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Speech by Mr Heng Swee Keat, Minister for Finance, at the ASEAN Conference at Marina Bay Sands Convention Centre, Singapore

03 May 2018

Mr Teo Siong Seng, SBF Chairman

Mr Wee Ee Cheong, UOB Deputy Chairman and CEO

Dr Robert Yap, Chairman of ASEAN Business Advisory Council

Ambassadors, Distinguished guests, Ladies and Gentlemen

1. Good morning. Thank you for inviting me to speak at the ASEAN Conference. This is my first time here, and I am very happy to see so many business leaders from around ASEAN, enthusiastic to discuss and work together to advance the future of ASEAN.

2. I want to thank the Singapore Business Federation for your good work in promoting collaboration.

a. Today’s conference is an excellent initiative to bring together business leaders in Singapore and in our region, to share insights on the challenges and opportunities in the region, and to reach out to more companies that are keen to gain access to new or growing markets in ASEAN.

i. SBF is also secretariat to the ASEAN Business Advisory Council, which discusses business issues faced by ASEAN members, and to forge closer ASEAN integration.

b. Through this, I think we can help companies in the region know more about one another and connect better with one another.

3. Collaboration is the key to success. Economic growth is not a zero-sum game, but a positive sum game – each country benefits when our neighbours grow, as long as we adapt.

a. This is the ASEAN story. ASEAN was formed to encourage cooperation. Over the years, ASEAN leaders have worked hard to make this happen. We started off with ASEAN industrial projects and set up the ASEAN Free Trade Area. Today, we have the ASEAN Economic Community, or AEC.

b. I must share with you, that about 20 years ago, I was in the trenches at the Ministry of Trade and Industry, working with my colleagues, the secretaries of trade in the various ASEAN countries, looking at the ASEAN Economic Community. We spoke about investing in something more ambitious about ASEAN, about ASEAN as a single production base, and ASEAN as a single market. So we boldly put those in the documents, and we were glad that the ASEAN leaders accepted those documents.

c. It was through many, many months of working in the trenches that we managed to hammer out the agreement, and to see that over the years, all these have been expanded. Now we not only have closer integration within ASEAN Economic Community, but all the ASEAN’s major partners, whether it is ASEAN-China, ASEAN-Japan, ASEAN-Korea, ASEAN-Australia and New Zealand, and so on. So this is really a good sign.

d. And we are pushing forward with our cooperation, both within ASEAN, and with our partners in the region.

e. On the finance track, we meet each year at the ASEAN Finance Ministers’ and Central Bank Governors’ Meeting to discuss ways to deepen regional integration, ensure financial stability, and foster sustained growth. We just completed our meetings in Singapore just a few weeks back, and in fact, right after this, I’m flying off to Manila for the ASEAN+3 Meetings. We’ll be discussing even more interesting issues.

f. Working together and leveraging on each other’s strengths have enabled ASEAN members to make good progress. 

i. Today, ASEAN as a group constitutes the 6th largest economy in the world with a combined GDP of USD 2.56 trillion[1]. This is really quite remarkable.

ii. But even better news is that ASEAN is expected to grow at a yearly average of 5.2% from 2018 to 2022[2]. This makes the ASEAN region one of the fastest growing regions in the world.

4. In the same way, businesses across ASEAN can benefit if they work together, build on one another’s strengths, and grow together.

a. One example of a successful collaboration is the Kendal Industrial Park in Central Java. This is a Singapore-Indonesia joint venture drawing investment and creating jobs for the Kendal region. As at August last year, the park’s total investment value reached US$360m[3], and it had provided employment for 4,000 Indonesians.

b. Companies in ASEAN are cooperating more. Just over the weekend, during the ASEAN Summit, Keppel Corporation has signed a Memorandum of Understanding with Filinevest Development Corporation[4], a conglomerate in the Philippines, to develop solutions for sustainable urbanisation in the country. The companies will explore opportunities on urban solutions for Filinvest’s development portfolio.

5. Many members of our audience here are business leaders. You are the drivers of change.

a. The ASEAN Governments have worked hard to put in place the frameworks of cooperation. But cooperation can only happen when our business leaders make full use of these frameworks.

b. In Singapore, for instance, we have launched the Industry Transformation Maps (or ITMs) to draw synergies across the four pillars: jobs & skills, innovation, productivity, and internationalisation, to help businesses transform. I hope company leaders will make the best use of these to transform their businesses. 

