BEYOND SG

Middle East Turning Eastwards

1. A thoughtful Saudi diplomat traced many of the problems in the Middle East today back to the European carve-up of the Ottoman Empire. He said the region was 'ravaged' and 'violated'. The problems of Palestine, Lebanon and Iraq all stemmed from that era. There was a time when one could travel from the Gulf to Morocco overland easily.

2 My mind went back to a conversation I had with an Israeli diplomat ten years ago. The future looked brighter then and he told me that it could be possible in a few years time to drive from Cairo to Damascus. Now it all seemed a hopeless pipedream.

3. So much resources and nervous energy are wasted in conflict in the Middle East today. It is difficult to construct optimistic scenarios for the region. One could only hope for the best while preparing for the worst. But opportunities there are - aplenty. With the growth of China and India, energy prices will stay high for a long time to come. The countries rich in oil and gas are flushed with money and investing them in physical and social infrastructure, with lots left over for investment overseas.

4. A historic change is sweeping the region. Individual countries are increasingly looking eastwards for markets, for places to invest in, for ideas. The Saudi Government wants to send students to our universities in Singapore because they know that we have done well by international standards. We welcome them as we also welcome their investors and their tourists. It is clear from the warm welcome they've given PM, from the King and Crown Prince downwards, that they value good relations with us.

This is an honour for Singapore. Our re-engagement of the Middle East requires a corresponding change in our mindset.

George Yeo

Saudi Arabia at the Crossroads

1. It is my first visit to Saudi Arabia. Riyadh looks new andmiddle-class. Security is taken seriously -high walls, strong metal gates, check-points, security personnel everywhere, some armed with machine guns.

2. At the briefing by the Saudi Arabia Government Investment Authority (SAGIA) to PM this morning, I was pleasantly surprised by the deep knowledge the officers had of what we do in Singapore. SAGIA is an important agency of change in this deeply-conservative Kingdom. Managing the change is tricky business. The religious establishment is opposed to radical reform in the education system. If the Kingdom moves too fast like the Shah once did in Iran, the result could be a fierce backlash.

3. But change is in the air. When he ascended the throne, King Abdullah surprised many observers by visiting China and India first. It sent a strong signal to his own people and to the West. The Chinese presence is growing rapidly which must worry the US. Enormous projects to build new cities are being planned for. With high energy prices, Saudi Arabia has the resources to invest heavily in infrastructure and the education of its young population. It is a very young population with about half under the age of 21. We have a vested interest in helping the Kingdom transform itself.

George Yeo

Raising Goods and Services Tax (GST) in Singapore

Background

One of the key guidelines of this blog is that it should be apolitical but sometimes business, politics and social issues are all intertwined and you can't discuss one without the other. The recent discussion about raising Goods and Services Tax (GST) in Singaporeis one such issue. The current GST is 5% and it is expected to be raised to 7% next year. The Singaporegovernment explained that the reason for raising the GST is to enable the government to have more firepower in the future years to help the poor. In short and in simplistic terms, the GST increase is to rob a little bit of the rich Peter so that we can pay the poor Paul in years to come. The idea is to narrow the income/wealth disparity by taxing more from the consumers, especially the wealthy ones now. As a businessman with a natural fear for taxes coupled by an attention span of 10 seconds on things not related to my business and/or things I can’t possibly change, this is how I understand it.

Global Comparison of GST

Deloitte has a fantastic website that compares the global indirect taxes (GST/VAT/ Sales tax) of various countries. I have merely extracted the GST from a few countries for illustration:

• Australia 10%,
• Canada 6%-14% (depending on state),
• Malaysia 10% (to be changed in 2007),
• New Zealand 12.5%
• Singapore 5% (may be changed to 7% in 2007)

Check this out http://www.deloitte.com/dtt/article/0,1002,cid%253D5028,00.html

I was mildly surprised that Singapore GST was relatively low compared to many countries. Is that a good gauge of budgetary prudence or social welfarism at work? I really don't know. Hopefully, our gentle readers can throw some light here.

Raising taxes to help the poor

We know raising taxes is never popular. An American President lost an election because of it. "Read my lips- No New Taxes", said Mr Bush. Like the HAL Computer 9000 in the Stanley Kubrick movie "Space Odyssey 2001", American voters really read his lips and believed that there would not be any new tax and we knew what happen... It is also never easy to explain the benefits of raising taxes or adding new ones, no matter how noble the intentions.

But income disparity is indeed real in Singapore. I am sitting at VivoCity's Starbucks reading Warren Buffet's annual report, dissecting my company's latest quarterly results, making calls to my corporate lawyers, bankers, business associates and partners plus sipping my Christmas edition coffee. It is heaven - work and rest all in one. I feel guilty that I have such luxuries during weekdays. The luxury of time and bandwidth to spend it as I choose. To live to work and not work to live. As much as I want to look away, the disparity- be it income, social, opportunities and choice of leisure are getting more visible each day. If history has a habit of repeating itself, then the situation must not be left unchecked. First it will be envy, next will be anger, then it will be hatred and ultimately, revolt and chaos.

