SPEECH BY
MR LIM HNG KIANG,MINISTER FOR TRADE AND INDUSTRY, AT LATIN ASIA
BUSINESS FORUM 2008, 22 SEPTEMBER 2008, 9.15 AM AT SHANGRI-LA
HOTEL, SINGAPORE
Your
Excellencies
Distinguished
guests
Ladies and
Gentlemen
Good
morning.
Developments inLatin America-Asia demonstrate positive
prospects for increased
engagement
Most people think of Latin America
and Asia as two regions separated by culture, language and history.
Yet, Asia and Latin America are more connected than we
imagine.
In recent years, political and economic ties between
Latin America and Asia have deepened. Not only have
government–to-government links and interactions grown, but
companies from both regions have increasingly come to realise the
potential for doing business with each other. The growth in total
trade flows between Latin America and Asia bear testament to this,
having risen to reach US$267.3 billion in 2007, an increase of 24%
over 2006.[1]
The increased trade flows
are a manifestation of the similarities in our approaches to intra
and extra-regional economic integration. Both Latin America and
Asia are committed to furthering trade and investment
liberalization, even in these current uncertain
times.
In ASEAN, there has been
good progress made towards achieving the ASEAN Economic Community.
The recent conclusion of negotiations for the ASEAN-Australia-New
Zealand FTA as well as the ASEAN-India FTA Trade in Goods during
the ASEAN Economic Ministers Meeting in August will not only
continue to deepen ASEAN’s internal integration, but also expand
its external reach. In Latin America, 2008 bore witness to the
establishment of the Union of South American Nations or
UNASUR[2], which aims to create a single market and to integrate
infrastructure.
These are similar efforts taking
place more than 10,000 miles away from each other. These are
significant developments which will support continued integration
and diversification in both regions, as well as boost intra- and
inter- regional trade flows. They bode well for increased
cross-Pacific synergies. In fact, ASEAN and Mercosur[3]
[which is a customs union comprising Argentina, Brazil, Paraguay
and Uruguay] have already started a process of consultations with
the aim of increasing economic linkages between the two
regions.
Of course, while
healthy economic growth has been the hallmark of both regions’
economic trajectories in recentyears, these are times of economic uncertainty. Both
regions have nevertheless done well to improve their macroeconomic
fundamentals. This will enable Latin America and Asia to better
weather the challenges posed by the current
environment. As each region continues to pursue long-term
competitiveness and growth, we
should not lose sight of, and continue, to build on the momentum
generated thus far from increased
engagement.
Singapore’s growing trade &
investment links with Latin America
While trade links between Asia, as well as Singapore, and
Latin America have grown, there is scope to do much more. For
example, bilateral trade between Singapore and Latin America
increased at a compounded annual growth rate (CAGR) of 17% over the
lastthree yearstoreachUS$8.89 billion (SS$ 13.4 billion) in 2007.
Butthis only represents 0.07%[4]
of total world trade and 1.6%[5]
of Singapore’s total trade with the world last
year. There are many areas where there are opportunities for
collaboration, be it in agri-business, food and beverage,
electronics, oil and gas, transport, logistics or infrastructure. In fact, an increasing
number of our companies have made successful inroads into Latin
America in these sectors. To date, there are about 56 Singapore-based companies with
191 points of presence throughout Latin America engaged in a
variety of business and investment
projects.
Latin America’s infrastructure sector in particular has
attracted the interest of a number of Singapore companies. Latin
American governments are placing increasing emphasis on investing
in robust, well-integrated and efficiently managed infrastructure
to sustain growth. This presents opportunities in transportation
& logistics, urban planning, water and waste management,
industrial park development, and oil & gas, amongst others, in both
regions. Latin America’s need for expertise in
infrastructure development dovetails well with Singapore companies’
infrastructure development capabilities and search for new
markets.
SembCorp Marine and Keppel Offshore & Marine
have been active in Brazil’s oil & gas sector for several
years. Together they employ over 10,000 workers in Brazil. China
and India’s growing energy needs which Latin America helps service
coupled with the region’s resurgent oil and gas sector translate
into opportunities for both companies to provide services in
jack-up and offshore rigs, as well as conversion of tankers into
floating, production, storage and offloading
vessels.Keppel Seghers has already developed
water treatment projects, at both municipal and industrial levels
in Argentina, Brazil and Mexico.[6]More
recently,Jurong Consultants was
appointed the master-planner for a Refinery & PetrochemicalPark
in Panama.[7]
In July of this year, Inter-Roller continued
its foray into Latin America by clinching its second Baggage
Handling Systems project in Quito,
Ecuador.
