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ISSUE 4 2016

NORWAY ASIA BUSINESS REVIEW The Magazine of the Norwegian Business Associations in South and Southeast Asia

HM King Bhumibol Adulyadej: Thailand’s Guiding Light The Greenest Industrial Site in the World Brexit: How Will It Affect Norway? E-Commerce Moving Ahead in the Region S P E C I A L

R E V I E W

Singapore State Visit to Norway


NORWAY-ASIA BUSINESS REVIEW

ISSUE 4 2016

NORWAY ASIA BUSINESS REVIEW The Magazine of the Norwegian Business Associations in South and Southeast Asia

HM King Bhumibol Adulyadej: Thailand’s Guiding Light The Greenest Industrial Site in the World Brexit: How Will It Affect Norway? E-Commerce Moving Ahead in the Region S P E C I A L

R E V I E W

Singapore State Visit to Norway

Cover Story

H.E. President Tony Tan is welcomed by Norwegian Prime Minister Erna Solberg at the Chief of Defence Residence at Akershus Fortress in Oslo. The State visit took place from 10 to 12 October 2016 with the President and Mrs. Mary Tan visiting both Oslo and Tromsø. Photo: Heiko Junge / NTB scanpix. Pages 8-17

Editor: Axel Blom Journalists: Harvey Brock, Anton Bentzon, Sofie Lisby, Henri Viiralt and contributions from guest correspondents Operational Management: Vibeke Lyssand Leirvåg Director of Sales: Anders Magnusson Art Director: Pansak Chintanapakdee Production: Graphics-Related Co., Ltd. Concept Design: Spaulding & Associates Published by: Thai-Norwegian Chamber of Commerce in co-operation with Norwegian Business Association (Singapore) and other Norwegian Business Associations in Asia Editorial & Advertising: Norway-Asia Business Review, Thai-Norwegian Chamber of Commerce Mahatun Plaza, 14th Fl., 888/142 Ploenchit Road, Lumpini, Pathumwan, Bangkok 10330, Thailand Norway-Asia Business Review reaches Norwegian-related business executives and decision makers throughout the region including the diplomatic missions as well as government ministries in Norway and Norwegian sector-based organisations. Business Review is a quarterly business magazine and the contents reflects this. Each magazine has a main theme and the articles are centred around this theme. The magazine focuses on Norwegian-related stories from the region and issues that have impact or interest for Norwegian related businesses. Business Review is available in print as well as digital form through Issuu and Pressreader. Copyright © Thai-Norwegian Chamber of Commerce

NORWAY ASIA BUSINESS REVIEW ISSUE 4

2016

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5 FOREWORD President of Norwegian Business Association Singapore, Leonard Stornes reflects on a year of accomplishments

6 SPECIAL REVIEW 8 Singapore-Norway Chamber of Commerce welcomes a business delegation from Singapore 10 A Maritime Partnership in theStrengthening a Maritime Partnership: A Joint Maritime Statement was signed between Singapore and Norway during the State Visit 12 Creating an Elite Research Partnership: The recent Singaporean state visit to Norway provided an opportunity for the two nations to deepen their research and economic ties 14 Singapore’s Arctic Foray: Singapore and Norway appear poised to partner on a number of Arctic research projects, proving climate is not a barrier to scientific inquiry 16 Norwegian Energy Collaboratorium offers smooth start-up to Norwegian energy companies in Singapore

6 ARTICLES

Eulogy: HM King Bhumibol Adulyadej, Thailand’s Guiding Light 18 The Greenest Industrial Site in the World 20 Brexit: Now that UK has taken its bold step, how will it affect Norway?

S P E C IA L REVIEW

CONTENTS

ISSUE 4 2016

22 A Helping Hand in Asia: Asian Development Bank 24 Applying for ADB Assistance 27 Business Review meets Norway’s new Ambassador to Myanmar, H.E. Ms Tone Tinnes 28 Myanmar’s Government Faces a Fragile Future

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30 NorAlumni, a model for all Asian countries to link former students to Norway? 38 Investments in renewables is booming worldwide. What's happening? 40 Why is waste to energy not taking off in Thailand, when raw materials are so abundant? 42 Estonia, a country of 1.2 inhabitants has 5 million e-citizens. What can we learn?

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44 E-commerce in the region is reaching new heights. What are the next steps? 46 Asia is paving the way for digital payments, but who are the players that can disrupt the legacy-bound financial industry?

36 SNAPSHOTS

The 2016 Seafood Dinner in Kuala Lumpur

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48 The Thai-Norwegian Christmas Party at the Ambassador's Residence

49 STATISTICS Norway and Asia

50 DIRECTORY Norway in Asia

President Tan brought with him a business delegation of 14 Singaporean companies. The Heads of State, the business delegation and Norwegian business attended a forum hosted by the Norwegian Shipowners’ Association on the first day of visit. The visit also featured discussions on the countries’ knowledge-based economies, their way forward, both in the ocean space and beyond. The last day of the state visit was spent in Norway’s Arctic capital, Tromsø, where President Tan visited the world’s northernmost university. Singapore is a permanent observer to the Arctic Council and contributes actively to the work of the organisation. Photo: Stortinget

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NORWAY-ASIA BUSINESS REVIEW

ISSUE 4 2016

FOREWORD

ISSUE 4 2016

A Year of Accomplishments

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s 2016 is soon ending we look back on a year where we have from Asia been able to better engage with key stakeholders at home, helping to promote opportunities in Asia on the agenda.

For the first time a Norwegian Prime Minister, Erna Solberg, attended the Norway-Asia Business Summit and we take this as a sign that Asia is growing, with opportunities and changes firmly planted on the political agenda. It was also very encouraging to have the enthusiasm of Kristin Skogen Lund from NHO, Anita Krohn Traaseth from Innovation Norway, Sturla Henriksen from Norwegian Shipowners Association and Professor Torger Reve from BI Norwegian Business School (amongst many other key speakers) with us during the summit as it is essential for us to build upon the engagement and interest of all stakeholders regarding the exciting business opportunities that reside within Asia. We need the key organisations, institutions and people in Norway with us on this journey. Lim Hng Kiang, the Minister of Trade and Industry in Singapore, and Sudirman Said, Minister of Energy and Natural Resources in Indonesia, also played key roles in unwrapping and discussing the key drivers for growth capitalisation in the region. Singapore President Tony Tan’s visit to Norway was another stepping-stone as Asian countries increasingly appreciate and acknowledge the value Norway and Norwegian businesses represent and can contribute towards Asian economic growth. The Policy Brief focusing on Indonesia and Myanmar represented an opportunity to better understand the fundamental changes and structural improvements taking place at a very fast pace in both countries. Thomas Lembong,

PHOTO: NHST MEDIA GROUP

chairman of Indonesia’s Investment Coordinating Board, discussed the challenges and many improvements that have been implemented there, bringing a better operating environment to foreign-owned businesses established in Indonesia. He also highlighted the fast digital growth there and exciting opportunities for companies to establish products and services in a country with a young population (the median age is 28 in Indonesia compared with 39 in Norway) and quickly growing middle class with higher purchasing power. Stig Tråvik, the Norwegian Ambassador to Indonesia, echoed Mr Lembong’s enthusiasm, noting Indonesia’s GDP growth is now 5.1% making it one of the fastest growing economies in Asia. Tone Tinnes, the Norwegian Ambassador to Myanmar, enlightened attendees on the many changes taking place politically and in terms of infrastructure wise in a transforming country where staying power and patience are needed to fully capitalise on the positive changes. Myanmar and Laos are both expected to deliver GDP expansion rates of around 7% in 2017. So come to Asia if you are not already here and set up a business. It’s exciting as there are encouraging infrastructure developments all around us in the region. Intra-Asian trade will strengthen in the years ahead, further mitigating the possible impact of any slowdown in Europe or US moves towards trade protectionism. Sincerely, Leonard Opitz Stornes President Norwegian Business Association (Singapore)

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ISSUE 4 2016

PHOTO: BB2 / SHUTTERSTOCK

The Life and Adoration of His Majesty King Bhumibol Adulyadej, Rama IX, The late king of Thailand

Thailand's Guiding Light

article is written to help the reader understand a little better the This impact on Thailand of the recent demise of the King of Thailand. DAVID LYMAN, CHAIRMAN AND CHIEF VALUES OFFICER, TILLEKE & GIBBINS INTERNATIONAL LTD.

It is safe to say that hundreds of thousands, if not millions, of words have been published on, and thousands of photos have been recently displayed about, this great man. All have been intended to remind and educate the local and global populous on the multitude of achievements and contributions of this virtuous, wise, decent, gentle, selfeffacing, caring, creative, forever active and tireless leader of his people. On 13 October 2016, at the age of almost 89, His Majesty King Bhumibol Adulyadej, the guiding light of Thailand for the past 70 years, faded and then expired. He had lived to the full a most active and productive life. His interests and knowledge were varied and vast, his morality and integrity were forever intact, and his commitment and dedication to his people, of all creeds, colors, ethnicities and faiths, and to their welfare and interests, were boundless. Such was the man who is, was and forever will be

adored by the Thai people and those foreigners who have been fortunate enough to have lived in this land, the Land of the Free. You may have seen the media reports of the literally millions of Thais who have come to the Grand Palace in Bangkok where the King lies in state, to mourn and pay their respects to the person who has been the Father of their nation. The country was flooded with tears. Such an outpouring of love and devotion is unique to this Kingdom of Thailand. It is important to emphasize to the non-Thai reader of this brief monograph the cultural context in which the Thai constitutional monarchy functions. Do not try to compare the attitude of your own culture regarding your monarchy to the Thai attitude toward theirs. Each exists in its own environment and must be viewed in that context. My motive here is to help the reader

to get a brief insight about this unique person, as the man he was beyond the pomp and pageantry associated with his official functions and royal duties. King Bhumibol was endlessly diligent and productive in all his undertakings, earning the respect and love of his people and his country. He always put the welfare and interests of others ahead of his own. He was a man of the people, now numbering some 67 million, their hero, their inspiration, and in some respects, their salvation. To many of his subjects in this nation he was akin to a divinity. To say that he was an amazing human being would be an understatement. To put it mildly he was a Renaissance man. His talents and skills and abilities were legend around the world. He was fluent in Thai (central, provincial and Royal Thai), French, English and German. His musical compositions, penned over the years from his heart sitting at his piano, were and remain very popular. An accomplished musician, he loved to play the saxophone, clarinet, trumpet and guitar. Musicians from around the world came here to jam with him. His Majesty was creative in the forms of music, art and literary works. He had a portfolio of over 1,000 works covering these areas of composition, creativity and innovation. In addition, as an inventor, he holds over 20 patents and 19 trademarks. Sailing in his dingy was more than just a hobby with him. An avid competitor, he participated in and won many a sailing race, not because he was


NORWAY-ASIA BUSINESS REVIEW

king and people let him win, but because of his skill at reading the wind and the sea and handling his sails and his boat. He designed and built by hand some of the competition boats he raced. He was a firm believer in exercise and would go for morning walks of 2-5 kilometers per day whenever he could. He was one of Thailand’s early Ham Radio operators with his own call sign. His love of dogs and other animals is endearing. He took in and raised stray, handicapped and abandoned street dogs. As a writer he authored a popular book about his favorite dog, Tong Daeng (“Copper”). The King and his Queen would often visit rural hospitals and clinics and help with the supply of medicines and medical equipment—all of which they would pay for, naturally. And they would pay the hospital bills of some of the lessfortunate patients, who would otherwise not be able to afford needed treatment. He loved to paint, especially portraits of his beautiful wife, Queen Sirikit, whom he married in 1950 when she was just 17 years of age. It was love at first sight. For decades she was regarded as one of the most beautiful women in the world. They sired and raised three daughters and a son. The Crown Prince has succeeded his father as King Rama X. Constantly travelling from one end of the country to the other, the King often drove himself in whatever vehicle was available. An accomplished photographer, when upcountry his camera was almost always around his neck or in his hand and up to his eye. He lost the sight of his right eye in an automobile accident in 1948 in Switzerland, but given his dynamic lifestyle, you would never know this. On his Coronation Day in 1950, His Majesty took an oath: “We shall reign with righteousness, for the benefit and happiness of the Siamese people”. Daily he lived up to that pledge. His Majesty was a devoted humanitarian for his entire 70-year reign. He and his Queen made countless visits to the rural regions of the country, often sitting on the ground with farmers and villagers throughout his kingdom to learn of their problems and to devise means of helping them survive and thrive. Clutching maps and reports of the area, he would converse with local officials to learn of the difficulties they faced up and down their chain of command. They would frequently work late into the night often just by the lights of their vehicles and flashlights, ignoring the swarming insects. No place was too remote or inhospitable for them to visit, and as he told me, they fulfilled their impressive mission to visit every corner of the country. Their Majesties would donate generously to those in need, providing them with things for their daily use and

consumption, while seeking more longterm solutions to enhance their living conditions. Sufficient and protected water supplies for these people were always in the forefront of the King’s thoughts and contributions. Locating, designing and building local dams, ponds, fisheries, and waterways were his special interest. Conservation of the country’s flora and fauna, domestic and wild, and national development were his dedication along with public health and welfare. “Royal Development Projects”, they are called, and he created almost 3,000 of them. Low-lying Bangkok’s recurring flooding was not ignored by His Majesty. The city’s canals, waterways, dikes, pumps and water gates were upgraded along with the establishment of water holding areas/reservoirs he dubbed “monkey cheeks”. Flood control is a never-ending challenge, coupled with cleaning up the pollution of the waterways. To help alleviate the effects of perennial droughts on agriculture, particularly in the North and Northeast of the country, the King introduced artificial rainmaking by cloud seeding from aircraft. Consistent with his abiding concern for the development of Thailand and the welfare of all of his subjects, the King originated the now universal concept of the “Sufficiency Economy”. The term is almost self-defining. The concept consists of three parts: (1) Moderation; (2) Reasonableness; and (3) Self-immunity; plus knowledge and integrity. The mission and driving motivation the King saw for himself were to strive to raise the standard of living of the Thais to bring them into the post WWII world of the 20th and 21st centuries. Concurrently he was saddled with strengthening the country to withstand the external and internal threats to its borders, its form of government and its way of life. His endeavors were not devoid of personal tensions, frustrations and disappointments. But his unwavering dedication to his dream and his tenacity to succeed prevailed over those temporary impediments. It is important to point out that, in this country, the King is above politics, and he did his best to stay that way. He tried not to involve himself with politics, or politicians, and endeavored not to be drawn into political debates or controversies. Some events he could not avoid. So he would have to maneuver deftly between remaining above all the issues and yet exercising the needed leadership to keep the crises from expanding and perhaps exploding. Over the decades of his reign, he did manage to stabilize a variety of impending crises while not descending into the political arena. On a personal level, I had the

ISSUE 4 2016

honor of having three audiences with His Majesty. In all of them, I found him to be very disarming, calm, charming, humble, almost shy, and tolerant, but still very much a king. He frequently called up his ever-present wit and engaging sense of humor. On one occasion we talked of our mothers, who knew each other. He told me, pointing to his chest, that his mother, who raised him without a father who died at age 38, told him that his name means: “The strength of the land” or “Energy from the earth”. So she periodically admonished him to stay close to the ground—that is, close to his people. While telling this story, he demonstrated with his hands that if he got too high and mighty,” his mother would prick his balloon so he would come back down to earth”. His Majesty may have wanted to avoid getting too high, but the example that he set, through his life and his work, proves that all of us—whether royalty or not—can reach for the stars while remaining grounded, humble and kind. He was our King, and an enlightened, decent and honorable human being. He will be missed by us all who loved him. Now, in December 2016, the Crown Prince has ascended to the Chakri throne. “Le roi est mort, vive le roi.” – “The king is dead, long live the king”.

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Upper left: Mass singing of the Royal anthemby black-clad mourners at Sanam Luang in Bangkok.

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Facts

HM King Bhumibol Adulyadej was born on 5 December 1927 in Cambridge, Massachusetts, U.S. to HRH Prince Mahidol Adulyadej, Prince of Songkla and HRH the Princess Mother, Srinagarindra Died on 13 October 2016 in Bangkok, Crowned on 5 May 1950 Ninth monarch of Thailand from the Chakri Dynasty as HM King Rama IX The world’s longest-serving head of state, serving for more than 70 years Married in 1950 to HM Queen Sirikit Four Children, Princess Ubolratana Rajakanya, HM King Vajiralongkorn, HRH Princess Sirindhorn and HRH Chulabhorn Walailak

.. . . .. . . .

For further reading and watching about His Majesty, I recommend the following” BBC’s 1979 documentary – “Soul of the Nation”. On YouTube “King Bhumibol Adulyadej: A Life’s Work”, edited by published by Editions Didier Millet, 2011 “The King of Thailand in World Focus, edited by Denis D. Gray, published by the Foreign Correspondents Club of Thailand, 2007

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NORWAY-ASIA BUSINESS REVIEW

ISSUE 4 2016

PHOTO: MINISTRY OF COMMUNICATIONS AND INFORMATION OF SINGAPORE

The newly established Singapore-Norway Chamber of Commerce hopes to attract more Asian businesses to Norway.

