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K orea , Myanmar & Singapore: Staying Ahead in Ever-Changing Asia

K orea , Myanmar & Singapore: Staying Ahead in Ever-Changing Asia. May 29, 2013. Myanmar – New Opportunities and Risks . Asia Business Forum – Seattle May 29, 2013. Brief Legal History. Pre-British British Waves of Invasions and Acquisitions The Raj and Afterward to 1937

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K orea , Myanmar & Singapore: Staying Ahead in Ever-Changing Asia

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  1. Korea, Myanmar & Singapore: Staying Ahead in Ever-Changing Asia May 29, 2013

  2. Myanmar – New Opportunities and Risks Asia Business Forum – Seattle May 29, 2013

  3. Brief Legal History • Pre-British • British Waves of Invasions and Acquisitions • The Raj and Afterward to 1937 • Post-1937, World War II to Independence in 1948 • The Panglong Agreement, The Constitution, and U Nu • U Ne Win, the NLD and SLORC, the SPDC, to the present USDP (Union Solidarity and Development Party) and new capital in Naypyitaw

  4. What Burma Was – The Prize • The only colonial medical school from where a graduate could go directly to the UK • Resource rich – rice, timber, oil, gems, other • Semi-independent governance since 1937 – a model for the coming Commonwealth

  5. The State of Law and the Legal Practice • Based on English Common Law • Singapore in 1962 a good example • From 1962 on a very limited legal practice • Winding down businesses due to expropriation – some still on-going

  6. The State of Law and the Legal Practice – Cont. • Private land transactions • Criminal and family law • The occasional commercial dispute • Commercial law practices just died • Laws school operated but mostly as a viable means to continue English language studies • The SLORC/SPDC constructively killed the university system, including the law school, around 2003 • Distance education certificates from a variety of sources available, but not in Myanmar law

  7. After 1992, under the SLORC, a series of new, commercially oriented laws to address the opening of the economy to both Myanmar citizens and foreigners • The opening of the economy to both Myanmar citizens and foreigners • Foreign Investments Law • Banking laws, others • New laws, regulations follow However, the real burden is on the administration

  8. Issues • Administrative capacity – too few trained people with too much to do • Land tenure, ownership, leases – private and government • Environmental • Labor • Taxes • Corruption • Who is good and who is bad; the US SDN List, other means • Residency • Cost of living, housing, education, other • Due Diligence

  9. John F. Pierce PartnerDLA PIPER LLP (US) 701 Fifth AvenueSuite 7000Seattle, WA 98020Tel: 206 839 4815Email: john.pierce@dlapiper.com

  10. Dale Goff Foreign Entity Structures

  11. Managing Product Structure • Problem Statement • How to optimize revenue at a global scale? • Structure products to keep IP safe & maximize profits: • Royalty based • Inventory based

  12. Regional Subsidiary Set-up • Asia Pacific Operations Center (APOC) in Singapore • APOC is master subsidiary entity of Microsoft Corporation USA • All Countries are Marketing Subsidiaries of APOC • Annual budget allowance provided to near zero $ remaining • All sales contracts & fulfillment managed out of APOC • Saves over $500M/year just for Japan $3B revenues • Operational costs in Singapore lower than North Asia • Over 100 Japanese working in Singapore just as if in Tokyo • Caution to understand IP Tax laws by Country • SG is designed for physical good commodities; not Royalty

  13. Q & A Thank you!

  14. Tension in Korean Peninsula: How it’s affecting Korean Economy 29 May 2013 Seungcheol Lee Economist G20 Economic Organization Division Ministry of Foreign Affairs

  15. A g e n d a I. Security Challenges on the Korean Peninsula 1. North Korea’s Recent Provocations II. Impact of North Korea risks on Korean Economy 1. KOSPI in the past 2. Financial markets: CDS premium and Stock Market 3.Exchange rate and exports 4. Foreign Direct Investment in 1st Quarter 5. Tourism 6. Summary III. Future relationship between the North and the South 1. High-Intensity Armed Clash to Occur Again on the Peninsula? 2. President Park’s Inter-Korean Policy Initiative

