Speech by Senior Minister and Coordinating Minister for National Security Teo Chee Hean at the 4th South Asian Diaspora Convention on 16 November 2019.
“The South Asian Diaspora and Beyond:
Building Networks for a Brighter Future”
Ambassador Gopinath Pillai,
Ladies and Gentlemen,
Good morning. I am pleased to join you at the South Asian Diaspora Convention again. This is an important platform that brings together members of the South Asian diaspora from around the world to network, exchange ideas and create more opportunities, and for all of us to understand more about what is going on in this very important region. I thank Ambassador Gopinath Pillai and the Institute of South Asian Studies for their hard work in organising this meaningful event.
I last spoke at this Convention 6 years ago and a lot has changed since then. It is almost unrecognisable in some ways. In several countries, trade and foreign investment have become a lightning rod for economic inequality and various social issues, rather than as a contributor to growth and economic well-being. Restrictions have also been placed on technology and sourcing. This has disrupted global integrated logistics and supply chains.
These disruptions and uncertainties have cast a pall over the global economic outlook. Will we continue on a path of greater multi-lateral trade liberalisation and integration, which we have been moving along for the last half a century at least? Or will we see more restrictions, tariffs and barriers placed on technology, trade and investment? What does this mean for all of us? Will we live in a more integrated world, or will we live in a bifurcated or fragmented world?
We need to understand these forces and work together to build a region and world that will bring greater collective long term benefits for our people.
South Asia – Prospects and Challenges
South Asia and its diaspora, which at 41 million is the largest in the world, have an important role to play.
South Asia itself has emerged as one of the most dynamic regions in the world, with tremendous growth potential. The region accounts for more than one-fifth of the world population, and enjoys a demographic dividend with its youthful population. Real GDP growth in the region has steadily increased from an average of about 3% per annum in the 1970s to over 7% in the last decade. Over 200 million South Asians have been lifted out of poverty in the last three decades. Today, South Asia contributes to over 15% of global growth, with India being the fastest growing major economy in the world.
South Asia’s diaspora has played a large part in, and benefited from the opportunities provided by a more integrated world that many of you here represent. You have contributed to a more integrated world and have benefited from it as well. Your professionals and companies in major fields such as IT, finance and trading play important roles in many countries.
However, global growth, and growth in South Asia, cannot be taken for granted, and could be affected by both domestic factors and external factors. In the face of the global economic slowdown, the Asian Development Bank has already lowered South Asia’s growth projection for this year from 6.6% to 6.2%. Singapore and other countries in our region have also not been spared.
What can we all do to help the region overcome its challenges, realise its full potential, and uplift the livelihood and well-being of our people? I would like to suggest three ways in which the South Asian diaspora can play a significant role: Enhancing Economic Links; Strengthening Connectivity; and Developing People.
Contributing to a More Dynamic South Asia
First, enhancing economic links. The diaspora are natural advocates and supporters with useful networks that South Asian countries can leverage to promote closer economic cooperation within the region, and with other regions. Trade expansion creates more opportunities for growth – larger markets, greater ability to leverage the comparative advantages of the workforce in each of our societies, and foreign investments that bring capital, technology and jobs.
Regional integration has been a powerful force for growth in many regions. In South East Asia, countries were able to resolve or set aside significant bilateral differences and focus on development. Part of this was the impetus that countries saw when peace, stability and openness brought about rapid prosperity and progress for their neighbours. These became good examples and an impetus for countries to resolve differences that they have and go on the path of progress as well. This provided the foundation for greater economic integration within a free trade area where businesses and peoples can prosper together.
There remains much scope for South Asia to exploit this potential. The volume of intra-regional trade in South Asia remains low, even after the 2004 South Asian Free Trade Area (SAFTA) agreement. Intra-regional trade accounts for just 5% of South Asia’s total trade, compared to 24% for ASEAN in 2015.
International trade also remains a relatively low share of GDP in South Asian countries, especially when compared to developing nations in the East Asia and Pacific region. According to a joint study by the World Bank and the International Labour Organisation (ILO) this year, merchandise exports in South Asia account for less than 10% of GDP, compared to over 20% in East Asia and the Pacific and 30% in Europe and Central Asia. These differences are not small ones – both in intra-regional and international trade.These are significant differences.
Southeast Asia and South Asia are geographically contiguous, and are natural partners. There are many opportunities. We already have the ASEAN-India Free Trade Area (AIFTA), which came into effect in 2010. But there is a lot more potential for growth partnership.
Negotiations for the Regional Comprehensive Economic Partnership, or RCEP, have concluded on the sidelines of the recent ASEAN Summit in Bangkok. We hope that India and the other 15 countries can overcome the outstanding issues so that India can come on board eventually. We look forward to the region, including India, moving ahead together as one.
