• last year
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
Transcript
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)
25:19 [BLANK_AUDIO]

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