H.E. Dr. Thani bin Ahmed Al Zeyoudi, Minister of State for Foreign Trade, Minister in Charge of Talent Attraction and Retention, UAE H.E. Cham Nimul, Minister of Commerce, Cambodia In conversation with: Geoff Colvin, FORTUNE
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00:00 Well, we're going to continue now.
00:02 We're going to continue now on this same topic
00:05 and talk about globalization and the future of trade.
00:09 Research from the McKinsey Global Institute
00:11 finds that every region of the world
00:14 relies on trade with other regions
00:16 for more than 25% of at least one important type of good.
00:21 In the wake of the pandemic
00:24 and with the rise of geopolitical tensions,
00:27 a shift in the conversation took place.
00:30 Much more talk about decoupling, protectionism,
00:33 reshoring, friend-shoring.
00:36 But at the same time, new international partnerships
00:39 and agreements are driving fresh collaborations
00:43 and giving rise to middle power nations
00:46 as influencers around the globe.
00:49 So let's dive into the impact of all that
00:52 and their effect and what better place
00:54 to have this conversation than here in the UAE
00:57 as the nation continues to establish itself
01:00 as a leading hub for East-West trade.
01:03 Joining us now are His Excellency,
01:06 Dr. Tani Ben Ahmed Al-Zoudi,
01:09 the United Arab Emirates Minister of State for Foreign Trade,
01:13 also Minister in Charge of Talent, Attraction and Retention,
01:18 and Her Excellency, Cham Nimul,
01:20 Cambodia's Minister of Commerce.
01:23 Please welcome them to the Fortune Global Forum.
01:26 (audience applauding)
01:28 (upbeat music)
01:30 Lots to talk about here.
01:41 Your Excellency, I'd like to start with you.
01:47 This recent agreement, there's a recent agreement
01:49 between the UAE and Cambodia.
01:51 It's quite interesting.
01:52 It aims to boost significantly non-oil bilateral trade
01:57 between the two countries.
02:00 What are the main aspects of this deal
02:03 and how do you see it strengthening economic cooperation
02:07 between the two countries?
02:09 - Thank you, Mr. Jeff, if I may.
02:12 Start with a quick appreciations
02:14 to the Fortune Global Forum for the invitation
02:18 extended to myself and the delegations
02:20 and also to His Excellency, Dr. Tani,
02:23 for your kind nominations,
02:25 as well as sharing the floors with Your Excellency
02:27 and Mr. Galvin, a legendarist of his own kind.
02:30 Very much delighted that we are able
02:32 to have this conversation this morning.
02:34 And in response to your, Mr. Galvin's questions
02:38 on the new economic partnership,
02:42 the comprehensive economic partnerships
02:44 that Cambodia and UAE is in the process of fully ratifying
02:48 and it will be entering into force as expected,
02:51 hopefully in the very first term of 2024 itself.
02:55 If I may start with a little bit of a background.
02:58 The big question is that, I'm sure,
03:02 more than probably 40% of the audience here
03:05 probably haven't heard of Cambodia to begin with.
03:08 And the big question was that,
03:11 why Cambodia with its much smaller economies
03:15 and much more distant lands?
03:17 In a economic cooperation with large economies
03:20 and well-developed economies such as the UAE.
03:23 So that being said, is that the comprehensive
03:28 economic partnerships that we are talking about here,
03:31 is actually a new kind of its own free trade agreements,
03:35 in a sense that it's very forward-looking,
03:37 it's very innovative,
03:38 and it's that it's allowed for monitorings
03:41 and evaluation process.
03:44 It's also gone beyond our traditional free trade agreements,
03:48 where it's only focused on the trading of goods,
03:50 trading and services,
03:51 and of course, mobilizing investment.
03:53 For the CEPAS here,
03:55 I may your excellencies on your behalf,
03:57 the CEPAS focus a lot more on as well in streamlining,
04:02 custom process, reducing the regulatory burdens,
04:07 allowing for ease of exploitation
04:12 and doing business in both sides of the world.
