1. Good afternoon.
2. Very happy to join you at the Nikkei Forum Innovative Asia.
3. A key issue on everyone’s minds today must be how we can emerge stronger from COVID-19.
a. I am sure this is a priority for countries like Japan and Singapore, as much as it is a priority for all businesses, especially those who intend to serve the global markets.
4. Many of you are no doubt thinking about how to emerge from COVID
a. But we should also keep in mind that many of the forces impacting us pre-dates COVID and COVID is by no means the only driver of change for a COVID and post-COVID world.
5. Prior to COVID, the world was already facing various longer-term challenges and driving forces. Let me share some of them.
a. First, geopolitical tensions have threatened to distort the proper functioning of the global economy.
i. Politically motivated polices and trade restrictions that distort investment and production decisions will adversely impact the proper functioning of the global production patterns and supply chains.
ii. Such actions harm everyone in the long term and reduce global production to the detriment of all.
iii. Businesses must certainly factor in geo-political risks into their decisions, but business can and also have a responsibility to speak up and advocate for global trade and against populist policies that may hurt businesses and workers in the long run.
b. Second, technological advancements have disrupted many conventional business models but they have also brought new opportunities.
i. Uber, Spotify and Airbnb have changed the way we live and travel in the past decade.
ii. Industry 4.0 technologies, including digital and additive manufacturing will change the way products and production systems evolve.
c. Third, the demographics of the world are also changing rapidly.
i. The developed economies are ageing rapidly while the emerging market populations are growing rapidly.
ii. This has serious implications on the pattern of consumption, production, investments, and consequently, trade flows.
6. COVID-19 has accentuated and accelerated these trends.
a. The insecurity of the supply chains, whether perceived or not, has aggravated the protectionist tendencies in many countries.
i. Just when the opposite – open and connected trade – is more important than ever before.
ii. We need to better appreciate that we are all in this together.
iii. We will only get out of this faster, together.
iv. We will be here longer and in deeper trouble when we practise beggar-thy-neighbour policies.
b. Second, digitalisation adoption and adaptation have accelerated with COVID-19.
i. This has disrupted many business models and created many new opportunities.
ii. Digitalisation and connectivity can fuel the next lap of global economic growth.
iii. But it will also cause disruption that requires government and businesses to help their people to make the necessary adjustments and adaptations.
iv. Otherwise, all economies will experience the pushback against globalisation and digital connectivity by those who are either left behind, or who have benefitted relatively less.
v. We all must turn a potential digital divide, into a potential digital multiplier.
c. Third, many countries have spent a great deal of their resources, especially financial resources, to stabilise their economies.
i. The fiscal strain may cause economies to undertake policies to compete for tax revenue that further distort investment and commercial decisions as to where to site their production, and how to secure their supply chains.
ii. Worse, it may destabilise the global financial system if economies undertake irresponsible and unsustainable monetary or exchange rate policies.
d. Fourth, economies and businesses need to carefully consider the evolving demographic dynamics.
i. The mature economies will need to consider the need for long-term, sustainable and stable returns for their investments to sustain the needs of an ageing population.
ii. Economies with ageing populations will need to consider where to site their investments and productions in order to tap the talent and youthful dynamics for their production system.
iii. All companies will need to consider where to site their investments and productions to be closer to the growing middle-income markets.
iv. All emerging economies will need to consider how to attract sufficient investments to create the necessary quantity and quality of jobs to meet the aspirations of their “demographic dividend”.
7. All companies and CEOs are undoubtedly thinking through the above considerations and figuring out how to restructure your businesses or place your investments to serve global markets, and to tap on the world as both your hinterland and marketplace.
8. Singapore understands the challenges and aspirations of global businesses. Unlike countries with better natural endowments, our competitive advantages and offerings come from the intangibles:
a. A predictable, coherent and progressive business environment for global businesses to serve the world from Singapore and to secure the best long-term investments.
b. A progressive environment for global businesses to mobilise capital in a trusted system, aggregate talent in an open system, and protect intellectual property in a transparent and fair legal system.
c. A commercial environment with the widest possible network of Free Trade Agreements (FTAs) and Digital Economy Agreements (DEAs) to mitigate the risk of a bifurcating or fragmenting world.
d. A trusted hub where global companies can fulfil their international obligations without fear that we will in any way restrict exports for our own benefits, but to the detriment of the global supply chains. These are what we are determined to offer in Singapore for you.
