haslinda: the shimmering skyline of singapore, home to asean's financial hub, and one of the most expensive cities in the world. singapore is a place where fervent enterprise meets money. >> a large part of the story is driven by private enterprise. haslinda: singaporean banks are up to 16% of all project related finance in asean. >> the private sector wants something clearly. the public sector wants something. you must make sure there is the right match. >> if we can combine them, then we are behind this balance sheet

necessary to make these projects happen. haslinda: striking a balance and -- on infrastructure is one of the great challenges confronting asean: the next generation. ♪ haslinda: hello, i'm haslinda on in singapore, a country just under 6 million people accounting for less than 1% of asean's population, but about 12% of its combined gdp. singapore is a financial and infrastructure hub of southeast asia. nowhere else in the region is there anything quite like singapore. a small island connected to the world by the region's biggest airport and global trade by the world's second business as biggest container port, with

highly advanced financial market, education, and expertise. >> who are small. relatively less developed. on the other end of the the spectrum, we have countries like singapore, who are first world countries. 2 completely different parts of the spectrum. to say it is one market, one third of behavior, or opportunity, is not obvious. we spoke to investors around the world. their responses, decision to invest into china would be very different. haslinda: dbs is southeast asia's biggest bank, most of the business is done in singapore, with half of its revenue coming from institutional banking.

>> a large part of the asean story is driven by private enterprise. people say it grows at night when the government is asleep. the private sector will be at the forefront. the businesses collaborate across borders. it is the consumer who is willing to work. i think it will be slowly driven by the individual. i would think the government sector and for a long extent. >> most governments have the same goal, they want to make the population more happy. they need to provide infrastructure to do this. there are different countries, different approaches. some countries are dependent on the private sector. some are more dependent on the state owned enterprises. >> we have investment opportunities and facilities.

i'm a great believer that private sector engagement, particularly with the balance sheet and private companies growing, there is an accountability and serious threat that comes with private sector engagement in traditionally public funded projects. >> the key thing is to look at it from the eyes of the private sector. they will not mobilize their capital unless they think it is necessary and they will get return. once you look at it through that lens, you have to understand it needs to be treated properly. also, the framework and regulations. the investment in an environment is key. haslinda: the asian involvement, asean needs to spend 3.1 trillion dollars over the next 10 years to meet its infrastructure needs. singapore has set up what effectively is a one-stop shop called infrastructure asia. >> capacity building in

countries is important. if there is a project and proposal for how to structure it, the people within the country who are assessing the project must have the capability, the ability to assess it well. it is not just about the project. you also want employment, capability transfer, know-how transfer, and you want the benefits that come from the projects. >> you have to have a collaboration between the public. public sector and public policy has to be informed. not just from a policy standpoint, but an infrastructure standpoint. if you want to build, i think the public sector has a lot of play. if you want to create policies around capital markets, public sector. it is a good thing, the private sector would take the lead. >> singapore is the role model

for a lot of countries we would imagine. perhaps not only imagine, but also to the rest of the world in terms of forward-looking. making sure the public sector policy is truly in line with the trend within the economy where it is going. haslinda: science cement group is one of thailand's biggest conglomerates. infrastructure company that has been doing business with countries in what is now asean for more than 100 years. from the window of its headquarters, you can see the main station that will connect fast trains from singapore all the way to china. >> highline is doing a lot of the investment in infrastructure. countries like vietnam across indonesia are doing a lot of investment in infrastructure.

there's also the trend trying to link infrastructure between the countries in asean with china. the expectation is the next 10 years, the line turns out the investment, at least from a government standpoint, it will be on infrastructure. with a rising middle class, growth, countries are wanting to build cities. they need the overall layout and plans and how to put it all together. waste, sanitation, water, telecoms, electrification. these are some of the key ones we have encountered in our conversations around singapore. >> if we can combine them, then you start to harness the kind of balance sheet necessary to make these projects happen. most asian countries are a few years behind where they should be.

that is a very positive thing, the growth that has taken place. urbanization taking place in manila, jakarta, bangkok, the big asian cities, have really led to the birth of the forward-looking infrastructure that is needed. >> you really need the approach for every country. you have singapore, which is extremely developed. totally different challenges and opportunities compared to myanmar, laos, or cambodia. we have invested our approach and strategy for each of these countries. we are looking at what they need to develop and making sure we bring a good solution. haslinda: the first light in the philippines, 130 years ago. up next, finding the right kind of power to supply asean for the next generation.

