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PPI Asia Trip Report

International engagement is integral to PPI’s mission of policy innovation, going back to the “third way” dialogues we helped to launch back in the 1990s. In addition to multiple visits to Brussels and other European capitals over the past several years, PPI went to Australia last summer to unveil a unique study of the App Economy” Down Under. Underscoring the value of such global outreach, the host for that July 2014 event, Communications Minister Malcolm Turnbull, just became Australia’s Prime Minister. 

Extending our efforts in the Asia-Pacific region, we’ve just returned from a fascinating two-week foray to Japan, Vietnam, and Indonesia. Here’s a brief report on our trip, which centered on two new studies of the App Economy in Southeast Asia, as well as our work to support President Obama’s push for the Trans-Pacific Partnership (TPP). 

It began on Sept. 7 (Labor Day) in Tokyo, where PPI’s traveling party was briefed by top officials of Ministry of Economy, Trade, and Industry (METI) on Japan’s priorities for the TPP negotiations, Among other things, we discussed TPP’s importance in supporting increased trade by small and mid-sized U.S. and Japanese firms, and we emphasized TPP’s critical role in promoting the cross border data flows on which the global economy increasingly depends.

 At the Ministry of Defense, we received a broad survey of regional security concerns, including China’s “creeping expansion” and island-building activities in the South China Sea. This briefing helped to provide context for Prime Minister Shinzo Abe’s controversial new security proposals, which are intended to allow Japan’s armed forces more latitude in joining mutual defense efforts in the region, including joint exercises with U.S. forces. 

 Energy also figured prominently in our talks. From directors of the Agency for Natural Resources and Energy and Office for International Nuclear Energy Cooperation, we learned that the post-Fukushima shutdown of nuclear energy has left Japan importing an amazing 96 percent of its energy, leaving it hugely dependent on coal and Middle East oil. Little wonder that Japan is gradually bringing nuclear reactors back on line and trying to tilt its portfolio more toward natural gas and renewable solar and wind power. The United States could support these efforts by a key ally by lifting outdated restrictions on U.S. oil and gas exports. 

Other key meetings in Tokyo included a wide-ranging conversation on U.S.-Japan relations and the progress of “Abenomics” with the Japan Institute of International Affairs (JIIA), as well as a roundtable discussion with the American Chamber of Commerce in Japan on the investment climate in Japan, the government’s efforts to stimulate economic growth, and the attempts to stimulate innovation in regenerative medicine. 

PPI next traveled to Vietnam, a country in the throes of rapid economic development and modernization. In Ho Chi Minh City, we met with city officials eager to lower legal and regulatory barriers to foreign investors, as well as leaders of the city’s University of Technology and Education, an American-founded college that is trying to meet the economy’s insatiable demand for engineers and technicians. 

If Ho Chi Minh City is Vietnam’s business center, Hanoi is the seat of a government firmly controlled by the Communist Party. There, PPI released “Vietnam and the App Economy, a report by our chief economic strategist Michael Mandel. Using a methodology Mandel pioneered in measuring the number of U.S. app-related jobs since the introduction of the smartphone in 2007, the study shows that Vietnam ranks surprisingly high in app job growth – first, in fact, in Southeast Asia (including Thailand, Malaysia, Singapore, Indonesia and the Philippines). 

 The report warns, however, that new regulations under consideration – for example, a rule that would prohibit data from leaving Vietnam – could crimp the development of the country’s nascent digital sector. What’s more, the wisdom of a heavy state role in certain sectors, such as telecom and mobile broadband, was the subject of some very spirited discussions with our hosts. 

 PPI’s visit and Dr. Mandel’s report were well-received in the Vietnamese media, gaining positive coverage from the Vietnam News Agency, ICT News Vietnam, Vietnam Breaking NewsThe Voice of Vietnam, and VietnamPlus.

 PPI also released a second report, “TPP and the Benefits of Freer Trade for Vietnam: Some Lessons from U.S. Free Trade Agreements,” at an event organized by the American Chamber of Commerce in Hanoi, which included leading Vietnamese economists and economic reformers. Written by Ed Gerwin, who directs PPI’s Trade and Global Opportunity project, the report shows how countries that use high-standard free trade agreements to enhance transparency and the rule of law, adopt higher labor and environmental standards, and make other key reforms often see significant growth in foreign investment, greater innovation, and broader participation in global commerce. Gerwin’s report garnered media coverage in The Hill and the Communist Party of Vietnam’s Online Newspaper.

 Our schedule also included meetings with top-level officials from Vietnam’s Ministries of Foreign Affairs, Information and Communication, and Science and Technology, as well as visits to Saigon Hi-Tech Park, the U.S. Embassy, Viettel Corporation, FPT Software, and Vietnam Silicon Valley.

 From Hanoi it was on to our final destination, Indonesia. At a packed public forum in Jakarta hosted by Mastel, an association of leading Indonesian and foreign companies, we released another Mandel study, “Indonesia: Road to the App Economy.” That was followed by a roundtable featuring top Indonesian government officials, business leaders and economists. PPI’s core premise – that emerging market economies, such as Indonesia, should not overlook possibilities for growth arising from the intangible, or data-driven economy, as well as traditional, labor-intensive manufacturing – sparked a lively discussion.

 The report and Dr. Mandel’s public comments were quoted in CNN Indonesia, Bisnis Indonesia (the leading business print newspaper in the country)Detik.com (the number one online news outlet in Indonesia), and Kompas Online (the number one print newspaper by circulation).

The PPI delegation included Will Marshall, Michael Mandel, Lindsay Lewis, Cody Tucker, and Ed Gerwin. We will continue to find ways to engage on policy issues globally, as the new economy being fostered by U.S. innovation needs better international understanding and increased appreciation. We hope you will find the opportunity to join us in the coming year as we push for unique policy solutions at home and abroad.