Mr Lee Yi Shyan at the Singapore Prestige Brand Award 2008 Award Presentation Ceremony

SPEECH BY MR LEE YI SHYAN MINISTER OF STATE FOR TRADE AND INDUSTRY AT THE SINGAPORE PRESTIGE BRAND AWARD 2008 AWARD PRESENTATION CEREMONY 3 DECEMBER 2008, 8PM, AT THE SHANGRI-LA HOTEL SINGAPORE

Mr Lawrence Leow

President of the Association of Small and Medium Enterprises (ASME)

Mr Robin Hu

Executive Vice President (Chinese Newspapers Division) of Singapore Press Holdings (SPH)

Distinguished guests

Ladies and Gentlemen

Good evening!

First let me thank ASME and Zaobao for inviting me to this gathering to celebrate the well known brands in Singapore. Since its inception in 2002, the Prestige Brand Award has elevated the profiles of many local brands and propelled their presence both regionally and internationally. Year after year, the award ceremony proves that Singapore companies, despite being small, can produce brands that capture the imagination of the marketplace.

What is a brand? To me, a brand is a promise made good. A well-defined brand often evokes a set of emotive qualities that appeal to one’s aspirations. Products and services that enjoy good branding speak to their target customers. Yet branding cannot be achieved by just talking or a putting up posters. Successful branding is built through hard work, consistency and validation by repeat customers. Customers will only begin to believe your brand after many good experiences.

As you and I travel overseas, we are often greeted with some enthusiastic and positive responses when we say “we come from Singapore". I think I can fairly say that Singapore enjoys a certain respectable reputation overseas amongst our business associates. I too, have received many compliments on the “Singapore brand” and “what we stand for” from the foreigners we come into contact with.

Just yesterday, I attended a luncheon hosted by our Prime Minister for His excellency, Dr Oscar Arias Sanchez, the President of Costa Rica. During the lunch, President Sanchez described his admiration for Singapore and this was part of his speech which I would like quote to you:

“I was studying at university when Singapore claimed its independence, an event I remember well. At that time, as we say in my country, Singapore and Costa Rica were similar to two drops of water – two tiny nations, hundreds of kilometers apart. During the same period that saw the birth of this country, Jorge Debravo, the greatest poet of my people, wrote these lines: “I am searching for a city, a city of light and bread and song. On some star there must be a place that is waiting for us.” Forty-three years after the Independence of Singapore, I can’t help but think that this is the city of light and bread and song that our poet dreamed of, and that it was waiting for us, not on a distant star, but on the other side of the world. A city where life evolves at the dizzying speed of light, where the people always have bread on the table and song for their spirits. A city that, today, opens its doors to us, and reveals some of our deepest mysteries.

I have come to this country to admire its beauty and its astonishing development, to learn from its vision and its determination, and also to compare the experiences of Singapore with those of Central America. This sister republic of Asia, which was once so like Costa Rica, has made the leap to the future that my small nation still awaits. The streets and avenues of Singapore, its buildings and ports, hold many lessons for Costa Rica. Today, we have come to extract them. We want to extract from this land the secret of progress that you have reaped for decades. We want to find the answer to the dilemmas you have overcome. We want to share the character of this people that always looks forward”.

Costa Rica is similar to Singapore in that she has a 4.19 million population. She considers her self tiny even though her land size is 70 times ours. Her GDP is about US$45.77 billion, and a per capita of US$11,100. Costa Rica is interested in Singapore’s formula for development and success. In fact, they have placed order for 300 copies of MM’s memoir which has been translated into Spanish.

A number of other countries have similarly asked about our “secret for success”. Just last week, I met with Valery Shantsev, Governor of Nizhny Novogorod Region of Russia. It was his second time to Singapore and he told me he wanted to know how we went about attracting investments and developing our human resources.