Second, strengthening connectivity. One key area is infrastructure, which provides the sinews for development and growth - power, water, sanitation, telecommunications, roads, railways, ports and airports.
South Asian countries face a significant infrastructure gap. According to a study by the ADB, the region needs an average investment of about USD 365 billion per year to meet its infrastructure needs between 2016 and 2030. This is equivalent to about 7.6% of the region’s projected GDP. When we take into account climate mitigation and adaptation costs, the figure rises to USD 423 billion in annual average investment, or 8.8% of the region’s projected GDP.
Given the high cost of infrastructure projects, it is often not possible for South Asian governments to finance these projects on their own. Governments need to find ways to mobilise capital from the private sector and multilateral institutions to plug the gap.
Singapore has set up Infrastructure Asia, an open platform to better connect the demand and supply side for infrastructure projects in Asia. We welcome South Asian countries and the diaspora to tap on Infrastructure Asia, to connect with best-in-class partners with the right resources and expertise to collaborate on infrastructure projects in South Asia. Another initiative that Infrastructure Asia will be working on is a capacity-building programme with the World Bank Group to strengthen capabilities of infrastructure project structuring, financing and implementation, to better attract international financing and innovation into infrastructure. Some of the countries may not have much experience in infrastructural projects in a form which is financeable and can attract correct partners in order to move the projects forward.
Our infrastructure companies in Singapore are already very active in the region. For example, Sembcorp Marine Rigs and Floaters recently collaborated with Shapoorji Pallonji and Bumi Armada to convert a very large crude carrier (VLCC) into a floating production, storage and offloading (FPSO) unit, which will be deployed on the east coast of India. The project will produce up to 90,000 barrels of oil per day and help meet India’s significant energy needs.
Apart from physical connectivity, we should also explore new forms of connectivity. We have two important events – the Singapore Week of Innovation and Technology and the FinTech Festival – in Singapore. South Asian countries should enhance digital connectivity and harmonise digital platforms in the region, and beyond. For example, India’s RuPay and Singapore’s NETS launched a tie-up last year to facilitate cross-border payments. India and Singapore are also exploring linking our national single window platforms to facilitate cross-border exchange of trade information digitally. This would smoothen trade and lower the time, frictions, and cost of trading with each other.
Third, developing people is key to all the things that we do. The region’s population is projected to grow from 1.8 billion currently to 2.1 billion by 2030, making up one quarter of the world’s projected population in 2030 and many would be young people. Education is the key process for transforming this abundant latent resource into a creative and productive future-ready workforce. However, there is much to be done. UNICEF estimates that more than 11 million children of primary school age and more than 20 million children of lower-secondary school age in South Asia do not go to school. Closing this education gap will help develop the full human resource potential of South Asia, and ensure that the benefits of growth are widely shared. It is important to do this because the foundations of education lasts a lifetime. If we do not get it right from the beginning and do it as quickly as possible, there will be continuing effects for decades to come. If we do it right, the potential will be unlocked, bloom and flower, and bring benefits to the individuals for decades to come.
The diaspora understands the needs and potential of the region, and can help to supplement education and training opportunities in a targeted way. For example, after working as a migrant worker in Singapore for 18 years and seeing how Singapore’s polytechnics have trained graduates with skills that are in high demand, Mr Joy Sudip Bhadro went back to his hometown of Habiganj in Bangladesh to set up the “North East Ideal Polytechnic Institute” in 2012. As the town’s only vocational institute, it has trained two batches of 57 students in civil, electrical and computer engineering. 85% of its students have found jobs in their area of study, with some landing jobs even before graduation.
I also encourage the diaspora to organise and facilitate more exchanges and partnerships between South Asia and your countries of abode, to promote innovation and enterprise, business collaboration, technology transfer and development, and international regulatory best practices.
In addition, the diaspora can create more opportunities for youth interactions. These could be educational exchanges, scholarships, internships and work attachments. Apart from developing our people, you will also enable them to build important bridges and networks from young, so that they can take our partnership into the future.
Ladies and Gentlemen
There is much to be done. The world is in flux, with growing protectionism and unilateralism. The multilateral trading system and international rules and norms are coming under threat. These are pressing challenges that require all of us to work together – no single country or region can overcome them on its own. There is an opportunity now for us to come together to engage and help shape the architecture of the future, and to strengthen regional and global integration. There is an opportunity now and we should grasp it.
The South Asian diaspora, known for their spirit of determination, hard work and innovation, are our natural partners in this important endeavour. By working together to enhance economic links, strengthen connectivity, and develop our people to connect to the greater global community, we can create a brighter future for our two regions and peoples and the world.
I wish all of you new ideas, insights and inspiration from this Convention. Thank you.
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