Good morning to everyone who is tuned in, friends and colleagues from the Ministry and various agencies. I would like to keep my remarks fairly concise, primarily to emphasise a few key points, which I think are worth reiterating in the current environment, and then segue into questions that are pertinent and uppermost on your minds.
Let me start by saying that, obviously, we are in a challenging economic environment. And how we emerge from this is going to depend critically on the manner of our response. That is true of countries, and it is true of the global economy. Because if we treat this as a reason, or an excuse to retreat into inward-looking policies, then while that might give us some short-term sense of righteousness in the case of some, in the long-term, it is going to do great harm to the potential for growth, opportunities, and the raising of living standards for all our people.
This is true, whether you're a small country or a big country, because ultimately, we need the global connectivity in order to realise the full potential, leveraging off each other's competitive advantage, in order to create a bigger whole. So that the whole is more than the sum of the parts.
I think that requires both political will and a certain level of courage and conviction on the part of citizens and governments. Because if it is hard in normal times to talk about free trade, then it is even harder when the economic environment is more challenging. And yet, we have to make the case to stay the course. Because that is the only way we can ensure the continued global connectivity and the opportunities that we all seek out.
That is why, in the case of Singapore, we have persevered with our global strategy of how to integrate more with economies. You know of our FTAs - 25 FTAs covering about 85% of global GDP. And they yield tangible value to our companies. MTI estimates, I think in 2018, about $1.2 billion of tariff savings, but the FTAs actually offer us a lot more than that. Because when you have FTAs, individual FTAs give us bilateral advantages, but when we have this network of FTAs, it also creates an important overall network effect, which enhances the value proposition of countries and economies that sit at the nodes of these networks. And Singapore is one such country. So, it is critical that we continue on this path. This is why Singapore continues on various initiatives, for example we concluded the EU- Singapore FTA a year or so ago, and we are persevering with the RCEP and so on, because these are important initiatives that will signal to the world, that it is not just Singapore, but our like-minded partners remain committed to the cause.
I would say that we are now bringing this openness and connectivity into the digital domain. Because that is really the new frontier for global trade and economic progress. Whilst our past FTAs have focused on the movement of goods, movement of services and so on, tariffs etc., I think we increasingly need to look at the movement of data, of bits and bytes. We need to increasingly look at how the different systems are interoperable, in other words, interoperable standards, and how we can then facilitate those digital flows. Whether it is e-commerce, whether it is e-payment solutions, whether it's about businesses using their corporate ID across borders etc. It is important that we are able to facilitate that.
And there are different measures about how much the digital economy is going to grow by. But all the measures are consistently predicting a surge. And our COVID-19 experience has reinforced this. Businesses have seen the value of digitalisation, especially with regard to SMEs. In the past, when we used to talk about digitalisation, SMEs used to give us a polite hearing, and treat it as well, "okay, it's a nice to have", and then I think it became a kind of "good to have". But these days, they all recognise it is a "must have", for now and for the future. So that's a very important transition. It then creates a very fertile ground on which we can build a stronger digital platform for Singapore's economic future.
This is an area we want to work on. And whether it is our traditional FTAs, or our Digital Economy Agreements, we want to make sure that our companies are able to fully benefit from them. This is why this event like the FTA Day and the work that SBF is doing, and also what MTI, Enterprise Singapore and our various other economic agencies are doing, is key. Because it's not just about securing agreements with other countries. It's about ensuring that as a result of that, our businesses are now able to take advantage of those agreements, understand what they are, where are the areas where they stand to gain and to take full advantage of those provisions.
This is why SBF's efforts with the business community are an important part of this overall strategy that we have embarked on. This FTA Day is a very important initiative because it serves as an important crescendo, if you like, in the annual calendar, where we're able to synthesize the different trends, bring it to the attention of the business community, and have an opportunity for us to engage and interact like we're doing now.
This is an altered circumstance. Usually, we'll be in a big conference room and we can talk to each other and see each other, but I think whether it's virtual or physical, the spirit remains the same. And I'm looking forward to having a very good conversation with all of you.
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