Statement by Ms Indranee Rajah, Senior Minister of State for Law and Finance, at the Connectivity Between Asia and Europe Session of the 12th Asia-Europe Finance Ministers' Meeting, Ulaanbaatar, Mongolia10 Jun 2016
Connectivity is an Important and Central Theme for ASEM
1. Singapore welcomes ASEM’s continued focus on Connectivity. Where there has been more robust connectivity, we have seen higher economic dividends in terms of greater productivity, service efficiency, and spillover benefits in trade and investment growth.
2. So far, we have focused on three key pillars which are critical enablers, and these have generated significant multiplier effects:
a. Trade Connectivity;
b. Transport Connectivity; and
c. Financial Connectivity.
3. Trade Connectivity accelerates and facilitates the flow of goods and services.
a. This has expanded market access and increased investments.
b. It also reduces the cost of doing business.
4. The Regional Comprehensive Economic Partnership, or RCEP, which ASEAN and its dialogue partners are currently negotiating, is a good example of how we are seeking to enhance trade connectivity.
5. When realised, the benefits of RCEP will be substantial, given that RCEP’s membership covers more than 45% of the global population and more than a third of global GDP.
A) Transport Connectivity
6. Transport Connectivity is also a critical enabler.
a. In ASEAN, the liberalisation of the air services regime within our common market has led to the rise of low cost carriers.
b. This has greatly expanded people’s access to air travel with resulting benefits.
7. The demand for air travel in Southeast Asia is expected to grow at 6.5% per annum over the next 20 years .
a. With a sizeable combined market of 1.1 billion people in Europe and ASEAN, the benefits of an ASEAN-EU Comprehensive Air Transport Agreement (CATA) are substantial.
B) Financial Connectivity
8. Next – Financial Connectivity.
a. This is becoming more and more important.
b. Singapore has embarked on Financial Connectivity initiatives.
c. One example is the Chongqing Connectivity Initiative. This will allow corporates in Chongqing to issue RMB bonds in Singapore to fund the infrastructure needs in the Western Region. This presents opportunities for regional participation, while supporting the internationalisation of the RMB.
Strengthened Collaboration in ASEM on Connectivity – Three Ideas
9. I would also like to suggest that we can do more on an inter-regional basis, in three areas.
A) More Inter-regional Connectivity Initiatives
10. First, we should have more inter-regional Connectivity initiatives.
a. The One Belt One Road (OBOR) is a good example of how connectivity between Asia and Europe can be strengthened.
b. Such initiatives expand the coverage and potential market base, making our infrastructure investments viable and self-sustaining.
c. A region-to-region FTA will also allow Asia and Europe to be better integrated and encourage stronger business linkages.
B) Strengthening Collaboration on Digital Connectivity
11. Next, we should also take a forward-looking approach, and think about new areas of Connectivity, and one such new area is Digital Connectivity.
12. Digital Connectivity is a game changer. It will chart the next wave of economic growth and development, and will greatly expand markets for our businesses.
13. It is a huge area of untapped potential.
a. To date, over 4 billion people remain digitally disconnected, and
b. 6 billion lack access to reliable internet connection that is critical for basic e-commerce.
14. Our regions would benefit from greater policy attention to Digital Connectivity by ASEM members to drive high-level coordination.
Reach Out to a Wider Base of Stakeholders
15. Third, I would suggest that ASEM reach out to a wider base of stakeholders in designing and implementing Connectivity initiatives.
a. We should engage more stakeholders in this conversation to develop a comprehensive Connectivity architecture.
b. The private sector and multilateral development banks would make good strategic partners with their rich expertise and resources.
16. In conclusion, I look forward to greater collaboration with ASEM members in promoting Connectivity to the benefit of the people in both our regions. Thank you.