MOS Lee Yi Shyan at the Abu Dhabi Economic Forum

SPEECH BY MR LEE YI SHYAN, MINISTER OF STATE FOR TRADE AND INDUSTRY, SINGAPORE, AT THE ABU DHABI ECONOMIC FORUM, 5 FEBURARY 2007, 3.30 PM

Your Excellencies

Distinguished guests

Ladies and Gentlemen

Introduction

It gives me great pleasure to be here today. Singapore’s links with the Middle East are strengthening. In particular, Singapore and Abu Dhabi are moving closer together and there is a shared understanding between our leaders on the value of a close partnership and the benefits that it will bring. It is only through greater understanding of each other that the true value of a close partnership can be realized by our peoples and our businesses. To bring us one step closer, I will share with you how we are transforming Singapore, as well as how our companies are internationalizing and expanding into Asia; with specific focus on what we are doing in the Middle East.

Singapore Economy

2006 was a year of achievements for Singapore. Our real GDP grew by an estimated 7.7%. Total trade posted a strong 13% growth to reach US$530 billion. Investor confidence in Singapore is strong. We attracted US$5.7 billion in fixed asset investments last year, the highest level in recent years. We have also secured significant investment commitments for services and R&D. Major projects include a large-scale petrochemicals complex by Shell, a wafer fabrication plant by Intel and Micron, and global water R&D centers by GE and Siemens. Singapore’s GDP growth averaged 8% between 1966 and 2005. Per Capita GDP increased from US$560 in 1966) to $26,890 in 2005.

Integrated Resorts

To tap on the high growth potential of tourism in Asia and to fuel Singapore’s next stage of economic development, we have embarked on two exciting new projects called the Integrated Resorts at Marina Bay and Sentosa, with total investments worth over US$6.5 billion. We call these resorts ‘integrated’ because they are large, iconic complexes with a comprehensive range of amenities, such as hotels, retail and F&B outlets, high-end entertainment venues, themed attractions and casinos.

Las Vegas Sands plans to invest over US$3 billion to build the Marina Bay Sands Integrated Resort, which targets mainly business travelers or MICE (meetings, incentive travel, conventions, and exhibitions) market. The resort will have about 110,000 square meters of convention and events space,. Resorts World at Sentosa, to be built by Genting International and Star Cruises who plan to jointly invest over US$3 billion in the project, which aims to attract mainly family and leisure visitors. The resort will have a Universal Studios theme park with 22 major attractions, of which 16 are specifically designed for Singapore. The large number of attractions makes this a very sizeable theme park, larger than Universal Studios Hollywood. Each Integrated Resort is projected not only to increase the number of tourists coming to Singapore, but will also generate an additional US$1.8 billion, or approximately 0.8%, to Singapore’s annual GDP by 2015.

Real Estate Developments

The overall strength of the Singapore economy, the buzz created by the Integrated Resorts and the strong investment climate in Singapore have fuelled interest in high-end luxury properties, particularly in the Marina Bay area, where we are developing our new financial district right next to the Marina Bay Integrated Resort. Middle East investors are no strangers to Singapore’s high-end luxury property market, and just last year alone, a new record of US$18 billion

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of property investment sales was recorded, doubling the previous record set in 2005. 

To propel Singapore’s growth, we believe in providing a vibrant and adaptable domestic economy that is open to investors, and we welcome our friends here to share in Singapore’s growth. We know that you are planning to build many “world’s first” projects in Abu Dhabi. But as shrewd investors, you will also appreciate the rapidly growing markets in Asia and Singapore. Singapore can be the gateway for Abu Dhabi companies to grow your Asian investment portfolios, including financial and direct investments. Singapore’s strength lies in the strong linkages we have established in ASEAN, and with the emerging giants of China and India. Our understanding of Asia enables Singapore to be a good base for Abu Dhabi companies to further their expansion into other parts of Asia. Let me elaborate on these links.

