approximately 350,000 people. They are mostly from the ethnic group of the Cham people who live in eastern and southern Cambodia in in towns and rural fishing villages on the banks of the Tonle Sap and Mekong rivers and in southern Kampot province.

Since the end of the Khmer Rouge era, during which Cambodian Muslims were prosecuted and more than 100 mosques were destroyed, their number is growing again and demand is rising for halal services of different kinds. But, so far, the Cham are unable to follow Islamic law when they borrow money, even if they want to, because there is no Islamic banking infrastructure in the country, not even informal cooperatives.

In addition, Islamic microfinance in Cambodia could help establish and financially strengthen small and medium business ventures of Cham Muslims, which, in turn, could eventually become interesting for Islamic banks in Southeast Asia and the Middle East once they have reached a critical size. And for the broader unbanked part of Cambodia’s Buddhist population, Islamic microfinance could be branded simply as a – religiously neutral – “ethical financing solution,” a strategy that has been successful in Indonesia and Malaysia, the conference suggested.