>> we have 65 million people. tens of them don't have access. some countries have electrification rates of 30%. ♪

haslinda: within asean, there is a shift. not just towards conductivity and inclusion, but also towards sustainability. in a region where coal is king, energy demand has grown by more than 60% over the past 15 years. >> we have 65 million people, some don't have access to electricity. some countries have an electrification rate of 30%. singapore is 100%. power duration is the key piece that needs to be grown. we are focusing on that market. we have the advantage of a food portfolio, the renewable

technologies, wind, solar, energy storage. also, the thermal technologies in gas and coal. every country has specific situations, specific resources, some have no resources. we really need to look at customized solutions for each of them. haslinda: for a country to reach their potential, the demand for power needs to be met. what other challenges our meeting that demand? >> the challenge is power has really come from very traditional fossil based fuels in the past. issues of climate change and sustainability have become big, rightly so. how to balance the energy needs on one hand with a higher cry for sustainable solutions is a challenge. we are looking at the price

-- we are lucky that the price differential and cost effectiveness of renewable energy has come down. there is an opportunity to start thinking of a percentage of renewable energy in the energy equation. haslinda: this is the oldest and one of the biggest conglomerates in the philippines. it's energy arm is working on renewable products worth around -- projects worth around $1 billion in the philippines, indonesia, and vietnam. asean has set the target for renewables to make up 23% by 2025. >> most governments have become far more enlightened, in the philippines there is a big move towards renewables. the challenge for us as the private sector is to adjust portfolios and participate in those areas. that is the challenge, really addressing energy needs in a renewable way. that's the challenge i think governments face, that sector groups face.

>> the world has had a view that you need a balance on the agenda. climate change is a big issue. it has been the biggest issue. it is like everything in one issue. one extreme view would be to stop everything to do with popular -- fossil energy today. there is massive demand for energy over the next 15 years in asia. there are no alternatives to fossil fuels. >> we have the likes of dbs and the aiib saying they will not lend unless a project is green and sustainable. is it a mistake in a region that is looking for cheap power, which is coal, and it remains king? >> i think they are doing the right thing.

they are moving the equation towards a renewable space. we have set a goal of having 50% of our energy production in our own portfolio to be renewable in the long-term. i believe there is always a balance. i'm not an extremist in my views. we should have a direction towards renewables. there are cases, depending on the energy needs, where fossil based solutions are still the most efficient. >> we had to figure how to continue support, while at the same time recognizing you cannot keep going down this path. this will create a very dark future. we try to balance them and see how to start calibrating down our energy finances. banks have an important role to play. we have to figure out alternatives at the same time. we are doing a lot more solar, more wind, more biofuel to be able to help finance it. haslinda: the u.s. giant general electric, southeast asia

represents a massive growth opportunity. its annual revenue for the region has doubled to $7 billion in eight years. across the region, it employs 10,000 people. >> the main growth opportunity for the future is having these countries worked even closer together. i worked in laos laos week. in the north, it is generating energy, exporting to vietnam and thailand. in the south, they are importing from the south and thailand. from an energy perspective, the grid system is to have electricity at the right place. that is where the region can do better in generating more relationships between the countries, in terms of the physical infrastructure. haslinda: what is key in inclusive growth, inclusive development? for countries like indonesia, where they have 17,000 islands,

what do you bring to the table to help bridge differences? >> in indonesia it is interesting. they need both. the big power generation plants for the densely populated area. then we have smaller systems, more engine solutions to bring to the remote areas. we did bring a lot of electricity to remote islands by bringing these standalone solutions, trade amounts. it is easy to install. that has been a great achievement on the side of the government to bring power to places where there was no power before. haslinda: almost every country has a infrastructuren plan that ranges from $100 billion to $300 billion, yet here we are talking about the death of infrastructure in southeast asia. why is that the case? if there is one action to be

taken, what will it be? >> the growth has been scioscia -- so tremendous, that everyone is playing catch-up. i'm very much in favor of planning ahead and over weighting infrastructure, particularly in economic sectors. that would keep economic growth going. governments have to do balancing with political issues, social issues. it doesn't always happen perfectly. haslinda: up next, from hanoi to ho chi minh, how vietnam is out racing change. plus, asean through the eyes. ♪