The Making of a Chamber

ingapore’s President H.E. Dr Tony Kam Yeng and his wife Mrs Mary S Tan visited Oslo and Tromsø on the first Singaporean state visit to Norway from 10 to 12 October 2016. SOFIE LISBY

On the programme was a gala dinner at the Royal Palace with Their Majesties King Harald and Queen Sonja, as well as a visit to the research vessel “Helmer Hansen” and several official signing ceremonies. While the cameras clicked and officials from the Maritime and Port Authority of Singapore and the Norwegian Ministry of Trade, Industry and Fisheries signed the highly anticipated Joint Statement on Maritime Partnership, something far less conspicuous was going on behind the scenes. The newly established Singapore-Norway Chamber of Commerce (SNCC) signed together with Innovation Norway its first MOU with the Singapore Business Federation, the city-state’s main business chamber, representing more than 22,000 companies as well as key local and foreign business chambers. The MOU was one of the first activities of the SNCC, which had launched just weeks earlier. “Singapore is perhaps the most important place for Norwegian business interests in Asia,” explains Mr Erik Borgen, President of SNCC and former head of financial services group DNB’s Asia office in Singapore. He also held the position as President of the Norwegian

Business Association Singapore (NBAS) for more than a decade. “On the other hand, Singapore is not very well represented in Oslo. There is a general consulate but no trade councils, no chamber, nothing. A group of professionals from various industries thought the balance was a bit skewed and we wanted to see if there was enough interest to create a chamber in Norway to not least attract companies from Singapore. We thought it would be good to start before the state visit so after toying with the idea for a few months, we opened on 26 September 2016 with close to 40 members from various industries such as traditional manufacturing, the maritime and oil and gas industry, legal, finance, brokers, telecommunications – generally a good picture of the type of companies that are also operating in Singapore.” Bilateral relations between Singapore and Norway are as welldocumented as they are successful. Diplomatic relations started when Norway established an honourary consulate in Singapore in 1906, only a year after Norway gained its independence in modern times. Since then diplomatic as well as economic relations have continued to strengthen in areas such as

maritime and offshore sectors as well as education and research and development. Today Norway is Singapore’s eightlargest trading partner from Europe and its fourth largest investor from Europe with investments reaching SGD 23 billion in 2014. More than 250 Norwegian companies have offices in the city-state. With such a long and successful history, it would be easy to assume that Singapore has similar levels of engagement in Norway but that is far from the truth. In fact very little information exists on the Singaporean business community in Norway, not to mention any support networks and programmes. With the SNCC that is about to change. “The idea is to create a forum here in Norway to promote the development of business relations between Singapore and Norway,” explains Mr Borgen. “We would also very much like to attract more Singaporean businesses to Norway so it is not as loop-sided as it is today.” SNCC operates on a small membership fee and the Chamber plans to organise events that are of interest to its members. “SNCC is primarily a networking organisation,” notes Mr Borgen. “In the foreseeable future we will start to organise events where we gather our members to discuss topics that are of interest to them and how can we develop good business relations. This is not a forum on how to do business in Singapore but rather about building mutually beneficial relationships. In the beginning of next year, we will have an orientation by the Singapore Economic Development Board (EDB) on the programs they are currently offering foreign companies and investors in Singapore.” According to Mr Borgen, changes in the global economy are forcing


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Norway and indeed the rest of the world to push innovations and look for new ways to develop and renew key industries. “The issue today is that the traditional industries are lagging a bit; everyone is looking for new areas of development,” he says. “Of the Norwegian businesses operating in Singapore today, around 75 percent are in the maritime, oil and gas and offshore sector. All of those industries are experiencing difficult times at the moment – the shipping industry is fairly challenging and the oil and gas industry is squeezed by low prices. We are hoping to assist the government and its agencies such as Innovation Norway in finding new areas, both private and public, that we can develop and thrive off in the future.” Norway’s expertise and long history at the forefront of traditional industries such as maritime and oil and gas will help the country attract new, relating industries, hopes Erik Borgen. “We are at the forefront of these industries,” he says. “There will always be maritime, shipping and oil and gas, but given our experience we can do new things and we can do them more effectively. There is, for instance, very broad cooperation on research and development between institutions in Norway and Singapore. The question is,

how can we commercialise the results of all the work being done in research and development?” The first event of the SNCC is a seminar on the impact on digitalisation. Singapore is a hub for digitalisation and the government has made concerted efforts to boost and support the industry and attract industry leaders. “We are going to combine input of people who are working in digitalisation in Norway with the inputs from companies who are using Singapore as a hub for digitalisation. We want to continuously follow up the initiatives Singapore does on expanding their reach as an international business hub.” Mr Borgen has no illusion that Norway will become an economic powerhouse on par with Singapore, attracting thousands of international companies anytime soon, however, he does hope to see more Singaporean companies look to Norway for expansion and growth. “We have high potential businesses here, not only in the traditional industries but also in other areas such as of innovation, education and research and development. There is a great push from the government to make Norway more attractive to foreign investors and I think that the weakening of the Norwegian

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krone of the last year has made Norway a more attractive market place. There is no reason why existing collaboration between Singapore and Norway in research and development cannot spin off into actual business. There is also broad cooperation in education. This is also obviously a good breeding ground for ideas and cooperation. “Of course I also have to be realistic. Norway is a small country and it can take a lot of effort to convince Asian companies to think of Norway as an interesting area; traditionally they look to the US and larger European countries. But that is exactly why is it very important to have all kinds of spokespeople, embassies, Innovation Norway and the SNCC that are out there telling the story so we are not being forgotten.” For more information about the Singapore-Norway Chamber of Commerce and how to become a member, contact Ruby Hassan, Head of the SNCC in Oslo on ruby.sncc@gmail. com

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Left: The business delegation accompanying H.E. President Tony Tan from Singapore took part in the meeting with the newly form Singapore-Norway Chamber of Commerce.

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Singapore’s recent state visit to Norway allowed the two countries the chance to renew their agreements on maritime, especially regarding research and development.

Strengthening a Maritime Partnership

aritime makes up a healthy portion of the economies of both M Singapore and Norway, so it was fitting that a Joint Maritime Statement was signed on 10 October 2016 during the island nation’s state HARVEY BROCK

visit to Scandinavia.

H.E. Singapore President Tony Tan was accompanied on the visit by Andrew Tan, chief executive of the Maritime and Port Authority of Singapore (MPA). Norwegian State Secretary Dilek Ayhan represented the Norwegian Ministry of Trade, Industry and Fisheries during the signing ceremony, which was witnessed by His Majesty King Harald V of Norway.   In addition to substantial commercial and industrial collaboration between the highly competent maritime clusters of Singapore and Norway, the agreement continues extensive cooperation between the two countries in research and development (R&D) in the maritime environment, sustainable energy technology, offshore and marine engineering, maritime operations and info-communications technology.  “We believe the joint statement creates a good platform to stimulate increased cooperation within the ocean industries,” said Mr Håkon Smedsvig, international adviser for the Norwegian Shipowners’ Association. “There are, for instance, good examples of how know-how and technology from the oil industry is being transferred to other

industries, such as renewable energy and fish farming. We think that there is potential for new industrial partnerships and more collaboration within research and academia on how to take advantage of the vast possibilities in the ocean.” For example, in education, the Bachelor of Science in Maritime Studies and Master of Science in Maritime Studies are jointly conducted by BI Norwegian School of Management and the Nanyang Technological University.  The collaboration between the two countries on maritime research started in 2000. The statement continues a memorandum of understanding (MoU) signed in 2015 that set aside SGD 6 million by the MPA and Norwegian Research Council for a Joint Call for Research Proposals, focusing on navigational safety, ship operations and safety, shipport operations, green shipping and maritime arctic research. One recent research project developed under the MoU is a Ship Traffic Simulator. Driven by Singapore’s homegrown technology company SimPlus Pte Ltd and Norway’s Kongsberg NorControl IT AS, the simulator uses software to

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PHOTO: MINISTRY OF COMMUNICATIONS AND INFORMATION OF SINGAPORE

assess the safety and efficiency of various navigation strategies. “The maritime partnership between Norway and Singapore is strong, and many of our member companies in the Norwegian Shipowners’ Association have offices in Singapore,” said Charlotte Demeer Strøm, director of international politics for the association.  “The state visit was a good opportunity to fortify and give new momentum to the long-lasting relationship between the two nations.  “It is always a challenge to evaluate the immediate impact of such a visit. We were honoured to host such a historic business forum bringing together leading business executives from both sides to discuss new trends and opportunities in the maritime industry. The global economic downturn is affecting both countries, and Norway and Singapore must continue to reposition their economies for future growth. “We know that the ocean holds vast resources that are yet to be explored, such as food, energy and minerals. Through close cooperation between authorities, business and research centres, we believe it is possible to take advantage of this great opportunity, and in a sustainable manner. As high-income countries, Norway and Singapore must also adapt to new global trends such as digitalisation and automation, which are affecting industries across the board.  “The joint statement as well as an agreement between Innovation Norway, the Singapore Business Federation and the Singapore-Norway Chamber of Commerce sets the stage for even stronger cooperation between governments and businesses.” Speaking in 2015 about the MoU, Arvid Hallén, director-general of the Norwegian Research Council, mentioned the effect cooperation has already had on maritime research.


NORWAY-ASIA BUSINESS REVIEW

“This MoU has already had a large impact,” said Mr Hallén. “It is particularly important that Norway and Singapore launched a joint call for proposals in maritime research for the first time as it will lay the foundation for cooperation between Norwegian and Singaporean research groups working together on the same projects. Both Singapore and Norway put great emphasis on improving the environmental footprint of shipping, and when scientists from two of the world’s leading maritime nations work together, the results will be of major significance for both parties as well as for the environment.” In addition to the joint call for research proposals, the two nations also collaborate on the Singapore Maritime Technology Conference, the International Maritime and Port Technology Conference, the Sustainable Marine Transportation Conference, and joint industry workshops. These platforms help both countries enhance their reputations as centres of excellence for maritime R&D and technology, and provide opportunities for maritime professionals to share industry challenges and experiences as well as technology developers and the research community the chance to share their expertise and solutions. Around 80% of the 400 Norwegian companies operating in Singapore are in the fields of maritime or offshore.  Singapore’s maritime sector now contributes 7% to its GDP and employs more than 170,000 people. Singapore is one of the busiest ports and transshipment hubs in the world and a leading international maritime centre. Norway and Singapore often share views regarding shipping market entry, security, environmental protection and Law of the Sea. Norway was the first Western country to join ReCAAP – the regional mechanism to combat piracy.

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Left: Andrew Tan, CEO Maritime and Port Authority of Singapore and Dilek Ayhan, State Secretary at the Norwegian Ministry of Trade, Industry and Fisheries sign an agreement on Norway's Maritime Partnership with Singapore.

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Facts

Around 80% of the 400 Norwegian companies operating in Singapore are in the fields of maritime or offshore Singapore’s maritime sector now contributes 7% to its GDP and employs more than 170,000 people Singapore is one of the busiest ports and transshipment hubs in the world and a leading international maritime centre Norway was the first Western country to join ReCAAP – the regional mechanism to combat piracy

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PHOTO: STORTINGET

Norway and Singapore go back a long time, but we will remain important partners 50 years from now – we are partnering for the future.

The State Visit

his was the key message when H.E. President Tony Tan Keng T Yam and Mrs Mary Tan visited Norway on a State Visit from 10 to 12 October. The first ever State Visit from Singapore to Norway focused on business, knowledge and arctic affairs. Norway and Singapore reinforced their maritime partnership and entered into ten other agreements on collaboration in research and development. Below is the complete schedule for the very hectic visit

Monday, 10 October 2016

• Official welcome of H.E. President Tony Tan and Mrs Mary Tan at the Royal Palace by Their Majesties King Harald V, Queen Sonja and Their Royal Highnesses Crown Prince Haakon and Crown Princess Mette-Marit • Inspection of the Guard of Honour • H.M. King Harald presents representatives of the official Norway • Wreath laying ceremony at the national monument at Akershus Fortress • H.E. President Tony Tan and H.M. King Harald visits the Norwegian Storting, (the Parliament) • Mrs Mary Tan visits the Botanical Gardens at Tøyen accompanied by H.M. Queen Sonja. • Handover of seeds to the Svalbard Global Seed Vault and visit to the Norwegian National Seedbank for wild plants • Luncheon hosted by Their Majesties King Harald and Queen Sonja at the Royal Palace • H.E. President Tony Tan and H.M. King Harald visits the Norwegian Shipowners’ Association • Business Forum and signing of Joint Statement on Maritime Partnership • Gala Dinner at the Royal Palace

Tuesday, 11 October 2016

• H.E. President Tony Tan, Mrs Mary Tan and Their Majesties King Harald and Queen Sonja visits the Research Council of Norway • H.E. President Tony Tan and Mrs Mary Tan are received by the Norwegian Prime Minister, Ms Erna Solberg at the Chief of Defence Residence • Government Luncheon hosted by Prime Minister Solberg at Akershus Fortress • H.E. President Tony Tan, Mrs Mary Tan and Their Majesties King Harald and Queen Sonja visit the Norwegian National Bank • Flight to Tromsø

Wednesday, 12 October 2016

• H.E. President Tony Tan, Mrs Mary Tan and H.M. King Harald visits the Arctic University of Tromsø including the Sami Cultural Center Árdna. Presentation of the Sami history and culture • Visit to the ship simulator at the Technology Building • Presentation of Barents Watch • Presentation of Marine bioprospecting • Luncheon hosted by the Mayor of Tromsø • H.E. President Tony Tan, Mrs Mary Tan and H.M. King Harald visits RV Helmer Hanssen. The research vessel is presented. • Presentation of the research project “Polar Night, life and light in the dead of night” • Presentation of Arctic Climate Change • Presentation of the Norwegian Coast Guard

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The recent Singaporean state visit to Norway provided an opportunity for the two nations to deepen their research and economic ties.

Creating an Elite Research Partnership orway hosted a state visit from the president of Singapore in October N in an effort to improve the close cooperation between the two countries in trade, research, the maritime sector and arctic issues. HARVEY BROCK

The Business Review asked Ms Eline Skard, senior adviser for energy, resources and the environment for the Norwegian Research Council, to comment on the significance of the visit. “The purpose of the visit as a whole was threefold: • To fortify our economic cooperation, particularly in the maritime industry, but also within other industries; • To move forward on already established research collaboration; • To highlight the ongoing collaboration on arctic issues,” said Ms Skard. She described the initial purpose of the research and enterprise seminar as being a relatively small academic event that would attract the Singaporean academic and business delegation along with Norwegians with similar interests. The meeting was meant to bring new  stakeholders together, establish new networks, and to take stock of the current state in order to identify future opportunities in research, innovation and business cooperation between Singapore

and Norway. “We thought it would be a great occasion to arrange this seminar during the state visit,” said Ms Skard. “But as the interest for this event continued to grow, both Norwegian and Singaporean institutions regarded this as a good opportunity to sign new memorandums of understanding [MoUs] to enhance research collaboration between the two nations. We also had the enormous pleasure to welcome President Tony Tan, Mrs Tan and Their Majesties King Harald V and Queen Sonja to the seminar.” The signing of nine new MoUs during the visit became symbolic of the role that research collaboration can play in tightening the bonds between two nations, she said. The fact that these MoUs were signed by leading Norwegian and Singaporean institutions (both research and business) indicates they regard such long-term commitments to be of high value, said Ms Skard. “In order to follow up on the growing Norwegian interest in increasing research collaboration with Singapore,

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PHOTO: MINISTRY OF COMMUNICATIONS AND INFORMATION OF SINGAPORE

the Norwegian Research Council recently based a research and technology counselor in Singapore,” she said. “Dr Per Christer Lund works in close cooperation with the Royal Norwegian Embassy and Innovation Norway in Singapore. “The counselor’s mission is to discover new possible areas for research collaboration [the maritime industry has traditionally been the main area], and to facilitate such collaboration. Another task is to keep a close eye on development and possibilities in Southeast Asia in general. It is well known that Singapore is the gateway to other countries in the region.” One potential area for collaboration in which there is mutual interest is clean energy, said Ms Skard. “We see high interest in this field in both business and academia, from both nations,” she said. “Dr Lund is keen on the possibilities of motivating and enabling Norwegian stakeholders in grasping the potential that lies in the Singaporean market. We are hoping to establish some kind of a knowledge partnership — a collaboration and communication arena for Norwegian companies and institutions with energy engagements in the region. The framework for this arena is now being established.” Relations between both regions date back to over a century ago. In 1906, a year after Norway became independent, it set up an honorary consulate in Singapore — then part of the Straits Settlements — which was an important harbour for Norwegian vessels. Formal ties were established in 1969, after Singapore’s independence. From Oslo, President Tan travelled to the northern city of Tromsø, where he toured the university there and went


NORWAY-ASIA BUSINESS REVIEW

Photo: Alan O Neil

Singapore should be intensified, both in connection with technologies important to maritime research and overall. Close research cooperation between Norway and Singapore may promote highquality research in both countries as well as increased industrial collaboration between them,” he said.

director-general of the Norwegian Research Council, said at the signing. Norway set aside NOK 15 million for this funding announcement, and Singapore pledged a corresponding amount. In 2014, the council commissioned an analysis of its international collaboration activities measured by scientific publication. The bibliometric study conducted by Science Metrix showed Singapore would be a good strategic partner for Norway in a wide range of subject areas. In addition to maritime-related research output, the two countries have had co-publication in areas such as health and care services, ICT, biotechnology and environmental technology. Several initiatives under the Strategic Research Programmes at the National Research Foundation Singapore overlap with Norwegian Research Council initiatives and programmes, including the Innovation Programme for Maritime Activities and Offshore Operations (MAROFF), the Large-Scale Programme for Petroleum Research (PETROMAKS 2) and the LargeScale Programme for Energy Research (ENERGIX), said Mr Hallén. “Research collaboration with

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Left: Norway - Singapore Research and Enterprise Seminar held at the Research Council of Norway on 11 October 2016.

