‘3’

    "It is a pleasure for me to address the business community of this remarkable city-State. There is no parallel in modern history of a city that fashioned itself into a sovereign nation only a few decades ago, charted out a novel economic strategy of export-oriented growth, converted this small, natural resource-poor land into one of the richest countries, and became a shining miracle of Asia and the world. It is a fitting tribute to Singapore that, on the basis of its citizens’ average income, it is richer than its erstwhile colonial master.

    The ability of your remarkable people to adapt successfully to the ever-changing economic environment is truly exemplary. But, what is also impressive about the Singaporean growth model is the special role that the government and its top leadership — first under former Prime Minister Lee Kuan Yew and now under you, Prime Minister Goh — played in creating the right conditions for businesses to flourish and for entrepreneurs to convert their ideas into profitable businesses.

    Both India and Singapore share the same language of commerce. Our entrepreneurs have a similar zeal to succeed. We have a similar legal and contractual system inherited from the British. Both countries have invested heavily in human capital and are fast becoming knowledge-centered societies.

    Singapore is a manufacturing, trading, and financial services powerhouse, and is now focusing on hi-tech areas. Mr. Prime Minister, this is evident from your vision to transform Singapore into a "Knowledge Island". I am told that you wish to attract the best talent from the region and the world to sustain the miracle of Singapore in the new competitive environment fast taking shape in this region. If that is so, then look to India for a fruitful, sustainable, and satisfying partnership.

    As you are well aware, India too is making rapid strides in many hi-tech areas. Our software professionals, both those in India and Indians based in the United States, have shown their prowess in information technology. We are now focusing on biotechnology, bio-informatics, development of new drugs, and other sunrise areas of science and technology. We have a large network of research and development laboratories with a vast reservoir of well-trained and talented professionals. Already, several leading global players in the Knowledge Economy have set up large research labs in India using Indian talent to cater to their worldwide plans.

    India also has top-class professionals in many other services — from medicine to management and from engineering to legal consultancy. It would help Singapore if it further strengthened its services sector, to cater to the needs of the global economy using Indian professionals. Since quality education is going to be a key driver of the economy in the new century, we could also think of setting up extensions of India’s world-recognized technology and management institutions here. These could attract young talent from around the world and train them to tap the high-value opportunities in the Knowledge Economy.

    Therefore, there is a growing synergy between the future trajectories of economic growth of our two countries. Today business leaders from India and Singapore have a historic opportunity to join together to reconsider their business strategies to take into account our needs and your strengths — and also your needs and our strengths. Only then, will we be able to fully realize the immense potential for greater economic interaction between India and Singapore.

    Some of this potential has already been realized, through ventures in sectors as diverse as container warehouses, hotels, residential complexes, ports, other construction projects and, most notably, information technology. But many more opportunities are waiting to be tapped.

    This morning, we agreed to set up a Joint Study Group to consider a comprehensive Economic Cooperation Agreement between India and Singapore. This would help us engage more effectively over a broader economic spectrum including trade facilitation, customs cooperation, intellectual property, financial sector collaboration, etc. The Group will be set up within a month and we should aim at concluding the agreement within a year.

    I have marveled at Singapore’s success in becoming a major tourism destination. We have a lot to learn from Singapore, particularly in leisure tourism and conventions tourism. This morning, Prime Minister Goh and I agreed that our two countries could explore new ways of jointly promoting tourism. I am sure that this interesting idea will provide attractive new opportunities for businessmen both in India and Singapore.

    Biotechnology is a specific area of immense potential for cooperation. I am happy to inform you that we have agreed this morning to set up an India–Singapore Biotechnology Park. This will help in shared research and commercialization in areas as diverse as pharmaceuticals, agriculture, food and drinks, manufacturing, and environmental technology. We have agricultural universities with huge captive areas of well-developed land, which your agro-biotechnology firms can use beneficially.

    Today we signed a Memorandum of Understanding on cooperation in telecom. It is heartening to note that the possibilities in this field are already fructifying. A good example is the recent broadband undersea telecom link set up between Singapore Telecom and Bharti Telecom of India. India is one of the fastest growing telecom markets in the world, adding a thousand telephone lines an hour and I am confident that both of us will profit from greater investments from Singapore.

