SPEECH BY MR
LIM HNG KIANG, MINISTER FOR TRADE AND INDUSTRY, AT THE INDIAN HIGH
COMMISSION SEMINAR ON “OPPORTUNITIES IN THE SEZ SECTOR IN INDIA” ON
TUESDAY, 23 MARCH 2010, 9.00AM, AT THE SHANGRI-LA HOTEL SINGAPORE,
JURONG BALLROOM
HE Dr T C A Raghavan, High Commissioner of India in
Singapore
Mr Raj Kumar Khatri, Commissioner, Department of
Industrial Development, Government of
Karnataka
Distinguished
Guests
Ladies and
Gentlemen
Introduction
It is my pleasure to address you today. Let me begin by
first extending a warm welcome to the senior officials from the
Central and State governments of India as well as Special Economic
Zone (SEZ) operators and businessmen who have travelled from India
to share with us developments in the SEZ sector. It is not often
that we have such a gathering and I think we should take full
advantage of the luminaries we have in the room today. This seminar
has also come at an opportune time, with the global economy and
foreign direct investment (FDI) flows into Asia on the
mend.
Singapore’s experience with
SEZs
SEZs have garnered much attention for contributing to
economic growth by driving exports and creating employment. This is
largely due to the success of the Chinese SEZs which have
transformed China into the world’s premier manufacturing hub. The
SEZ model has been replicated in many places, though with varying
success. Singapore too has had its fair share of experiences with
SEZs, having been involved in developing industrial spaces in Asia
since the 1990s, notably the SuzhouIndustrial Park in China, the
Vietnam-SingaporeIndustrial Parks, and the Batam, Bintan and
Karimun (BBK) industrial parks in
Indonesia.
ouIndustrial
Park
The
SuzhouIndustrial Park, or SIP, was our first industrial project
with China and we celebrated its 15th anniversary last
year. The park spans 288 square kilometres (28,800 hectares), of
which 80 square kilometres (8,000 hectares) belong to the
China-Singapore collaborative area. Aside from the
high-tech
industrial park, the SIP also houses a modern township and about 9
universities and research
institutes.SIP's GDP reached US$16.4 billion
as of end-2009, and attracted US$1.8 billion in utilised FDI last
year.SIP’s fiscal revenue also grew by 13% year-on-year to reach
US$1.6 billion last year. At the end of last year, a total of 584
companies operate in the SIP China-Singapore collaborative area.
Despite some early difficulties, SIP is now one of China’s top
performing industrial
parks.
Vietnam-SingaporeIndustrial
Park
Singapore and Vietnam jointly built our first
Vietnam-SingaporeIndustrial Park, or the VSIP, in
1996 in Binh Duong province in the South. Following its success, a
second industrial park was added on, and subsequently a third
township was built in Bac Ninh in the North.The VSIPs have
attracted investments in excess of US$2.5 billion, and now house
380 companies from more than 20 countries, employing over 60,000
workers.In January this year, the fourth VSIP in Hai Phong province
was officially launched. Together, the VSIPs cover an area of about
48 square kilometres (4,845
hectares).Much
closer to home, Singapore has also pioneered industrial estates in the neighbouring Riau
islands of Batam, Bintan and
Karimun.
What is so distinctive about Singapore’s industrial
parks? It is that we have pursued an integrated approach which
brings together industrial,
residential and commercial zones within our industrial
parks. We call this the ‘work, live, play’
concept. The underlying
belief is that the industrial park should be self-sustaining,
supported by a skilled and satisfied workforce, and served by
amenities such as schools, restaurants, entertainment centres and
green spaces. With the increasing concern over climate change and
carbon emissions, Singapore has tried to also create
environmentally sustainable industrial spaces. The EcoCity project
in Tianjin, China, is an example of one such
endeavour
It has not always been a smooth ride but Singapore
companies have gained much from our experience in planning,
developing and operating SEZs in the region over the past two
decades. Distilling our experiences, we have found that there are
several critical factors for success. First, location and
infrastructure are key factors. Not only must the SEZ be
well-linked by roads, airports or seaports for access to domestic
and global markets but also to infrastructure such as power and
water supply. Second, the presence of clear policy guidelines and a
streamlined tax and incentives structure will definitely go a long
way to creating an attractive investment environment. Third, good
management at the administrative level to drive the development and
ensure the smooth running of the SEZ operations. And last but not
least, gaining the support of central and local levels of
government is also imperative for the success of the
SEZs.
Participating in India’s SEZ
Sector
In India, the concept of the SEZ is not new, with one of
the earliest Export Processing Zones in Kandla, Gujarat set up in
1965. With economic growth in India booming at an expected 8.5%
this year and your exports taking up an increasing larger share of
global trade, it is not surprising that the SEZ model has emerged
for industrial development and export
promotion.
India is, of course, a different market from where we have
operated. Unlike China and Vietnam, India has a much larger number
of formally approved SEZs[1],
more than 500 with various forms of public and private equity
configurations. Issues pertaining to land acquisition, resettlement
and creation of employment are important concerns which need to be
addressed and managed well.
Nevertheless, Singapore
companies have
had some success in India, most notably Ascendas, which set up the
Bangalore IT Park in 1993. Ascendas has since replicated the model
across India and will be sharing its experiences at the Seminar
later.So how can Singapore companies contribute to India’s SEZ
sector?From our experience and track record in China, Vietnam and
other markets, our companies have developed expertise in many
areas.Let me just highlight
two.
Master Planning and Industrial
Development
First, master planning and industrial development. Aside
from Ascendas, Jurong India also has a substantial presence across
18 cities in India, with over 80 million square feet of land under
various stages of design and implementation.They bring premium
designs and technology to the setting up of integrated townships,
SEZs, industrial parks, nuclear cities, and urban
infrastructure.
Transport and
Logistics
Second, transport and logistics. As I mentioned earlier,
an efficient transport and logistics chain is critical to the
success of a manufacturing hub or SEZ. Singapore’s third-party
logistics companies are well-equipped to meet these
needs.For example, Changi Airport
International, together with Bengal Aerotropolis Projects,
pioneered India’s first Greenfield ‘Aerotropolis’ project in
Durgapur, West Bengal.When completed, the Aerotropolis will not
only house an airport but also an industrial park, logistics hub,
IT park and supporting infrastructure like housing, tourism and
healthcare
facilities.
Singapore
companies,
therefore, have much to offer and this Seminar is a welcome
opportunity for us to learn more about India’s SEZ policies and
explore areas for further
cooperation.
Conclusion
In closing, I congratulate the Indian High Commission in
Singapore for their initiative in organising this Seminar and I
wish all of you a very fruitful session
ahead.
Thank
you.
[1]
According to India’s SEZ website, as of Feb 210 there are
574 formally approved
SEZs