The newly introduced segment on
Infrastructure in this year’s Forum is thus timely. I am sure there
will be active interest to discuss the opportunities in this
area.
Beyond the infrastructure sector, our companies
and industry associations continue to make headway in Latin
America. For example, a consortium led by CrimsonLogic was recently
awarded a US$10 million (S$14.5million) contract to develop,
operate and maintain an Integrated Customs Management System for
the Panama Customs Authority. This is CrimsonLogic’s third success
in Panama following its earlier contract to build and maintain a
trade documentation system for the Colon Free Zone and its
engagement by the Panama Canal Authority to build and maintain its
automated pre-arrival declaration and mobile inspection
system.
Singapore’s Efforts in Deepening
Engagement with Latin America
These private sector activities will
be complemented by efforts to deepen relationship at the
government-to-government level, as well as partnerships between the
public and private sectors. For example, to complement our current
FTAs with Panama and Chile, Singapore signed an FTA with Peru this
year, at a ceremony in Lima witnessed by President Alan Garcia.
Singapore is also looking to do more by building on our existing
MOU with Mercosur and work towards the possibility of an FTA. In
addition, you would have just heard the range of IE Singapore’s
initiatives[8]
geared towards enhancing business
interactions including the appointment of Dr Alejandro Ferrer as
Honorary Business Representative in Panama, further widening IE
Singapore’s presence in Latin
America.
I am also pleased to learn
that Singapore Business
Federation (SBF) and the Federation of Industries of Rio Grande do
Sul (FIERGS) will be signing a Memorandum of Understanding (MOU)
during this Forum[9].
The MOU will serve as a concrete platform for SBF and FIERGS to
strengthen and further grow existing bilateral investment and trade
ties between Singapore and
Brazil.
Latin America’s thriving private sector can also look to
Singapore as their launching pad as they seek to expand their
presence in Asia. In particular, Latin American companies’
strengths in the natural resources as well as food and beverage
business segments dovetail well with Asia’s continued demand for
such products. Blue chip companies from Latin America such as
Embraer, Petrobras, Vale, Grupo Modelo from countries such as
Brazil and Mexico amongst others, have established their presence
in Singapore.We welcome companies to continue to leverage on our
geographic location at the crossroads of Asia, excellent infrastructure, network of free
trade/double taxation/investment guarantee agreements and strong
capabilities in manufacturing, R&D, logistics and supply chain
management.
Conclusion
Latin America and Asia are two
regions rich in its diversity of culture, language and
opportunities. Our respective strengths present opportunities for
collaboration. The strong presence of the Latin American trade
associations, businesses and government agencies here today also
bears testimony to the increasing synergies between Singapore and
Latin America.
Singapore is committed to deepening our links with Latin America.I am
glad to see such a strong response to today’s Latin Asia Business
Forum.This forum has grown from strength to strength reflecting its
importance as a place to exchange ideas, network and forge
rewarding partnerships. I am confident that the Latin Asia Business
Forum will continue to be an important platform in bringing the two
regions closer together.Let me conclude by wishing all of you a
successful forum ahead.
Thank you.
[1]USAID
(Latin America= Latin America & the Caribbean; Asia=East Asia
& Pacific + South Asia)
[2]UNASUR
was established in May 2008 and aims to model itself after the
EU.
[3]Mercosur
or Mercado Comun del Sur (Common Market of the South), is a customs
union comprising Argentina, Brazil, Paraguay and Uruguay. Venezuela
is in the process of Mercosur accession. Its entry as a member of
Mercosur has been approved but has yet to be ratified by Brazil and
Paraguay. Associate Mercosur members include Bolivia, Chile,
Colombia, Ecuador and Peru.
[4]Total
world merchandise trade in 2007= $13.6 trillion
(WTO)
[5]Singapore’s
total trade in 2007 = $846.6 billion (DOS)
[6]Keppel
Seghers website, http://www.keppelseghers.com
[7]http://uk.reuters.com/article/oilRpt/idUKN2062003520071121
(Project is worth US$40 billion)and Jurong
Consultants website, http://www.jurong.com/others.html
[8]Such
platforms include the business missions, outreach events and
activities e.g. roundtables and seminars, the BuySingapore programme which aims to connect
global buyers and sellers with Singapore companies, and even
launching an executive management programme in Latin America as
part of the International Business Fellowship Programme to train
executives.
[9]This
will be held on the morning of 23 Sep 08 after Amb Leong Horn Kee's opening
address.