Singapore’s connectivity

The important role played by middlemen in the development of world trade is a concept that is familiar to the Middle East. Merchants from the Arabic world were the crucial connectors for the East and West in the days of the Silk Road starting some 2,000 years ago. First by land and then by maritime routes, Middle East traders played a crucial role in bringing tea, silk, spices, ceramic wares and other valuable commodities to the West, and in return, gold, silver, ivory, jade and other precious stones, wine, Mediterranean colored glass and European delicacies flowed in the opposite direction. 

Likewise, for Singapore, our role as a key connecting port between India and China took off from the early 19th century, when the British East India Company established Singapore as its main port east of the Suez. With our free port status, we quickly became the meeting point for traders from both East and West. With the decline of entrepot trade in the second half of the 20th century, Singapore’s ability to transform itself into a transshipment hub has ensured our continued importance in world trade, as more than 80 per cent of world trade is carried by sea. 

Today, Singapore is the world’s largest container port, with 200 shipping lines connecting us to 600 ports across 123 countries worldwide. Last year, we handled a record 24.8 million TEUs. Referred to as a "Megastructure" in a recent feature by National Geographic, Singapore handles one out of every ten containers moved around the world every year. 

Singapore’s connectivity with the region and the world is furthered epitomized in our airport. Singapore’s Changi Airport has consistently garnered best airport rankings, and it is currently served by over 75 airlines that operate more than 4,000 weekly flights to over 180 cities. One departure or arrival takes place every two minutes. Last year, over 35 million passengers passed through Changi. This is no mean feat, considering that our resident population is only 4 million. Our third terminal is scheduled to open next year, and this will bring our total capacity to 64 million. 

These air and sea links play a crucial role in making Singapore an ideal hub for companies intending to expand and grow in Asia. Singapore is within a 7-hour flight radius from most parts of Asia, including the important growth engines of India and China. Our excellent air and sea links make just-in-time and same day deliveries a reality, and executives based here have no problems getting to other parts of Asia because of the availability of flights to most parts of Asia.

Stable government and sound infrastructure

Singapore also has a stable government which has put in the necessary infrastructure and pro-enterprise regulatory framework to make Singapore an ideal location for companies to establish their Asia Pacific headquarters. Today, Singapore is home to 7,000 multinational companies. Of these 7,000, some 2,000 are Chinese companies, 2,000 are Indian companies and about 1,600 are Australian or New Zealand companies amongst others. The number of Middle Eastern companies, now around 180, is also growing, adding to the vibrancy of our marketplace.

International Financial Centre

Singapore is also a major international financial center. In December 2005, the Banker named Singapore as the “Financial Centre of the Future” in its inaugural ranking of international financial centers. We are a significant wealth management center and the world’s fourth largest foreign exchange trading center. The Singapore Exchange, home to Singapore's leading listed companies, is also at the global forefront in attracting international issuers and is rapidly emerging as Asia's offshore risk management center for international derivatives.

Telecommunications Infrastructure

According to the World Economic Forum's Global Information Technology Report 2004-5, Singapore is ranked first for readiness and usage of infocomm in businesses, government and security. Multinational companies based in Singapore leverage on Singapore's info communications connectivity to conduct regional or global operations from here. 

Moving ahead, Singapore is developing a Next-Generation National Infocomm Infrastructure which aims to deliver broadband to everyone, anywhere and anytime. In December last year, we introduced an island-wide wireless service that allows all residents to stay connected even while on the go. At the same time, a new ultra-high-speed gigabyte wired network linking every home and office will be ready in a few years. 

We therefore welcome Abu Dhabi and firms from this region to establish their Asia Pacific Headquarters, International (Offshore) Trading and Investment offices in Singapore. Our agencies will be happy to engage you to discuss how they could support your plans in terms of facilitation and incentives.

Singapore– Your Partner in the Middle East

In recent years, many Middle East countries have embarked on economic diversification programmes to reduce their dependence on oil revenues. Huge investments are being made in infrastructure, education, tourism and healthcare projects. 

Many Singapore companies who had played key roles in developing Singapore into the vibrant city it is today have shown keen interest to bring their expertise to the Middle East, In recent years, their presence is being increasingly felt. Let me share some of the examples with you. 