Income disparity - it is starting to rear its head 

Here is an interesting digression. When we give motivation talks to school children these days, we see them hugging their bags with their dear lives (as opposed to us who were school children in the 70s and 80s, we FLUNG our bags laden with textbooks as a sign of youthful rebellion). We were naturally curious. So we questioned them why they love their school bags so much. They revealed that all their latest tech gismos are inside their school bags - Apple Nano, Nokia cellphones or Sony handheld games, HP PDA, Creative video players etc. They can't lose their precious possessions and are constantly in fear that they may be stolen! Now, imagine yourself belonging to the "have-nots" camp and have to struggle with school fees and canteen break money. The disparity will become very stark indeed. It is probably too much to bear.

Understanding the need to solve the disparity issue (and be more aggressive in our progressive tax platform) is one thing. Linking it to a GST increase is another. The poor don't see themselves excused from the GST although we KNOW mathematically that they are the least affected. To many (and sometimes myself), it is universal - it hits the rich "tai tai" as much as the guy worrying about his next meal. That is the real problem.

We need to know how the poor is helped

The next issue is that Singaporeans really don't know how much the poor is being helped. Our government has this habit of taking pride in this creed "we assist those who help themselves and only help those who are totally helpless." We avoid misguided social welfarism. Again, maybe the government is more generous than this unfair perception but as private citizens, we really don't know how much work is done. There is not enough visual explanation in the media what is really done for the poor. We attribute poverty assistance to private charities, celebrities doing their bit and that's about it. The solution is to reverse this thinking. It is time the government go all out showcasing the real work done for the less fortunate. Nope, having a 30-minute docudrama on television won't help, nor a 60-minute Channel News Asia story on how the poor is funded by the Budget. It has to be at the street level, visual, simple and repeated. Unfortunately, most of the things I hear at the street level are that "the best the government can do for you when you are made jobless is getting you a taxi license". That is not true. The government does much more. Perhaps, this is a good time to explain to us what's done to help the poor. If the Singapore government succeeds, maybe, just maybe, we may find the GST increase tolerable. We may not like it but we can live with it.

Harold Fock

Red Star Over Vietnam

1. I have just come back from the APEC meeting in Hanoi. In front of the old Lenin statue in the city were large letters on a flower bed proclaiming: Welcome to Vietnam APEC 2006. I wonder what Lenin would have thought. Flanking the Ho Chi Minh Mausoleum were two rows of large red flags - on one side, with the hammer and sickle, the flag of the Communist Party - and, on the other, with the yellow star, the state flag. Because Bush was also paying a state visit, the US star-spangled banner was also a-fluttering. One Singapore diplomat thought it all quite surrealistic.

2. What does Marxism-Leninism mean in Vietnam and China today? In some ways, they have become capitalist. In both societies, there are growing numbers of wealthy people living very different lives from the teeming masses. The class struggle is no longer talked about. Deng Xiaoping said that 'to be rich is glorious' and 'let some become rich first'. The procrustean socialism of the past had kept everyone back. Now, there is rapid economic development in both Vietnam and China, but new social tensions have arisen which worry the leaders a lot. Local elections are conducted to ensure that leaders at the village and county levels are responsive to the needs of ordinary people. Multi-party elections are not allowed and, in both countries, the Communist Party remains dominant.

Certain aspects of Confucianism have come back, like Hu Jintao's idea of a 'harmonious society' and the governance of the state by a bureaucratic elite. The ownership of land, which was what the revolution was principally about, remains tightly controlled. Marx's theory of productive forces has been given a new interpretation in Jiang Zemin's 'three represents'.

3. President Hu also paid a state visit to Vietnam. The joint press release was effusive about the progress of good bilateral relations between Vietnam and China - both state-to-state and party-to party relations. It is a complex relationship. In Fairbanks major work on the East Asian Transformation, he identified a cyle in the relationship between Vietnam and China over the last thousand years. When a new dynasty emerges in China, it tries to regain its old prerogatives in Vietnam. Vietnam resists successfully but quickly settles with its huge neighbour acknowledging its status. Then Vietnam follows in its footsteps. We are seeing that pattern repeating itself.

George Yeo

George Yeo in Vietnam

1. It has been almost two years since I was last at Hanoi. This must be my tenth visit since the early 90's. Each time I come, the city looks better. It is a charming city dotted with lakes and old French colonial buildings. The Vietnamese are making steady progress and has been growing faster than any other country in ASEAN, right through the Asian financial crisis till now. In 15-20 years time, Vietnam will be a major force in ASEAN. They are an intelligent, hardworking and determined people. Many young Vietnamese will head off to atttend night classes after work. Thousands of them study in Singapore.

2. Singapore has excellent links with Vietnam. We are one of their major investors and trading partners. There is now a sizeable Singapore community in Ho Chi Minh City number over 2000. Tiger Beer is big here.

3. In a methodical way, Vietnam has been upgrading its capability, step by step, to hold conferences from the ASEAN Summit to the Asia Europe Summit to, now, the APEC Summit. The new conference centre is spacious and well-equipped with an attractive architectural design. It has a huge forecourt of fountains. 25 Leaders from around the Pacific will descend on this city with a history of a thousand years from tomorrow, among them President Bush, President Hu Jintao, President Putin and PM Abe. We have just completed the ministerial meeting which the Vietnamese Foreign and Commerce Ministers co-chaired with great skill and diplomacy.