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Facts

Norway started diplomatic relations with the Straits Settlements in 1906 There are close to 400 Norwegian companies in Singapore, most of them in the maritime and offshore industries Norway is Singapore’s 13th-largest foreign investor with investments reaching SGD 21.9 billion Among Singapore’s European trading partners, Norway ranks as the eighth-largest, with SGD 2.4 billion in bilateral trade last year A 2015 MoU between the Port Authority of Singapore and the Norwegian Research Council created a fund of NOK 30 million for maritime research projects

Passion. Passion. Passion. PerhapsPerhaps our greatest our greatest Photo: Alan O Neil

Photo: Alan O Neil

Perhaps our greatest source of energy. of energy. sourcesource of energy. Photo: Alan O Neil

Photo: Alan O Neil

Photo: Alan O Neil

Statoil isStatoil an international energy with operations inwith more than 30incountries. world The world Statoil isenergy an company international energy company more than The 30 countries. is an international company with operations in more thanoperations 30 countries. The world needs energy, and our itmission ismost tosustainable supply it inand theresponsible most sustainable and needs energy, andmission our mission is to supply in way. It’s not anresponsible needs energy, and our is to supply inthe themost sustainable and responsible way. It’s not anway. It’s not an we easy strongly believe thatstrongly with the right people, passion curiosity — passion it’s possible. task, butthat we that with theand right people, — it’s possible. easy task,easy buttask, webut strongly believe with thebelieve right people, passion and curiosity —and it’scuriosity possible. Learn more on statoil.com Learn more on statoil.com Learn more on statoil.com Statoil. The Power of Possible

Statoil. The Power of Possible

Statoil. The Power of Possible

Photo: Alan O Neil

Photo: Alan O Neil

onboard the university’s research vessel. Norway is Singapore’s 13th-largest foreign investor with investments reaching SGD 21.9 billion. Among Singapore’s European trading partners, it also ranks as the eighth-largest, with SGD 2.4 billion in bilateral trade last year. Close to 400 Norwegian companies are in Singapore, most of them in the maritime and offshore industries. The Singapore Business Federation led a delegation of 13 companies to Norway in conjunction with President Tan’s trip. Norway last updated its MoU with the Port Authority of Singapore in April 2015, which included the announcement of a joint funding programme. “This funding announcement will pave the way for cooperation between Norwegian and Singaporean research groups on the same projects. Singapore and Norway both stress the importance of reducing the environmental impacts of shipping, and this kind of research collaboration across national borders will be very valuable. Singapore is investing heavily in research and development. When researchers from two of the world’s leading maritime nations work together, both stand to benefit,” Mr Arvid Hallén,

ISSUE 4 2016

Statoil is an international energy company with operations in more than 30 countries. The world needs energy, and our mission is to supply it in the most sustainable and responsible way. It’s not an easy task, but we strongly believe that with the right people, passion and curiosity — it’s possible. Learn more on statoil.com

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Singapore and Norway appear poised to partner on a number of Arctic research projects, proving climate is not a barrier to scientific inquiry.

Strange Bedfellows

ingapore and Arctic research are not a natural match. But the S country’s maritime collaboration with Norway and its overall strength in research do offer a hint of why Singapore President Tony Tan insisted HARVEY BROCK

on a trip to the Arctic University of Norway (UiT) in Tromsø on his state visit in October. “There are more reasons than you might think for Singapore to want research collaboration on Arctic issues,” said Mr Geir Gotaas, senior advisor at UiT. “Singapore’s relationship with Norway has mostly revolved around shipping, and with climate change we are seeing the Northeast Passage open up quicker than expected. “Singapore and Norway were both early signatories to the UN Convention on the Law of the Sea, and there have been discussions about interpretations of legal rulings. Norway and Russia had a 40-year disagreement over rights in the Barents Sea that was settled in 2010, and Singapore is directly affected by decisions over rights in the South China Sea, so there is some common ground there. “The UiT and the K.G. Jebsen Foundation co-founded the Jebsen Centre for the Law of the Sea at UiT in 2013. “Singapore is also skilled at landbased aquaculture, while Norway has a long tradition of sea-based aquaculture. There is room for collaboration here as one solution to Norway’s problem of sea lice in its salmon farms is to try onshore

aquaculture, though this would be a more expensive option.” The city-state is interested in bioprospecting, which is the search for plant and animal species from which pharmaceuticals and other commercially valuable compounds can be obtained. Some 60-70% of the ingredients used in human medicine are found in nature, such as quinine, which is the bark of a tree, said Mr Gotaas. “In an Arctic environment, plants and animals have to adapt to the cold weather,” he said. “They have to have really efficient enzymes to keep their internal systems functioning in this environment. In some instances, species may have completely different immune systems from similar plants and animals in warmer weather. Some of them are sedentary so they need really strong immune systems to fight off parasites and bacteria. “The world is running out of antibiotics that work, which could potentially mean a return to a situation where tuberculosis and blood poisoning are lethal conditions, as they were prior to the discovery of antibiotics in first part of the 20th century. The immune systems

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PHOTO: MINISTRY OF COMMUNICATIONS AND INFORMATION OF SINGAPORE

of these Arctic plants and animals may provide the key to develop stronger resistance to these problems. “The research method in which you study such plants and animals is similar to what Singaporean researchers know based on their training. And Norway has a massive bio-bank of a few thousand sampling sites for marine flora and fauna, enabling useful cooperation.” The terms of collaboration are still quite broad, and no financing has been provided yet. A memorandum of understanding is being developed between the Agency for Science Technology and Research in Singapore and UiT, with university rector Anne Husebekk planning a visit to Singapore in the spring of 2017 to finalise the agreement. And in June 2016 a delegation from the Energy Studies Institute (ESI) of the National University of Singapore (NUS) visited Tromsø to look at smallscale renewable energy options. “Many rural Arctic communities are not connected to the power grid and depend on diesel for electricity,” said Mr Gotaas. “In addition to being expensive, this type of power generation can be unreliable. Our energy centre is looking at ways for small communities to harness several types of renewable energy, store it and then distribute it to community members in a sustainable manner. “Both ESI-NUS and UiT have worked with the University of AlaskaFairbanks on energy-related issues, so there is an opportunity for tripartite agreement with Singapore on some of this research. The UiT is recruiting six professors now to lead its Arctic Centre for Sustainable Energy. Mr Gotaas said the centre's main objectives are: “interdisciplinary R&D excellence within renewable energy and CO2 management


NORWAY-ASIA BUSINESS REVIEW

in order to create sustainable societies in the Arctic; to create an internationally competitive and outstanding environment that is an attractive R&D partner for the commercial and public sectors;and to ensure that graduates receive high quality education and expertise within renewable energy and CO2 management that is relevant for the business and public sector in the north.” “Norway has also created a public information-sharing system [BarentsWatch] in only a decade,” he said. “The public, including fishermen, can find out about waves, winds and the position of fishermen’s nets on the site.” BarentsWatchis a collaboration between government agencies and research institutions working to collect, develop and share knowledge of coastal and marine areas close to Norway. It is hosted by the Norwegian Coastal Administration. Another potential field for partnership with Singapore is in bioimaging, which uses digital technology to visualise biological processes in real time. “One of our Associate Professors, Dr Balpreet Singh Ahluwalia, who has his PhD from Nanyang Technological University, is leading our Optical Nanoscopy and bio-imaging activities,” said Mr Gotaas. “It’s like looking through a new type of microscope that lets you see what goes on inside live cells. “We are working with Singapore Bioimaging Consortium on this mix between physics and biological science. We want to teach a more crossdisciplinary approach, and we feel most of the sciences are following this trend too.” A final area of interest for Singapore could be obtaining information on how to operate ships safely in Arctic weather. “Drift ice, cold weather, and waters that have not been properly mapped in 50 years or longer all make maritime dangerous in this part of the world,” he said. “These hazards would become of great concern to Singapore if its ships started to ply the Northeast Passage. Satellite coverage and imagery gets worse and less reliable the farther north you travel. “The UiT has a Centre for Integrated Remote Sensing and Forecasting for Arctic Operations. The goal is to build a knowledge hub for research and development on Arctic surveillance technologies, with leading expertise in disciplines such as remote sensing, signal processing, radar technology, and modelling. Right now much of the data on the Arctic environment is gathered from satellites, and we have several scholars who are skilled at pulling this information down and making it usable. Ultimately we want to make safer decisions in the Arctic.”

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PHOTO: SHUTTERSTOCK

In a rare example of public pressure affecting corporate policy, at least in the US, DNB, Norway’s largest bank, sold its assets in the contested Dakota Access Pipeline in North America and is reconsidering the loan it provided for 10% of the project funding.

DNB Divests from Dakota Pipeline

reenpeace and other non-governmental organisations G gathered over 120,000 signatures on a petition asking financial institutions to pull their financing for the project. DNB made the announcement of its divestment on 15 October. Earlier that month Reuters reported the bank was “reconsidering its participation” in the financing of the pipeline if “concerns raised by Native American tribes against its construction are not addressed.” “We have initiated an independent review of how indigenous rights are safeguarded in this process,” said Mr Even Westerveld of DNB. “In addition, we have intensified the dialogue with our customers to use our position as a bank to influence a solution to the conflict.” The disputed project is an underground oil pipeline meant to run from North Dakota to southern Illinois in the US. Some 80% of the USD 3.8 billion pipeline has been constructed. The pipeline has received major headlines in the US because of protests by Native American tribes on whose land the project was scheduled to run through. The tribes claim the pipeline would have a negative environmental impact on their land. “It is great that DNB has sold its assets in the disputed pipeline, and it is a clear signal that it is important that people speak out when injustice is committed,” said Martin Norman, a Greenpeace Norway campaigner. “We now expect DNB to also

terminate its loans for the project immediately.” “There should be a clause in the lending agreement that deals with human rights violations, and DNB should use it to get its money back and end all involvement in the Dakota Access pipeline. If they don’t have such a clause they must accept they have a bad contract and take the loss.” “All financial institutions with a stake in the pipeline must quickly realise financing this project is toxic,” said Ms Lilian Molina, a Greenpeace US spokesperson. “It would be smart for them to get out ahead of the growing movement of customers looking to divest from banks that finance the destruction of our planet and ignore Indigenous rights and sovereignty. Citigroup, TD Securities, Wells Fargo, SunTrust, and the other banks backing this project should see this as a sign to get on the right side of history.”  On 4 December, President Obama’s administration announced the Army Corps of Engineers denied an easement through Lake Oahe near the Standing Rock Indian Reservation in North Dakota and it will begin “undertaking an environmental impact statement to look at possible alternative routes,” reported CNN.

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Norwegian Energy Collaboratorium provides a helping hand for Norwegian energy businesses in Singapore.

Driving Growth through Research or decades Norwegian interests in Singapore and wider Asia have F concentrated on traditional industries such as maritime and oil and gas. SOFIE LISBY

However, with a slowing of the Norwegian economy due to a fall in oil and gas prices, the private and public sectors are increasingly looking to other industries for future growth. The trend has manifested itself in a number of initiatives to attract foreign investment and drive innovation in new sectors, including the establishment of the Singapore-Norway Chamber of Commerce in Oslo, as well as public

debate on how to leverage Norway’s expertise in areas of clean energy in order to fuel tomorrow’s economy. The Norwegian Energy Collaboratorium in Singapore (NEC) is one such initiative. Supported by Innovation Norway and the Norwegian Research Council, the aim of NEC is to enhance research collaboration and business development for Norwegian companies in Singapore via a strategic

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PHOTO: PER CHRISTER LUND

partnership with one of Asia’s leading technological universities, Singaporebased Nanyang Technological University. “The idea is to provide technical support for Norwegian companies in Singapore,” explains Dr Per Christer Lund, Science and Technology counsellor at the Norwegian Embassy and Innovation Norway in Singapore, and director of NEC. “Traditionally the focus has been on maritime and oil and gas and that will continue to play a large role as that is where the majority of the Norwegian businesses in Singapore operate. But there are clear trends towards new sectors – more and more businesses and entrepreneurs are interested in clean energy businesses and research. Research drives new technologies and new technologies drive growth.” The high concentration of Norwegian businesses in Singapore and strong ties in areas of education and research and development have laid the foundation for NEC. During the recent state visit of Singapore’s President Tony


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Tan and Mrs. Mary Tan to Norway, the Research Council of Norway and Innovation Norway organised a seminar where ten MoUs between Singaporean and Norwegian institutions were signed, indicating the drive and support for more cooperation in the research and development between our two countries. “The Norwegian energy sector is increasingly looking abroad for new investments and inputs and many companies are using Singapore as a starting hub due to good infrastructure and a very favourable businesses environment,” explains Dr Lund. NEC is still in its infant stages but Dr Lund sees a number of opportunities and areas where the Centre can assist and promote Norwegian energy businesses at home and in Singapore. He has identified four main roles that NEC can fulfil. As a partnership between Innovation Norway and the Norwegian Research Council and the Energy Research Institute at Nanyang Technological University, NEC can promote Norwegian technology and services, facilitate research collaboration as well as university cooperation in terms of student and faculty exchange between Nanyang Technological University and education institutions in Norway. Nanyang Technological University already has MoUs with leading universities and research orgnisations in Norway including Norwegian University of Science and Technology (NTNU), University of Oslo, Norwegian Business School (BI), Sintef and MARINTEK.

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Secondly, NEC can act as a “softlanding” site for Norwegian energy technology entering markets in Southeast Asia. “We can help small Norwegian companies have a soft landing into Asia. They may have technologies that are applied in the home markets (Norway, EU) and with presumed applicability globally. However, they need to verify that their technology also is relevant in specifics of the Asian market,” explains Dr Lund. “NEC will provide office and laboratory facilities at Nanyang Technological University in the short and medium term and we can provide a professional eco-system where they have access to technology, market experts, related businesses and entrepreneurs. That way we can help them minimise risk and the cost of Asian market entry. They will have access to state-of-theart facilities where they can test and demonstrate their technology, develop prototypes and change and modify existing technologies as well as get feedback from experts and professors at Nanyang Technological University. You could say it is like an incubator in the warm, innovative environment of a university.” The third area where Dr Lund sees the need for NEC is in the support of energy related companies in Singapore and Southeast Asia to expand and strengthen by giving them access to a discussion and collaboration environment, early access to new technology, research facilities and new companies and investors that

can support them in expansion. “Take traditional maritime and oil and gas companies with ambitions of moving into cleaner energy such as LNG and renewables such as Statoil,” he adds. “NEC can help such energy companies move beyond the petroleum trading businesses and look into new avenues for growth such as renewable energy. Elkem, REC, Multiconcult and SN Power are all companies that continuously push innovation. They need access to new technology, new ideas, new concepts and insights.” Lastly, NEC plans to utilise its strong network in the Singaporean business community to help Norwegian companies connect with the right partners and institutions. “We can help companies plug into a wider network of related businesses and agencies, such as IPI Singapore, SPRING, the Economic Development Board (EDB) and International Enterprise (IE) Singapore. Also, Singapore is a great starting point for expansion in Southeast Asia so we can help with contacts in India, Vietnam, Malaysia, Indonesia, Thailand and Myanmar trough the Innovation Norway offices in these countries.” NEC will operate with a membership fee and hopes to attract companies, agencies and research institutions. “Our modus operandi will be to organise monthly symposia for the members,” explains Dr Lund. “Members should act and interact and benefit from a diverse group of participants. We also plan to organise technological seminars, workshops and symposiums on relevant topics and we will attend conferences and exhibitions including Singapore International Energy Week and the Singapore Conference on Sustainable Energy. We will also organise site visits to members or other companies in order to facilitate idea exchange. We’re here for the members so it also depends on what the members want.” “The NEC website will be an information portal connecting Norwegian energy companies with the rapidly expanding market opportunities in the region. “, Dr Lund adds.