    Friends, Singapore’s economy has shown tremendous strength in difficult conditions, and is once again demonstrating the phenomenal energy of its businessmen. The Year of the Horse will hopefully see an end to the difficulties of last year. The Indian economy has also proved its resilience by maintaining a relatively healthy growth rate. In the financial year just ended, our economy is expected to grow by more than 5 percent. Even during the Asian crisis of 1997-98, India’s growth rate stood at 6 percent. This shows the strong fundamentals of the Indian economy and point to India being a good destination for those making long-term investments.

    Therefore, with both of our economies looking up, this is the time when we should reinforce our economic partnership to benefit from faster growth. Yes, total trade between India and Singapore has been steadily increasing. Last year it rose by 4.5 percent to reach 3.9 billion US dollars. But, I am sure you will agree with me that we can do much more.

    Further, in the recent past, with the opening up of the Indian economy and the ongoing liberalization of exchange control mechanisms, more and more Indian companies are looking to invest abroad. Singapore is one of the major destinations in this regard. Many Indian companies aim to set up shop in Singapore to take advantage of its position as a major regional hub and service center.

    We want to promote trade and business not just between our two countries, but also with the entire South East Asia region. We are looking forward to the first India–ASEAN summit in November this year. It will help us to consider initiatives to promote our economic links with the ASEAN member countries. Just last week, India, Myanmar, and Thailand have decided to build a highway to link the three countries. This highway will go a long way in reviving the traditional economic and people-to-people contacts between India and our extended cultural neighbourhood in South-East Asia. Since Singapore is our largest trading partner in ASEAN, I am sure that Singaporean businessmen will benefit much from greater Indo–ASEAN trade.

    I am aware of the perception among foreign businessmen that India is a "slow" place to do business in. A few unfortunate examples of unsuccessful partnerships in the past need not deter you from looking at the many more attractive opportunities in the future. Let me assure you that my Government is taking many steps to reduce the regulatory burden on businesses and to provide better infrastructure facilities. Many state governments too are carrying the reform agenda forward and trying to provide a congenial environment for business.

    Let me also assure you that those companies that are prepared to invest for the long-run in India are already reaping the benefits. Just look at the many companies from our fellow Asian country of South Korea who have achieved substantial sales in India, in a short time. Some of their brands have become household names in India.

    We have allowed 100 percent foreign direct investment in urban infrastructure, integrated townships, and urban mass rapid transport, in all of which Singapore is a world leader. Therefore, we hope to see much more actual FDI flows from Singapore than the present cumulative total of merely 400 million US dollars. This, you will agree with me, is too low. I may incidentally point out that this is less than one-third of the total approved direct investment from Singapore so far.

    Let me also say here that my Government is committed to maintaining the direction of economic reforms, and to creating a more attractive FDI regime. For example, under the new Exim Policy announced just a few days ago, we have made our Special Economic Zones even more appealing for foreign investors. I would like to invite Singapore’s entrepreneurs to have a close look at these Special Economic Zones, which we are confident will act as a catalyst for further growth. In implementing this new policy, we would like to benefit from your expertise and experience. What Singapore has done in Pudong outside Shanghai, we want you to replicate, in some places, in India, by not just investing in SEZs, but in actually running them.

    Since land is a scarce resource in your country, our new policy on SEZs offers you an opportunity to create mini-Singapores outside Singapore. You have the capacity to synergize with Indian partners, particularly in the private sector, to provide infrastructure and other facilities to own and operate SEZs, according to your business plans. Our recent budget has permitted developers to import duty-free equipment for putting up SEZs. We have also relaxed the rules for import of second-hand plant and capital equipment, which should encourage Singaporean industries seeking to relocate elsewhere. All this is bound to bring unique economic benefits to your investors. Such SEZs would also create more employment opportunities in India, which is the over-riding objective of our economic policies.

    Friends, earlier in my remarks I referred to the many similarities between India and Singapore. I would like to mention one more important similarity. Both our two countries are multi-ethnic and multi-religious. Singapore is home to a large number of People of Indian Origin. They too belong to different regions, religions, and linguistic communities in India. This diversity is the proud source of India’s unity and strength.

    I wish to reassure this audience that we in India remain committed to protecting and further strengthening the ideals of peace, harmony, and social cooperation, which are the cornerstones of stability and progress of any nation. Let not some of the recent unfortunate happenings in India create any unease in you. India has the resilience and the civilizational genius to overcome these aberrations.

    In conclusion, let me thank all of you for your interest in furthering economic interaction between India and Singapore. I wish to especially thank you, Mr. Prime Minister, for the consistent support given to businessmen in both countries by your government. I applaud your vision. I look forward to seeing our mutual partnership strengthen and flourish in the years to come.

    Thank you."