Mr Peter Ong at the launch of Dutch Chamber of Commerce in Singapore

SPEECH BY MR PETER ONG, PERMANENT SECRETARY FOR TRADE AND INDUSTRY, AT THE LAUNCH OF THE DUTCH CHAMBER OF COMMERCE IN SINGAPORE (DUTCHCHAM) ON 19 JUN 2008 AT THE ASIANCIVILISATIONSMUSEUM

Your Excellency Ambassador Chris Sanders

Ms Joanna Johnston, Chair of the Dutch Chamber of Commerce

Distinguished Guests

Ladies and Gentlemen

Good Evening

It gives me great pleasure to join you here today at the launch of the Dutch Chamber of Commerce in Singapore. Thank you for the warm welcome.

EXCITING TIMES FOR ASIA

The setting up of the Dutch Chamber of Commerce in Singapore is testament to the strong economic relationship between our two countries, and recognition of the strong growth prospects in Asia.

For those of us who live in Asia, the continued economic growth is palpable.China’s economy has been growing at 8 to 10 percent a year, and India at 7 to 8 percent. Both economies are expected to maintain their momentum. According to the International Monetary Fund’s April 2008 World Economic Outlook, India is expected to maintain a healthy growth rate of 7.9 percent, while strong domestic consumption in China will keep GDP growth at 9.3 percent. The sustained growth from these two economies will continue to fuel the economies in the region.

Beyond India and China, other economies in Asia have also continued to register robust growth. ASEAN, in particular, has become an attractive investment destination. With a total population of more than 550 million people and a combined GDP of well over US$500 billion, ASEAN has a substantial consumer market which companies cannot ignore.

Therefore, while we cannot realistically expect to be completely insulated from the effects of a US recession, Asia is certainly less dependent on the US now than it was ten years ago and offers plenty of opportunities of its own.

RIDING ON ASIA’S GROWTH

How then has Singapore positioned itself to take advantage of this Asian buoyancy?I will highlight several key strategies that Singapore has adopted to tap the dynamism in Asia, as well as to remain competitive.First, we keep our economy open.With our open-door policies, pro-business environment, rule of law and free market economy, Singapore has consistently been ranked as the most business-friendly economy in the world by the World Bank.

Second, we advance and diversify our economy.From a humble entrepôt beginning, Singapore has become a high-end manufacturing base for disk drives and semi-conductors. It is also a world-class centre for chemicals and biomedical sciences.The services sector is strong and stable and we are the regional hub for finance, logistics, shipping and transport.By diversifying our economy, we have increased our economic resilience and are able to better withstand shocks in any one sector.

Third, we adopt a forward-looking strategy.We are not only improving our economy of today, but laying the foundations for the economy of tomorrow. We actively nurture our young businesses and groom budding entrepreneurs.We promote R&D and aim to devote 3 percent of our total GDP to R&D by the year 2010.The father of modern management philosophy, Peter Drucker, once said that ‘innovation is the act that endows resources with a new capacity to create wealth’.By actively encouraging entrepreneurship and R&D, Singapore hopes to create a new wave of innovation that will add dynamism to our future economy and extend our capacity to create wealth.

Lastly, we are growing our external wing. Beyond developing our domestic economy, we are expanding our economic space by deepening our presence in existing markets, and building economic bridges with key trading partners like the EU, US, China and India.With our extensive network of FTAs, businesses in Singapore will find it easy to trade with and invest around the world.

In China, for instance, Singapore and China established the SuzhouIndustrial Park in 1994 as our flagship cooperative project.This project has developed rapidly over the past decade.The success of our partnership with China has led us to collaborate on another project.We are now planning to develop an Eco-City in Tianjin.This Eco-City will integrate economic development with environmental conservation.When completed, the Eco-City is expected to be a model for other cities in China, as well as in other parts of the world.

Our trade and investment links with China are growing rapidly.We have close to 3000 Chinese companies based in Singapore.Chinese companies see Singapore as the first stop on the road to internationalisation.They use Singapore as a regional base to serve Southeast Asia, to raise funds and to gain leverage from our connectivity and infrastructure.

Singapore also has close links to another major player – India.Our landmark free trade agreement with India, known as the India-Singapore Comprehensive Economic Cooperation Agreement, or CECA, was one of the first free trade agreement ever signed by India.The CECA is one of Singapore’s most utilised FTAs.Through the CECA, our businesses gain a competitive edge over other countries wishing to tap India’s burgeoning market.Likewise, many Indian companies have chosen Singapore in which to base their operations.Singapore is home to some 3,300 Indian companies and many Indian expatriates.

