Speech by Minister Lim Hng Kiang at the Sweden-Southeast Asia Business Summit at PARKROYAL on Pickering

Your Excellency, Minister Mikael Damberg,

Distinguished guests,

Introduction

1.            I am pleased to join you today at the Sweden-Southeast Asia Business Summit. Let me first extend a warm welcome to Minister Damberg and his distinguished delegation to Singapore.

Given our longstanding and complementary relationship, Singapore and Sweden are natural partners.

2.            This year marks 50 years of diplomatic relations between Singapore and Sweden. Since 1966, relations between Singapore and Sweden have deepened, supported by strong partnerships across a broad spectrum of sectors such as defence, science and technology, and education.

3.            Economic cooperation remains the cornerstone of our bilateral relationship. Singapore is Sweden’s largest trading partner in Southeast Asia. In the last decade, the stock of foreign direct investment from Sweden into Singapore has grown 15 times to reach close to S$1.1 billion. Singapore’s stock of investment into Sweden has also grown significantly, from only S$4 million in 2003 to S$630 million today. Currently, there are more than 300 Swedish companies based here, making Singapore home to the largest concentration of Swedish businesses in Southeast Asia. It is indeed fitting that the inaugural Sweden-Southeast Asia Business Summit is held in Singapore.

Southeast Asia’s growth potential and increasing integration with the global economy present abundant opportunities for companies. 

4.         The theme of this Summit and its focus on how to deepen collaboration between Sweden and Southeast Asia is a timely one, given Southeast Asia’s growth potential and increasing integration with the global economy.

5.         As a region, Southeast Asia is growing faster than the rest of the world. In the last decade, Southeast Asia grew at an average of 6%[1] compared to the global average of 4%[2]. Looking ahead, experts estimate that ASEAN could become the fourth largest single market in the world by 2030 (after the EU, US and China)[3], and that ASEAN’s combined GDP could rise more than fivefold to US$10 trillion by 2030.

6.         Southeast Asia has healthy demographics and in every age group, its population growth rate will be faster than the global average.[4] With the rising affluence of Southeast Asia’s fast growing middle class, Southeast Asia will become an increasingly important final demand market. This presents immense opportunities for businesses to grow consumer-centric activities.

7.         ASEAN is also becoming increasingly integrated both internally and with the rest of the world. The ASEAN Economic Community (AEC) was formally established on 31 Dec 2015 and facilitates business amongst the ten ASEAN member countries, making the region a more compelling market and production base.

8.         On the external front, ASEAN is negotiating the Regional Economic Comprehensive Partnership or RCEP, the world’s largest regional free trade deal. The 16-Party agreement will cover more than 45% of the global population and account for more than a third of global GDP. Earlier this year, Singapore, and three other ASEAN member states Malaysia, Brunei and Vietnam signed the Trans Pacific Partnership with 8 other Parties. TPP countries account for 40% of global GDP, one third of global trade and boast a market of 800 million people. Together, the RCEP and TPP will fulfil the vision for a Free Trade Area of the Asia-Pacific. This will further integrate Southeast Asia into the global economy, and present more business opportunities.

Singapore is well positioned as a launchpad for Swedish companies to access dynamic growing markets in the region.

9.         Swedish companies have recognised the continued and growing importance of the Asian market and the attractiveness of Singapore as a trusted watch-tower from which they can manage their regional operations. Ericsson and Volvo are two examples of Swedish companies that have chosen to base their regional headquarters, and business functions such as solutions development and regional distribution of products here in Singapore.

10.       ASEAN remains a region with diverse cultures and differing levels of economic development.  Companies venturing into new markets often face challenges such as financial risks, cultural differences, and availability of competent employees. Having a reliable partner who understands the market can help mitigate some of these risks. Singapore’s understanding of the region and the strong track record of fruitful bilateral collaborations make Singaporean businesses natural partners for Swedish companies to navigate the complexities of doing business in Southeast Asia.  

Singapore is an ideal destination for Swedish companies to test-bed solutions for Southeast Asia and the wider Asian market.

11.       Like Sweden, Singapore recognises the importance of innovation for businesses to remain competitive and relevant in the face of technological advancements. The Research, Innovation and Enterprise (RIE) 2020 plan announced by Prime Minister Lee Hsien Loong in January this year is a sign of Singapore’s continued commitment to science, technology and innovation. Singapore aims to be the world’s first true Smart Nation by harnessing technology to create more opportunities to enable innovation and for workers to thrive amidst technological changes and globalisation. The RIE 2020 plan sets aside S$19 billion over the next 5 years to support Singapore’s R&D efforts and increases Singapore’s attractiveness as a destination for global industries and R&D initiatives.

12.       Singapore’s robust intellectual property regime, transparent government, and consistent and predictable pro-business policies make it an ideal destination for Swedish companies to test-bed solutions. Minister Damberg has highlighted Sweden’s strength in innovation and this is indeed an area where Singaporean companies can tap on the deep expertise of Swedish companies through technological partnerships. There are a number of test-bed areas in Singapore that Swedish companies can not only test and develop existing prototypes, but also create new technologies and solutions for the Southeast Asian and wider Asian market.

13.       One area is in automation and advanced robotics. Robotics technology can enable us to work more effectively and create more value-added jobs. It is also relevant to Southeast Asia as a market given its rapid urbanisation, young working population and growing middle class. Singapore has a number of facilities like Changi Airport and Changi General Hospital which would allow companies to test-bed autonomous guided vehicles and flexible robotic solutions.  In fact as many of you might be aware, just last month, nuTonomy launched the first ever public trial of a self-driving taxi service in Singapore. This is a significant development and will accelerate the pace of deploying such a commercial service in Singapore and the region.

14.       Another area is in the application of design thinking and technology. As part of Singapore’s Design 2025 vision, we seek partnerships in design practices which can help address Smart Nation problem statements through a combination of technology and design thinking. In this area, the Swedish agency “Veryday” has an ongoing partnership with Design Singapore Council looking into social service innovation that can improve the quality of life of disabled people.  I would encourage companies to forge more of such partnerships. Such design thinking and technology can then be applied on a wider scale in Southeast Asia to create innovative new products that are tailored for specific cultures and contexts.

15.       Other potential areas such as innovative medical technology and e-Healthcare also present good opportunities for collaboration between our companies.

Conclusion

16.       We are confident that our economic ties will continue to grow and become more robust. We look forward to the early ratification of the EU-Singapore Free Trade Agreement to provide a boost to our trade ties and strengthen our bilateral relations. We also welcome more Swedish companies to be based in Singapore and partner Singaporean firms to capture the economic opportunities in the fast-growing and dynamic Southeast Asia markets.

17.       On this note, I wish you all a successful dialogue and hope that Minister Damberg and his delegation will have a fruitful visit to Singapore.

[1] Source: ASEAN Community Progress Monitoring Report.

[2] Source: 2013 World Economic Outlook Database.

[3] Source: ASEAN-US Business Council

[4] Source: Who are the future consumers of Southeast Asia? World Economic Forum.