9. Trust will become an even more important factor with increased geopolitical uncertainties.
a. Interdependence, rather than independence, will provide greater diversity and resilience to our supply chains.
b. We are all safer if we have a shared interest in each other’s prosperity.
c. But trust is not a function of geographical distances. Trust is a function of mutual interdependence and track record.
d. This is the reason why Singapore will do our utmost, even in the depth of the COVID-19 pandemic, to allow companies sited here to fulfil their international commercial obligations, never restricting exports for our benefit but to the detriment of others.
i. This is also the same reason why we have done the same thing during the Oil Embargo in the 1970s. That has helped us to cement the trust which the world placed in us and allow us to grow Jurong Island to become one of the foremost petrochemical hubs in the world today.
10. In the search for stable long-term returns, policy consistency and business environment predictability are critical considerations for businesses.
a. This is why Singapore pays so much attention to this.
b. We say what we mean, and we mean what we say.
c. We will keep our promises and deliver on them.
11. Many of you have already planted your investments in Singapore.
a. Many global companies like 3M, Mitsui Chemicals and Procter & Gamble have already been in Singapore for many years.
i. Partnering us in our development and growing with us.
ii. Businesses like Mitsui first established its presence in Singapore in 1966. Mitsui’s presence in Singapore eventually grew to include its entire value chain, including manufacturing and R&D activities, leveraging on local partners such as A*STAR and the research institutes. Today, it provides a full suite of activities in Singapore, in service of the world.
b. More recently, companies like Google, Nestle, Philips and others have built on their regional HQ presence in Singapore to set up multiple functions here. This includes the establishment of Nestle’s R&D Centre, which was the first in Asia back in 1980. In 2016, Nestle further invested in the set-up of its Research Centre Asia in partnership with A*STAR.
c. Despite the challenging business environment last year, Singapore attracted investment commitments exceeding S$17 billion in Fixed Asset Investments in 2020. Japan contributed almost 7% to this. These investments are a strong signal of confidence in Singapore amidst an uncertain world that we will never take for granted and which we will seek to repay many times over.
12. Over the decades, many Japanese partners have chosen Singapore for their ventures. We are encouraged to see this even during the pandemic.
a. In August 2020, Kajima, an engineering, procurement and construction player, broke ground for its integrated HQ and R&D campus in Singapore. The S$100 million investment - the Kajima Global Hub - will serve as Kajima’s Asia Pacific headquarters and its first overseas innovation centre.
b. Shimadzu, a diagnostics company, also placed its trust in Singapore by selecting us as its first launch market outside Japan for the company’s rapid COVID-19 Polymerase Chain Reaction (PCR) Test.
13. Singapore’s diverse ecosystem of partners allows businesses to easily and rapidly access complementary services and capabilities. For businesses looking to accelerate innovation, there is a strong network of established companies and innovative start-ups which can provide a leg-up for firms based in Singapore to serve the world.
a. Pharmaceutical companies like Santen have already been leveraging our innovation ecosystem to their advantage. An ophthalmology specialist, Santen has an ongoing S$37 million strategic collaboration with the Singapore Eye Research Institute on diseases prevalent in Asia.
14. Singapore will continue to work with like-minded countries and companies to uphold and update the global trading system.
a. We will work with like-minded partners like Japan, Australia, New Zealand and Chile to break new grounds for digital connectivity and data flows to enable the next lap of economic growth.
b. Just as in the pandemic, Singapore will work with like-minded countries to keep our global supply chains working, resist protectionist tendencies and ensure that critical essential supplies continue to flow to those who need them.
15. The youthful demographics and talent of Southeast Asia will provide investors with access to both markets and talents.
a. Singapore can be that platform for global companies to leverage on the talent and markets for Southeast Asia.
b. Southeast Asia can also provide the needed dimension in a world seeking greater diversity and resilience in their global supply chains.
c. The region’s rapidly growing middle-class portends significant economic opportunities not only in terms of consumer goods and services, but also infrastructure and essential services like health and education.
d. An example is Omron Healthcare. In February 2019, the global blood pressure monitor company established HeartVoice as a Singapore-based joint venture with local mobile developer, iApps. The joint venture developed integrated digital health solutions including telehealth. At the height of the COVID-19 crisis, HeartVoice was able to scale its offerings beyond Singapore into Southeast Asia.
16. It is therefore our priority to ensure that Singapore will continue to offer value-add opportunities to our businesses and partners. In a time of global uncertainty, we will distinguish ourselves by being a trusted partner, providing a safe harbour for capital, talent and intellectual property, while offering long-term policy coherence and consistency.
17. We thank you for your partnership over these many years. We look forward to strengthening our existing collaborations and to form new ones with our Japanese partners and beyond.
18. Thank you very much.