Speech by Minister S Iswaran at ASEAN 2018 Forum under the Global Business and Markets Trade Platform

​SPEECH BY MINISTER S ISWARAN, AT ASEAN 2018 FORUM UNDER THE GLOBAL BUSINESS AND MARKETS TRADE PLATFORM, WEDNESDAY, 25 APRIL 2018, 11.15 AM, BUSINESS FORUM 2, STAND B38, HANNOVER MESSE FAIRGROUND HALL 27, HANNOVER, GERMANY 

Dr Volker Treier, Deputy CEO of International and European Economic Affairs at the German Chambers of Industry and Commerce

Distinguished Guests,

Ladies and Gentlemen,

Opening

It is my pleasure to join you today at the ASEAN 2018 Forum at Hannover Messe 2018. The theme of today’s forum – Digital Transformation in Industries – is consistent with the emergence of ASEAN as an economic force in Asia, resulting in greater growth opportunities in the region.

For our Singapore companies who are participating in this event, it has been eye-opening and also an opportunity to engage with potential partners.

I want to just take a few minutes to emphasise why we believe that it is important for Germany, and particularly your Mittelstand companies, to focus some of your expansion and internationalisation efforts in the ASEAN region.

The first, and the most obvious of which, we have talked about: the sheer economic size of ASEAN. A population of 600 million, two and a half trillion GDP, and importantly, it is projected to grow by about five per cent or so for the rest of this decade. If you look beyond that, the potential is even greater once you take into account the fact that there will be infrastructure investments.

When you add to it the fact that the middle class is growing fast and its disposable incomes are rising. It means there will be a growing demand for the kind of products or services that Germany is well known for, in terms of quality, safety and assurance. These are the aspirational products that our consumers in the region want.

The second point I would make is, even in this uncertain global trading environment, ASEAN continues to be resolute in its commitment to economic integration. The ASEAN Economic Community (AEC) is a vision that we set for ourselves in order to have a seamless economic region, whether it is from a distributor manufacturing perspective or in terms of the flow of services, we want to integrate the region to offer a compelling alternative to what you might find in China or India, or in some of the other larger economies of the world.

The third point I would make is – quite apart from having the ASEAN Economic Community itself which focuses on the traditional free trade agreements on goods and services – is the effort that we are undertaking this year across ASEAN but under the chairmanship of Singapore: the digital economy. We believe that this is going to be the next big phase in the development and evolution of ASEAN. Not just because it creates a new platform for growth but it’s also going to enable ASEAN to unlock the potential of our Small and Medium Enterprises (SMEs). Traditional economic models have been dominated by the large players but the SMEs, through a digital economic platform, will be able to access distant markets at a relatively low cost and they will be able to work in collaboration with partners in the country and in other parts of the world in order to grow.

In particular, we have undertaken a few initiatives in this regard. One is an ASEAN Agreement on e-Commerce, which aims to advance trade rules in e-commerce to lower barriers to entry and to also build up greater digital connectivity to promote electronic commerce flows in the region.

We are at the same time developing a framework to monitor the progress of ASEAN’s digital platform. This will help ASEAN to assist in our digital ecosystem and also help us identify how we can better enable our stakeholders to benefit from ASEAN’s digital integration efforts.

Our efforts in Industry 4.0 and in the digitalisation of the manufacturing sector have gathered significant momentum. We are doing this in Singapore, Malaysia, Indonesia, Philippines, Thailand and many of our ASEAN member states are already focused on this. They each have different approaches to it but the objective is the same – to gear up our industries, and in particular the manufacturing sector, for the future.

In that regard, we are very happy that we will be hosting the Asia Pacific equivalent of Hannover Messe in Singapore in October this year. It is called Industrial Transformation Asia Pacific. It will be held in October so I wanted to make sure that I invite all of you to come to Singapore for this event because we believe it will be the start of a long-term commitment between Deutsche Messe and Singapore to develop this platform for the benefit of all the economies in the region.

The final point I wanted to make is on the European Union (EU)-Singapore Free Trade Agreement (EUSFTA). I think it is an important opportunity between EU and Singapore to work together to establish this link. Germany already has a strong contingent of companies in Singapore. There are about 1,600 - 1,700 German companies based in Singapore and I know that in larger ASEAN, there are twice as many, about 3,400-3,500. Therefore, you already have a substantial interest in the region but when you compare that with the total number of your Mittelstand companies, I think it is a very small proportion.

The opportunity is there for them to come out into the region and ASEAN will be a very attractive area for them. The EUSFTA will facilitate that movement. But quite apart from the bilateral value, the additional value of the EUSFTA is the fact that it will serve as a path finder for a larger EU-ASEAN agreement on trade and investments. That is our hope: that we can move in that direction so that there is greater integration between the EU and ASEAN in our trade and economic relations.

I want to conclude by saying that we are delighted to be here with all of you for this event and we think that there is significant opportunity for us to partner together. The EU and ASEAN, Germany and Singapore. Because of the opportunities that are available and our complementary capabilities. We think through greater partnership our two regions and two countries, we can achieve much opportunities for our people and businesses.

Thank you very much. ​​​