4. In 1975, the North took over the South. In 1978, Vietnamese Army divisions crossed the Mekong to vanquish the Khmer Rouge, threatening Thailand and the rest of us in Southeast Asia. In 1989, they pulled out and, not long afterwards, Vietnam joined ASEAN. With the Cold War far behind us, we are entering a new phase of peace and cooperation in the Asia-Pacific. The North Korean nuclear problem is still a headache but the prospects on the whole are bright. APEC is now a premier organisation and, for the first time, the Leaders will be talking about a Free Trade Area of the Asia-Pacific encompassing over half the world's economy.

George Yeo

The Asian Renaissance

SPEECH BY GEORGE YEO, MINISTER FOR FOREIGN AFFAIRS, AT THE NALANDA BUDDHIST SYMPOSIUM ON 13 NOV 06 AT 9.00 AM

1.             Today's symposium is about the past and the future.  It is a celebration of the Buddhist heritage that has contributed so much to the cultures of Asia.  This is not a symposium about the Buddhist religion as such, but about Buddhist values and philosophy which have become an integral part of East Asian civilization.  Whether consciously or not, Buddhist values and philosophy influence the daily actions of hundreds of millions of East Asians, helping to shape a persistent pattern of social interactions which makes East Asia an identifiable civilizational area.

2.             Let me for clarity confine East Asia to the chopsticks people - the Chinese, Japanese, Koreans and Vietnamese.  I will talk about the influence of Buddhism on the rest of Southeast Asia later. 

3.             Three great value systems undergird East Asian civilization - Confucianism, Taoism and Mahayana Buddhism.  Confucius and Lao Zi lived at about the same time as the Buddha.  Both Confucianism and Taoism were adopted very early by Korea and the Taoist yin yang symbol is at the centre of the South Korean state flag.  During the Nara and Heian Periods, Confucianism from China took hold in Japan and its influence is still  evident in Japanese society today.  Mahayana Buddhism reached China about 2000 years ago but did not become widespread until it was thoroughly Sinicized, a process which took many centuries.  Buddhism had first to become Chinese in its grammar, invocations and iconography.  From China, the different Buddhist sects  spread to Korea and Japan with relative ease.  Chan Buddhism (禅宗佛教) and Taoism melded in China, and it was that evolved form of Chan that became popular in Japan, giving Japanese Zen Buddhism its present character.  Thus one could say that Taoism reached Japan through Chan Buddhism.

4.             I am painting in very broad strokes and you could rightly criticize me on the details.  But in the same way as one could identify the origins of Western civilization in Greece, Rome and Judeo-Christianity, so too one could trace the origins of East Asian civilization to the influence of Confucianism, Taoism and Mahayana Buddhism.

5.             As Asia re-emerges on the world stage in this century, its civilizational origins will become a subject of intense study and debate.  Asians will look back to their own past and derive inspiration from it for the future.  This inspiration will cover the entire spectrum including governance, scientific inquiry, architecture and aesthetics.  A tremendous burst of creative adaptation is becoming evident across much of Asia. The Western world went through a similar phase as it emerged out of the medieval ages.  Hence the word 'renaissance' has come to be applied to Asia's re-emergence today.  Just as Europe's past was partly retrieved through the Arab vehicle, for it was the Arabs who were fascinated by the civilization of the ancient Greeks and had its works translated into Arabic when Western Europe was still in the Dark Ages, Asia's past has been partly retrieved through the Western vehicle. Without the massive contribution of Western scholars, our knowledge of our own past in Asia would be much poorer today.  I include here Alexander Cunningham's identification of Nalanda from an English translation of Xuan Zang's record of his journey to the West and Joseph Needham's encyclopaedic study of Science and Civilization in China.  I say this only to remind ourselves that we stand on the shoulders of others.

The Buddhist Heritage

6.             The recovery and celebration of our Buddhist heritage is an important part of the Asian renaissance.  The revival of Mahayana Buddhism in East Asia is a big phenomenon.  With the end of ideology, religion has become more important, most recently in China and Vietnam.  I don't have the statistics but it is clear to the casual visitor that Buddhist temples are once again flourishing in both these countries and quite a number of young people are becoming monks and nuns.

7.             Buddhist pilgrimages are growing in popularity and proceeding farther and farther afield.  The interest in visiting the holy sites in India is bound to see a sharp increase in the coming years.  This is a huge opportunity for Indian tourism which calls for the Central and State Governments to put in much more effort.  But, much more than tourism, renewed interest in a pan-Asian Buddhist heritage will facilitate the re-encounter of the two great civilizational areas of East and South Asia.

8.             At a seminar on South Asia's contribution to the global community last week, I mentioned that it is much easier to talk about the Buddhist heritage than to discuss the interactions of Judaism, Christianity and Islam.  In the case of the religions derived from Abraham, there is too much politics and pain associated with those interactions.  In the case of Buddhism, however, after the bloodbath in Kalinga which shocked Ashoka and set him off on a different path, the message is generally one of peace, compassion and acceptance.  Buddhism teaches us that nothing is permanent.  This reminds us not to be arrogant.  Buddhism teaches us that every action has consequences.  This reminds us to be good.  The deep humanism in Buddhism is a value we need more than ever in a shrinking world where no religion, no ethnic group is in a majority. 