04:14 And beyond that, of course,
04:16 in the world of moving the goods,
04:18 the rule of origin has always been the most barrier
04:21 to all the traits beyond other technicalities.
04:24 And that is something else that we take
04:26 into great considerations,
04:27 allowing the process to be moving much, much smoother,
04:31 it's much more less cost,
04:34 transactional costs for the exporter and importers.
04:36 In also responding to your Mr. Goldman's question
04:41 of to what the UAE's and Cambodia's trade agreements
04:45 is set forth.
04:47 In that being said, what I raised earlier,
04:52 so why is Cambodia and UAE's?
04:55 In a sense that we wanna be able to look beyond
04:58 just the bilaterals relationships
04:59 that we are developing diplomatically and economically,
05:03 is that it's Cambodia's as a small and little open economies
05:08 is in the heart of the ASEAN itself,
05:10 which is as the audience might be aware,
05:13 is a growing and very rapidly growing economies
05:17 of the region.
05:18 And we are hoping that with this,
05:21 that's the UAE's looked upon Cambodia and beyond its borders
05:25 on into the ASEAN itself with a large purchasing powers
05:29 and also 600 millions of customers
05:33 sitting around there as well.
05:34 And the very same thing for Cambodia's,
05:37 the economic partnerships that we are hoping to develop
05:40 with UAE is basically also serve as a gateways
05:44 for us to the Middle Eastern market
05:45 as well as the African market.
05:47 So I believe that our cooperation will move us beyond
05:52 and incorporate us and integrate us even more
05:54 to the regions itself.
05:55 And that goes on both way based on the mutually
05:59 benefiting propositions.
06:01 - Yeah, your excellency from the UAE perspective,
06:07 what were the most important reasons
06:10 for making this agreement?
06:12 - The complementarity, Jeff.
06:14 Let's look at the growth which Cambodia had since 1998.
06:20 The average annual growth was around 7.7% until 2019,
06:25 shows the potential of the economy in this nation.
06:29 And even in the last few years,
06:31 our bilateral trade has been searched big time,
06:34 shows that there is a lot of opportunities
06:37 that we just started to harvest in this relation.
06:41 To complement what Her Excellency the Minister said
06:43 on the SIPA, it's very comprehensive.
06:46 We went beyond the liberalization of trading goods
06:50 and services, although the percentages is really high.
06:52 We're talking about almost 90%,
06:54 more than 90% liberalization in most of the commodities
06:58 between both nations.
06:59 And at the same time, we're focusing on the SMEs
07:01 and how we're going to encourage the small
07:05 and medium exporters from both sides
07:07 to capitalize on this market.
07:09 The digitalization, which is a new thing
07:11 which has been added into our SIPAs,
07:15 IPR, the quality, et cetera.
07:17 As a new partner nation to the ASEAN,
07:20 we see Cambodia as another member of the ASEAN,
07:23 which can give us that boost into the group.
07:26 And that's why we are seeing Cambodia
07:28 as a gateway to many of the products.
07:30 Few things that it's worth to be highlighted as well.
07:33 We are one of the net importer of food products,
07:36 and Cambodia is one of the main producer
07:38 of many of the commodities.
07:39 Maybe for the logistical and the infrastructure
07:43 availability within Cambodia, most of the products
07:46 goes from Cambodia to their neighborhoods.
07:48 But now we're coming with more interest
07:50 to have a direct access to Cambodia,
07:52 so many of their commodities and services
07:54 can be directly directed to the UAE.
07:57 Looking at the commodities, we're talking about
07:58 food products, agriculture, luggages,
08:02 apparels, et cetera.
08:03 But from our side, we can supply them
08:06 with the machineries, spare parts,
08:08 petrochemicals, aluminum, steel,
08:10 which they need as part of their economic growth
08:13 and development of the nation.
08:14 - This is a very innovative trade agreement.
08:19 Your Excellency, could this be a blueprint,
08:23 a model for future trade agreements with other countries?
08:28 Or involving more than one?
08:31 - Very much so, Mr. Jeff.
