Mr S Iswaran at The Baden-Wurttemberg Forum, 22 Nov 10

SPEECH BY MR S ISWARAN, SENIOR MINISTER OF STATE FOR TRADE & INDUSTRY AND EDUCATION, AT THE BADEN-WURTTEMBERG FORUM ON MONDAY, 22 NOVEMBER, 1000 HRS AT THE GRAND HYATT HOTEL, SINGAPORE

Your Excellency Minister President Stefan Mappus

Your Excellencies

Distinguished Guests

Ladies and Gentlemen

Introduction

I am very pleased to join you today at the Singapore leg of the Baden-Württemberg Forum”.[1]I would like to extend a warm welcome to His Excellency Minister-President Stefan Mappus and your delegation to Singapore.

Bilateral relations between Germany and Singapore

Germany and Singapore enjoy a warm and close bilateral relationship that spans more than three decades. Our economic ties can traced back to the 1970s when Singapore was a young state with a pressing need to develop our skills and our workforce so as to lay a strong foundation for our economic development. Together with the Singapore Economic Development Board, Germany established the Rollei Government Training Centre in Singapore and later, the German-Singapore Institute as well. Both centres provided invaluable expertise and industrial training for Singapore workers.

Today, Germany and Singapore continue to enjoy excellent relations and close cooperation in many areas. Germany is our largest trading partner in the EU, while Singapore is Germany’s largest trading partner in ASEAN Southeast Asia.

Out of the 16 states in Germany, our trade ties with Baden-Württemberg are the most substantial, comprising a good one-third of Germany’s total trade with Singapore. Our trade with Baden-Württemberg has also expanded by nearly 50 per cent from 2005 to reach S$5.6 billion [2.8 billion Euros] in 2009.

Investment ties are also flourishing. Germany’s investment in Singapore more than quadrupled over the past decade to S$9.6 billion in 2008.[2]

There are over 1,200 German companies here in Singapore today. Of these, 130 companies hail from Baden-Württemberg, with 38 having established regional headquarters or production facilities here. We are home to household names including Robert Bosch, Carl Zeiss, SAP and Daimler, and market leaders such as Trumpf and Festo. We certainly and deeply value Germany’s support and continued confidence in doing business in Singapore.

The Germany-Singapore Business Forum, which was launched in 1994, reflects this close economic cooperation. There is much that Singapore SMEs can learn from the German Mittelstandes.In this regard, recognising Baden-Württemberg’s strong reputation for its outstanding SMEs, the 8th Germany-Singapore Business Forum was held in Stuttgart last month. The forum was an excellent opportunity for Singaporean and German companies to explore business collaboration in areas such as environmental technology, medical technology and precision engineering.

Another key enabler in fostering closer economic ties is the German Centre for Industry and Trade in Singapore. In 1995, Landesbank Baden-Württemberg[3] provided the necessary support for the centre to be established. With more than 100 companies, the German Centre acts as an important incubator for SMEs wishing to penetrate the Asian market. I look forward to seeing even more SMEs tap on the services of the German Centre and also use Singapore as a base from which to venture into the emerging and promising Asian markets.

Singapore as Gateway to Asia

We are in the heart of Asia and Singapore offers companies good infrastructure, excellent connectivity and a highly-skilled workforce. German companies keen to venture into the region can also partner Singapore companies and leverage on their established presence and familiarity with regional markets. We have a network of 18 Free Trade Agreements (FTAs). Through these, we remain well connected to the key regions of growth including the US, China, India, Japan and our own neighbourhood, ASEAN. This benefits Singapore based companies who enjoy easier market access and tariff savings.

Looking ahead, negotiations for the EU-Singapore FTA have also started this year and we hope to work towards a high quality FTA which will further boost the flow of goods, services and investment between Singapore and the EU. Businesses are important partners in this process.We look forward to your support and also welcome your feedback on how we can construct a FTA to suit your business needs and future needs.