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Facts

PHOTO: PER CHRISTER LUND

Above left: The Chinese Heritage Center and the “Beehive” building (left) at Nanyang Technological University” Above: The NEC team at Nanyang Technological University. From left: Research director Dr. Sanjay Kuttan, NEC director Dr. Per Christer Lund, and ERI@N executive director Subodh Mhaisalkar.

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Nanyang Technological University is the leading technological university in Singapore and the second in Asia, according to Times Higher Education. The Energy Research Institute at Nanyang Technological University (ERI@N) conducts research in areas of energy generation, conversion and storage systems as well as grid systems and urban energy solutions in a “living lab” environment with a particular focus on solutions for mega-cities and for the tropical environment. ERI@N is one of the leading research institute for innovative energy solutions in Southeast Asia.

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PHOTO: HYDRO

Norway’s clean energy surplus should be used to attract heavy industry, this keeping value at home.

Green Heavy Industry? hen it comes to clean energy, Norway is often lauded for its W commitment to sustainable and renewable energy and its high levels of clean energy production. SOFIE LISBY

In fact electricity, which accounts for two-thirds of the entire country’s energy consumption, comes from renewable hydropower. Norway produces more than 135 terawatt hours (TWh) of hydropower annually – enough of a surplus that the country exports around 14 TWh to countries like the Netherlands, Sweden and Denmark. High voltage subsea cables are being extended to the United Kingdom and Germany and some analysts predict that Norway will be able to increase hydropower exports to 32 TWh by 2030. With such a surplus and a promising outlook for exports – not to mention oil reserves in the North Sea and a sizeable potential of wind and bio energy – Norway could be forgiven for leaning back and reaping the rewards of decades of innovation and growth. Not so. On the contrary, the country is constantly looking to innovate and drive growth.

One of the main government bodies tasked to do so is Innovation Norway. Amongst its objectives is to promote innovation, entrepreneurship and internationalisation, as well as advise the government on business development. The agency recently published a white paper called Dream Commitment on Norway’s clean energy sector and how it can develop going forward. The paper put forward three strategic recommendations: to maintain and enhance the green energy system to be able to increase renewable energy generation and export; to replace fossil fuels with renewable electricity in sectors where it is suitable such as in the transport sector; and to utilise the country’s green energy surplus to add value around energy intensive industries and services. “The last point is especially important,” says Dr Per Christer Lund,

co-author of the white paper and Science and Technology counsellor at the Norwegian Embassy and Innovation Norway in Singapore. “We have a surplus of green renewable energy, what shall we do with it? We can continue to export it as raw material through power cables but that is probably not the best value for this commodity. Another and more attractive option is to use the energy surplus for value adding in Norway by attracting energy intensive heavy industry. This includes chemical and petrochemical industries, aluminium, silicon and other metal smelters, natural resources processing and energy intensive services such as data storage. By attracting these industries to Norway and powering them with our clean energy surplus, we not only help the global climate but we also keep the value in Norway. Industries represent 14% of greenhouse gas emissions globally, so shifting from fossil-based to renewable energy will be a major contribution to reach the 1.5 degree target. Norway has all the right constituents to be in the forefront of “greening the industry”. This will create the basis for innovative technology development within areas such as adaptive manufacturing, process engineering and control, automation and digitalization and material technologies. In short an essential factor in the “green shift” that Norway as well as other country’s needs.”


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According to Dr Lund, Norway’s energy surplus has increased for a number of reasons. “Over the last five to ten years we have seen the focus on sustainable has increased,” he says. “Despite a substantial growth in population, total demand has levelled because we have become more effective and also because of climate change. Winters are becoming warmer so there is less demand and summers are wetter, which means there is more water in the reservoirs. The other element is that government policy has led to incentives for companies as well as individuals to shift to renewable energy.” The foundations of modern Norway’s economic success was laid at the beginning of last century when large companies like Hydro and Elkem grew metallurgical industries based access to hydropower. Since then, the economy has thrived on the back of maritime and since the 1970s the oil and gas industries, areas in which Norway has gained international repute for being clean and effective. But according to Dr Lund, new world realities are forcing Norway and other countries to push innovation and find new areas of economic growth. “Because of the pressures on the oil and gas industry and the pressures coming from the shift to green energy, Norwegian entrepreneurs, businesses and investors are looking for alternatives to the oil and gas industries,” he notes. “Heavy industry can be very suitable as a complement to the traditional oil and gas industry. We already have expertise in industrial processes with high degree of automation and information and communications technology and we have a lot of the infrastructure in place such as deep harbours industrial sites in the bottom of many fjords with high voltage grid connections. Furthermore, we have a growing army of high skilled and ingenious oil and gas engineers looking for new jobs in new areas..” According to Dr Lund, the push for attracting new industries should be a joint effort by the private and public sectors. “Industry is driven by profit,” he says. “There should be a shift in investor attitude from short term, high return investments back to the old ways of long term investment. This is not done overnight. On the other hand, we need to provide better market conditions to facilitate and promote long term investments. This could be long term electricity contracts, leasing of land and predictable environmental regulations. The government should also look at how to make Norway more attractive to foreign investors, looking at things like tax incentives, regulations of the work force and mobility.” Dr Lund advocates what he calls a paradigm shift when it comes to foreign investment. “Foreign investment has a tendency to have somewhat negative connotations,” he notes. “People are

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afraid that the value will be transferred away from Norway. But this attitude has to change. We live in a global world and foreigners are not here to take our resources and run away with them. We have a sustainable knowledge base in this country and we need to capitalise on that. In the past we have been very successful in expanding our own companies abroad and selling our products – just look at the success of Norwegian seafood. We need to apply the same international attitude when it comes to business at home. “A good example is the oil and gas industry in the 1960s where we provided a very lucrative environment for foreign investments. Without involving foreign investors back then, Norway would never have been able to make our economy what it is today.” The government can learn a lot from looking at how governments elsewhere attract foreign investors, says Dr Lund. “How do other countries shape their foreign direct investment policies?” he asks. “Iceland is home to some of the world’s largest aluminium smelting facilities, and the industry accounts for 40% of the country’s export, exceeding the traditional fish export. That has only been possible with foreign investors such as Alcoa, Tinto and Century Aluminium, all from US and Canada. We can also look at other countries that are actively inviting foreign investors, such as the United Kingdom and Germany. Due to Norway’s unique energy make up, if we can come up with policies that will attract more foreign investment into key industries, it will be a win-win situation.”

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Facts

Norway is the world’s sixth largest producer of hydropower. The country produces 30 percent of total hydropower energy and has 50 percent of the storage capacity in Europe. Norwegian hydropower is a sought-after commodity with increasing value and there is high potential for increasing production of both hydro and wind power. Almost all of the land-based electricity production comes from hydropower and 60 percent of the total land-based energy consumption comes from renewable energy (138 TWh hydropower, 2.5 TWh wind power and 16 TWh bio energy in 2015. The rest is covered by fossil fuels and is used primarily in transport and industry. Norway has a larger share of energy heavy industry than other European countries mostly because of hydropower. Norway exports about a quarter of its hydropower in the form of high-powered products such as ferroalloys and aluminium. Energy heavy industry in Norway has evolved into a global leader in developing technology communities and industries related to existing industries. Norway is the world’s third largest exporter of oil and gas, surpassed only by Saudi Arabia and Russia. Norway is the world’s second largest gas exporter, most of which is sold in Europe, where Norwegian gas accounts for 20 percent of consumption. The amount of gas exports per year is roughly ten times the yearly hydropower production. Norway is the world’s seventh largest oil exporter. Source: Confederation of Norwegian Enterprise (NHO)

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PHOTO: HYDRO

Upper left: Norsk Hydro's aluminium plant at Sunndalsøra. The aluminum industry is extremely energy intensive and as such ideal for Norway. Above: One of the first hydropower stations in Norway was Vemork in Telemark. The plant housed heavy water production during WWII and was blown up in a daring raid against the German occupation.

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PHOTO: SHUTTERSTOCK

The United Kingdom has voted to leave the European Union. What is the impact on Norway?

Brexit: Impacts on Norway?

arlier this year, while Brexit was still for many a mere idea – an E intangible concept even – Dr Ulf Sverdrup, Director of the Norwegian Institute of International Affairs (NUPI) wrote an opinion piece for the SOFIE LISBY

Norwegian state-owned broadcasting company, NRK, on the possible effects on Norway if the United Kingdom would indeed vote to separate from the European Union.

Dr Sverdrup argued that while a vote to leave would be difficult for the United Kingdom and would lead to political disarray, it would spell disaster for the European Union, representing the biggest crisis in the Union’s history. “Several countries including the United Kingdom will seek to reduce insecurity and calm the markets but everyone knows that divorces are painful and complicated. A potential Brexit will exacerbate the political trust issues we are witnessing within countries and across

borders, it will intensify polarisation in European politics and it will likely increase the distance between the elite and voters. The risk for spill over to other countries will also be high,” he wrote.

Brexit – What Now?

As we all know, the United Kingdom did indeed vote to leave the European Union. How many of Dr Sverdrup’s predictions have materialised and where does that leave Norway? “We have actually seen some

opinion polls indicating that support for more integration in the European Union is increasing in some member states after Brexit,” says Dr Sverdrup. “The European Union and high profile politicians such as [German Chancellor] Angela Merkel are putting a lot of effort into maintaining the Union and strengthening ties. So far the cost of uncertainty has been carried by the United Kingdom, not by the European Union.” The list of negative effects of Brexit on the United Kingdom is long. The vote to leave was followed by a brief period of political instability, and just as the experts predicted, the pound fell dramatically, declining to a three-year low against the euro in October following British Prime Minister Theresa May’s announcement that the United Kingdom would trigger Article 50 and begin formal negotiations by the end of May 2017. In an attempt to boost the economy, the Bank of England cut interest rates from 0.5 percent to 0.25 percent, the first reduction in the cost of borrowing since 2009, and announced a UKL100 million scheme to force banks to pass on the low interest rates to households and businesses. The Office


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for Budget Responsibility downgraded its growth forecast for 2017 from 2.2 percent to 1.4 percent. The negative effects have not been contained to the United Kingdom. Despite some polls suggesting support for stronger integration, Dr Sverdrup foresees a difficult year ahead for the European Union. “There are issues relating to unemployment, migration, distrust and division and domestic politics within member states,” he says. “France, Germany and the Netherlands will all have critical elections in 2017 and Italy will have a referendum in early December this year. We don’t know how this will play out.” According to Dr Sverdrup, Brexit has highlighted the need for reform in the European Union. “The European Union needs to implement far-reaching reforms on issues relating to the economy, the monetary union, the securing of external borders and migration,” he argues. “You could add that after the results of the US election, the European Union will also have to strengthen its foreign policy and look into areas relating to defence. “It is a paradoxical situation because the need for reforms have increased after Brexit but the possibility for finding an agreement might have become smaller. The European Union needs new leadership and new ideas to make it strategically relevant. The perception of the European Union needs to change, voters need to see the relevance of the Union as an instrument

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to improve economies and solving problems. One of the fundamental problems is the willingness – or lack thereof – of governments to integrate. Europe is suffering from trust issues; trust levels have decreased and the institutions are not strong enough.” Many will agree that Brexit has dealt a blow to the European Union and the argument for less integration has gained momentum across across the continent. For Dr Sverdrup, however, stronger integration is the answer. “I don’t support the argument for less political and social integration,” he says. “Modern economies need to have regulations, there needs to be cooperation on environmental issues, and we need to create certain structures to avoid things like tax avoidance. We need to increase integration, not decrease it.”

The Impact on Norway

Dr Sverdrup has touched upon the relationship between Norway and the European Union in several published articles. Not part of the European Union but of the European Economic Area (EEA) and a founding member of the European Free Trade Association, Norway is part of the single market and must play by its rules. The European countries are Norway’s most important political and military collaborators, its most important trading partners and a large portion of the Norwegian government’s main investment fund, the Sovereign Wealth Fund (formerly

the Government Petroleum Fund), investments are in Europe. Instability in Europe will thus affect Norway negatively, Dr Sverdrup argues. “From a Norwegian perspective, so far Brexit hasn’t had much impact yet,” he says. “It very much depends on the solution the United Kingdom will seek and whether other countries will withdraw from the Union. If the United Kingdom ends up with an agreement similar to Norway, the impact will be rather small. If there is further fragmentation, the impact of course will be much bigger. In that case, Norway will have its agreements with the European Union and we will have to make new, bilateral agreements with the United Kingdom.” In the United Kingdom, the idea of an agreement similar to that of Norway has been rejected by the “Leave” campaign because such an agreement would mean the United Kingdom must still allow the free movement of people. Others see continued membership of the EEA and potential membership of the EFTA as an option. The latter may represent a challenge for Norway, suggests Dr Sverdrup. “For Norway it will indeed be a challenge to have the United Kingdom in the EEA,” he says. “The optics is very different if the United Kingdom wants to use the EEA to disintegrate from Europe. Traditionally, the EFTA countries have used the EFTA as a tool to integrate themselves.”

.

. . . . .

Facts

Brexit Timeline: February 2016: Then British Prime Minister David Cameron announced the EU referendum date. 15 April 2016: The official referendum campaign kicks off. 23 June 2016: Polling day for the EU referendum. The Leave campaign won by 52 percent to 48 percent. 24 June 2016: David Cameron resigns as Prime Minister. 13 July 2016: Theresa May becomes Prime Minister. The former Home Secretary had campaigned to stay in the European Union but in her bid to become Prime Minister said “Brexit means Brexit”. 2 October 2016: Theresa May sets March 2017 as deadline for invoking Article 50 of the Lisbon Treaty, which will formally launch negotiation for the United Kingdom to leave the European Union. 3 November 2016: The High Court rules that Parliament must vote on whether the United Kingdom can start the process of leaving the European Union. Prime Minister Theresa May appealed the ruling. 5 December 2016: The Supreme Court hears the Article 50 appeal case. December 5, 2016: The Supreme Court will hear the Article 50 appeal case.

. . .

Above: The Prime minister of United Kingdom, Theresa May in Press conference at the Elysee Palace.

PHOTO: FREDERIC LEGRAND / SHUTTERSTOCK

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PHOTO: ASIAN DEVELOPMENT BANK

Norwegian companies contemplating a move to Asia or trying to establish a foothold here may not be aware of the financing opportunities available through the Asian Development Bank (ADB).

Navigating ADB’s Financing Options

so happens the Alternate Executive Director is a Norwegian, so Ithetthejustbank Business Review interviewed Mr Joar L. Strand to find out how can be of value to Norwegian companies. See the sidebar for HARVEY BROCK

information on applying for ADB assistance. Business Review: Tell me a little bit about your background. How did you end up at ADB? Joar Strand: My interest in Asia was triggered as a young business student learning about the “Japanese Business Model”. After graduating I got a trainee position at the Norwegian Trade Council in Tokyo, where I became bitten by the “Asia bug”. After two fascinating years in Japan I joined the Norwegian Foreign Service. My main motivation was to become part of Team Norway’s efforts to strengthen ties to Asia. I have since served at embassies in Manila, Singapore and Jakarta. While working in Asia I established contact with people in ADB, and was quick to apply when a vacant position came up at the bank. This is my second posting here at the Norwegian constituency office of ADB. BR: How would you briefly describe ADB?

JS: ADB is an international development finance institution, owned by Norway together with 66 other nations. Our goal is to reduce poverty and promote sustainable economic growth. We provide loans, grants, equity investments and guarantees to our developing member countries. And we supplement our financial support with development knowledge and policy advice. BR: How can ADB be of value to Norwegian companies doing business in Asia? JS: For project finance, ADB can serve as a catalyst for private investments, providing direct financial assistance to private sector projects. While ADB’s participation is usually limited, it leverages a large amount of funds from commercial sources to finance these projects. Projects must have clear development impacts and demonstration effect that go beyond the

benefits captured in the financial rate of return. ADB also provides indirect assistance by engaging governments in dialogues, especially in areas that pertain to regulatory frameworks and reform. Many financial institutions view ADB's influence as a factor that mitigates risk because governments are less likely to intervene unpredictably when ADB is part of the transaction. ADB's involvement in a project or transaction, whether through financing or in the form of guarantee support, gives the project an additional measure of credibility with host governments, private investors, and lenders. ADB's five decades of experience in the region have given it a wide network of government agencies and financial institutions. It also enjoys the support of 67 member governments, providing it with access to many local agencies. Some of the advantages of engaging ADB in a project are: • ADB provides risk mitigation to both its sponsors and host governments; • ADB initiates constructive dialogue with host governments in support of regulatory reforms and changes; • ADB has comprehensive sector knowledge; • ADB provides longer loan maturities when warranted; • ADB promotes transparency, corporate governance, and risk management; • improved compliance with laws and regulations; • support for environmentally sound projects; and • mobilisation of additional financing when needed.


