Speech by Minister S Iswaran (Industry) at the Sri Lanka-Singapore Business Forum

​SPEECH BY MR S ISWARAN, MINISTER FOR TRADE AND INDUSTRY (INDUSTRY), MINISTRY OF TRADE AND INDUSTRY AT THE SRI LANKA-SINGAPORE BUSINESS FORUM, AT HILTON RESIDENCES COLOMBO, SRI LANKA ON WEDNESDAY, 1 JUNE 2016, 10.15 AM

Your Excellency, Minister Malik Samarawickrama, Minister of Development Strategies and International Trade;

Mr Arjuna Mahendran, Governor of the Central Bank of Sri Lanka;

Mr Upul Jayasuriya, Chairman of the Board of Investment of Sri Lanka;

Mr Shamil Mendis, President of the Sri Lanka-Singapore Business Council

Distinguished Guests;

Ladies and Gentlemen,

​Good Morning.

Opening

1. Let me start by expressing on behalf of the Government and people of Singapore, our deepest condolences and sympathies to the Sri Lankan people and Government for the lives that were lost during the recent landslides and floods caused by Cyclone Roanu. In the past two weeks, we in Singapore have been struck by the resilience of Sri Lankans and the way in which organisations – including the Ceylon Chamber of Commerce – have rallied to the aid of their fellow citizens with donation drives and other forms of assistance. Singapore stands ready to do our part to assist Sri Lanka. With the strength of the Sri Lankan people, the will of the Government, and the goodwill of your friends from around the world, Sri Lanka will be able to quickly overcome this tragedy.

Sri Lanka-Singapore ties go back a long way

2. I would like to thank Minister Malik and Mr Mendis for their kind words on Singapore and how we can cooperate with each other. We, in Singapore, have been involved in the important process of nation-building and economic development over the past five decades. We recognise that this is an ongoing challenge; sustaining and maintaining Singapore’s economic development and growth in the context of the globalised economy. We are here to learn as much as we are here to share what we can do together, to mutually benefit Sri Lankans and Singaporeans.  

3. Sri Lanka and Singapore’s history are intertwined in many ways and go back a long way. The Sri Lankan Community was already present in Singapore in the early 1900s. Though small in number, many of its members were prominent in a wide range of professions from education and engineering to medicine and law. They were among the pioneer leaders of independent Singapore and played an important role in the growth and development of modern Singapore. One notable leader was Dr S Rajaratnam, whom we count as one of our Founding Fathers. He served in various ministerial roles from Culture Minister to Labour Minister to Foreign Affairs Minister, before he retired as Singapore’s Deputy Prime Minister in 1985. Dr Rajaratnam was also instrumental in drafting the Singapore Pledge, which encapsulates our core values and is recited each day by every Singaporean student in school.   

4. Today, many members of our Sri Lankan community continue to retain strong ties to their ancestral homeland and these links have contributed greatly to the economic, political and cultural links between Sri Lanka and Singapore.

Economic Relations

5. In 1977, one of the first Singapore companies to establish operations in Sri Lanka was the Prima Group. Prima decided to make Trincomalee its South Asia hub and grow its investment and presence in Sri Lanka. Since then many other companies have followed in their footsteps with a sizeable presence of Singapore companies in Sri Lanka by the early 1990s. They were in diverse sectors ranging from Real Estate and Construction to Manufacturing and IT Services. These early entrants have since been joined by other companies in the consumer products, education services and R&D sectors.

6. Many Singapore companies have formed strong partnerships with their Sri Lankan counterparts, while the growth of foreign direct investments from Singapore to Sri Lanka has been significant. In the ten years from 2004 - 2014, the stock of Singapore’s Foreign Direct Investments in Sri Lanka increased by about two and a half times, bringing it to a total of 520 million US Dollars.

7. In turn, Singapore is home to about 360 Sri Lankan companies in a wide array of sectors. They range from trading companies to professional services. Foreign Direct Investment from Sri Lanka into Singapore stood at 170 million US Dollars in 2014. While modest in absolute terms, the amount nonetheless represents a 40-fold increase from 10 years ago and affirms the scope for opportunities at the business-to-business level between our two economies.

8. Indeed, the Colombo skyline also bears testament to the Sri Lanka-Singapore partnership. You might be aware that Singapore companies Shing Kwan Group and Woh Hup Group invested in and were involved in the construction of the World Trade Centre and the Bank of Ceylon buildings respectively.

9. The economic links between Sri Lanka and Singapore have thus been growing organically, but I share Minister Malik’s assessment that they are still far from their full potential. There is more that our respective governments can do to encourage broader and deeper partnerships between our two business communities.  

Importance of Trade Infrastructures

10. Given Singapore’s small market and population, our companies have embraced internationalisation as the basis for growth. To support and encourage that trend, Singapore has worked hard to establish, and extend, our network of bilateral, regional, and multilateral trade and investment agreements. That architecture of free trade agreements has been an important contributing factor in the ability of Singapore-based businesses to internationalise and find new opportunities in diverse markets.

11. For example, through the ASEAN Economic Community, Singapore is well connected to the Southeast Asian region, which has a total market size of 625 million people and the GDP growth rates are expected to average in the five per cent region in the next five years or so, which is significantly higher than the global average. This growth is driven by fundamentals and it is a growth rate that we expect to be sustained for some time to come because of the pace at which some countries are growing. While such agreements help our companies in venturing abroad, they also confer advantages to our trading partners. They will also be useful to Sri Lankan companies who wish to explore new export markets for their goods, just as Singapore companies can also tap on Sri Lanka’s economic links with the countries of South Asia and beyond.

12. When Prime Minister Wickremesinghe visited Singapore in October 2015, he emphasised his view that there should be a Sri Lanka-Singapore Free Trade Agreement (SLSFTA). We took careful note of his clear message which reconciled with Singapore’s own instincts to deepen economic links. Hence, I asked my officials to explore with their Sri Lankan counterparts the possibility of restarting negotiations on a SLSFTA.

13. I am happy to share with you today that my officials have reported to me that their initial studies strongly suggest that both Sri Lanka and Singapore stand to gain much from concluding a modern, comprehensive Free Trade Agreement. I have discussed the matter with Minister Malik and we have agreed to instruct our officials to finalise their studies quickly so that a decision on how to proceed with a Sri Lanka-Singapore Free Trade Agreement can be taken soon, perhaps when Prime Minister Wickremesinghe visits Singapore shortly.

Closing

14. In a highly competitive globalised economy, all businesses need to look beyond their traditional markets for new growth opportunities if they are to succeed. I just got back from Europe and it is quite clear that the European businesses are looking for opportunities in Asia because the centre of gravity of global growth has shifted to this part of the world. They are looking for partners who understand the terrain, nuances of our markets and preferences of our consumers so that they can better address these needs by working with their counterparts in Asia. We should be working closely on these efforts to bring our economies more closely together. A Free Trade Agreement between our two countries is one effective way to enable such interactions and growth.

15. Another means to deepen and broaden the existing economic linkages between Sri Lanka and Singapore is for our businesses to form partnerships and seize the opportunities in each other’s markets and regions. In this regard, the Sri Lanka-Singapore Business Forum by the Sri Lanka-Singapore Business Council of the Ceylon Chamber of Commerce is a useful platform to foster greater cooperation between our companies. I am glad to see the strong representation from both our business communities here today.

16. I urge all of you to take full advantage of this opportunity to network and form long lasting partnerships.

17. I wish all of you a fruitful and productive session. Thank you.

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