Last week, we hosted the 2nd Singapore-Jiangsu Cooperation Council meeting in which Party Secretary Liang Baohua said that they would like to send more people to learn from Singapore as there was “a substantial gap between Jiangsu cities and Singapore in the way we do our planning and management of the cities”. His request was made even after Jiangsu had sent 13,000 people to learn the various aspects of Singapore software over the past 14 years is telling. From South America to China, from Russia and the Middle East, many countries are sending study teams to Singapore. Why? What is in the Singapore brand that captures their imagination?

These examples are highlighted not to indulge ourselves in the gracious compliments of others in Singapore. Quite the opposite, I mentioned them to raise the question of how we got here and what we need to do to uphold this reputation, and sustain the Singapore Brand into the future.

I think we got here through hard work and consistency. We consistently maintain a pro-business environment: no red tape, no corruption and low tax regime. We consistently invest in education, vocational training, R&D so that our workforce is skilled, up-to-date and are capable of supporting new industries as we restructure the economy. We consistently manage our financial resources carefully and painfully accumulate our reserves to strengthen investors’ confidence in Singapore. The net outcome is a consistent policy stance that international investors come to expect of Singapore. All these efforts have contributed to the building of a respectable Singapore Brand.

I think what we have achieved at the national level can also be applied at the firm’s level. In fact, a strong national brand often offers a good platform on which individual firms can build further brand attributes on.

A strong brand is most invaluable, especially in trying times. Yet you cannot build a brand overnight, just before you need it. Therefore, the government has been promoting the use of branding as a strategic business capability. Brand Pact, for example, is a joint initiative by IE Singapore and SPRING to help local companies meet their brand development needs. Since the launch of Brand Pact in April 2005, 6702 companies have benefited from various Brand Pact initiatives which included training workshops and use of brand assessment. Companies have in total received $17.7 million worth of co-funding support for brand development projects.

Consider our local company, Eu Yan Sang’s example. Eu Yan Sang was conferred the prestigious Singapore Brand Award organized by IE Singapore for four consecutive years and also secured the Fastest Growing Brand 2006, with a brand value of $64.2 million, up by 29 per cent from 2005. In the TCM industry, trust is most important. In fact, I can’t think of any industries Singapore firms compete in where trust is not important. A strong brand conveys trust.

As many of you already know, 2008 has turned out to be a difficult year. The external economic environment has deteriorated significantly and we now expect GDP growth in 2008 to be around 2.5 per cent. For 2009, we expect the global downturn to deepen further. Due to the considerable uncertainty in the external environment, we expect GDP growth next year to be between -1 and 2 per cent.

Global financial crisis has resulted in the collapse of major banks and financial institutions. Overnight, confidence evaporated from global financial markets and left many banks nervous about lending. Generally, there is evidence that our local banks have also become more cautious in their lending. We may not have a situation of a credit freeze in Singapore yet, we are certainly feeling the impact of a credit squeeze.

Therefore, my ministry has made some enhancement to the existing business financing schemes two weeks ago. These enhancements will support an additional $2.3 billion of loans to help local enterprises to gain access to credit in this current economic slowdown. Apart from extending the coverage to all local enterprises, we also increased the loan quantum's and government’s share of the risk in loan defaults.

For example, the existing Micro-Loan Programme now provides an increased loan quantum of up to $100,000 in unsecured loans for companies with 10 or less employees, with the government taking on 80% of the default risk. For companies with more than 10 workers, a new Bridging Loan Programme has been introduced which provides credit of up to $500,000 in unsecured loans and the default risk will be shared equally by the government and the financial institutions.

These are just two of the enhanced schemes under the new slew of measures that took effect two days ago and will be valid for a year. I hope that these measures will address some of the immediate financial needs of businesses and ensure that local enterprises have sufficient resources to continue their operations. I urge more companies to make use of these schemes.

In conclusion, let us remain consistent in investing in our core capability. We must continue to deliver what our customers expect of us: quality, integrity and consistency. We know the financial tsunami will ultimately pass us; our immediate task is to secure our boats, make them water tight, stabilize any sea-sick crews and strengthen the engines. When the tsunami is over, the blue sky and calm sea will return. Thank you.