♪ >> it is a judicious cost of everything. the event it of technology, it is fundamentally deflationary. you have faster access.

the ability to underrate customers. if you assume the cost burden comes down, even developed countries can get it efficient. there is only a positive. i don't see a negative. >> the countries are trying to make an improvement, in terms of making it easier to do business. but also trying to make sure that the companies invest in the countries. it is not easy to operate not only in different countries, but also in different tax law regulations and processes. that is something that at this point is the challenge. >> the face of asean, in terms of the cities, they should get more modern.

cities will adapt to what they need to be in the future. more sustainable, more environmentally friendly, less traffic jams. there is a lot of work to be done in the region. i think there will be drastic change in the way that cities operate, especially the way that they are powered, over the next years to come. depending on the way they are structured, but if they address real public sector needs, particularly in transportation, basic infrastructure, that brings people more formally into the economy, it becomes a very inclusive way. people from all walks of life, particularly lower income groups. you take a major transportation project in a major urban city. it is tough for people to move around the major cities. haslinda: the housing economy is forecast to grow by almost 7% in 2019, making it the fastest

growing among the asean side. outside the region's biggest economy, vietnam is on a similar course. i have not been involved for 20 years. the restrictions are clear. moving from a complete demand and controlled environment to letting the market forces and private cap take their own. i think the shift is tangible. at the same time, they have a long way to go. relative to many of the other more macedonian economies in asean, vietnam can still be more difficult from a market standpoint. haslinda: you are scaling up your investments in renewable,s why vietnam -- renewables, why vietnam? >> they were offering interesting tariffs for investors to come into the pipe frame. you can say i put my capital here, put it there, they are

very welcoming. than capital starts to move -- then capital starts to move toward that. vietnam has been welcoming. the specific projects in the renewable space. in our case, we had expertise, a management team, financial ability to tackle the project at this point in time. we said why not? asean is an exciting place. vietnam is being generous with their investment offerings. we took advantage of it and moved quickly in that direction. >> the major projects, one that comes first is our investment in petrochemical complex in the southern part of vietnam. that's roughly about $4 billion. right now, we started the construction already. they are offering about 10%.

we expect it to take another 3.5, four years before we can commercialize. that is supposedly the first petrochemical complex within the vietnam. haslinda: what is the biggest challenge for the asean region? >> let me start with the positive. the challenges -- these are all positive challenges, the region has been doing well. if you look at global growth, southeast asia, asia in general, has been a shining light. i think it will continue to be. the challenge comes from how to make the growth sustainable, predictable, and continue over the medium and long-term. there are some fascinating trends taking place, urbanization is becoming massive. with that, comes the infrastructure needs of an urban environment. that's a big challenge. you can see it traveling through any main city in southeast asia. >> there are now about 1800

aircraft flying around asia. over the next 10 years, it will be 2200 additional that come onto the market. more than doubling. the same 260 megawatts, gigawatts installed. another 200 gigawatts to be ordered over the next 10 years. health care is the same. health care has very steady growth over the last years, about 10%. there are thousands of hospitals planned, new hospitals across the region. >> people are also more connected. technology allows us to be able to move through and understand the difference, in terms of the culture and language. i said this is the most advanced improvement i have seen between

the countries for the last four to five years. >> one big difference is the proliferation of wonton banks. i think relatively new phenomenon, whether it is gab, project. the go around the space and we have not seen those before. that is a big shift. i think there is a desire and steady steps to integrating the market. especially on the trade side. tariffs are low, but even non-tariff have been reducing. what needs to happen is greater market integration. we need greater people integration, the mobility of labor. haslinda: public policy and private enterprise within borders and beyond.

power to the people, partnership, and shared preferred it. -- prosperity. from manila, thanks for watching asean: the next generation. ♪

♪ >> facebook's crypto play, the social media giant unveiled a new currency that it hopes could be as widely used as the dollar. skeptics and regulators are speaking out. we talked to the u.s. cftc commissioner to the biggest threats to the derivative market and what the market should expect under the new chairman. how a changing regulation affecting shareholder activism in europe. welcome to "bloomberg markets: rules and returns."