NORWAY-ASIA BUSINESS REVIEW

In providing assistance to the private sector, ADB uses equity investments, loans, guarantees, and syndications to mobilise private investments. Within the private sector ADB currently prioritises two areas: capital markets/financial sectors and infrastructure. With regard to infrastructure, ADB is focused on the following core sectors of operation: energy , transport, telecommunications, water, and urban infrastructure. ADB also finances existing infrastructure projects for upgrading or expansion. Various forms of risk-sharing and ownership arrangements, including build-own-operate and build-operatetransfer structures, have been designed by ADB to help governments and investors in infrastructure projects. Agribusiness and manufacturing will also be looked at, though very selectively. Contracts: Norwegian companies and consultants have been awarded more than 130 contracts worth USD 75 million in delivery of goods and services to ADBfinanced projects since the bank was established. But there is a big untapped potential for Norwegian companies to get even more contracts. Contracts are generally awarded based on international competitive bidding. ADB as a venue for networking: It is a meeting place for sector specialists. ADB hosts regular sector events. Overview: As a regional bank, ADB has a good overview of developments in Asia, and has a close policy dialogue with member countries. If you for example want to do business in the energy sector in a particular region of Asia, then establishing contact with some of

ISSUE 4 2016

the bank’s sector specialists will most likely give you a very good overview of what’s in the pipeline with regard to new initiatives. Knowledge partnerships: As ADB’s clients require greater valueadded knowledge support, the bank is in the process of establishing knowledge partnerships with leading companies and centres of excellence to better meet this demand. BR: What are some of the regulations regarding financing that Norwegians should know about? JS: ADB gives priority to sectors in which a country has a comparative advantage, and to sectors and companies deprived of capital in the face of market imperfections and high levels of perceived risk. Its aim is to catalyse financing from local and foreign sources, not compete with them. Thus, ADB will seldom take an equity stake larger than 25% of total share capital. Furthermore it will seldom be the largest single investor in an enterprise and finally it will not assume responsibility for managing an enterprise. If needed, ADB can help mobilise additional debt from other financing institutions in the form of parallel financing or syndication arrangements in which ADB acts as the lender of record, and banks take participations in the loan. It may also provide guarantees to commercial financial institutions. BR; What are ADB's requirements for screening, analysis, and planning to manage environmental impacts of private sector projects? JS; Through safeguards, ADB seeks to ensure environmental soundness and sustainability of projects and to

support the integration of environmental considerations into the project decisionmaking process. Environmental assessment reports are prepared for a project to identify potential impacts and risks. These describe the project, its environmental setting, the alternatives considered and selected, where relevant, the consultation and disclosure undertaken, and the environmental management plan to be implemented by the clients. Depending on the project, other instruments such as an environmental assessment and review framework, environmental audit report, environmental and social management systems, or strategic environmental assessment can be used to satisfy ADB's requirements on environmental assessment and planning and management. BR: What are ADB's requirements for managing social impacts of private sector projects? JS; ADB has policies and procedures establishing essential requirements and good practice for social soundness. Social issues in private sector projects may pertain to adding social value and helping create broader social support. Furthermore, managing social safeguards including involuntary resettlement and indigenous peoples issues, as well as social risks related to labour, public health, and gender equity. Social impact assessments can be undertaken as part of overall environmental assessment. Based on the outcome of the environmental and social assessment and depending on the project modality, social documentation are prepared such as resettlement plans and frameworks, social safeguards audit reports, environmental and social management systems, and gender action plans, among others.

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. . .

Facts

Established in 1966, ADB has committed USD 231.53 billion in loans to the vision of an Asia and Pacific region free of poverty. Norway is a founding member of ADB. Norway holds 0.341% of the total shares in ADB and 0.571% of the total membership votes. Norway has contributed USD 500.93 million in capital subscription as of 31 Dec 2015. It has contributed and committed USD 239.96 million to Special Funds since joining in 1966. Companies and consultants from Norway have been awarded USD 75.13 million in procurement contracts on ADB-financed projects since 1967. Norconsult AS was the top Norwegian company in terms of consulting contract value from ADB the last five years, with USD 1.43 million for water and other urban infrastructure and services.

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Upper Left: Joar L. Strand, Alternate Executive Director, ADB at his office in Manila. Above: ADB Headquarters in Manila, Philippines.

PHOTO: ASIAN DEVELOPMENT BANK

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There is no standard form of application for ADB assistance. However, ADB would need some basic information to evaluate a project.

Applying for ADB Assistance

is a typical list of information requirements for new Below infrastructure projects that require ADB assistance. 1. Executive summary

• Brief project description • Discuss the importance of the project to the country • Explain how and why ADB can assist the project

2. Project description

• Describe project in detail • State why it is important to undertake the project • Discuss how much support has been obtained from the government, lending institutions, and other investors

3. Feasibility study

• Establish the technical, financial, economic, and environmental and social viability of the project • If necessary, a feasibility study

should be prepared by a reputable consultant or consulting firm

4. Background on sponsor(s)

• Discuss ownership and management structure • Describe sponsor’s experience in project development in the home country or abroad, with emphasis on projects in developing countries, if any • Provide a financial history, including audited financial statements for the last three years, financial plans and projections, and copies of any recent filings with securities commissions

5. Project ownership structure

• Discuss the proposed ownership and management structure of the project • Explain the legal, tax, and other

PHOTO: ASIAN DEVELOPMENT BANK (ADB)

advantages of the proposed structure • Describe cost and incentive structure for contractual arrangements with any separate management company

6. Project’s implementation arrangements

• Explain the implementation and contractual arrangements for the project, including the construction and supervision methodology • Provide the draft construction contracts • Provide a bar chart showing major scheduled achievements and completion for each of the major components of the project • Detailed description of liquidated damage provisions and performance bond requirements

7. Project operations

• Describe the operational arrangements • Provide copies of the contractual agreements • Discuss availability and training of operational staff, expected efficiency levels of operation, incentives and penalties for performance, maintenance plans, and reporting systems

8. The market

• Describe the market and marketing arrangements


NORWAY-ASIA BUSINESS REVIEW

• Provide draft off-take concession and/or purchase agreements • Discuss price sensitivity and market risks • Provide current and projected markets • Discuss credit-worthiness of customer(s)

9. Environmental and social aspects

• Infrastructure projects: Provide a site-specific environmental and social impact assessment report, highlighting environmental and social impacts and mitigating measures, prepared by an acceptable consulting firm. Provide environmental and social management plans including any resettlement plans, Indigenous Peoples plans, or gender action plans, among other social plans. • Capital markets projects: Establish an environmental and social management system to ensure investments comply with ADB’s environmental and social requirements.

10. Cost estimates

• Provide cost estimates analysed according to (a) major cost category

and (b) local and foreign currency cost • Include detailed taxes and duties, development expenses, working capital requirements, and interest payments during construction

11. Financing plan

• List the various sources of financing for the project, and include amounts, currency, and terms of the debt and equity investments, security arrangements and status of financing commitments • Describe the source of finance for contingencies and cost overruns • Discuss escrow and retention arrangements • Explain the dividend policy as well as any proposed restrictions on payout • Discuss how you want ADB to assist the project (propose an equity, debt, guarantee or cofinancing arrangement)

12. Financial model

• Provide financial projections for the project covering the period from financial closing through final maturity of the proposed ADB financing • Submit two copies of the financial

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model (one on diskette and one as hard copy) • Include balance sheet, profit and loss statement, cash flow statement, and detailed assumptions • Use an integrated model that will allow for sensitivity analysis of critical elements of the project • Calculate the economic, financial rates of return, and return on equity investments

13. Risk analysis

• Analyse the risks in implementing and operating • Discuss the mitigating measures that will be undertaken and identify the party that will bear and/or pay for the mitigating measures

14. Permits and licences

• List all permits and clearances required for implementing and operating the project, the issuing authority, and the date of issue or expected date of issue Upper Left: At 73 megawatts, the NED plant in Lopburi, Thailand is the largest solar photovoltaic project in the world and is central to Thailand's efforts to generate energy from renewable sources. The project has been part-financed through ADB. Photo: Mari Svenningsen/Norwegian Seafood Council

Freshness Flown In Fresh salmon from the cold clear waters of Norway. Flown into Asia several times a week and available from major supermarkets in Asia’s megacities. 48 hours from catch to counter.


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NORWAY-ASIA BUSINESS REVIEW

ISSUE 4 2016

PHOTO: ROYAL NORWEGIAN EMBASSY, YANGON

How Norway is leveraging its private sector to bring positive change to Myanmar.

Forging Ahead

he smooth transition of power to the democratic political party NLD, T has played an integral role in further easing of sanctions on Myanmar earlier this year, and things seem to be slowly but surely moving in the HENRI VIIRALT

right direction.

Its GDP figures, albeit recently downgraded slightly, still make it one of the fastest growing economies in Asia, and incomes among the nation’s 51 million consumers are constantly rising, with foreign investors continuing to pump money into the country. Many of these positive changes in the country, however, would not be possible without relying heavily on its partners such as Norway, which has not only been a strong supporter of the democratisation process, but also assisted in the economic and social development of the country. “There is a strong relationship between Myanmar and Norway, going a long way back. The relationship has been broadening over the recent years and includes bilateral government cooperation, support to the reform process and peace process as well as the presence of several Norwegian companies in Myanmar” says H.E. Ms Tone Tinnes, who recently started her posting as the Norwegian Ambassador to Myanmar, following two years as Ambassador to the world’s youngest nation, South Sudan. “Myanmar has great potential and we are committed to continuing our partnership with the country in the different sectors we are involved in. I am happy about the progress made so far in the peace process, and encourage the Government, military and the Ethnic Armed Organisations to further advance their joint efforts for peace.” Arguably one of the most crucial

areas of infrastructure development in Myanmar is capacity building in the energy sector, with around 34 million people still lacking basic access to electricity. Many of the mega dam projects currently being assessed do not address the fact that 70% of the population is living off grid in rural areas. In order to meet their immediate needs, prioritising small scale and decentralised energy sources seems to be the way forward. “We have a substantial capacity building programme in the Ministry of Electricity and Energy, drawing on Norwegian expertise. One important element of the programme is to establish a unit for social and environmental impact analysis. We also share Norwegian experiences with small- and mediumsized hydropower stations, which have a much smaller footprint and are much less capital intensive than larger projects.” The ongoing improvements in the energy sector and the liberalisation of the telecom industry have enabled the latter to flourish, enabling millions to get connected and the country’s subscriber base to skyrocket. Ericsson’s Mobility Report in 2015 suggested that 6% of new mobile subscribers were coming from Myanmar, making it the fourth fastest growing market globally. In addition, smartphones are the first handsets owned by 80% of Myanmar’s mobile users, according to the two main operators, Telenor and Ooredoo.

“We see that access to information is crucial not only on a personal basis, but also for the democratisation process. In a very short period of time there has been an explosion of smartphone usage and it makes it possible to share information between different parts of the country in a way that simply wasn’t possible before. With the basic infrastructure in place, services like mobile payments are the next step and legacy financial institutions are partnering with telecoms to leverage on their expertise on how to transfer funds between individuals much easier than before,” Tinnes says. One such endeavour is Wave Money, a joint venture between Telenor Myanmar, First Myanmar Investment and Yoma Bank, which was recently launched to provide money transfers and mobile top-ups. It expects to launch bill payments before Christmas and merchant payments by early next year. Around 80% of the population has currently very limited access to banks, which has helped Wave Money acquire north of 100,000 customers in merely two months after the launch, and is projecting to have more than 1 million users by end of the year. It launched in major cities such as Yangon and Mandalay, and is now scaling up to other parts of the country. To date, its services are available everywhere except Chin and Kayah states, where the company expects to launch in the first quarter of 2017. With countries like Norway being very active in developing a country such as Myanmar, Ms Tinnes is quick to point out that it’s important for private companies to do business in an ethical and sustainable way. “Norway attaches great importance to the principles of ethical business, CSR, and sustainable development. We believe that Norwegian companies operating abroad can have a positive impact, for example by setting high standards for corporate conduct, which can subsequently be followed by local companies. From the Embassy side, we are working with organisations like the Myanmar Centre for Responsible Business, which contribute to awareness and progress on these issues.” Looking ahead at what’s in store for the country, Ms Tinnes takes a pragmatic approach. “There are a number of challenges ahead, but the government is aware of them and is addressing them. Our message is that we are here to assist through cooperation with Government institutions and others, through strengthening civil society and contributing to economic development and job creation. For the business sector, I see substantive potential for Norwegian businesses and I welcome them to explore the various opportunities in Myanmar.”

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After nearly a year in office, Myanmar’s democratic government faces a perilous future.

A Fragile Future?

Escalating violence in Rakhine, Kachin and Shan states threatens O to derail the government’s national reconciliation efforts, and is increasingly raising fears that the country’s powerful military may not LARRY JAGAN

remain in their barracks much longer, and could seize administrative power in a coup, which is allowed under the constitution.

This all comes at a time when the government has launched a renewed effort to boost economic growth and attract foreign investment. At the same time there is an acute power vacuum at the top of government, which continues to limp forward, still directionless after nearly eight months in office. Ministers are bewildered and confused; and many seem reluctant to take any initiatives. Some steps though have been taken to address the gaping policy vacuum with committees established to assist ministers to work out policies and plan for their respective ministries. Special foreign advisors are being placed in key ministries to help in the planning process and execution of policy objectives. But the government bureaucracy continues to operate as though there has been no change, though there is less opportunity for corruption. It is business as usual complain most Myanmar businessmen complain, amid growing fears that there may be an economic and

financial crisis looming. For the moment though, the economy is at best sluggish. Myanmar’s business community’s disappointment with the National League for Democracy Government’s continued lack luster performance is festering, verging on anger. There is no movement, they complain. Business is at a standstill. Contracts and tenders are stuck in a bureaucratic logjam, though some experts argue it is a systemic institutional problem. Foreign direct investment continues to trickle in, a fraction of last year’s flow, the budget deficit is soaring, less than 30% of the government’s capital budget for the current financial year – a dramatic underspend that may have serious consequences, the exchange remains unstable and is depreciating, the balance of payments deficit is increasing alarmingly and even tourist arrivals have dipped this year since April. Everything remains in limbo as the government works out its priorities and sets detailed plans of action in every sector. Ministers are overwhelmed and daunted by the

ISSUE 4 2016

PHOTO: PAUL D SMITH / SHUTTERSTOCK

task. Chief Ministers of the states and regions are at a complete loss. One crucial positive step take by the government and parliament is the new investment law which the head of the Department of Investment and Administration (DICA), Aung Naing Oo is certain will boost foreign investment when finally implemented. Passed by parliament last month, the necessary rules and regulations are being formulated, and expected to be enacted by parliament before the end of this month. The will be fully operational by the end of next March, in time for the new financial year. This will boost direct in investment immeasurably, he said. “I saw a lot of visitors last year, but few actually invested, as they were waiting for a stronger legislative infrastructure and regulations.”

Westminster committee system

To support the ministers, a plethora of committees – under the president’s office, the parliament, the state counselor and directly under the ministries authority – have been set up. The Government seems to have copied the British parliament’s approach, possible on the advise of some of the key British advisors around Daw Aung San Suu Kyi. All in all more than 80 committees, including the Union Peace and Dialogue Joint Committee, under Daw Aung San Suu Kyi’s chairmanship – that is apart from the international commission led by the former UN secretary general Kofi Annan on Rakhine. The most important of these


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committees as far as policy development is concerned is the national economic coordinating committee. As a result of its deliberations, and with Daw Aung San Suu Kyi’s approval, three sectors – agriculture, education and health have been earmarked as priorities. Plans are being finalised for a series of major infrastructural projects to kick start the economy – Daw Aung San Suu Kyi has travelling abroad extensively to garner international financial support for them. The recently formed committee to coordinate international donor and UN support is tipped to be even more powerful, by senior government insiders, and is likely to have a leading role in the approval of all international support. It is also likely to coordinate the work of the foreign advisors positioned throughout government. To facilitate ministerial policy deliberations and implementation, international advisors are being assigned to each ministry – the most renown is the Australian economic expert Sean Turnell, who is now embedded in the Planning and Finance ministry in Nay Pyi Taw. Advisory or support committees have been set up within the ministries too – often including “outside” experts -- and regular executive committee meetings of the ministers with their top civil servants are also being encouraged. But the agriculture central executive is yet to meet, according to senior sources in the ministry. In education a high-powered committee has been set up, with the former civilian deputy education minister under the former military leader Than Shwe, Dr Myo Myint as chairman. He was actually considered for the current minister’s job originally, and as the current minister was a junior public servant when Myo Myint was deputy minister he constantly defers to

ISSUE 4 2016

him. Daw Aung San Suu Kyi takes a keen interest in education – and has taken overall control of vocational training – and the minister gets unfettered access to her. But Myo Myint is going to be increasingly influential in education policy development. The other power broker in education is the first Lady. Su Su Lwin (who also formerly worked for UNICEF) – and one of Daw Aung San Suu Kyi’s closest confidantes – exerts significant influence on education policy. These committees have been replicated in many other ministries, especially the health ministry. But in the end, according to senior public servants in the president’s office, there is only one decision-maker, Daw Aung San Suu Kyi. She makes every decision, they said. This dints any initiative in the bureaucracy. Minsters – although she has instructed them to make decisions – are hesitant and confused, and defer to her constantly. Decisions at ministerial level are slow and cumbersome, as project proposals and reports are constantly shuffled around the ministry, with the minister asking for further information or opinions. In health in one case the minister sought more than 20 “second opinions”, and still has not made a decision. There is a deep-rooted bureaucratic crisis, according to experts brought in to recommend public service reform. Daw Aung San Suu Kyi remains protective of the bureaucrats, not wanting to upset them. She has told MPs and senior NLD party officials not to pressure or criticise the public servants at this stage. Party officials say bureaucratic reform is in the pipeline. It is a mindset established after 60 years of military rule. There is no culture of problem solving, instead sticking rigidly to rules and regulation, no information or data available for evidence-based policy formulation, and no principle of consultation. Therefore

PHOTO: NATIONAL LEAGUE OF DEMOCRACY (NLD)

Upper left: Yangon downtown area is full of crumbling colonial buildings. Above: Aung San Suu Kyi on the election campaign trail in 2015.

the public service is in no position to take initiatives, there is no incentive to do so, and in fact are actively discouraged from doing so, and instead wait for orders from above: it is a command structure that mirrors the military mindset. In conversations with many public servants in the last months weeks, the key response is “we have had no specific instructions”. A functioning and professional institution needs to be built from the ground up.