6. I urge business leaders to:

a. First, work together to expand the range and scale of opportunities available.

i. Just as each member country of ASEAN has its own special characteristics, their companies have also developed special qualities and strengths to meet the needs in each country. With greater integration in the AEC, there are even more opportunities for businesses across ASEAN states to come together, to complement one another, based on their expertise and experience. Taken together, businesses in the region can develop new capabilities and insights, and serve their customers even better.

ii. There are several initiatives in place to encourage this:

1. To encourage greater cooperation in the region, a key initiative of Singapore’s ASEAN Chairmanship this year is the ASEAN Innovation Network. It aims to strengthen linkages between innovation ecosystems to spark and test new solutions and collaborations.

2. Businesses can also take advantage of the PACT programmes, which encourage companies to forge strong partnerships and provide more holistic support for collaborations among companies of all sizes. It will cover overseas partnership projects, and partnerships among enterprises of all sizes. Companies can also help each other build capabilities through partnerships, scale and establish themselves in local and overseas markets

iii. I also encourage you to work closely with your Trade Associations and Chambers (TACs). TACs need to have a deep understanding of the needs and growth opportunities of their respective industries. TACs can develop their capabilities further, to support your members to scale and internationalise.

1. For example, the Singapore Food Manufacturers’ Association partnered with Focus Network Agencies, to introduce dedicated food gift aisles at its Taste Singapore outlets in Terminals 1 and 4 at Changi Airport. This opens up a new platform for our food manufacturers to showcase their products to the international market. To offer a seamless offline to online experience, these food gifts are also available online at ishop Changi.

7. Next, I hope ASEAN companies regionalise to serve our ASEAN market.

a. As at 2014, 99% of companies in the non-financial business economy[5] in the EU are from the EU. The percentages are similarly large for US and China. So essentially, these are all very big markets. In the case of the EU, even though there are many member countries, it is one single market. What that means is really, the scale of what each company can do is multiplied greatly. These companies in these big countries with big markets, even the start-ups, have the advantage of having access to big markets and enjoy significant economies of scale.

b. I’ve been talking to a lot of businesses in Singapore and in the region. One thing which struck me quite a lot, is this question of scale. Without that scale, the cost structure would be high, and the reach would be small. And I think we must think hard about this question on scale. So I believe that ASEAN companies should seek similar scale. I mentioned earlier that ASEAN is the 6th largest economy in the world. This large market in ASEAN provides greater opportunities for all ASEAN businesses.

i. As a result of the AEC, businesses enjoy lower trade costs, expanded sources of materials, and greater opportunities.

ii. The Go Southeast Asia Awards that will be given out later, is an excellent initiative to build up the pool of Singapore talent keen and able to work in the region. And I hope that our young people can play a role in this phase of ASEAN’s development. The award seeks to help young undergraduates with international career aspirations experience working in the region, while helping companies develop regional talent.

iii. The SE Asia Leadership programme, on the other hand, enables Singapore business leaders better understand Southeast Asian markets, and encourage them to expand their businesses and build networks in the region.

iv. Companies can also tap on the Enterprise Development Grant and Market Readiness Assistance grant to internationalise and develop capabilities

v. Companies looking to internationalise can also tap on Enterprise Singapore (ESG)’s 35 Overseas Centres – of which many are located in Southeast Asia. These centres help companies generate new business leads, find business partners and acquire new technologies and business capabilities in different markets across the world.

vi. (Png) Cheong Boon, Chief of Enterprise Singapore and Permanent Secretary of Trade and Industry, is with us here today. I urge you to swamp him and get him to look at what can be done. But personally, I’m very delighted that we set up Enterprise Singapore because that’s something which Lee Yi Shyan and I, when we were running the Trade Development Board and Spring Singapore, at that time called PSB, worked very hard to realise, and I’m glad that this is a long maturity, but finally the baby is born and I hope that it will grow strong. So please swamp Cheong Boon, and see how he can help us to regionalize and internationalise better.

8. Finally, I encourage businesses to transform in order to access the opportunities of digitalisation and innovation

a. I announced at Budget 2018 that we intend to grow Singapore as a Global-Asia node of technology, innovation and enterprise. This is part of our effort in transforming the Singapore economy, and in contributing to our region’s development.

b. Some of you may ask, why Global-Asia node? In the early years of our development, we have been plugged into the global network quite well, to the US, to Europe, to Japan. Because these were the very developed economies that had the technology know-how, and the buying consumption power. And that has really helped us to grow. In fact, if you look at the story of the Asian dragons and the Asian tigers, that was a story of how we develop and internationalise.

c. But now, as I said in the Budget speech, the centre of economic development has shifted back to Asia. The Asian region – China, India, South Korea and ASEAN – are projected to grow very strongly in the coming years. This does not mean that it can be taken for granted, that this will happen as nothing will happen automatically; we really have to work hard at it.