we delve into the challenges and opportunities around the globe. first, let's get a roundup of this week's news. sebastien: the top american take a hard look at facebook's cryptocurrency project. on twitter, a high lawmaker says the social media giant is already too big and powerful. he wrote the company has exploited data and failed to protect privacy. a french soccer legend has been arrested as part of a corruption probe in the 2022 world cup in qatar. he was previously dammed from banned from the sport for an ethics violation for a payment from a governing body. president trump says he has the authority to replace jerome powell as fed chairman. he could demote powell to board

governor but isn't planning to do so at the moment. trump asked white house lawyers to explore removing the chairman. he concluded it would be too risky. he has no intention of leaving. that is your regulation news roundup. >> the commodities futures trading commission isn't getting a new chairman. an undersecretary of the treasury is set to take over at the start of july. the start of the tenure may be clouded by an ongoing disagreement with the clearinghouses. let's talk with a commissioner at the cftc. she joins us from washington. delighted to have you on the show. let me pick up on the fact that chairman tarbert and this tarbert is expected to focus on this disagreement. if europe moves forward, how should the u.s. respond? >> the 2.2 legislation which you

are referring to has provided the europeans with a bit of a potentially larger reach into clearinghouses in various jurisdiction. it is obviously in my opinion predicated on brexit. fortunately the united states is getting caught up in the debate. from my perspective, the united states could go a fair bit away from our current approach in providing difference to the -- deference to the european colleagues. it has to be a two way street. the principles from 2009 when the g20 was faced with the financial crisis were based upon the idea that regulatory bodies around the world, particularly within the g20 nations would come together and have a common set of principles. unfortunately, there were gaps. we are at a point right now

where there are very few gaps such that it is time for the united states to revisit how we have applied our reach into other jurisdictions. it would be unfortunate for the europeans to go in the opposite direction. i have very high hopes that our current chairman has done tremendous work in providing the groundwork for better relationship. i have high hopes that chairman tarbert will continue that work and we will find a resolution that allows both jurisdictions the appropriate amount of deference. >> as chairman tarbert takes over, what would you say is the biggest threat in derivative markets? commissioner stump: particularly in the otc market we have had an enormous transformation largely due to the fact they have been subjected to an entirely new structure over the past 10 years.

that did not necessarily change the fact that the risk is always evolving. just recent we have seen brexit, a transition of assets in cryptocurrencies. that is not uncommon in the derivatives market. those are not necessarily the obstacles or the risk that is insurmountable. in my opinion, the threat that may be presented regulatory structure is stagnant and accounting for the dynamic manner in which the markets must operate. we always have to be cognizant of the fact of the regulations we put in place. the entirely new structure will have some consequences that we might not have anticipated. the reforms are designed to encourage transparency and reduce counterparty credit risks through the introduction of clearing.

we have to ensure the policies be put in place actually invite -- we put in place actually invite market participants to the market. i do think we have to be very cautious that we are nimble enough to react to the market structure. nejra: let's talk about something specifically in regards to the proposal. you said on june 11, giving the -- given the different views on this subject, i have no expectation everybody will be happy with the ultimate product. will firms be able to conduct hedging activity under the rules? commissioner stump: that is our objective. that is our goal. the matter of it going in the united states for years is such that they have applied in the agricultural commodity. as we seek to expand that to energy commodities and metal commodities. we have to realize one's size

-- one size will not fit all. we cannot take what has worked in the agricultural space and what legitimate hedging strategies and assume it will work and fit nicely if we layer it on top of the energy hedging strategy. we cannot assume that what works for energy hedging is in fact going to apply to agricultural commodities in a way that makes sense. i have high hopes we will be able to advance the position. some of that will require being more willing to allow the exchanges to administer the hedging exemptions we need put in place. the exchanges know the markets. nejra: there is so much we could discuss but you did mention cryptocurrency. i have to ask you about facebook's libra. how should regulators respond to facebook's libra coin?

