The FutureChina Global Forum, organised by Business China in celebration of 20 years of diplomatic ties between Singapore and China, hopes to build a ‘community of insiders’ from business, political, academic, technological and cultural fields, said Business China chairman Chua Thian Poh. The theme of the forum was “Strategic Insights for riding China’s next decade”.

‘What can we teach the Chinese? Bilingualism – understanding the world without translation. English is the second language of all countries that do not have it as their first language. Without it, you are at a disadvantage,’ said Mr Lee.  He added that, mastering bilingualism is difficult but China has to create an English-speaking environment to master the language in order to grow economically.

Responding to a question, Mr Lee said the role of the US as a world power will change in about two decades’ time and it has to come to terms with China becoming a super power. He also added that Singapore keeps an equal distance between China and the US.

The keynote speakers of the event included Singapore Foreign Minister George Yeo, US Ambassador to China Jon M. Huntsman Jr and Wu Jianmin, Executive Vice Chairman of China Institute of Innovation and Development Strategy, People’s Republic of China.

China needs to master English, says MM Lee [TODAYonline, 13 July 2010]
MM Lee: Invest in China with confidence, guanxi [Business Times, 13 July 2010]
Bilingualism important as influence of China grows: MM Lee [Channel NewsAsia, 12 July 2010]

Singapore, Malaysia to finalise land swap deal in 3 months [Channel News Asia, 22 June 2010]

Shell’s decision to develop its petrochemical operations in Singapore has encouraged other companies to come to Singapore. PM Lee Hsieng Long, the guest of honour at the complex’s opening, said that Shell’s newest investment was likely to "catalyse a new wave of high-value investments" from other chemical companies.

Source:
Shell opens $4b chemical complex [Straits Times 5 May 2010]

The ruling comes months before Myanmar is set to adopt a new constitution and hold elections as part of a “road map” for a return to civilian rule.

Singapore’s Ministry of Foreign Affairs expressed its disappointment over the verdict, and said that a dialogue among the Myanmar authorities, Aung San Suu Kyi and all other political groups ahead of this year’s elections would offer the best prospects for national reconciliation and the long-term political stability of Myanmar.

Myanmar Denies Dissident’s Appeal [New York Times, 26 Feb 2010]
Suu Kyi ruling ‘disappointing’ [Straits Times, 26 Feb 2010]

The story on Singapore in 2009 has been that of a vulnerable small and open economy overcoming the fallout from the global financial crisis with sound economic and financial fundamentals, good governance and a timely stimulus package.

The exposure of Singaporean financial institutions to failed and distressed institutions in the US and Europe was not significant and did not pose any systemic risks to Singapore’s economy, as local financial institutions were well capitalised and remained resilient. Nonetheless, the global crisis did lead the Monetary Authority of Singapore (MAS, Singapore’s central bank) to step up financial system surveillance and prudential oversight. In October 2008, MAS joined 13 other major central banks in a US Dollar swap facility with the US Federal Reserve. This was a precautionary measure for Singapore to reassure financial institutions that they would have access to US dollar liquidity. Thus far, MAS has not needed to draw on the swap facility, which will end next month.

In October, Singapore’s government announced a guarantee on the deposits of individuals and non-bank customers of banks licensed in Singapore, to ensure a level playing field for Singapore’s banks following a similar announcement by some governments in the region. This guarantee will remain in place until 31 December 2010.

Amidst the global financial turmoil, Singapore remains a leading financial centre for banking, foreign exchange and insurance, retaining a ‘AAA’ sovereign rating by Fitch (in April 2009).

The global crisis has more severely impacted on Singapore’s economy through the export and investment inflow channels. Non-oil domestic exports declined 7.9 per cent in 2008, particularly in the third and fourth quarters. The decline accelerated in the first quarter of 2009 (-25.6 per cent), and then moderated in the second quarter (-14.5 per cent) and third quarter (-7.8 per cent). This severe export decline has raised concerns over Singapore’s reliance on external demand.

Balance of payments data show FDI inflows declined by 32 per cent in 2008, after reaching a historic peak of S$48 billion in 2007. For the first three quarters of 2009, the decline moderated to 8.0 per cent over a comparable period in 2008. Large negative exports and FDI inflows contributed to a sharp decline in GDP growth to 1.1 per cent in 2008. The GDP declined a sharp 9.5 per cent in the first quarter of 2009, moderating to a 3.3 per cent decline in the second quarter or an average loss of 6.5 per cent for the first half of 2009.

Singapore’s Prime Minister noted in August 2009 that the economic crisis was worse than expected but less bad than feared. Indeed, in the third quarter, GDP recovered and actually grew by 0.6 per cent, with the forecasted decline for 2009 GDP revised to -2.5 per cent. Massive retrenchments were anticipated, which could undermine political stability and social cohesion, but in reality unemployment has not soared, partly due to mitigating measures adopted.