Hiatus continues

Everyone is now concerned that the current hiatus in government is set to continue for the next few months: no significant developments are expected until after April. With Daw Aung San Suu Kyi travelling now preoccupied with the violence in Rakhine and the stuttering peace process, her eyes are of the ball for the time being, and much needed reforms of government are on the back burner. A cabinet reshuffle was imminent, but has been delayed. Several ministers were to be axed, amongst then – agriculture, energy, finance and planning and commerce were expected to lose their posts – but it is now unclear if and when a major clear out of ministers will take place. The Governor of the Central Bank is also in the firing line, though there seems to be some constitutional issues, which may prevent the president sacking him prematurely – his contract runs to the middle of 2018. But there are many senior economists with the NLD who are actively campaigning to get rid of him. Senior sources in the government say the Governor’s removal is a high priority. They also believe a major shake up of the energy ministry, especially MOGE, is essential for progress, and a pre-requisite for Myanmar to attract substantial foreign investment in the future in this sector. But for present Daw Aung San Suu Kyi is totally pre-occupied with the violence in Rakhine and the alleged human rights abuses by the military there. She has just set up an internal commission to investigate these claims, and the background to the attacks on the government border posts in October. A former general, Myint Swe and currently Vice President is to head the commission. As former senior military officer, Daw Aung San Suu Kyi is hoping he will have the confidence of the military. Much is riding on this commission’s finding and government’s subsequent action. It comes at a time when relations between Daw Aung San Suu Kyi and the army commander Senior General Min Aung Hlaing have taken a turn for the worst. Many now fear that if the Lady does handle the situation delicately, there is a growing danger of an administrative coup by the military.

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PHOTO: ROYAL NORWEGIAN EMBASSY, BEIJING

Norwegians have developed a professional network to enhance collaboration with host countries in Asia by funding co-research projects and offering career development for students and young professionals

Safety in Numbers

sia has long been regarded among Europeans as a wondrous region A full of exotic people, fascinating history and breath-taking scenery. Over the past few decades, interest and attention towards the Chinese HENRI VIIRALT

and Japanese culture has exploded among Norwegians.

The number of students of the Japanese language at Norwegian higher education institutions, for example, has increased from a few in the late 1990s to more than 300 in 2014. The Chinese and Japanese, too, are becoming increasingly fascinated with the Norwegian way of life, and a growing number is deciding to pursue higher learning in the Scandinavian country each year. NorAlumni, founded in cooperation between the Research Council of Norway and Innovation Norway, is a network for strengthening research collaboration, student exchange

and industrial partnership with the host country. The initiative, which is free and open for everybody with a connection to Norway and the host country, is currently active in China and Japan. “China and Japan are prioritised in terms of research cooperation as there is quite an extensive pool of Norwegian students that have decided to pursue their masters or PhDs in China and vice versa, so the initiative was founded to capitalise on these experiences in order to advance research and innovation, and to increase student mobility. In Japan, it was important to set this network in order

to expand research collaboration, by sharing experience and network leading to more competitive projects who could success through the funding schemes of the Research Council of Norway, H2020 and others,” says Mr Svein Grandum, the project lead for NorAlumni Japan at Innovation Norway. Ms Lei Qu, Grandum’s counterpart in China, who took over the responsibilities to run the initiative there this summer, agrees with Grandum’s sentiments. “Although it’s quite far, there is a surprisingly large number of Chinese students who have found Norway to be an interesting destination to study, so here the initiative was set up to keep all the connections alive with students who have either worked or studied in Norway and then have returned, as well as Norwegian students who are studying in China or looking for opportunities to do so. As Svein mentioned, the Research Council has been financially supporting different co-research projects between Norway and China, and while NorAlumni China doesn’t directly fund research, we utilise the discretionary funds made available by the council to


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organise various events. In the future, there will be trainings for students and young professionals,” Ms Qu says. “In terms of activities we are engaged in Japan, there are three core pillars. Both Norwegians and Japanese tend to be quite hesitant in leaving their respective countries, so the first pillar has to do a lot with supporting and strengthening the network of students coming and going to Norway, and we prepare many events and information packages to lessen the threshold to take the leap and study abroad. The second is career development. We are seeing that there are far too few Norwegians with adequate competence in doing business in Japan, so one of our missions is to increase awareness for the students and to liaise to some extent with various employers in order to find internship and work placement opportunities for the students. The third pillar is to convey information on what funding opportunities are available and how it can enhance cooperation between the two countries,” Mr Grandum says. “In China, the research side is already quite stable and in a growing path, there are definitely more and more students coming to us for career opportunities. Since Innovation Norway is present in many countries, we can tap into various industries and they tend to be aware of us, too, so if a

Norwegian company is establishing presence in China, they first come to us to find suitable employees and interns. Sometimes we invite them to present directly to the alumni members to give them a clear understanding of what they’re looking for in candidates,” Ms Qu says. The content for career development events has to provide some value for the students and young professionals, and understanding individual needs in a large network isn’t always easy. In order to tackle this issue, Mr Grandum deems it vital to be in constant dialogue with whom he calls “ambassadors”, the students, researchers and business representatives that are representing the group’s interests, who act as NorAlumni advisors on how to improve and make the content more relevant. In how to keep the network growing, and how to successfully implement it in other countries, both Mr Grandum and Ms Qu agree that it’s an evolving challenge. “We now have 760 members in NorAlumni China and it’s become more challenging to address the various needs of the network. A few weeks ago, I was presenting NorAlumni China at an event in the EU delegation to China, and after the event a lady from the French embassy approached me and asked how we managed to successfully establish this initiative, and how we keep members

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engaged. What I said was that you have to give them something they want and it has to be meaningful for them. In terms of network building, if you go to these events long enough, you form connections with these people naturally and the ones that you like you probably meet outside our events anyway, so just inviting them to network won’t be enticing enough. It is only by talking more with members to understand what their needs are and how we can best cater to it,” Ms Qu says. “To add to it, I think we need to be flexible enough as a network to pivot in one direction in another if in talking with the members we understand that their needs have changed. Who knows, perhaps in five years our areas of focus will be entirely different,” Mr Grandum says.

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.. . .

Facts

Established in Japan: 2010 Established in China: 2010 Number of members in Japan: approximately 400 Number of members in China: 760 For further information, visit: http://japan.noralumni.no/ http://china.noralumni.no/

PHOTO: ROYAL NORWEGIAN EMBASSY, BEIJING

Above left: Participants at NorAlumni in China mingling. Above: Guest of honour, 87 year old Wang Benxu, who was among China’s first diplomatic delegation to Norway, and who was there when they set up the Chinese embassy in Oslo in 1954.

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Grander than ever and now past its 20th year, was the annual Norwegian Seafood Gala Dinner held at the Mandarin Oriental Hotel in Kuala Lumpur on 14 October 2016. The dinner attracted more than 650 happy guests.

Norwegian Seafood Gala Dinner

he Royal Norwegian Embassy in Kuala Lumpur hosted the most T popular Norwegian food event in Malaysia in co-operation with Snorre Food from Singapore who flew in one tonne of food as well as

several award winning chefs for the event. This year’s emphasis was on sustainable seafood. Composed entirely of seafood flown in from Norway, the gala dinner serves as a networking platform that marries business contacts to world class cooking prepared by both Norwegian and Asian traditions. This year’s event also featured talented Rio Yamase playing the Hardanger fiddle, a traditional West Norwegian musical instrument. Photos by Choy Peng/choypengism.blogspot.com

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1. Masterchef Markus Dybwad preparing one of his signature dishes before arrival of the guest 4. Violinist Rio Yamase with her Hardanger fiddle and the accompanying pianist 5. Frank Næsheim and photographer and blogger Yong Choy Peng who contributed all these wonderful pictures 6. Snorre Food CEO, chef and organiser, Frank Næsheim in happy company with a quartet of ladies at the dinner 7. 7. H.E. Ambassador and host of the Norwegian Seafood Gala Dinner, Hans Ola Urstad, giving his opening remarks 8. Frank Næsheim and his team of chefs receiving accolades from the participants of the Norwegian Seafood Gala Dinner

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2, 3, 9, 10, 11 Guests and some of the 72 seafood culinary creations at the Gala Dinner

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PHOTO: REC GROUP

Lower costs, an interest in the environment and government subsidies are working in tandem to drive a tidal wave of renewable energy capacity.

Green day: An Energy Revolution

n October report by the International Energy Agency (IEA) clarified A that new renewable energy installations worldwide have now surpassed those that burn fossil fuels, providing succour to Norwegian HARVEY BROCK

entrepreneurs who are promoting the energies globally.

Almost half a million solar panels were installed every day last year as green energy overtook coal as the world’s largest source of installed power capacity. An installation’s capacity is the maximum amount of energy it can produce, though the amount it produces will vary based on how long it produces over a time period. A wind or solar farm cannot generate constantly like a coal plant, so they may produce less energy in a given period than a coal plant even if they have a higher capacity. The main catalyst for the explosion in renewable energy is massive drops in the price of solar and onshore wind power that would have been “unthinkable” five years ago, Dr Faith Birol, executive director of the IEA, told The Financial Times in October. Average global generation costs for new onshore wind farms fell by 30% from 2010 to 2015, while those for big solar power plants declined by twothirds, noted an IEA report released in October. The global energy advisory agency forecasts costs will drop by 15% for wind power over the next five years and 25% for solar over the same period. “The centre of gravity for renewables growth is moving to emerging markets,” said Dr Birol.

The IEA revised its five-year forecast to increase renewables’ capacity by 13% from its estimate in 2015, mainly because of stronger policy support in China, India, Mexico and the US, though the latter may change depending on the whims of President-elect Donald Trump. Dr Paolo Frankl, head of the IEA’s renewable energy division, warned that government policies for renewables are still shifting in many areas, while the transient nature of wind and solar power will require grid operators in some markets to upgrade their infrastructure to cope with the growth in alternative energy. “There is still lots to be done. There is too much policy uncertainty,” he told The Financial Times. But the move by so many countries to ratify the Paris climate accord and follow up on it so close after its passage is a positive sign for renewables, he said. An average of two wind turbines went up every hour in China in 2015, as the country attempts to deal with choking air pollution that has led to massive public pressure to address environmental issues. China alone accounts for 40% of the capacity growth in renewable energy last year. A new high of 153 gigawatts of

renewable energy was installed in 2015, or 55% of the total installed last year, mainly comprising wind and solar projects, which exceeds the total power capacity of Canada. That amount is larger than the total of installations for fossil fuelbased energy and nuclear power. In terms of electricity generation, coal power plants supplied 39% of the world’s power last year, while renewables including hydropower dams made up 23%, reported the IEA. The agency forecasts renewable energy will account for 28% of the total by 2021, when it predicts the energy will supply the equivalent of all the power generated in the US and EU combined. The IEA also estimates green energy will be on 42% of the world’s power grids by 2021. The continuing tax credits for solar and onshore wind farms offered by the US are partly responsible for the massive uptick in renewable energy installation, said the agency. Mexico’s clean energy capacity is forecast to double by 2021, adding 15GW as a reform of the power industry has led to record low prices for electricity generated from solar and wind. Renewable energy in India is estimated to increase by 76GW by 2021, with a 700% rise in solar power leading the way. Prime Minister Narendra Modi has promised USD 3.1 billion in state aid to revamp India’s solar manufacturing industry as he aims to install 175GW total by 2022, up from 45GW now, but weak grid infrastructure and distribution risks may limit deployment, said the IEA. The EU is only expected to increase its installed renewable energy capacity by 21% by 2021, down from 62% over the last six years because of weak growth in electricity demand and policy uncertainty. The bloc targets 27% of its energy consumption from clean sources by 2030, but Brexit, Germany’s measures to lower the cost of renewables on consumers and Poland’s limits on wind and solar projects are downside risks to


growth, said the agency. Closer to home, Thailand is experiencing its own boom in renewable energy investment even if installed capacity is still mainly projections. The military government revised the country’s power development plan, a long-term outlook, after it took power to increase renewable energy capacity to 19,000 megawatts by 2036, a 153% increase. Many Thai investors took notice, but some by-laws of the City Planning Act and Industrial Works Act did not allow construction of power plants in certain areas near communities, so development was delayed a few years. Amendments to regulations in 2015 helped to jump-start investment. Another obstacle for Thailand is insufficient high-voltage transmission lines to carry renewable energy from private power generators to consumers. The Electricity Generating Authority of Thailand plans to spend almost THB 300 billion from 2015-2019 to upgrade 780 kilometres of transmission lines. The Energy Regulatory Commission (ERC) expects to grant renewable energy development licences for more than 1,000MW of capacity this year and next to private operators, Mr Viraphol Jirapraditkul, a commission member, told the Bangkok Post in November. That includes 519MW for solar farms, 400MW for biomass power plants, and 140MW for waste-to-energy projects, with a total investment near THB 65 billion. “We expect to grant more licences for 10MW or less, which should spur small businesses,” he said. Kasikorn Research Center estimates capital expenditure on renewable energy from the second half of 2016 to the end of 2018 will be THB 110150 billion, with 23 billion allocated for solar farms. The delay in domestic development has led some eager Thai companies to acquire capacity through mergers and acquisitions, including looking overseas. Super Block Energy Group expects to have 1,000MW of installed renewable energy capacity this year, rising to 2,000MW next year. It is looking for opportunities in Japan as well. TPCH Power Holding, a subsidiary of Thai Polycons, hopes to expand its renewable power capacity from 141MW to 350MW by 2021 by focusing on biomass, waste-to-energy and hydropower both domestically and overseas. It is conducting a feasibility study on a hydropower plant in Laos with a capacity of 100MW and recently received three licences from the ERC to develop biomass plants with a combined 26.1MW of capacity.

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Above left: Solarco installation at Nakhon Pathom in Thailand.

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A lack of understanding and clear data as well as jumbled promotional efforts and an inadequate grid capacity have stalled investment in the segment.

Washing the Stink Off Waste-to-Energy?

espite ample raw material, Thailand has been slow to get the ball D rolling on waste-to-energy projects. There is only 135 megawatts of installed capacity from these local projects to date, or less than 1% of the HARVEY BROCK

country’s energy consumption.

That figure pales in comparison to the 2,707MW of installed capacity for biomass power, or 1,330MW of solar, or even 367MW of biogas and 225MW of wind power. Because Thailand has a large agricultural sector, it had abundant raw materials that are useful in waste-toenergy projects such as the by-products from sugar cane, rice and corn farming. Even urban waste can often be used for this type of energy production. There are five types of wasteto-energy technologies in Thailand — landfill gas, anaerobic digestion, gasification, refuse-derived fuel, and incineration — of which the latter makes up 75% of capacity in the sector here. Waste-to-energy plants work similarly to fossil fuel-based plants: the burning fuel heats water into steam that drives a turbine to create electricity.

While the military government has increased forecasts for long-term alternative energy production and offered several schemes to promote their investment, waste-to-energy has failed to gain traction in Thailand. For Dr Sopitsuda Tongsopit of the Energy Research Institute at Chulalongkorn University, it boils down to a number of factors that have afflicted most of the renewable energies in the country. The government recently increased the capacity goal for waste-to-energy to 550MW by 2036 in its power development plan (PDP), or over 300% from current levels. These plans are quite ambitious, but they lack a clear statement of objectives and don’t address grid integration challenges by finding optimal locations for the grid system, she said.

