Speech by Mr Tharman Shanmugaratnam, Minister for Finance at the Federation of Merchants' Associations 20th Anniversary & 10th Executive Committee Inauguration Ceremony, 29 October 2008, 8.15pm, Orchard Hotel

Mr Chua Ser Keng,
President of the Federation of Merchants' Associations, Singapore,

Distinguished Guests,

Ladies and Gentlemen,

Introduction

1. I am delighted to be with you tonight for the Federation of Merchants Associations' 20th Anniversary celebrations and the inauguration ceremony of its 10th Executive Committee.

2. Since its establishment, the Federation of Merchants Associations has played an important role in uniting various merchant associations in Singapore. When it was first formed, it had 10 merchant associations. Today, the Federation is made up of 30 merchant associations from various districts and has a membership of over 1000 members.

3. This unity of the 30 merchant associations is an achievement, and has brought many benefits to its members. I would like to commend the Federation and all those who have put much effort into making this possible. Several of the leaders of the Federation have in fact served for many years, and worked hard to bring everyone together. The President, Mr Chua Ser Keng, has served for 13 years. Among its Vice-Presidents, Mr Tan Seng Peng and Mr Ong Ah Kwang have served for full 20 years since the Federation was formed, and Mdm Lim Kim Kiok has served for 10 years. There are many others too, who have put in many years of service for the benefit of their members.

4. The Federation has indeed brought real benefits to its members. For example, it has assisted neighbourhood retailers to purchase their shop units by helping them secure financing. It has helped them to upgrade their shops, and to develop retail expertise. It has also engaged in collective promotion of affiliated merchant businesses. In all these aspects, the Federation has been aided by the strong support network created through the collaboration amongst the merchant associations which belong to it.

5. The members of the Federation comprise businesses which span a wide range of merchandise and services. They have thus been of value to the public as well, by helping to fulfill their basic needs in our neighbourhoods and suburban estates. In so doing, they have contributed to the stability and well-being of our society.

6. Over the years, the Federation has also helped to create bridges between the business community, government agencies and consumers. It has helped its members keep pace with the changing business environment in Singapore - for example by organising numerous workshops and seminars to keep members abreast of developments in the retail sector. The Federation's close working relations with government agencies like SPRING, NEA and WDA, have helped its members to take advantage of the various Government schemes to assist businesses, and provided Government with valuable feedback on the operating realities faced by retailers and consumers alike.

Small Retailers: Rising to the Challenge of Competition

7. These working relationships between our business associations and Government agencies become all the more critical when considering the challenges that local merchants face in Singapore.

8. To state that retailing is a competitive industry today is an understatement. Small retailers especially, have to deal with the challenges posed by the entry of larger players who use technology more extensively, plus the reality of younger and increasingly sophisticated consumers, who face many more choices compared to even 10 years ago. Online shopping for example is likely to grow in popularity, especially among the younger generation.

9. Our smaller retailers will have to build on and renew their long established relationships with their neighbourhood communities in order to compete effectively. They are trusted by the community, and many of our neighbourhood retailers have a reputation of providing good value.

10. These long-term relationships are strengths. But they will not in themselves be enough. At the same time, there is a need for retailers to combine their efforts and resources or tap on each other's strengths wherever possible, so as to deliver goods and services that keep up with the times, and are provided at competitive prices.

Responding to the Current Crisis

11. The current global economic crisis will however be the immediate challenge. Amidst recessionary conditions in the G-7 countries, and a dampening of growth prospects in Asia, we have to expect slow and below-trend growth in Singapore over the next year, and quite possibly beyond 2009.

12. However, we can be confident that Singapore will be able to weather this crisis, and emerge stronger and more competitive after the crisis. Our fundamentals are strong. The Government is able to implement appropriate measures to help our businesses and households; our banks and financial institutions are strong; our society is stable; and our people know from past experience that solutions will be found for any problem Singapore encounters.

13. Furthermore organisations such as the Federation of Merchants' Associations are able to make collective efforts to help their members stay resilient in the downturn. The collaborations between our merchant associations, and between businesses and Government, become all the more critical in the current downturn. Our business associations can take advantage of SPRING and WDA's schemes to help their members upgrade skills and knowledge in the midst of the downturn, and to secure bank financing. They can also work with IE Singapore to expose their members to new markets overseas. There are many parts of Asia where consumer spending is still growing.

Building from Strength to Strength

14. The Federation has come a long way, and been through many ups and downs. I encourage the Federation, with its 20 years behind it, to keep helping its members to move ahead with the times, explore new ways to reach out to a new generation of customers and ensure that the quality of service meets their expectations.

15. It is heartening to see that the Federation has maintained its steadfast commitment towards the community, in particular towards the Chinese Development Assistance Council (CDAC). These efforts strengthen the Federation's relevance to the community and help to increase the spirit of solidarity among its members. The Chinese proverb ????, which loosely translated, means two parties sharing a common interest, describes the close symbiotic relationship that must be maintained between associations like the Federation and the wider community for collective success.

16. I urge the incoming Executive Committee and the Federation's members to continue building on the collective strength of the various merchant associations, and its close relationship to the community, so that we can look ahead to many more years of growth, and to serving Singaporeans well.

17. Once again, I congratulate the Federation of Merchants Associations' on its 20th Anniversary and the inauguration of its 10th Executive Committee. Have an enjoyable evening ahead.