Areas for further bilateral cooperation

I would also like to encourage our Singapore companies to seize the opportunity to step up their business collaborations with German counterparts. In this regard, Baden-Wurttemberg’s core industries, such as mechanical, automotive and electrical engineering, complement Singapore’s core competencies well. With a per capita GDP exceeding that of many major EU economies[4], Baden-Württemberg’s affluent population also offers significant market opportunities for our companies in Singapore. In particular, there are three key areas of collaboration which hold much promise.

(i) Urban solutions

The first is in developing urban solutions, which is a new growth area for Singapore. It offers much potential, particularly in the context of e-mobility. Indeed, some German companies such as Siemens and Bosch are already leveraging on Singapore’s strengths in systems integration to co-create and test-bed solutions in clean technology. Because of our compact size, we are an ideal city to test-bed urban solutions, before adapting and exporting the outcomes on a larger scale to cities in China, India and many Southeast Asian countries.

Transport mobility is one of our key priorities in developing urban solutions. Some of our initiatives include developing a “Smart Grid” infrastructure and a test-bed project for electric vehicles. For the latter project, I understand that Robert Bosch has already been appointed to design and develop the charging stations. There could be further opportunities for German companies as we expand our transport infrastructure.

Singapore has also allocated significant funding for campus research centres on transport modeling. Given Germany’s considerable expertise in this area, you could tap on these incentives to collaborate with our research institutes and universities to co-create new transport solutions.

(ii) Health and Wellness

The second area for collaboration is in health and wellness, specifically medical technology. Singapore’s population comprises an ethnically diverse mix of people with a large proportion of baby boomers.[5]This provides significant opportunities for Baden-Württemberg companies to test-bed and adapt medical technology products and services for the Asian consumer, before taking them to the regional market.

On the hardware front, Singapore’s precision engineering companies could also collaborate with German medical equipment manufacturers to supply sophisticated parts and box-built solutions.

(iii) Research and Development

The third area for collaboration is R&D. To keep pace with the changing global economic landscape, both Singapore and Germany have recognized innovation as the key to future growth. It is a well-known fact that Baden-Wuerttemberg is one of the leading centres for innovation and education in Europe.[6]Likewise, Singapore has made R&D a key national priority and we have made the commitment to invest 3.5 per cent of our GDP on R&D by 2015.

We have also recognized the importance of aligning research to the needs of the economy. Our agencies such as A*STAR and National Research Foundation work to ensure a strong nexus between knowledge creation and industry needs.

There is therefore much potential in further deepening the R&D links between both countries. Areas of mutual interest could include energy efficiency, bio-technology, health & medical technology.

Conclusion

In conclusion, I would like to commend the Baden-Württemberg government, Baden-Württemberg International, and all other partners who have helped to successfully organise this forum.I hope that the insights gained and partnerships formed at this forum will spur greater economic cooperation between Singapore and Germany. I wish you a productive session ahead.

[1]This forum is one of two Baden-Wurttemberg Forums taking place in Singapore and Kuala Lumpur respectively.

[2]Singapore’s investment in Germany stood at S$670 million in 2008.

[3]LBBW is the central bank of the savings banks in Baden-Wurttemberg, Rhineland Palatinate and Saxony. With total assets of 417 billion euros and some 13,000 employees in the group, LBBW is one of Germany’s largest banks.

[4]Baden Wurttemberg’s GDP stands at 344 billion euros. Its per capita GDP is the 4th highest in Europe after Luxembourg, Denmark and Ireland. Overall GDP exceeds that of Belgium, Sweden or Austria.

[5]At the last population census in 2000, DOS estimated that there are about 1 million baby boomers in Singapore (born between 1947 and 1964).

[6]Its expenditure on research, currently at 4% of GDP, is among the highest within the EU and even worldwide. The EU average expenditure on R&D is 1.9%, the German national average 2.5%, and the US average is 2.6%.