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PHOTO: GIGIRA / SHUTTERSTOCK

A problem is there is no unifying agency coordinating functions and troubleshooting obstacles in meeting PDP goals, said Dr Sopitsuda. This leads to unanticipated speed bumps and ad hoc solutions when government promotions are introduced, as most are separated into different schemes, she said. Many renewable energy projects have been stalled because of the delay in transmission capacity reinforcement, while areas rich in renewable resources often have inadequate grid capacity to accommodate interconnection, said Dr Sopitsuda. She added that the Electricity Generating Authority of Thailand (Egat) does not have a real-time view of distributed generation. Dr Sopitsuda recommended setting a performance target for Egat for share of grid-connected renewables as well as rethinking the zoning approach for the deployment of renewables. To be fair, there has been some progress in the segment. Hitachi Zosen Corp won an order in April for a wasteto-energy plant from KPN Green Energy Solution Co in Nong Khai province. The 6MW plant will be operated by Nongkhainayu Co, while KPN is in charge of engineering, procurement and construction work. Hitachi Zosen will provide incinerators and waste-gas processing equipment. Nongkhainayu has a contract with a local government office to operate a waste-processing business for 25 years. In January 2016, Thai telecom


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group Samart Corp announced plans to invest THB 1 billion to build four garbage-fuelled power plants in the northern provinces in late March. “Energy business will be a major revenue driver over the next few years, contributing about 40-50% of revenue,” president Watchai Vilailuck told Reuters. The Alternative Energy Development and Efficiency Department of the Energy Ministry believes it is a process of educating the public about waste-to-energy schemes. To promote waste-to-energy production, the government has run campaigns to promote community participation in waste-to-energy conversion, waste sorting activities, and community understanding programmes about waste management and the environment, said the department. The government also introduced an adder tariff of THB 3.50/kWh for power produced from incineration or gasification, and THB 2.50/kWh for power produced from gas from landfill waste or biogas from waste fermentation. The department established an ESCO (energy service companies) Fund to promote energy conservation and alternative energy investment by providing investment assistance to potential operators. Operators are eligible for incentives from the Board of Investment, including a waiver of the machinery import tariff and an eight-year exemption from corporate tax as well as a 50% reduction for a further five years for alternative energy projects. The government’s 10-year (20122021) alternative energy development plan aims to boost the portion of alternative energy usage to 25% of overall usage, raising waste-to-energy output

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to 160MW of power and 100 kilotonne of oil equivalent (ktoe) thermal. Of the current 78.59 ktoe thermal capacity, 1.28 ktoe are from the replacement of cooking gas with biogas while 77.31 ktoe are from refuse-derived fuel.  Moreover, wastes were also used as fuel at cement plants as a substitution to coal. To motivate waste-to-energy production, the government allocated THB 4.5 million to study and improve the data on the segment’s potential. Without sufficient data, potential operators lack credible information to back their investment decision, said the department. Estimates range from 81% to 50% of all waste is not disposed of properly in Thailand. There are an estimated 106 landfill sites in the country and 30.9 million metric tonnes of improperly disposed of municipal solid waste per year. The department projects 18 new waste-to-energy plants will be added by 2018, increasing capacity by 115MW. The government study will categorise community waste sources into those with less than 50 tonnes a day of waste and those with more to assess investment potential, in addition to creating a waste database. Dr Sirintornthep Towprayoon of the Center of Excellence on Energy Technology and Environment from King Mongkut’s University of Technology Thonburi believes waste separation and pre-treatment of waste to reduce moisture content and increase heating value is essential to increase efficiency. A final stumbling block to adoption of waste-to-energy in Thailand has been the disjointed government response to legitimate public concerns when policies are introduced. For

PHOTO: SUNIPIX 55 / SHUTTERSTOCK

Upper left: People working in municipal waste disposal open dump in Mukdahan province, Thailand. Above: Natural Gas Combined Cycle Power Plant in Samut Prakarn province, Thailand

example, in 2015 a National Environment Board (NEB) decision to exempt wasteto-energy facilities with a capacity of less than 10MW from environmental impact assessments (EIA) led to a strong condemnation in The Nation following protests. EIAs allow locals to obtain information and voice their opinions on energy projects affecting their communities.  They also allow them to present their opposition to plants that would pollute the environment and threaten public health, as public participation and public consultation are part of the process. The NEB’s view was that even without the EIA requirement, such plants were still required to honour the Code of Practice, and full compliance with the code would ensure proper measures were in place to minimise health and environmental impacts, said The Nation.  The Natural Resources and Environment Ministry insisted the code was as good as an EIA, as it would bar waste-to-energy plants from setting up in protected forests and wetlands.  The ministry also disclosed that a checklist of more than 300 items was required before a project licence would be issued.  The country has a garbage disposal problem. Only 19% of its 2,490 waste disposal facilities operate in line with proper standards. The rest dispose of garbage through risky methods, such as burning piles of garbage in open fields. There are infrequent media reports of fires at current or former landfills, spreading harmful smoke in neighbourhoods.  On 26 August 2014, the National Council for Peace and Order issued a resolution that recommended wasteto-energy plants as a way to tackle the garbage problem, and called for the easing of laws and the EIA to promote the construction of waste-to-energy plants.  But Sonthi Kochawat, secretarygeneral of the Thai Environmental Health Association, warned that any rush to promote the establishment of wasteto-energy power plants could backfire if they caused serious pollution, leading to fierce public opposition, said The Nation.  Thailand followed a similar path previously by exempting biomass power plants with a capacity of less than 10MW from EIAs. In Roi Et, three such biomass plants were built near villages without EIAs, and the locals have been living amid black smoke.  “The first plant opened in 2001. Then two more plants started their operation. By late 2004, black particles swirled around,” Phuriton Namlak, a resident of tambon Nuea Muang in Roi Et’s Muang district told The Nation.  Perhaps the government can adopt a more reasoned approach to promoting waste-to-energy.

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Estonia, a tiny nation by the Baltic Sea, is considered the most advanced digital society in the world. Out of its 1.3 million residents, 94% are active digital ID card users, which enables secure access to all the state’s e-services, and a number of private sector ones.

Scale and Scalability

he platform, e-Estonia, allows voting in elections, filling income tax T returns, and signing legally binding documents just a few of the things that can be done digitally, from anywhere in the world. HENRI VIIRALT

According to the 2015 Index of Economic Freedom, Estonia was ranked first among EU countries and ninth in the world, and in 2009, it received a Guiness World Record for “fastest time to register a new legal entity” – a mere 18 minutes. This conducive business environment is now offered not only to its own citizens, but also to an increasing number of e-residents. “In 2014, I received a grant from the government to research the benefits that e-residency would offer for the domestic economy, as well as foreign entrepreneurs. Based on this research, we set up the e-Residency programme,

which we found to be beneficial for the nation since it brings an increased amount of investments into the country, says Mr Kaspar Korjus, e-Residency Programme Director. “A typical e-resident will incorporate a business, open a bank account locally, all while setting it up and running it from abroad. This in turn generates income from taxes, both directly and indirectly, by using services like running a virtual office and legal consultations.” To date, Estonia has over 15,000 e-residents from 135 countries, with plans to have 20 mn by 2025. “E-residency is a scalable product.

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It will certainly require bold new steps in the future, but on an international scale, there are hundreds of millions of people who require a convenient business environment. When we’ve asked for the primary reasons why foreign entrepreneurs chose to become e-residents in Estonia, the first is the ability to run their enterprise from afar. Secondly, since we’re part of the European Union, they can register the company as a EU one, thereby benefitting from a large number of safeguards that the union has put in place for its businesses. Furthermore, the overhead costs of running an Estonian remote business is really quite low. Lastly, Estonia is an awesome new digital country, which I invite everyone to be a part of.” In most Asian countries, the transformation into a digital society is lagging much further behind, starting to take its very first steps. With the lack of ICT infrastructure, heavy reliance on bureaucracy and ingrained corruption, it will be awhile before any serious progress will be made. Nonetheless, this hasn’t discouraged a few Norwegian businessmen, who welcome the challenge in hopes to reap the rewards when the time is right.


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PHOTO: SHUTTERSTOCK

“We were two companies that met through a programme ran by Innovation Norway a few years back. The companies in question are Exilesoft, a software development company, helmed by Mr Finn Worm-Petersen, and More Software Solutions, a software company focusing on government and business sectors, of which I am the co-founder and CEO of,” says Mr Frode Preber Ettesvol. “We both agreed that the potential for digitising government workflows and workflows in the region is massive.” Asia Digital Corporation (ADC) is set up with a goal to contribute to a better society. It intends to achieve it by exporting Nordic technology and competence to Asia to drive economic development with transparent and sustainable e-government solutions. “We realised that in order to achieve success in the region is to build local capacity by hiring people to do the consulting, setting up offices and so on in the respective markets. This was only a year ago, and now we have several proof of concepts done, hoping to go live with the first contract in January 2017.” This first project is the digitisation of the birth and death registration in Ho Chi Minh. It comprises 900,000 books and the complexity stems from scanning

and transcribing Vietnamese handprint into a digital form. Together with Open Text in the US, ADC has set up a solution to solve it and has achieved an accuracy rate of over 90%, which in itself is no small feat. Ettesvol says they’re currently busy preparing the contract and discussing price, and hopes to roll out the project on a countrywide basis upon the success in the Ho Chi Minh pilot. “One of the challenges in these projects is financing, and in most cases, they require assistance. The medium to large sized projects are able to apply for partner financing through the government-backed Export Credit Norway that we’re working with, and they can offer very low interest rates. It’s an entirely different story when you compare them to the rates they’re getting locally in Vietnam or Bangladesh. In order to make this happen, we need to prove that the project is well documented, transparent, with proper procurement process in place, in order to show that there’s no corruption involved.” With several other projects in the pipeline, Mr Ettesvol says most of the projects they’re working towards will be based around gathering data around the three pillars of government: people, businesses, and property. He also estimates that the first few years will have to do with scanning since it’s relatively easy when compared to digitisation of processes and workflow of government agencies. “We’ve been discussing with the Ministry of Justice in Vietnam to modernise some of their processes, and we actually did a proof of concept a few years ago already. The problem is that 40% of

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the Vietnamese local communities still lack the basic electronic infrastructure – the computers, scanners, the internet – to do their jobs. I think for now we need to find a way to help them get the infrastructure in place, so it becomes the backbone for digital data gathering. It will be nearly impossible to look at improving workflows and processes before.” One of the countries that ADC is currently eyeing for projects is Thailand, which Mr Ettesvol says is making progress, but there are potential pitfalls which the government should avoid. “It’s extremely important that they look at this on a broader scale. What they’ve managed to do so far is a bit of e-governance here, a little bit there, but if you keep doing it then very soon what you end up with is essentially building a huge mess of silos of data. Therefore, the government needs to have a bird’s eye view and connect the different ministries under a unified platform, so the information can be made available and used between all of them.” Although many Asian nations may be years away from realising true e-governance and a digital society, the steps that companies such as ADC are taking are crucial in paving the way. And if the experiences of the tiny nation by the Baltic Sea are any indication, the interaction between government agencies, and between the government and its citizens, has the power to entirely transform a nation, making short work of bureaucracy, running all levels of government more efficiently and transparently, and all of it culminating in a better educated populace and a healthier economy.

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Upper left: Tallinn, capital of Estonia. Estonia is one of Europe's most e-savvy countries. 94% of the population are using e-government services.

PHOTO: SHUTTERSTOCK

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PHOTO: I AM NIKOM / SHUTTERSTOCK

The battle for Southeast Asia’s ecommerce dominance is officially on, where only those with the deepest pockets have a chance to walk away as the victor

Hannibal at the Gates

With 600 million people, a growing middle class and rising internet L penetration, Southeast Asia is one of the last regions left in the world where the battle for ecommerce dominance is only starting to heat HENRI VIIRALT

up, beginning in April when Alibaba, the Chinese king of ecommerce, acquired Rocket Internet’s Lazada, the leading e-commerce platform in Southeast Asia, in a landmark USD 1 billion deal.

Jack Ma’s largest overseas acquisition, albeit widely heralded as the next gold rush for the region by venture capitalists and tech industry pundits, in the hopes that it would put the region firmly on the global map and bring with it more funding and large exits, isn’t merely about snuffing out the competitors, but a sage move as part of a much larger strategy

to acquire a massive end user base in a market where the lack of commerce infrastructure is eerily reminiscent of the earlier days of Chinese ecommerce. Ma’s endgame, as it becomes more and more evident, is to introduce and monetise his other products and services, starting with Alipay. The key reason why Taobao,

Alibaba’s equivalent to eBay, Amazon and Rakuten, was able to find so much success in China can be attributed to Alibaba’s deep understanding of how Chinese shoppers like to transact and being able to cater to it, such as enabling buyers and sellers to negotiate on pricing. More importantly, Taobao incorporated an optional escrow service, which enables the shoppers to pay for goods only after receiving and inspecting them, thereby reducing the risk of being cheated on transaction. With Alipay, the shopper can directly debit a Chinese bank account, removing the need for a credit card, thereby removing other financial institutions out of the equation. “..looking at China’s online payment market, we see Alipay right in the centre,  handling 68% of all transactions. However, rather than looking at Alipay as a stand-alone entity, we must recognize Alipay’s role as part of the Alibaba ecosystem. Most companies in this structure, such as Tmall and Aliyun, are interconnected and centred around Alibaba’s core e-commerce business. Collectively, they are strengthening the capabilities of the entire group and extend Alibaba’s reach into multiple sectors and industries. In Southeast Asia, by comparison, the payment options for ecommerce are limited. In the Chinese case, Alibaba and WeChat have decreased cash on delivery (COD) orders from more than 70% of total payments in 2008 to less than 21 percent during last year’s Singles’ Day mega sales. But just across the water Southeast Asia’s market is still fragmented and COD remains the dominant payment method for over 80% of total transactions,” writes Holly Reeves for ASEAN Today. Building the entire ecosystem around ecommerce is a strategy that has proven to be vastly successful for Alibaba in China, now dominating the USD 700 billion market with an estimated 82% market share. And it is only the beginning. “Alibaba group’s strategy is to build the infrastructure of commerce for the future. Ecommerce is only the first step. […] Around half of Alibaba Group’s workforce and our affiliated companies, including Ant Financial and Cainiao, are working on important areas of our ecosystem, including logistics, Internet finance, big data, cloud computing, mobile Internet, advertising and the socalled double H industries — Health and Happiness (the big data-based healthcare and digital entertainment businesses which will take 10 years to become data-driven),” states Ma’s letter to his shareholders in 2015. Therefore, not only does Alibaba eventually intend to take on retailers like the Indonesian, Lippo Group-backed Matahari Mall, and Thailand’s retail giant Central Group, both of whom are


pouring massive amounts of funding into its ecommerce platforms to eventually make a regional play, but also banks, insurers and hospitals. Aside from these lofty ambitions, one of the more immediate and interesting battles Alibaba will fight in the ecommerce sector will be with Amazon who is also making a play for Southeast Asia. “In India, we all know the story too well. Flipkart and Snapdeal are faced with the rich American competitor, which is set to pump USD 3 billion into the country. In Indonesia, rumour is that Amazon will likewise pump USD 600 million into the country. In a sandwich motion, Amazon is attempting to conquer India in the west and Indonesia in the East. And with a potential new centre point in Singapore, Amazon is picking its battles in the region carefully,” writes Anh-Minh Do in a recent article for Forbes. The article goes on to ponder what will this upcoming bloodbath mean for the consumers, the competition, and legislation. “No doubt, from the consumer perspective, the companies will burn as much as they can for marketshare. It’s good for consumers. That’s obvious. But what will it do for their competitors? The retailers and existing e-commerce sites in Southeast Asia? Certainly, smaller e-commerce sites are unprepared for an Amazon or Alibaba onslaught. We can see this in India with Flipkart marking down its valuation. There is little evidence that Southeast Asian e-commerce sites are more prepared. And yet, this isn’t the scariest part. Will Southeast Asia’s large conglomerates and governments stand by idly? Are we about to see protectionist regulations that help foster innovation and start-ups in local countries that can contend against the giants? Will the giants suck the value out of Southeast Asia? Although good for consumers, do they re-inject capital into the local economies?” The importance of Southeast Asia as a proving ground for both Amazon and Alibaba can’t be understated, with the outcome quite possibly turning out to be a make it or break it situation, one that determines the future of their overseas expansion strategy. Other players with deep pockets and long term vision, too, such as Matahari Mall that has spent USD 600 million to develop their platform, or Central Group, that plans to merge all its various ecommerce stores into a single, giant marketplace next year, will not go down without a fight. The stage is set, the outcome uncertain, but the lines are most certainly drawn in the sand.

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Cool headed Warm hearted Banking the Norwegian way. YOUR ACTIVE PARTNER. SINGAPORE 1 Wallich Street #30-01 Guoco Tower Singapore 078881 SHANGHAI 901 Shanghai Central Plaza 381 Huai Hai Zhong Lu Shanghai 200020 China

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PHOTO: SHUTTERSTOCK

Asia is paving the way for digital payments, but who are the players that can realistically disrupt the legacy-bound financial industry?

Payment Pioneers

he war on cash in favour of digital payment systems that are T expected to increase transparency, efficiency and security have been making headlines all around the world as of late, with everyone from HENRI VIIRALT

fintech startups to tech industry giants like Facebook and Line, to even governments jumping on the bandwagon.