Southeast Asia

9.             In between East and South Asia is Southeast Asia where all the world's great religions and cultures meet and co-exist.  If we are not able to live with people who profess different faiths or who are different from us, there can be no peace or development.  Over the centuries, there has evolved in Southeast Asian cultures a softness which enables us to co-habitate.  That softness has its roots in the Hinduism and Buddhism which came to our shores more than a thousand years ago.  Many of the great monks like Fa Xian and Yi Jing who travelled between South and East Asia spent time in Southeast Asia especially in Sriwijaya, Sumatra. Syncretism is a way of life in Southeast Asia. Here in Singapore, it is not uncommon to find mosques, temples and churches operating side by side, cheek by jowl.  Are there problems?  Yes, of course, every day!  But we have learnt how to overcome them, by being fair to one another, by a spirit of give and take, by learning from our mistakes, and by religious and community leaders playing their roles. 

10.           Buddhism came to Southeast Asia from different directions.  From the earliest days, it travelled overland and along the coast to Myanmar, Thailand and Indo-China.  By sea, it crossed the Bay of Bengal to Sumatra, Java and the Malay Peninsula.  The first influence was Mahayana Buddhism together with Hinduism.  Later, via Sri Lanka, Theravada Buddhism became dominant in Mainland Southeast Asia except Vietnam which received its Buddhism from China, and remains Mahayana to this day, as is also the case with many of the ethnic Chinese who are scattered throughout Southeast Asia.  In recent years, with globalisation, other Buddhist groups have established themselves in the region including Soka from Japan and Tantric Buddhism from the Himalayas.  We have in Singapore today quite a diverse mix of the different Buddhist schools.

Islam and the West

11.           In addition to the Buddhist heritage, the Islamic heritage and the Western heritage are also important unifying elements in Asia.  Unlike Islam's historical contact with the West which was usually unhappy, Islam's arrival in Southeast Asia was very different.  It brought hygiene and a system of trust which facilitated trade.  For centuries, the maritime silk route from the Mediterranean to China was dominated by Muslim traders. The Ottoman influence among Muslims in Southeast Asia was profound.   The songkok which Southeast Asian Muslims wear is a relic of that influence. It was not only from the Middle East and India that Islam came to Southeast Asia.  It was also from China.  The great fleets from Ming China that sailed to Southeast Asia and the Indian Ocean 600 years ago were commanded by Muslim Admirals, the most famous being, of course, Zheng He.   The Islamic heritage is therefore another theme in the Asian renaissance which should one day be taken up.  We should not only be preoccupied with the dangers of Jihadist extremism.

12.           The Asian renaissance is also incomprehensible without taking into account the Western influence of the last 500 years.  Although the Western dominance has receded, its impact on every aspect of life in Asia is obvious and enduring.  Any honest treatment of the Asian revival must acknowledge the many positive contributions of the West including the ideas of democracy, socialism and individual rights. The Christian influence in Asia is pervasive.  Without Christian missionaries dedicating their lives to the education of millions of Asians, Asia's modernisation would have taken much longer to happen.

South Asia and the Meaning of Nalanda

13.           Whether we are talking about the Hindu, Buddhist, Islamic or Western influence, South Asia played a major role as a source and as a conduit.

14.           The Nalanda project should therefore not be about Buddhism only although Buddhism is a big part of it.  For hundreds of years, the great university in Nalanda was a centre of learning for a wide range of subjects including philosophy, science and mathematics.  We should develop Nalanda as an icon of the Asian renaissance attracting scholars and students from a much wider region as the ancient university once did.  It should be a centre of civilizational dialogue and inter-faith understanding as it once was.  In this way, the Nalanda project is not only a celebration of the past but also an inspiration for the future of Asia and the world.

15.           We are very honoured to have joining us at this Symposium by video-conference, the President of India, Shri Abdul Kalam.  When I called on him during his official visit to Singapore earlier this year, we discussed Nalanda and I knew then that this is a subject dear to his heart.  A Muslim, a nuclear scientist, a great humanist, a devoted teacher, the President of India, with a deep passion in the Nalanda project - we could not have a person more fitting to deliver the keynote address.  President Kalam, Sir, we thank you for joining us in our discourse.

George Yeo

SPEECH BY GEORGE YEO, MINISTER FOR FOREIGN AFFAIRS, AT THE NALANDA BUDDHIST SYMPOSIUM ON 13 NOV 06 AT 9.00 AM

Blackberry, Slaveberry and Dumbberry

One of the business icons in the 21st Century is the businessman flicking out his Blackberry and doing his "Road Warrior" routine. He can email his staff, look at the Powerpoint, scream at the latest quarterly results and order his next Amazon book - all this convenience at the comfort of.. wherever he happens to be. The Blackberry trend is so prevalent among the business class that they fondly called it the Slaveberry. You can't leave home without it and can't do business without it. When there was a lawsuit against Blackberry's company Research In Motion (RIM) on its wrongful usage of intellectual property, an American partner from Discovery told me this, "Don't worry. RIM wont be in trouble. Congressmen cant function without it as their aides use the Blackberry to advise them what to vote." I don't know how true is this urban techno myth but it illustrates how powerful is this push mail on the go device.