08:32 The blueprint from the CEPA's experience,
08:37 for, if I may, Your Excellency, for the UAE,
08:41 the CEPA with Cambodia is the seventh,
08:43 but for us, it's actually the first.
08:45 So it's this comprehensive economic partnerships,
08:50 actually, it's, like I mentioned earlier,
08:53 it goes beyond the traditional.
08:54 So if it's moving on towards the blueprint
08:57 for the future's free trade agreement
08:59 or any other CEPA in the future,
09:01 it's that it's actually not only just focused
09:03 on market access diversification,
09:06 but it's actually built in the resilience.
09:08 As you know, small economy like ours
09:10 are very susceptible and very much as price takers,
09:13 in a sense, we are easily affected
09:15 by all the other external shocks
09:17 that we have seen over the times.
09:19 And this resilience is being built.
09:22 It's taking into great consideration
09:24 the vast difference between our two developing economy
09:26 and the size of that.
09:29 And it's actually allowed for that flexibility
09:32 for us to be able to develop and able to catch up.
09:35 So this come economic partnership,
09:38 it's not just about looking at just simple little goods
09:41 being transported back and forth.
09:44 It goes beyond that into that,
09:45 it goes into technical assistance,
09:47 it goes into others, innovation support,
09:51 it goes into supporting, like Your Excellency mentioned,
09:54 small and medium enterprises.
09:56 So all of this and push beyond the boundary
09:59 into the digital trade,
10:00 and then also a lot more infrastructure
10:03 for the protection of the intellectual properties as well.
10:06 So all of these are set for new blueprints
10:09 in a sense that it's most of the free trade agreement
10:12 once it goes into effects,
10:14 it's basically just the customs and private sectors
10:17 who actually utilizing it.
10:19 As a government, we only open the portal
10:21 and we are allowing it to just,
10:23 the private sector takes its own charge.
10:25 But in this SIPA, what's actually quite different
10:28 is that it's continuously evolving
10:31 to reduce that once again, the customs,
10:33 the rule of origins,
10:35 streamlining all the process of doing business,
10:39 but at the same time,
10:39 allowing for us to constantly be in conversation
10:44 in a dialogue where it looks like,
10:46 says what's upcoming,
10:47 and whether we can move the effectiveness
10:50 and the schedule of something much faster.
10:52 So all this negotiation that we have been looking into,
10:56 whether we're using the positive list,
10:57 we're using the negative list,
10:58 all of this is being taken to great consideration
11:01 for the new blueprints.
11:02 It's something else for Cambodia in the future
11:05 is when we are looking into all of this,
11:07 is that we are hoping that beyond just the diversification,
11:10 beyond all the aspects of the resilient,
11:14 but it's also served in the facts
11:15 that it's allowed for both sides
11:18 to be able to constantly adjusting and forward looking.
11:22 - Yeah, so that's very interesting
11:24 because what you're saying is
11:25 an important part of this agreement
11:27 is not just what's written on the paper, right?
11:30 It's also the relationship that has been developed
11:34 in negotiating it.
11:35 So now you can talk back and forth.
11:37 Does that sound right to you, sir?
11:38 - Absolutely.
11:39 Some of the insights, which usually don't say,
11:42 but I'm going to mention it
11:44 with a few, allow me, Your Excellency.
11:46 If you go back for 20 years ago,
11:49 most of the industries were booming in China.
11:52 And now many of those industries
11:54 are looking for new markets
11:55 because of the low labor cost,
11:57 because of the other geopolitical factors
11:59 that are happening around the world.
12:01 Many in the last 10 years shifted to Vietnam,
12:03 but now it is the time to shift even from Vietnam
12:06 and the neighboring countries to the other countries,
12:08 including Cambodia.
12:09 So it's one of the destinations,
12:11 which we know for sure is going to have
12:12 a huge industrial boom.
12:14 And we want to be one of the early entries
12:16 to such engagements.
12:17 Usually those elements are not reflected in the agreements,
12:21 but with the direct engagements,
12:22 we're pursuing such discussions and dialogues.
12:26 Tenants and highly skilled people as well.