  16. I. Security Challenges on the Korean Peninsula 1. North Korea’s Recent Provocations • Rocket launch(12th Dec 2012) • 3rd Nuclear Test(12th February) • Announced its decision to void the War Armistice(5th Mar) • Declared its entering into ‘state of war’ against South Korea(30th Mar) • Announced its decision to pull out all North Korea’s workers and • temporarily suspend the operation of Gaeseong Industrial Complex(GIC) • (8th Apr) • Warned foreigners off South Korea(9th Apr) • Short-range Missile Test( 17~19th May) UN Security council Resoluton 2087(22 Jan) UN Security council Resoluton 2094(7 Mar)

  17. II. Impact of North Korea risk on Korean Economy 1. KOSPI in the past After the Cheonan’s sinking in 2010 After the shelling of Yeonpyeong in 2010

  18. II. Impact of North Korea risk on Korean Economy 2. Financial markets: CDS(Credit Default Swap) premium ■2013 vs past (on the day basis) - 2013: Not serious compared to the past

  19. II. Impact of North Korea risk on Korean Economy 2. Financial markets: CDS premium ■CDS premium: 2013 vs Past (time series)

  20. II. Impact of North Korea risk on Korean Economy 2. Financial markets: CDS premium ■CDS premium: Korea vs other countries

  21. II. Impact of North Korea risk on Korean Economy 2. Financial markets: Stock Market ■2013 vs past (on the day basis) - 2013: More sensitive than CDS premium

  22. II. Impact of North Korea risk on Korean Economy 2. Financial markets: Stock Market ■2013 vs Past (cumulative time series)

  23. II. Impact of North Korea risk on Korean Economy 3. Exchange rate and exports ■Recent exchange rate(JPY/USD) and Korean export - Weak Yen vsNorth Korea risk

  24. II. Impact of North Korea risk on Korean Economy 4. FDI on South Korea during 1Q 2013 ■Foreign Direct Investment(FDI) growth rate for 1Q 2013 in Korea : 44.7%

  25. II. Impact of North Korea risk on Korean Economy 4. FDI on South Korea during 1Q 2013 ■Foreign Direct Investment(FDI) by Country

  26. II. Impact of North Korea risk on Korean Economy 4. FDI on South Korea during 1Q 2013 ■Foreign Direct Investment(FDI) by Industry

  27. II. Impact of North Korea risk on Korean Economy 5. Toursim ■Monthly Tourist Arrivals and Departures of Incheon International airport – The growth rate of Incheon airport’s tourists on April: 2.5%

  28. II. Impact of North Korea risk on Korean Economy 6. Summary • North Korea risks’ Influence on • CDS premium: Small and temporary • Stock Market: More than CDS premium, • but a weak Yen is more intimidating factor • Foreign Direct Invest: No, at least for American • Tourism : A little, but appreciation of Won and slow down of global • economy were also influential factors

  29. III. Future relationship between North and South 1. High-Intensity Armed Clash to Occur Again on the Peninsula? ■60 Years’ Experiences of Armistice –Armed Clashes, Assassination Attempts, Maritime Infiltration, Torpedo and Artillery Attack: Limited and Contained ■Lesson Learned – Whatever the rhetorics, escalation contained – Major War in nobody’s Interest ■Stark Comparison(2011) – Populations : South 49.4m vs North 24 m – GNI : South $1,119B vs North $29B

  30. III. Future relationship between North and South 2. President Park’s Inter-Korean Policy Initiative (the Trust-Building Process) ■Trust-building process: Safeguarding peace and making peace – Safeguarding peace : Strong deterrence through overwhelming defense capabilities – Making peace : Leading North Korea to make the right choice

  31. Thank You

  32. Q & A

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