I think Slaveberry is not the only thing we have to worry about. My company uses the Blackberry extensively among the senior managers, like any regional corporation. But I am worried.

1. The Blackberry promotes speed of decisions but not quality of decisions. It gives the managers the illusion that what is typed into the Blackberry, someone back in the office will execute it. It gives the false illustion of work being done and decisions being made. But they are often not well-thought out and pondered. Back in those printed papers days, you get to read a report, mull it over, weigh the consequences before you act. With the Blackberry, it is too easy and tempting to type "Go ahead. Good plan." and somehow hope someone in the office somewhere will do the something. It replaces meetings, discussion, feedback sessions and sometimes, good old fashion thinking.

2. Employees, contrary to the perception of a 24/7 boss, love it. Why? Because most managers are fuzzy and not precise about their decisions and implementation instructions. The Blackberry is the perfect tool for "decision audit" or more rudely, cover my a**. You see, with the Blackberry, the staff has the perfect written proof that the boss approved their decisions, not their fault when something screws up. The trick is to write a long email to the boss and he will be reading it at the airport, Starbucks or on the road. He will miss out the salient details and all the whitewash potential failure points. Better still, he replies, "Ok". A few months later when the employee is questioned for the bad decision, hey, I have an email written by you to go ahead, really not my fault.

3. On a small screen, you cant really see the total spreadsheet and the fine print of, say a legal document. So somone can attach the Blackberry email with documents, spreadsheets and powerpoint but the manager will want bize-sized summaries (pure text). Again, an important dimension in decision making is removed. I also notice this trend among Blackberry users - the shorter the email received from the Backberry, the higher chances of it being answered by the bosses. It is almost like MTV for the businessmen 2.0 and we all know how much intelligence there is, in the MTV multimedia content.

In short, we not only carry the Blackberry and "Slaveberry" but we carry the "Dumbberry". Not the technology's faut. It is us managers who have mistaken speedy decisions for quality ones. Think about it.

Harold Fock

South Asia in the Global Community: Towards Greater

SPEECH BY GEORGE YEO, MINISTER FOR FOREIGN AFFAIRS,

AT ISAS CONFERENCE ON 8 NOV 2006 AT 9.30 AM

1. In a strange way, we seem to be returning to the past.  Take Singapore as an example.  Strand by strand, we have been recovering all the old links which created modern Singapore - our links to the rest of Southeast Asia, to China, to India and, now, to the Middle East.  As a city-state, it is natural that we should experience first what larger polities would eventually also pick up. 

2. In Southeast Asia, we are rediscovering the connections which made the region an intelligible area of cultural and historical study before the Western powers carved it up.   Like pre-colonial Southeast Asia, ASEAN remains a diverse collection of big and small countries alternately influenced by China and India, benefiting from the East-West trade.

3 South Asia was completely dominated by the British Raj for some 200 years.  In many ways, the Raj was an inheritor of the Mughal Empire.  The British influence in India was so deep and profound, one could even argue that the British Raj was Indian, and that today's South Asia is but a collection of its successor states.  When Singapore was negotiating the Comprehensive Economic Cooperation Agreement with India, I remarked half in jest to my Indian friends, but half seriously, that we were only restoring the position of the Raj when trade and investment between the Sub-Continent and Singapore flowed freely according to the same laws and standards.  China is fast becoming India's biggest trading partner which was of course the position in the 19th Century.  The China trade was of the greatest strategic importance to the East India Company and, after it was wound up, to the British Indian Government directly.  Singapore grew on that trade and became the headquarters of the British Empire in Southeast Asia safeguarding the Straits of Malacca and Singapore.

4. Unlike South Asia and Southeast Asia, Northeast Asia consisting of China, Korea and Japan was much less thoroughly colonized.  The Western powers dominated China but their presence was concentrated in the concession areas, mostly along the coast.  Japan, after Meiji, tried to be like a Western power but failed.  The transformation of Northeast Asia began at the periphery, Japan first, then the Newly Industrializing Economies of South Korea, Taiwan, Hongkong and Singapore, before spreading inland.  The four Special Economic Zones which Deng Xiaoping started in 1980 were all at or near port cities which experienced a strong Western presence.  Not long afterwards, Shanghai resumed its old position as the dragon's head. Now the growth in China is spreading back to its ancient heartland around the cities of China's great plains and river basins.

5. In examining the role of South Asia in the global community of the 21st century, we need this perspective of time and space.  Although history never repeats itself in the same way, the deep tendencies are persistent.   The geography has not changed; the climate, maybe a little.  Cultural characteristics do change but slowly.  The populations are an order of magnitude bigger today but the relative sizes have not changed that very much.  What has changed dramatically is technology, but the ability of a society to acquire new knowledge and apply it to production and security has its roots in that society's past.