12:29 It's another things which we're working closely
12:32 through the, not only through the SIPA,
12:33 but through the direct engagements with the government.
12:36 The investments on the strategic commodities,
12:38 for example, Cambodia is very well known
12:39 with the rice production.
12:41 So we're really having a serious discussion
12:42 on rice production and cultivation within Cambodia.
12:46 Same thing on the infrastructure.
12:47 We're one of the countries which is very strong
12:50 on networking logistical investments,
12:55 where they can capitalize on the network that we have
12:57 to penetrate the bigger markets from the UEE.
13:00 So they use the infrastructure
13:02 that we're having around the world.
13:04 - Yeah.
13:05 Your Excellency, let me ask you something.
13:08 As I said in the introduction,
13:09 we're hearing more and more talk
13:10 about so-called middle power economies.
13:13 What are the strategies and policies
13:18 that these countries can use
13:21 to use their new found influence really?
13:26 And how does that reshape the traditional power
13:30 in the trade agreement world?
13:34 - Well, if we look at what happened in the last few years
13:37 with the geopolitics, the fragmentations,
13:41 the economic and trade measures that has been going around,
13:46 the importance of the mid-power nations
13:50 are getting more and more critical.
13:53 Even looking at the other factors
13:54 when it comes to the technological evolutions
13:58 and exploitations by governments,
14:01 the low to mid-income people that is moving up the ladder
14:06 when it comes to those incomes in those nations.
14:11 So there are so many factors that are happening
14:13 and mid-power are becoming more and more critical
14:15 to come up with solutions.
14:17 Historically, everyone is looking at the superpower nations
14:22 to come up with comprehensive solutions to the table,
14:26 to any matters that face the world.
14:28 But now the mid-power, they're using their strength
14:31 in certain specific topics or area of specialization
14:36 and they put it on the table.
14:37 Let's look at what happened in the last few years.
14:40 For example, Switzerland.
14:42 They've been a mid-power nation using their power
14:46 when it comes to the capital,
14:48 as a saving nation for the capital
14:53 and the wealth around the world.
14:54 Turkey with being a mediator in many of the discussion.
14:58 And Indonesia to become a mediator
15:00 during the conflict, throughout the conflicts
15:02 between Russia and Ukraine
15:04 on the food and the green discussion.
15:06 UAE is a mid-power nation which has as well its own strength.
15:11 We're a neutral nation.
15:13 We don't get into conflicts.
15:14 We do have huge networking around the world.
15:17 We're one of the countries that are adopting
15:20 a lot of technologies and we're much faster
15:23 in taking things forward.
15:25 And this is the beauty about the mid-power countries,
15:27 that they're very flexible, agile,
15:29 and can absorb things much quicker than the supernation
15:32 which has been taking most of the discussion forward.
15:35 So I think reshaping the global agenda
15:38 is going to be depending on
15:40 how we're going to utilize those mid-power nations
15:43 and use their power and skills in getting things done.
15:47 - Yeah, that's very interesting
15:48 because what you're saying is that middle-power nations
15:51 actually have advantage that the great powers don't have.
15:56 This sounds like something that will probably be a factor
16:00 for a long time to come.
16:01 Your Excellency, I wanna ask you something else.
16:05 I know you're very interested in innovation
16:08 and how that influences a country's economy, which is clear,
16:13 but how does it play a role in maintaining competitiveness
16:18 on the global stage?
16:20 - Thank you for the questions.
16:22 As I mentioned earlier,
16:23 as Cambodia is a small open economies,
16:26 innovation itself is not just a driving force
16:30 for developments and new breakthrough and new technologies.
16:35 But what we wanted to be able to see
16:36 is that it's actually becoming a culture of mindset
16:39 where it's all about forward-looking,
16:41 it's all about structure, about more being responsive,
16:44 and being able to stand at the forefront
16:48 instead of just basically looking at new technology
16:52 being adopted.