In construction and real estate, SembCorp has entered into a US$1.7 billion joint venture with the Abu Dhabi Water and Electricity Authority to acquire an Independent Water and Power Plant; while Keppel has been awarded a US$1.1 billion contract to develop a solid waste management facility in Doha. In Oman, Ascendas is managing seven industrial parks including the country’s first technology park, “Knowledge Oasis Muscat”. 

A number of our architectural firms have been appointed as chief master planners and project managers for projects ranging from shopping centers to marinas. For instance, CapitaLand will be investing over US$600 million to develop a residential and retail zone within the Bahrain Bay development project. The upcoming iconic five-star Grand Corniche Hotel in Abu Dhabi was designed by Surbana Consultant. Similarly, the Singapore Tower, which will be built in the new Dubai Business Bay, was designed by Singapore-based Ong and Ong Architects. While the Dubai Mall, supposedly the world largest mall, is designed by DP Architects. 

Singapore companies have also made their presence felt in the transport and logistics sector. Changi Airports International recently won an 18-month contract to manage Abu Dhabi International Airport. NOL-APL has established itself as the second largest cargo carrier into Egypt. Portek, a Singapore-based container port operator, is jointly operating the Bejaja Mediterranean Terminal with their Algerian partner Enterprise Portuaire De Bejaja. The Singapore Land Transport Consortium (SLTC) will be working with Q-Link Transport LLC, a subsidiary of Al-Qudra, on land transport projects in Abu Dhabi. 

In ICT technologies, the Infocomm Development Authority of Singapore (IDA) whom the Secretary General of the International Telecommunications Union Hamadoun Toure has commented to be “one of the best regulatory models in the world” for countries wanting to embrace new convergence technologies, has been working with the Kuwaiti government to strengthen their e-Government capability within the Kuwaiti public sector leadership. TNA Solutions has also collaborated with a local partner in Oman to establish ASM Technologies, a provider of education related ICT services. 

In lifestyle services, luxury resort operators, General Hotel Management and Banyan Tree are managing the “Chedi Muscat”, a luxury hotel situated on the Boushar Beachfront in Muscat, Oman and “Banyan Tree Desert Spa and Resort Al Areen” in Manama, Bahrain, respectively. Charles and Keith, a Singapore home-grown foot ware and accessories store, had met with remarkable success since their first franchise opened in Dubai in 2004. They have expanded their presence in the Middle East, having opened 20 outlets in Bahrain, Egypt, Oman, Saudi Arabia and UAE by 2005. 

Singapore companies are excited by opportunities presented by Abu Dhabi and the Middle East, particularly those in the construction and real estate services, transport and logistics, info-comms technology and lifestyle services sectors. They are looking for partners, and our Consulate-General in Dubai and soon-to-be established Embassy in Abu Dhabi would be happy to help facilitate your business linkages.

Conclusion

Arab traders were familiar with Singapore as early as the 14th century, when Singapore was a small but busy trading post known as ‘Temasek’.Their presence in the region preceded the Europeans by hundreds of years. In the 19th century, when Singapore was re-discovered by the British, Arab traders were also onboard the ship of Sir Stamford Raffles, who would later become feted as the founder of modern Singapore. Some of them settled down in Singapore and today, if you visit Singapore, you will even find some of our streets and landmarks named after prominent Arab families who have made Singapore their home. 

We are proud of this cultural heritage, which adds to the diversity of Singapore multi-ethnic culture. Our two regions have ties that date back many centuries and those ties have never been severed. In the 21st century, my hope is for us to strengthen our trade and cultural links. As we embark on the New Silk Route, I hope firms from both Abu Dhabi and the wider Middle East could join hands with their counterparts in Singapore to forge long lasting partnerships into the future. 

Our dialogue today should not just end here. Singapore will be hosting the World Economic Forum (WEF)’s East Asia Forum in June this year. There will be some 300 CEOs from the Asia region and beyond, and it would be a good opportunity to meet and network with potential partners. I look forward to meeting you in Singapore. 

With that, I wish you a very pleasant and fruitful session ahead. Thank you.

 [1]Source: CB Richard Ellis