6. Against this backdrop, let me now talk about South Asia in the global community at three levels.  First, the dynamics within South Asia itself.   Second,  South Asia vis-a-vis the West.  And, third, South Asia in larger Asia, which will be an important theme in this century.

7. Within South Asia, it is likely that the fragmentation which began with the end of Empire has reached its limit - Partition in 1947, the establishment of Bangladesh in 1971, the Tamil separatist movement in Sri Lanka and other relatively minor ones elsewhere.  Now technology and globalisation are re-connecting the parts.  As one South Asian diplomat remarked to me recently, if China could find creative solutions for Hongkong, Macao and Taiwan so that economic activities could carry on, why can't India and Pakistan find a creative solution for Kashmir?  Indo-Pakistan trade which is reaching $1b can easily become $10b which will still be quite small.  The sad fact is that South Asian cooperation is held hostage to India-Pakistan relations.  However, despite all kinds of difficulties, trade in South Asia will become freer year by year.  As with China, change is flowing in from outside.  The influence of Indians who studied, worked or lived overseas has been a great help.  The NRIs who return home create bubbles of India’s future, in the IT companies and campuses, in the industry and trade associations, in the new suburbs.  Now India has become a pace-setter for all of South Asia in a positive way.  What India does, Pakistan watches carefully and follows.  I remember many years ago the Pakistan Finance Minister telling me in Lahore that he listened to the Budget Speech made by the Indian Finance Minister live on radio.   An India that is economically strong must be a challenge to its neighbours.  Just as Southeast Asian countries are galvanised by China's rapid strides, India's strides will energize all the other countries of South Asia. This competitive development is good for the world.

8. However, there is a counter-trend which, if mismanaged, can create a lot of problems.  I am of course referring to Jihadist extremism.  If the madness in the Middle East gets worse, Pakistan, India and Bangladesh will all be affected.  If the Sunni-Shi'i divide widens, both Pakistan and India will feel the shocks.  We are fortunate that President Musharraf has been steadfast in the fight against Jihadist extremism after Sep 11.  As for India, there is a wisdom in the civilization which enables it to digest extreme tendencies and dilute their poison. On the whole, therefore, except for the border lands between Pakistan and Afghanistan, I am not pessimistic about the ability of South Asia to contain the problem of Jihadist extremism.  As has repeatedly been the case in history, Iran will play a significant role in maintaining the peace in the lands beyond the Khyber.

9. Let me now move to South Asia's relationship with the West.  Because India is not viewed as a competive challenge to the West the way China is, India's strategic relationship with the US, EU and Russia will not be as complicated as China's.  This is a great advantage.  The fact that India is a democracy is also a plus.  The large NRI communities in the US and Europe (principally the UK) are a major asset.   As a major successor state to the British Empire, India enjoys a special position in the English-speaking world.  India's companies can internationalise easily.  Many ethnic Indians hold senior positions in Western MNCs.  Outside South Asia, Indians, Pakisanis, Bangladeshis and Sri Lankans feel close to one another, attesting to their common cultural heritage.  In Singapore, all are considered Indians because their ancestors came here before British India was divided.  India's relationship with the old Soviet Union continues with Russia.  This is not surprising because it was a relationship based not on ideological considerations but on geostrategic reasons.  While India is happy to strengthen its links with the US and Europe, it will never want to be too dependent on them especially for military technology.  Looking ahead, India will be able to maintain good relations with all the major Western powers.  This, in turn, will provide a better environment for peace and development in the Sub-Continent.

10. It is the part South Asia plays in the re-emergence of Asia that tells the most interesting story.  Asia is more than half the world.  Its strong growth is changing the face of the whole world.  In this drama, the resumption of India and China as two major poles is re-drawing the global political and economic map.  Both are continental nations having by far the largest populations on earth with enormous reservoirs of human talent.  Historically, separated by high mountains and vast deserts, the two civilizations interacted sparingly and only with difficulty.  Except for 1962, there was never a major war between them from the beginning of time.  Except for the Buddhist heritage, there are few common reference points in their relationship.  Where India and China met in a significant way, it was in Southeast Asia which became a separate civilizational area buffering the two.  In more recent times, India and China met again under a Western ascendancy, first British, later American.   Today the common terms of interaction are Anglo-Saxon - contract laws, accounting standards, corporate structures, the common jargon of business schools and the English language.

11. The common Buddhist heritage will be revived in the coming years, if nothing else, because millions of Buddhists from Northeast and Southeast Asia will want to visit the holy sites in South Asia and the economic gains from religious tourism will bring great benefits to local people in all the countries of South Asia.  The influence of Buddhism on human civilization is largely benign and beneficient.  It is an easy subject to talk about unlike discussions about the interactions of Christianity, Judaism and Islam.  Next week, a seminar on the relevance of the Buddhist heritage to 21st century Asia will be held here in Singapore.  President Abdul Kalam of India, for whom this subject is a passion, will be taking part live by video-conference.