16:53 One interesting aspects in Cambodia,
16:55 as we have seen as well during the pandemics,
16:58 just earlier as your other panelists,
17:02 the CEO of FedEx was just mentioning
17:06 that the levels of the e-commerce has been rising
17:10 and then now it's been coming down and stabilized.
17:12 But for Cambodia, during the pandemic itself,
17:17 the adoptions and the adaptions of the technologies
17:20 is massive and it has remained quite high.
17:23 And the interesting thing about small economy like ours
17:27 is that we are actually able to leapfrog.
17:30 We don't have to reinvent any wheel,
17:31 we do not need to spend time
17:34 relearning a lot of other things,
17:36 but basically be able to adapt and leapfrog it over.
17:38 So, catching on to the IR 4.0 right away
17:41 in the sense that it's very interesting
17:45 is the fact that if you were to visit Cambodia,
17:47 it's almost a cashless-based economies
17:50 in the sense that we also almost entirely bypass
17:54 the credit card phase,
17:55 where most of us don't carry a credit card.
17:57 It's all on the phone, it's all on payment,
17:59 everything's QR code, everything's scanned.
18:02 We're occasionally joking that I sometimes
18:04 don't even have a dollar in my own wallet
18:06 because we also are dollarized economies
18:10 in the sense that we carry both the currencies.
18:11 But I would not be able to pull out
18:13 and have some small change,
18:15 just all between transaction of the phone.
18:17 So, we greatly rely on certain adoption and technology.
18:20 That's just one aspect of the innovation.
18:21 But what we're pushing for in our youth education
18:26 and all that is that particular cultures are forward-looking
18:29 to be able to just say,
18:31 "Look, here's what it is like now,
18:33 "anticipate the trends and stay ahead of that trend."
18:36 So, that's the only way for a small country like us
18:39 to be able to stay and remain relevant in that sense.
18:42 - Yeah.
18:43 Well, Your Excellency, of course,
18:45 innovation is a pure human creation.
18:50 And you have this interesting job as well
18:54 where you are in charge of attracting
18:57 and keeping human capital in this country.
19:02 Tell me more about that position that you have
19:07 and what you do to try to attract and retain talent.
19:11 - Well, the talent attraction and retention,
19:14 it's a file which has been added to the mandate
19:16 of the Ministry of Economy two years ago,
19:18 where we're looking at the human being
19:20 from the kindergarten until the retirements
19:24 with all aspects.
19:25 It's not only about retaining them
19:26 and ensuring that they're available in the market,
19:28 but also ensuring that they feel that they're part of the,
19:32 they're feeling home as part of the whole ecosystem.
19:35 So, we segmented the life of the human being in the country
19:40 from that early stage of their life until then,
19:43 and ensure that all their services needed
19:46 throughout their living in the UEE are tackled.
19:50 We started with the immigration and residency system.
19:54 And for the first time in the whole history of the UEE,
19:56 that we as the Ministry of Economy
19:59 handled the whole revamping of the system
20:01 without the Ministry of Interior
20:03 or the immigration people being involved in it
20:06 until we reach a level where they have to do
20:08 their final touches.
20:09 Basically because we did it in close collaboration
20:11 with the corporates and the private sector.
20:14 We had them, what are the issues,
20:16 how can we ensure that there is no reverse migrations
20:20 of those talents to the world.
20:23 We're a destination and we know that, yes,
20:25 many of the international wants to come here,
20:28 spend a couple of years and from here,
20:30 they use us as a gateway to go to the other countries.
20:32 But now with the whole system,
20:34 they're feeling that they really can live here
20:36 for very long without the system disturbing their life.
20:39 Give you some stories here,
20:40 because we start picking and coming up with those cases.
20:44 Any people and retirees who spent 30, 35 years,
20:49 all years of their professional life here in the country,
20:53 has to leave and depart the country in one month.
20:55 That was the system.
20:57 So they have to get all their,
20:59 whatever they managed to collect, they go back home.
21:02 Many of them came back to us and said,
21:04 after 35 years here,
21:06 even we don't know our relatives back home.
21:09 You're forcing us to go back somewhere
21:11 we have to rebuild the whole network again.