d. But the prospects are good, and as long as we are not carried away, that we remain vigilant to the possibility of possible financial stress and avoid the Asian financial crisis we experienced in ‘97 and ‘98, all the global financial crises 10 years later, I think we can continue to make very good progress. So as long as we keep our base level, we should be in a position to pursue these very interesting opportunities. So hence, a Global-Asia node where we hope that we can be a second home for global companies that want to seek access to this very big region. And that Asian companies can also use us as a second base for their international expansion.

e. I suppose the question is, why technology, innovation and enterprise? If you look at the growth of technology companies and how they are leapfrogging many of the traditional businesses, it’s quite amazing. So I think technology will play a very important role. In my new role as Chairman of the National Research Foundation, I’ll be looking at this issue even more closely, and I look forward to any suggestions that you have on how we can grow our technology capability and to partner businesses in deploying technology for innovation, deploying technology to scale our businesses.

f. And of course, the heart of it is enterprise, because without the entrepreneurial spirit, we can talk about plans, we can talk about frameworks, but it’s the entrepreneurial spirit that will ignite the fire and to get things going. So this is very much at the heart of what we have to do, and as business leaders, you are at the forefront of this.

g. The digital economy will unlock the potential of SMEs across ASEAN, by providing opportunities for small enterprises to access a larger market.

i. SMEs can test out new markets and the ASEAN markets more efficiently and at lower cost through e-Commerce.

ii. They can also reach out to a wider spectrum of consumers with digitally-enhanced business models.

iii. I was just chatting with our colleagues from UnionPay, who are also with us today, about some of the exciting things they are doing. I hope that our businesses can make full use of the technology.

iv. You heard earlier from Professor Subra (Suresh) about how the technology can be either very frightening or very enhancing. Personally, I’m an optimist, and I think that, when mankind invented fire, fire can destroy but fire can also be used in the most productive way. And it is for us to be the master of technology, and not be a slave to technology. This is a big challenge but I think we can do it. You often hear, technology is a disruptor. It can be a disruptor but I think of technology as a great enabler. As an augmenter, it will augment human labour in many significant ways. It will enhance what we’re able to do, it will enable us to do a lot more things that we’re not able to do before.

h. Talking about the digital economy, a key thrust of Singapore’s Chairmanship of ASEAN in 2018 is to encourage innovation in ASEAN. Our aim is to deepen ASEAN’s digital connectivity and encourage a wide range of innovation.

i. To create a better environment for e-Commerce in ASEAN, we are pursuing initiatives such as the ASEAN Agreement on e-Commerce, and the development of an ASEAN Digital Integration Framework/Scorecard.

i. To access these opportunities, businesses need to transform and innovate

i. Business leaders can explore opportunities for learning and networking at Singapore Week of Innovation and Technology, or SWITCH, in September this year. SWITCH strengthens Singapore as a key node in the global innovation network, where businesses can conveniently leverage interactions across events and countries all in one place, over one week.

ii. This year is the China-ASEAN Year of Innovation, and SWITCH will mark this celebration by featuring various China and ASEAN partners, exhibitors, participants to bridge and connect efforts. I welcome our ASEAN business leaders to participate in SWITCH 2018, from 17-20 Sep, right after the F1 night race.

9. Let me once again thank SBF for having me here at this Conference. I hope to see many more businesses in our region finding new ways and new opportunities to work closely together.

10. So with that, I look forward to our dialogue.


[1]Source: ASEANStatistics ASEAN Member States: Selected Basic Indicators, 2016

[2]Source: OECD Economic Outlook for Southeast Asia, China and India 2018: Fostering Growth through Digitalisation states that “Southeast Asia is poised to maintain its growth momentum, averaging 5.2% per year from 2018 to 2022 on robust domestic private spending and the implementation of planned infrastructure initiatives.

[3]Source: Channel News Asia, Kendal Industrial Park total investment value reaches US$360m: DPM Teo. “The Kendal Industrial Park’s total investment value has reached US$360 million so far, Deputy Prime Minister Teo Chee Hean said on Thursday (Aug 10). Speaking at a National Day reception in Jakarta, Mr Teo said that the industrial Park – also known as Park by the Bay – has also provided employment for 4000 Indonesians.” Updated 11 Aug 2017. 

[4]Source: Keppel Corporation Media Release, Keppel Corporation signs MOU with Filinvest Development Corporation for sustainable urbanisation solutions in the Philippines. 29 April 2018.

[5]Source: Eurostat. Non-financial business economy includes sectors of industry, construction, and distributive trades and services.