The dismal economic outlook from the fourth quarter of 2008 prompted Singapore’s government to move forward the Singapore Budget 2009 to January, with the announcement of a massive stimulus package to be implemented without delay. The $20.9 billion (US$15 billion) stimulus package represented 6 per cent of GDP and required the unprecedented step of drawing down of Singapore’s reserves. As Singapore has limited leverage in boosting domestic demand because of its high import leakage, the focus of the stimulus package was on saving jobs through the Jobs Credit scheme but also include skills upgrading, the lowering of corporate income tax to 17 per cent, loan assistance to small and medium enterprises, helping low income households through fee waivers and cash payouts, as well as increased public expenditures on infrastructure, health care and education.

The outlook for Singapore is of a faster economic recovery in 2010, although its pace will depend on the rate of economic recovery in the other advanced economies. Singapore’s Prime Minister announced in August 2009 that there was no need for ‘new prescription’ on top of the government’s $20.5 billion stimulus package, with the ultimate decision to modify but not yet completely remove it for 2010. Indeed, the Jobs Credit scheme will be extended to June 2010. As the stimulus package is funded from past budget surpluses and reserves, rising government indebtedness is not an issue. But in a post-crisis world, Singapore has to accelerate economic restructuring, improve productivity and move towards Porter’s ‘innovation phase’ economy if it is to remain internationally and regionally competitive. Emerging competitiveness will come from the biomedical sector, water and green technologies, and urban and city planning expertise, while emerging markets include China, India, ASEAN and the Middle East.
Dr. Chia Siow Yue is Senior Research Fellow at the Singapore Institute of International Affairs

STRAITS TIMES – 11 Nov 2009
By Ignatius Low & Jeremy Au

PM Lee greeting ministers and delegates at the reception last night. - ST PHOTO: CAROLINE CHIA

TWENTY years ago, a group of 12 economies went against the grain, deciding to band together and commit to free trade.

Now, in a pivotal moment in economic history, the 21-member Asia-Pacific Economic Cooperation (Apec) must once again take the lead in breaking down trade barriers and helping global businesses.

That was Prime Minister Lee Hsien Loong’s call to his fellow Apec ministers, as he welcomed them to the Apec talks taking place here this week. Evoking memories of the past and the notion of family, Mr Lee, dressed casually in an open- necked red shirt, addressed the dark-suited crowd at an official reception last night.

‘We have some special guests with us, old friends who were involved in the formation and early development of Apec,’ he said with a smile.

‘For example, Bob Hawke, who was prime minister when Australia convened the first Apec meeting in Canberra, which (Foreign) Minister George Yeo and I were privileged to attend 20 years ago.

‘From his wise and imaginative initiative, Apec has taken root and grown, and hence we are here today.’

Mr Lee paid tribute to Apec’s efforts these past two decades.

‘Our work helped to keep markets open, brought our economies closer, and contributed to the successful conclusion of the Uruguay Round,’ he noted.

The Uruguay Round of trade talks was the last major breakthrough in freeing up world trade. Settled in 1994, it led to a major reduction in tariffs worldwide.

As if to echo Mr Lee’s point, Apec leaders of the past two decades smiled from old photos hung on the walls of the banquet hall on the sixth floor of the Suntec City Convention Centre. The mini-exhibition, poignantly titled ‘Family Portraits 1989-2008′, features the full set of traditional group photos that Apec leaders had taken at the end of every annual meeting.

In the photos, the heads of Apec economies, all garbed in special costumes prepared by the hosts, linked hands in a symbolic gesture of unity.

‘This 20th anniversary is a good time to re-energise Apec and re-commit ourselves to its work,’ concluded Mr Lee, as he reminded the audience of the task ahead of them this week.

‘(Our meeting) takes place at a pivotal moment, when the world economy is emerging from the global financial crisis,’ he added.

‘While the situation has stabilised, the economic outlook remains uncertain. Much still needs to be done to sustain the economic recovery and also to prepare for the post-crisis landscape.’

After the reception, Indonesian Foreign Minister Marty Natalegawa told The Straits Times that it was especially important that the grouping did not lapse or regress now, in the aftermath of a global financial crisis.

‘The Apec conference now is crucial because it can solidify the various efforts at the global level, at regional level.

‘Hopefully we can speak in the same single voice in terms of the need to maintain economic stimulus and open trade.’

Tan Sri Rafidah Aziz, Malaysia’s former international trade minister, said Apec had achieved a lot, whatever critics said.

‘Now is a good time to re-energise and to market Apec, and tell people what we’ve done because people do not understand it,’ she said. ‘They think it is a talk shop. It is not…We should tell everybody, Apec has been successful.’

Senior officials from the 21 Apec economies have been meeting since Sunday to hammer out concrete initiatives to foster growth and integrate the region’s economies. The grouping’s trade, finance and foreign ministers will mull over them in the next two days, before a final meeting of the heads of government wraps up the proceedings over the weekend.

***

Ignatius Low and Jeremy Au are the money editor and political correspondent for the Straits Times respectively.