21:13 Yes, their families, their relatives,
21:16 but we've been away for quite some time.
21:18 Our family are still here.
21:20 So from there, it triggered the whole thing.
21:21 What we're doing?
21:23 We have to revamp the whole system.
21:25 So we did the whole immigration system,
21:28 then we start tackling the social aspects.
21:31 What do you mean?
21:32 The expatriates, they don't have pension fund.
21:35 So we created a pension fund.
21:36 We started as well tackling the education.
21:39 Why there is a shortage on the schools
21:42 for certain nationalities.
21:43 We're forcing the school and education system
21:45 to start giving more license for international schools
21:49 for specific backgrounds.
21:52 Now we're moving to the health
21:54 because the health insurance is a bit expensive
21:56 for the elderlies.
21:57 So that is the whole ecosystem which we built.
21:59 Now moving forward,
22:00 we're having this direct engagement with the private sector.
22:03 So we go back and modify and adopt those requests
22:08 coming from the private sector
22:10 and anything that we can bring from international practice,
22:13 we're doing it.
22:14 Our aim target is to become a real heaven
22:17 and a destination for the talents to stay here
22:21 and be part of the developments
22:22 and the growth of the nation.
22:24 There are so many aspects of this as well
22:26 because for the last 52 years,
22:28 we haven't developed the countries by ourself.
22:30 We did it with international people.
22:32 They've been part of this
22:33 and integral part of this developments.
22:35 And moving forward, we need them.
22:37 We need their brains.
22:38 We need to interact with them.
22:40 And we need as well to feel, everyone to feel that
22:44 this is a destination to everyone.
22:46 - And have you begun to see results
22:49 from the changes you have made?
22:51 - Last year, actually this year,
22:53 we attracted 5,000 billionaires.
22:56 Last year, 3,500 billionaires.
22:59 The number speaks about itself.
23:01 If the billionaires are coming for sure,
23:03 they're bringing their families
23:04 and encouraging the others to come.
23:06 So the numbers are already speaking about itself.
23:08 - Yeah.
23:09 It's very impressive.
23:12 Your Excellency, briefly,
23:15 can you tell us how you envision the roles
23:17 of your two countries, your two economies
23:20 in this changing global landscape?
23:24 - I do.
23:26 Seeing us as playing a very pivotal roles
23:30 in the upcomings of the tectonic shift
23:33 of geopolitics that we are seeing.
23:36 The evolving middle powers that Your Excellency
23:39 were just speaking of.
23:40 There's just some things that Cambodia
23:42 as a small economies, very much welcome.
23:46 We are very steadfast in a very rule-based
23:48 international order and free trade.
23:52 In a sense that it will bring prosperity
23:53 and equitable prosperities to us all.
23:58 And for both sides, we see that us engaging together,
24:02 like I said, once again, it's taken
24:04 to considerable difference between our sides of economies.
24:07 But able to be able to say, look,
24:09 how do we close that gap?
24:10 We can close it quickly.
24:11 And be able to say, how can we streamline certain things?
24:13 How we can cooperate further beyond just economics,
24:17 you know, prosperity, but more onto the movements
24:20 of peoples into cultural exchange
24:22 and quite a few other things,
24:24 even all the way to education.
24:25 So I see that the environments of the SIPA itself,
24:30 it actually will serve us greatly
24:34 in the sense that it was allowed us
24:36 to be able to have more voice in the setting
24:40 of the new norm and new orders
24:41 of the world trade system itself.
24:43 And this is some things that we greatly attach ourselves to.
24:48 Because at the end of the day,
24:50 you know, being small, it means that you have
24:53 to be a lot more proactive, a lot more, you know,
24:55 integrative and at the same time, very cooperative.
24:59 And making new friends is the best ways to,
25:01 you know, and strengthen old friends.
25:03 Also are ways to, you know, keep us in the games.
25:07 - Yes, an excellent point on which to end,
25:10 Your Excellency, Your Excellency,
25:12 we have covered a lot of territory.
25:14 Thank you both so much.
25:15 (audience applauding)
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