12. The improving relationship between India and China will be a hugely positive factor in the development of Asia, second in importance only to the relationship between the US and China.  The current border talks, the reopening of the Nathu La Pass, the rapidly expanding trade account, the explosive increase in bilateral exchanges - all this are but a prelude to a major re-encounter of two civilizations on their own terms.  It is only natural that Southeast Asia will be an important venue for this re-encounter.  To be sure, it will not all be smooth as no encounter of such a scale can be.  Along the way, there will be disappointments, distrust and recriminations.  All this we must expect when large forces are in play.  There will always be an element of strategic rivalry between them which the smaller countries around them will carefully analyse and which the other major powers will try to turn to their advantage.  The East Asia Summit is a way of encouraging the development of India-China relations in a direction beneficial to everyone.

George Yeo

Changes in the Strategic Landscape

Addendum to the President's Address at Parliament

1. The strategic landscape is changing dramatically.  The re-emergence of China and India is reshaping Asia and the world.

2. With the rapid growth of Asian economies, the patterns of interaction within Asia and between Asia and the rest of the world are changing and becoming more complex.  We have to respond to new challenges and opportunities.

3. With all the pieces now in motion, we have to review old assumptions and chart new directions for ourselves.  Whether the promise of 21st century Asia can be realised depends critically on stable relations among the major powers, particularly Sino-US relations.  Japan, India and Russia will also play major roles.  An integrated ASEAN is in everyone's interest.  How ASEAN positions itself in this complex new environment will affect our collective well-being for years to come.

 
4. Singapore and the region will benefit hugely from a strong ASEAN at the centre of an Asia on the move.  If we ride on this great tide, our future will be bright.  This must be the objective of our foreign policy.

SINGAPORE'S FOREIGN POLICY PRIORITIES

5. The fundamentals of Singapore's foreign policy remain sound.  We must refresh established relationships while growing new ones.

6. We must further entrench ASEAN as the cornerstone of our foreign policy.  Building a strong ASEAN Community is an imperative.  We are actively involved in drawing up an ASEAN Charter which will define our collective destiny in Southeast Asia.  We look forward to our assumption of the ASEAN Chairmanship next year, which coincides with ASEAN's 40th Anniversary.  We pledge to work closely with the rest of ASEAN and all of ASEAN's partners.

7. With our closest neighbours, Malaysia and Indonesia, we will continue to adopt a positive, pragmatic approach to strengthening bilateral relations based on mutual respect and benefit.  There is much scope for increased cooperation.  For example, the Framework Agreement that has been signed between Singapore and Indonesia to develop Special Economic Zones on Batam, Bintan and Karimun will open a new chapter in our economic relationship.  PM Lee and President Susilo Bambang Yudhoyono had also agreed in October 2005 to convene parallel negotiations on an Extradition Treaty, the Defence Cooperation Agreement and the Counter-Terrorism Agreement.  Negotiations are ongoing and we look forward to the early conclusion of these negotiations.  For Malaysia, there is also scope for closer cooperation. From time to time, disagreements and differences in views may arise between neighbours who depend so much on each other.  What we must do is to build on the positives and not allow contentious issues to define our relationships.

 
8. Within the region, we enjoy good and longstanding ties with Thailand. We will work closely with the new Thai Government for our mutual benefit and to strengthen ASEAN.  Our relationship with Vietnam is excellent and holds much promise for future growth.  We will continue to look for ways to strengthen our links to Brunei, the Philippines, Cambodia, Laos and Myanmar.

9. Beyond ASEAN, our growing web of FTAs with the US, Japan, Korea, Australia and New Zealand, among others, benefits Singaporeans and helps to promote economic liberalisation in the region.  The Singapore-India Comprehensive Economic Cooperation Agreement signed in June 2005 has paved the way for India's greater engagement of ASEAN.  Similarly, the China-Singapore Free Trade Agreement, where both sides recently agreed to commence negotiations, would give greater momentum to the establishment of the ASEAN-China Free Trade Agreement.  We are also working on Free Trade Agreements between ASEAN and Japan, ROK, India and Australia/New Zealand to complement our existing FTAs.

10. Because of our strategic position, the major powers have a strong interest in our stability and well-being.  They are our major economic partners and provide us assistance in critical areas.  We want them to have a vested interest in an ASEAN that is open, strong, integrated and outward-oriented.  In a modest way, ASEAN can provide them with a neutral platform to work for the regional good.

 
11. Singapore will continue to strengthen its links with the US, the EU, Japan, China, India and Russia.  Our ties with the US and Japan are deep.  We are constantly looking for new opportunities to further increase our engagement with them so as to anchor further their interest in the region.  To support our growing relations with China and India, we will enhance our diplomatic representation in these two countries.  Our relations with Australia and New Zealand are intimate and rooted in history.  We are engaged in talks with Russia and India to develop Special Economic Zones.  With ASEAN at the core, we will work through the ASEAN-plus meetings, APEC (Asia Pacific Economic Cooperation), EAS (East Asia Summit), ARF (ASEAN Regional Forum) and ASEM (Asia-Europe Meeting) to increase and secure Singapore's external economic and political space.  We will pay particular attention to transborder issues such as terrorism, piracy, pandemic diseases and environmental protection including finding long-term solutions to the haze which has afflicted us in the last couple of months.