commissioner stump: i believe any new technology, any new innovation needs to be introduced with building public confidence. this is no different. in our space, we regulate the derivative on the cryptocurrency. the futures in the otc swaps that may evolve out of the asset class. date, -- date, the only such derivatives are on bitcoin. if libra were to develop in such a way that there was a demand for a derivative contract. in other words there was demand for a price discovery tool such as the markets designed to assist with, they would be subject to the same scrutiny any other derivatives contract is objected to. the trading infrastructure, it provides that transparency. this is no different. if we are talking about interest

rate swaps for futures, we have an infrastructure that is well-established and well suited to provide that price discovery that is demanded once an asset developed to the point that the public needs that price discovery. and the risk mitigation tools. we would subject libra to that same infrastructure should the demand for a derivative contract the present. nejra: that makes sense. the plan from facebook to launch libra in 2020, would you think regulators including those at the cftc could be concerned enough that the plan to launch it in 2020 may not happen and may be delayed? commissioner stump: launching the underlying commodity, in this case the libra currency is something that we would take a wait and see approach. that would be a market discussion. i'm certain there would be considerable scrutiny. we will wait and see how all of

that plays out. should the market demand a derivative contract be available for libra, that is when we will come into the picture. i assume it would be somewhat after the 2020 timeframe that discussions would occur. we have had preliminary conversations at the agency because it is always good for us to know and be informed as to what is happening from the onset. nejra: thank you so much. dawn stump joining us from washington, great to have you on the show. next, facebook's new venture is causing a stir. we will get the latest from our team in washington and here. this is bloomberg. ♪

nejra: this is "bloomberg market: rules and returns." facebook's foray into cryptocurrency is a long way from being made a reality. the company coo says it is working with 27 partners to create a non-volatile currency called libra. it was met with criticism from regulators in washington and brussels. sandburg spoke to our caroline hyde exclusively. >> there are one billion people in the world who are not connected. let's talk about what that means. if you have a dollar and nowhere to keep it, that is a cure? it is bad for everyone and in particular women. there are 100 million women in the world, most of them are leaving their homes. working often in other peoples

homes to send money back to their families and they are paying huge fees and 20% more than men. we want technology to help everyone. what we announced yesterday is the formation of a global association. it will be based in geneva. we have 27 partners. paypal, mastercard, visa, spotify, uber, lyft. what we would like to do is help make a global cryptocurrency. we are a long way from launch. we have a lot of work to do but this is an announcement of what we would like to do with a roadmap for people to jump in and help us do it. this will be an association, not reporting to facebook. carol: your immediate response to the regulatory scrutiny? we have already have maxine waters speaking out. mara connie saying the door is mindfully open.

sheryl: we announced this early. we have published a white paper and asked for the formation. we know we have a lot of people to work with. this is a heavily regulated space. we need to talk with people, meet with people, that is what we are doing. we are then going to launch. nejra: facebook ceo of sheryl -- coo, sheryl sandberg. joining me not to discuss further is jesse westbrook. a financial regulation reporter in washington, d.c. great to have you with us. it seems sandberg took some of the wind out of the sales of facebook's libra project. maybe that is because we have seen so much pushback. why has there been so much pushback? is it to do with libra or with facebook running afoul of lawmakers? jesse: i think there is a lot of mistrust of facebook after what we saw with the 2016 election.

the alleged ability to protect -- inability to protect people's data. any time a company that is in the lawmaker's crosshairs, i think there will be a lot of skepticism of that. facebook, which is already in the doghouse isn't kind of trying to rebuild trust, they are announcing a new revolutionary step. i take exception with a few things sandberg said. she said this is very regulated. the payment systems are very regulated. it is an open question about whether crypto is regulated at all. there is suspicion in that

industry. it has been used to finance terrorism. it has been used to finance illegal activity. people hiding their identities to participate in illegal activity. it is interesting that a company that already has scrutiny of it will be going full throttle into an industry that is very controversial. nejra: to pick up on that point, which regulators might actually pushback here. we talking about the ftc, banking regulators? jesse: historically there is in a strong apparatus in federal regulation. you register with the unit of treasury that monitors for money laundering and then you have to register with the state you operate in. there has been a little speculation that a titan like facebook getting into the payment system and doing it via crypto will force washington's hand to deal with something that

they tittered on. multiple agencies claim jurisdiction over this. s.e.c., cftc, anything that is involved in the currency space that the fed would have interest in. there is a lot of unanswered issues in washington about who is going to police what. it might require congress doing something, saying ok, you are responsible for this. another regulator perhaps responsible for other angles. really setting the rules of the road. if this industry will take off and come out of the shadows, we need a regulatory apparatus. nejra: our financial regulation reporter, thank you so much. up next, getting active. how a changing regulation affecting shareholder activity in europe. this is bloomberg.