“Probably on average about 25% of the total adult population in ASEAN has a bank account. But there’s a massive opportunity to include people by using a mobile phone and having a payment mechanism linked to it, creating opportunities for them. It could give farmers access to microinsurance. It could give families in small villages the ability to save for their future, to make bill payments without having to leave their fields or close their

small provisioning store—by ensuring a safe and secure way of transmitting remittances at a lower cost,” says Mr Matthew Driver, MasterCard’s group executive, global products and solutions, APAC, in an interview with McKinsey & Company. In Thailand alone, the potential to disrupt the country’s heavy reliance on cash is ripe for the taking. ACI, a leading global provider of real time electronic payment

and banking solutions, released the results of its new Thai Commerce & Payments Study back in July. The survey,  conducted in  collaboration with DataOne Asia,  asked approximately 300  consumers about their shopping habits and payment preferences for instore, online and mobile transactions in Thailand. The study found that 40% of the respondents are already using alternative payments methods today, so it is essential that merchants offer more than card based payments. “Through our joint research with  Google, we estimate that today 11 million consumers are doing online purchases in Thailand,” Mr Sebastien Lamy, a partner Bain & Company and an expert in the firm’s digital practice, was quoted saying in a recent article in Forbes. ”We believe that this number will double in the next three to five years, as demand continues to grow and digital offerings and the supporting logistics and payments infrastructures continue to improve.” Interestingly enough, an industry


NORWAY-ASIA BUSINESS REVIEW

report by Moody’s Analytics found that the increased use of electronic payments, including credit, debit and prepaid cards, helped Thailand’s GDP grow by USD 3.18 billion (0.19% from total GDP) between 2011-2015, making it the largest increase in Asia. While the majority of advancements in digital payment ecosystem have been initiated by the private sector thus far, the Thai government has also been eager to pitch in and some industry experts are already hailing Thailand as the 2017 hub of ecommerce and e-payments among AEC. However, after months of promoting PromptPay, the upcoming national e-payments system that aims to make Thailand a cashless society and to support the country’s digital economy, the Bank of Thailand announced on 13 October that it would be delayed to an unspecified date in the first quarter of 2017. “Despite the PR and media hype, these homegrown solutions have yet to shift consumers away from cash on delivery, because a lot of these heroic efforts have been ‘technology for technology’s sake’ — building a faster car when what is really lacking are more roads,” writes Mr Sheji Ho, group CMO at aCommerce, Southeast Asia’s leading ecommerce service provider, in an article for TechCrunch. Even social media giant Facebook has been trialling an option exclusively in Thailand that would allow users to pay for product listed on Facebook Pages directly, with no redirecting to other pages necessary. Line, a popular chat app that lists Thailand as its second largest market

ISSUE 4 2016

outside of Japan, has already beaten Facebook to the punch, having launched extensive payment options along with gratis next day groceries, acquiring 2 million users for the service in the process. With a good-sized fintech scene and innovative ideas for improved services, it’s difficult to see who the likely winners are that will be able to retain customers among the myriad payment options available. For Thailand, it may very well be up to a new strategic partnership that has recently been formed. Back in April, Alibaba acquired a controlling share into Southeast Asia’s largest online marketplace, Lazada. With Thailand being one of Lazada’s top three performers, Alibaba is already hard at work in learning Thai consumers’ habits and making new friends. In 2011, Alipay, Alibaba’s digital payment system, spun off Alibaba Group to establish Ant Financial Services Group, which covers areas like digital payments, microlending, as well as banking and credit scores. With a USD 60 billion valuation, Ant Financial is second only to Uber as the most valuable non-public tech company. In November, Ant Financial announced an investment and the formation of a cooperation with Ascend Money, the owner of TrueMoney and the leading fintech company in Thailand. “The partnership with Ant Financial will definitely help strengthen Ascend Money’s capability and our market position in Thailand and the region. Ultimately, this will help us serve our customers better,” says Mr Teerawat Tilokskulchai, Ascend Group’s Chief Strategy Officer. “Ant Financial is one

of the most technologically advanced and successful fintech companies in the world so we can leverage not only their technology platforms but also their global partnership network in order to strengthen our business and operations.” Although the domestic digital payments market is saturated with more players popping up all the time, Mr Teerawat seems to be confident in Ascend Money’s strategy to thrive in Thailand and beyond, and sees others as ‘co-petitors’ rather than competitors. He argues that while there are many players, the fintech industry in Southeast Asia is still in its infancy, and there is ample room for Ascend to work alongside others to build the ecosystem and drive customer adoption – a move that in the end will serve the customer base better. While there may have been some concerns among industry specialists about the overlap of users between Ant Financial’s Alipay and Ascend’s TrueMoney– both of which have similar business models and are available in Thailand – the product strategy seems to be vastly different. “We are focusing on different target groups. Alipay is working to serve Chinese tourists who travel to Thailand and Southeast Asia to increase their convenience in being able to use Alipay services in these countries. TrueMoney is focusing on local customers in each Southeast Asian country that we are in.” Mr Teerawat believes the aforementioned benefits that Ant Financial brings to the table will help set Ascend apart from other players. Having built capacity and expertise in markets such as Cambodia, Vietnam, Myanmar, Indonesia, and the Philippines, the company will continue to strengthen its operations in Southeast Asia in the short to medium term. The strong push towards a cashless society in Thailand and elsewhere in Thailand, with varying degrees of readiness and financial infrastructure is also something that’s firmly on Ascend’s agenda. “I believe that the move toward a cashless society is real and is not just a hype. Various countries in Europe, like Sweden, are already successful in turning cashless. It is undeniable that the cost of handling cash is expensive while there are also security concerns. Moreover, financial technology that enables cashless transactions can also help provide better services to the underserved who have limited access to the traditional banking system, leading to an improved standard of living. At Ascend, we understand this and are coming up with new and better innovations to push toward a cashless society.”

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PHOTO: SHUTTERSTOCK

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The Christmas party at the Ambassador’s residence in Bangkok is now in its fourth season and as popular as ever

Ambassador's Christmas 6

mbassador Kjetil Paulsen opened his doors to close to 100 children of all ages on Sunday 27 November 2016, the first Sunday of Advent. A The event is the Chamber’s only family event and it reminds us that our

families give us much needed support in our daily lives. In line with tradition, the Christmas Party included a charity lottery in addition to lots of fun and games. Many thanks to Jotun for their generous contribution and to the Ambassador for opening his garden to us.

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9 2

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6. A happy Ambassador Kjetil Paulsen and TNCC President Vibeke Lyssand Leirvåg accompanied by the winner’s gorilla 7. Chamber Honorary Member, Dr. Kristian Bø gets a hug from the Chamber President 8. TNCC Executive Secretary Khun Nattamon was among the lucky winners 1-5/9. A happy crowd gathering in the Ambassador’s garden. There were many activities including Santa Claus handing out gifts to the kids, magicians, games and the kids sending their heartfelt thanks to Jotun, the sponsor of the day and finally the mandatory dance around the garden’s beautiful Christmas tree


NORWAY-ASIA BUSINESS REVIEW

STATISTICS

STATISTICS

ISSUE 4 2016

The Graphs

Nominal GDP/Capita 2015 GDP% Growth 2015 (TUSD)

2%

10 0%

2

1%

0

0%

Global Competitiveness Ranking 2016-17 6

3

GDP/Capita: Wikipedia/IMF; GDP Growth: Wikipedia/CIA Factbook; Global Competitiveness: Wikipedia/CIA Factbook; Global Competitiveness: World Economic Forum; Inflation 2015: CIA; Ease of World Economic Forum; Inflation 2015: CIA; Ease of Doing and Days totoStart a Business: World DoingBusiness Business and Days Start a Business: World Bank;Corruption: Corruption:Transparency TransparencyInternational; International; Bank; DemocracyIndex: Index:Economist Economist Intelligence Intelligence Unit; Democracy Unit; MobileTelephone Telephone Penetration: World Bank; Electric Mobile Penetration: World Bank; Electric Consumption: International Energy AgencyNorway Consumption: International Energy Agency; Norway Trade:Norway. StatisticsData Norway. Datadownloaded has been Trade: Statistics has been downloaded sources on 13 December from from sources on 13 December 2016 2016

5

7

8% 15

18

5

26 28

6% 32

37 47

4.5

55 56

4%

68 107

4 3.5

2% 0%

3 -2%

Ease of Doing Business Ranking 2017 90

9

7

1

4

80

5

Doing Business 2017 Days to Start a Business 50

11

18

34

70

40

49 84 90

60

30

103107 109 130

50

20

167 174

10 0 NO US

Corruption Index 2015 160

Democracy Index 2015 147 139

140

10 9

112

120 100 76 76

80

83 83

88

95

54

60

37

40 16 5

8

18 18 20

0

8 7 6 5 4 3 KE JP TW IN ID PH HK MY LK SG BD TH MM VN CN

20

HK SG KR LK TW JP MM MY BD VN ID TH IN CN PH

40

17 1.1%

Sources: Sources: GDP/Capita: Wikipedia/IMF; GDP Growth:

2

11

Electric Consumption kWh/Capita 2015

Mobile Telephone Penetration 2015 250%

30

200%

25

12

20

10

15

8

150% 100%

14

6

10

4

50%

5

2

0%

0

0 TW KE SG JP HK MY CN TH VN ID IN PH LK BD MM

Population Norway: 5.0 mill Demographics Population Oslo: 875,000 Life expectancy M/F NO: Population Norway: 5.0 80/84 mill Inhabitants per sq. km land area: Population Oslo: 875,00017 Life expectancy M/F NO: 80/84 Population Growth: 1.1%

10%

TH SG TW JP KE LK VN CN PH MY HK IN BD MM

5.5

Inflation 2015

NO US EU

0

MM IN CN BD VN PH LK ID MY KE HK TH SG JP

3%

4

NO US EU

6

NO US

Highest peak: Galdhøpiggen 2,469 m Inland water areas: 16,360 sq. km Demographics Coastline: 25,148 km

Inhabitants per sq. km land area: Population Growth:

4%

30 2% 20 1%

NO US

Highest peak: Galdhøpiggen 2,469 m 16,360 sq. km Geographic 385,199 sq. km Coastline: Area: 25,148 km

Geography Inland water areas:

6% 5%

NO US

8.5% NOK72,035 Fish %/value bill Chemicals 6.1% 51,727 Petroleum 29.1% 246,410 Gas Non-ferrous metals 28.5% 241,538 5.1% 43,449 Engineering products 13.2% 111,711 Scientific instruments 1.9% 16,163 Seafood 8.5% 72,035 Raw materials 1.9% 15,896 Chemicals 6.1% 51,727 Iron and steel 1.5% 12,832 Non-ferrous metals 5.1% 43,449 Others 4.2% 35,982 Scientific instruments 1.9% 16,163 Total (-5.6% vs 2014) 847,744 Raw materials 1.9% 15,896 Iron and steel 1.5% 12,832 Others 4.2% 35,982 Geography Total (-5.6% vs 2014) 847,744 Geographic Area: 385,199 sq. km

7%

8

241,538

Engineering products 13.2% 2015 111,711 Norway’s Top 10 Exports

8%

10

NO US

28.5%

12

NO US

Gas

14

SG JP HK TW MY KE CN TH IN ID PH VN LK BD MM

Current Account Balance NOK 55.0 bill International Reserves NOK 520.4 bill Norway’s Top 10 Exports 2015 Unemployment 4.3% bill Corporate Income Tax %/value NOK 28% Petroleum 29.1% 246,410 Value Added Tax 25%

16

SG HK KE TW MY JP TH CN VN ID PH LK IN MM BD

Current Account Balance NOK 55.0 bill International Reserves 520.4 bill Basic Figures NorwayNOK (2015) Unemployment 4.3% Export Growth 2015 2.3% Corporate Income 28% Export Growth 2016 Tax projected 2.4% Value Added Tax 25% Trade Balance NOK 233.7 bill

9%

SG HK JP TW KE MY IN TH CN LK ID PH VN BD MM

Countries are listed by their two-letter ISO 3166-1 code.(2015) The Basic Figures Norway data hasGrowth been 2015 assembled from a2.3% Export number of sources. See below for Export Growth 2016 projected 2.4% a full list. Trade Balance NOK 233.7 bill

8% 80 7% 70 6% 60 5% 50 4% 40 3%

ISSUE 4 2016

GDP% Growth 2015

HK SG MY ID VN TH JP KE PH LK CN BD IN MM

I

9%

NO NO US US SG EU JP HKMM KE IN TW CN BD MY VN CN PH TH LK LK ID ID MY PH KE VN HK IN TH MM SG BD JP

In order to give the readers an understanding of where the Asian countries are in their development, we have assembled an overview of various nindicators order tofor give the readers Norway, USA and the most an understanding of where important South and Southeast Asian the Asian countries are in their markets. The graphs in the two right development, we have assembled are of thevarious result. Countries are ancolumns overview indicators listed by their two-letter ISO 3166-1 for Norway, USA and the most code. The data hasand beenSoutheast assembled from important South a number of sources. below a full Asian markets. The See graphs infor the list. two right columns are the result.

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The Graphs

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Norwegian Chambers of Commerce and Business Associations are established in most major Asian countries. The organisations work to create venues and channels for exchanging and sharing information, to improve local business conditions and opportunities for Norwegian companies and to increase trade between their respective host countries and Norway.

Norway in Asia Indonesia Norway Business Council

Norwegian Business Association (India)

Norwegian Chamber of Commerce, Hong Kong

C/O Royal Norwegian Embassy Menara Rajawali 20th Floor Jl. DR Ide Anak Agung Gde Agung Lot #5.1 Kawasan Mega Kuningan Jakarta 12950, Indonesia W: www.inbc.web.id E: execsec@inbc.web.id T: +62 2157 63343

c/o Innovation Norway 92, Golf Links New Delhi 110 003 India W: http://www.nbai.in E: nbai@nbai.in T: +91 1149 099200

Rooms 1510-1512, West Tower, Shun Tak Centre, 168-200 Connaught Road Central, Central, Hong Kong. W: http://www.ncchk.org.hk E: info@ncchk.org.hk T: +85 2254 69881

Norwegian Business Association (NBA), Korea

Norwegian Chamber of Commerce, Japan

Royal Norwegian Embassy 13th fl. Jeong-dong Building 21-15 Jeongdong-gil Jung-gu Seoul 100-784, South Korea W: http://www.norway.or.kr E: yky@mfa.no T: +82 0272 77157

c/o Innovation Norway in Tokyo, 5-12-2 Minami Azabu, Minato-ku, Tokyo, Japan 106-0047 W: www.nccj.or.jp E: michal.berg@nccj.or.jp T: +81 3344 09935

Malaysia Norway Business Council c/o Royal Norwegian Embassy, P.O. Box 10332, 50710 Kuala Lumpur, Malaysia W: www.mnbc.com.my E: malaysianorwaybc@gmail.com T: +60 3217 10000

Myanmar-Norway Business Council c/o Royal Norwegian Embassy Nordic House No. 3, Pyay Road, 6 Miles Hlaing Township Yangon, Myanmar W: www.myanamr-norway.com E: contact@myanmar-norway.com

Nordic Chamber of Commerce and Industry c/o Maersk Bangladesh Ltd. 4th Floor, Plot 76/A, Road 11 Block M, Banani, Dhaka 1213 Bangladesh W: http://nccib.com E: info@nccib.com T: +88 0171 5991907

Nordic Chamber of Commerce Vietnam Petroland Tower, 17th Floor No. 12 Tan Trao Street, Tan Phu Ward, District 7 Ho Chi Minh City, Vietnam W: http://nordcham.com E: contact@nordcham.com T: +84 85 416 0922

Norwegian Business Association Shanghai Royal Norwegian Consulate General Rm. 1701, Bund Center, No. 222 East Yan’an Road, Huangpu District, Shanghai 200002, China W: http://www.nbash.com E: nbash@nbash.com

Norwegian Business Association (Singapore) c/o The Royal Norwegian Embassy 16 Raffles Quay #44-01 Hong Leong Building Singapore 048581 W: http://nbas.org.sg E: admin@nbas.org.sg T: +65 6622 9100

Norwegian Business Association Sri Lanka (NBASL) c/o Exilesoft 201, Sir James Peiris Mawatha Colombo 02 T: +47 95923712

Norwegian Business Forum, Beijing (NBF) Rm. 1701, Bund Center, No. 222 East Yan’an Road, Huangpu District, Shanghai 200002, China W: http://norbachina.com E: secretary@norbachina.com T: +86 1305 1611164

Philippines Norway Business Council c/o The Royal Norwegian Embassy 12th Floor, DelRosarioLaw Centre 21st Drive corner 20th Drive Bonifacio Global City, 1630 Taguig City, Metro Manila Philippines W: http://www.pnbc.ph E: info@pnbc.ph T: +63 2317 2700

Thai-Norwegian Chamber of Commerce 14th Fl., Mahatun Plaza 888/142 Ploenchit Road Bangkok 10330, Thailand W: www.norcham.com E: contact@norcham.com T: +66 2650 8444


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Norway-Asia Business Review 2016-04