12. We are rediscovering the Middle East.  We have stepped up high level exchanges with countries in the Middle East in the last three years. Many of them see Singapore as a reliable partner and as a model for social and economic development. We have created new platforms and mechanisms to broaden and deepen our cooperation with them.  To facilitate long-term cooperation and mutual understanding between the Middle East and Asia, we initiated the Asia-Middle East Dialogue, hosting the inaugural session in 2005.

13. We will also explore new opportunities in Latin America. We support the Forum for East Asia - Latin America Cooperation (FEALAC) as a way to increase understanding and exchange between the two regions.  Although our economic links to Africa are weak, we treasure our strong friendship with many African nations and work closely with them at international forums like the UN and the Commonwealth.

 
14. Singapore has always been a supporter of international organisations like the UN and the WTO.  We support the reform of the UN and the early resumption of negotiations and conclusion of the Doha Development Agenda.  At the last World Intellectual Property Organisation (WIPO) Meeting held in Singapore this year, a new 'Singapore Treaty on the Law of Trademarks' was successfully negotiated under Singapore's chairmanship.  A WIPO Office was opened in Singapore last year.

   
15. Because of greater interest in Singapore's development experience, we have been steadily expanding the Singapore Cooperation Programme (SCP) in a quiet way.  Since 1992, the Programme has sponsored courses and study visits for over 45,000 officials from 164 developing countries.  This has won us many friends.  It was in response to numerous requests from foreign governments for our expertise to help build up a range of public sector services that we launched the Singapore Cooperation Enterprise (SCE) to provide customised one-stop consultancy for such needs.

 
16. We are committed to inter-faith dialogue in the world.  Without greater inter-faith understanding, religious conflict will create problems for many countries including our own.  The messages delivered by the Grand Imam of Al-Azhar University Dr Muhammad Sayyid Tantawi and the Pope's Special Envoy Cardinal Renato Raffaele Martino during their visits to Singapore earlier this year have been helpful and inspiring.  We will do more to promote inter-faith dialogue in the coming years. 

SUPPORTING SINGAPOREANS ABROAD

17. As Singapore's external wing grows, more of our citizens will travel overseas for work, business, study and leisure.  The Ministry of Foreign Affairs will support Singaporeans abroad.  We will improve the services we provide to Singaporeans living or travelling overseas especially in times of emergency.  Earlier this year, the ASEAN Foreign Ministers agreed that, in an emergency, a citizen of an ASEAN country can turn to the mission of any other ASEAN country for help should his own country not have a mission in the foreign land.

18. Singapore is entering an exciting new phase in its history.  We are well-positioned in an Asia on the move.  If we organise ourselves well, work closely with our ASEAN neighbours and strengthen our links to the major powers, we can create many new opportunities for our people to better their lives in Singapore and abroad. 

George Yeo

Henry Ford and Harold Fock - Our Love for the Color Black

In Management 101, our lecturers love to tell us Henry Ford's Model T story. In his search for industrial productivity, he insisted that all Model T cars had to be painted black. "You can paint it any color as long as it is black." This has always been held up as a quintessential example of not listening to customers' needs for variations. There must be some historic car lovers who wanted their Ford Model T in pink or polka-dots yellow. In those days, you don't argue with the boss.

Personal Disclosure here - I love the color black. I drive a black car. Use a black Macbook and a black Fujitsu notebook. All my bags are black. All my office wear (except for the occasional white shirt to see institutional or private investors) are black. I live in a suitcase and having one color save me a tremendous amount of packing time. Black shoes goes with black socks, goes with black pants, goes with black T-shirt or black long-sleeves which ultimately, goes with a black suit. You look comfortable, fashionable and efficient. And black adds an air of mystery to your personality and personal branding . Guess why Batman does not wear bright blue and red? TO be fair, he is smart enough not to wear his underwear outside as the juvenile joke goes, so his fashion sense should be better than the other superhero.

But seriously, does consumer really want the entire spectrum of colors in their product? We don't need to look far. Apple IPOD versus Creative Zen players. Apple IPOD (mostly) comes in two colors- black or white. Creative has an endless range of colors. Technologically, one could even rank Creative players as more advanced than Apple's. And yet, simplicity (or rather lack of choice) beats variety hands down. There is something irresistable about the two color schemes adopted by Apple. They look retro, classy and timeless as opposed to all the fancy names like Ultra Neon and Shocking Pink (note: I made the names up; Creative does not call them that). Apart from looks, there is a functional reason to keep it black or white. If you produce accessories (as a third party) for IPOD, your production line only needs to deal with two colors. In fact, it became a high margin business opportunity for third parties selling all kinds of colored IPOD skins, pouches and speakers. Humans need to find ways to differentiate or stand out among themselves but too many choices confuse them.

I shared this story with a friend and her not-so-serious reply was that Henry Ford was a just a man of his times. It was black and white movie then. It is a multi-colored digital world now. Maybe. However, I still suspect Henry Ford is right. Had he been born today and launched his black Model T in the 21st Century, he might just say, "Paint it any color you want as long as it is black BUT do visit the iFORD store to customise your Model T". Perhaps, he understood consumers' needs more than we do. Simplicity wins again.

 

Harold Fock