♪

♪ nejra: this is "bloomberg markets: rules and returns." let's talk shareholder activism. largely concentrated in the u.s., more we see in the u.k. -- more recently in the u.k. but it is increasing as rule change. earlier, i spoke to martin mckenzie, head of corporate transportation services and i started by asking him that question. >> we have a two part approach. on one hand you have second shareholders rights directed from the you -- the eu. only at a principal level. what is happening in individual countries is actually very different. what you see say in the netherlands was a push to create

protectionism is very different in the u.k. nejra: you have model -- like a sophisticated -- quite a sophisticated model. malcolm: if you want to go the well trotted path, the u.k. is the obvious place to start. a lot of the partners do precisely that. they start in the u.k. with the new york-based fund in a tussle. the u.k. is a well-traveled path. lots of activists are there in the u.k., some of the other markets that are more fickle to access like spain or the

netherlands, the returns if you get it right can be very good. it is a much more difficult path. nejra: what are some of the areas where some of these countries pointed to actually do better. is it things for example like shareholder rights? talk us through where the winners are? malcolm: it gives you potentially better returns. you look at the returns they made initially. the regulations are more difficult and most of those. take france for example, they have the law which is changing the power, if you have held a share you get double the votes. that is difficult. they tend to come in earlier. in the netherlands or france

again, there is something about strategic investments. or again, the protections in the netherlands. the twisty part is more difficult. if you get it right the returns can be good. nejra: i noticed in your research you talk about alongside the u.k. and spain, italy scores very well. can you give us more detail? malcolm: they are a lot of the club med markets, they can be protected. italy is an open market. look at the amount of activism, it is slightly higher per number then the u.k. at 6% of businesses. that is quite open. there are big barriers to replacing directors you have to get the absolute majority in certain circumstances. not just the majority of the

general meeting to replace an incumbent directorn. nejra: are you expecting more investors to take an interest in these markets you say are more windy and twisty? malcolm: we are and we are predicting more of that. they will continue to be the well traveled path. we are seeing both overseas investors -- we are seeing european funds doing that. this focuses on germany. or the club med type of area and the capital. we are predicting increases in there, where the markets with the activism may only be 3% or 4%.

nejra: for those investors that are a little bit more, what advice do you have for navigating the regulatory barrier? malcolm: you have to do your research you have to know the potential pitfalls. the big one recently has two activists. they fell foul of competition policy when they were trying to merge the steel business. that has collapsed and has not been good for the share price. you have to do your research and do it well. understand what actually counts in these areas. not just the law but the way the practice works. how you can influence the various stakeholders to get behind your potential proposition. nejra: that is a great point. the application of the law can

sometimes be what trips people up in the end. i know you have talked about differentiation of markets geographically. is there much differentiation on the regulatory front or is that a bit more homogenous? malcolm: there is this thing about strategic sectors, steel, we were talking about it and the automotive business. france you would say as a strategic sector. therefore they might take some other action. bpi may invest in them and protect and be reinforced by the law. meaning it is protected for a period of time. then, there verts -- boats are

votes are worth twice as much. that is more difficult to navigate than the u.k. situation or italian situation. nejra: that was malcolm mckenzie. that is it for this week's episode of "bloomberg markets: rules and returns." if you have questions or comments you can email the team at rulesreturns@bloomberg.net. this is bloomberg. ♪ the latest innovation from xfinity

isn't just a store. it's a save more with a new kind of wireless network store. it's a look what your wifi can do now store. a get your questions answered by awesome experts store. it's a now there's one store that connects your life like never before store. the xfinity store is here. and it's simple, easy, awesome.

david: was it the hardest job you ever had? gen. kelly: it was very hard but very meaningful. not very enjoyable. david: your family was a blue-collar family. gen. kelly: very blue-collar. my dad was a world war ii vet. greatest man i ever knew. david: you were in combat. did you expect that you would survive? it was fairly dangerous. gen. kelly: it's a lot of shooting and bombs and whatnot. but we are marines. david: did you ever say to the president that maybe the tweets are too much? gen. kelly: never did. the president feels very strongly that his tweeting goes around the press. >> will you fix your tie please? david: people wouldn't reco