Apart from China and India, our immediate neighbours in South East Asia are also very important to us.Singapore has historically enjoyed close links with Malaysia and Indonesia, and our economic ties continue to grow today.We are also strengthening our ties with the rest of ASEAN, through the ASEAN Charter and ASEAN Economic Community Blueprint which we signed last November.Clear milestones will be set for the removal of trade barriers and for implementing smooth and efficient business processes across borders.These steps toward a single market will sharpen ASEAN’s competitiveness and strengthen our trade and investment linkages.

ROBUST BILATERAL ECONOMIC TIES WITH THE NETHERLANDS

Beyond Asia, we have also built robust bilateral ties further afield, with regions such as Europe.Traditionally, we have had strong links with Western European countries such as the UK, France, Germany and of course the Netherlands.

The Netherlands has long been closely engaged in South-east Asia.As far back as the 1800s, the Dutch were already an economic power and one of two colonial powers dominating this region.The Netherlands boasted the world’s first MNC, the Dutch East India Company, also known by its Dutch acronym, the VOC.The VOC was active in the Dutch East Indies and had a profound effect on our region’s history. Through their many trading posts and forts, the Dutch facilitated both economic and cultural exchange between Asian and European civilization.

This cultural and economic exchange has lasted through the centuries.Dutch companies, who were and are world leaders in chemicals and petroleum refining, remain closely engaged in this region and especially Singapore. Take Shell, for instance.Shell was established in Singapore over a hundred years ago, even before we had a modern petrochemical industry.Shell set up Singapore's first oil refinery on Pulau Bukom in 1961.Today, Singapore is Shell’s regional headquarters, with over 2000 employees. Shell has played an integral role in our economic development and has helped change the face of our oil and petrochemical industry as we know it today.

But Shell is just one of the 1000-odd Dutch companies who are firmly established in Singapore and are testament to our long-standing and robust bilateral economic relationship. We are privileged to host leading Dutch companies such as Philips, ASM Technology, Akzo Nobel, Royal Dutch Shell and Vopak. Many Dutch trading firms are beneficiaries of IE Singapore’s Global Trader Programme. Companies such as Concordia Agritrading, Astra Oil, B B Energy, Shell Eastern Trading, Trafigura and Vitol Asia have benefited from the Global Trader Programme and their strategic presence in Singapore to expand successfully into the region.

As a result of this strong Dutch presence, the Netherlands is now our 4th largest trading partner in Europe and one of our top investors. In 2007, our total bilateral trade was valued at 13 billion dollars.

As close economic partners, the links between the Netherlands and Singapore go beyond trade and investment to science and technology.Various visits and exchanges have taken place on the science and technology front.We are pleased to have hosted visits from renowned Dutch universities and institutes such as TU Delft, LeidenUniversity, Eindhoven University of Technology, RadmoudUniversity and Mesa+ Institute of Nanotechnology.

Singapore’s Agency for Science, Technology and Research, or A*STAR, has forged partnerships with several Dutch companies.A*STAR has worked with Shell Global Solutions on storage technologies, as well as Philips Electronics for research on optics.We are now in the midst of exploring various areas for collaboration between public and private sector organisations.We would be happy to do much more.

DUTCH COMPANIES CAN USE SINGAPORE AS A HUB TO VENTURE INTO ASIA

I earlier articulated the strategies we have adopted to remain competitive and ride on the Asian growth.Dutch companies can be part of Asia’s growth and prosperity by using our strategic location as a launch-pad into Asia, as well as by tapping our favourable economic conditions such as our infrastructure, well-educated English-speaking population, transparency, rule of law, clean government and pro-business environment.By doing so, both the Netherlands and Singapore will be part of a globalised, seamless and borderless web, and thus better positioned to overcome today’s economic uncertainties and to capitalise on Asia’s growth.

In this respect, I welcome the establishment of a Dutch chamber of commerce in Singapore.Other foreign chambers in Singapore have been of invaluable service to the business community here.For example, they raise awareness of business opportunities both here and abroad by conducting seminars and producing newsletters. They are important matchmakers, linking up foreign companies with suitable local partners to do business together.They arrange study trips to their countries to help local companies get exposure to their business climates.As good corporate citizens, the chambers also support charities and community projects, and offer scholarships and bursaries for students.

I look forward to seeing the Dutch Chamber of Commerce do all these and more.I am sure your Chamber will play an integral role in deepening Netherlands-Singapore relations and on this note, let me end by wishing you every success. Thank you.