BEYOND SG

SPEECH BY MINISTER FOR FOREIGN AFFAIRS GEORGE YEO AT THE BOOK LAUNCH OF "THE MAKING OF THE ASEAN CHARTER" ON 24 FEBRUARY 2009 AT THE MINISTRY OF FOREIGN AFFAIRS DPM

Excellencies, Dear friends, Colleagues
 
1 Listening to Walter, now I know why camels tear all the time. This will be a difficult year for all of us in ASEAN. How long this global economic crisis will last no one knows. It is not likely to be short. In the coming months, retrenchment in every ASEAN country will rise steeply. All governments in ASEAN will come under stress to a greater or lesser degree.

2 Under such conditions, it is natural that protectionist sentiments will rise. Governments will come under growing domestic political pressure to protect jobs and to favour local businesses.

3 ASEAN itself will be put to the test. Without strong leadership, individual ASEAN countries in their preoccupation with domestic economic problems may not follow through on commitments. The political will to make ASEAN an ever closer community may slacken.

4 By the time this crisis is over, the cards would have been reshuffled. Some countries will surge ahead while others will slide behind. As for ASEAN, the question is whether this crisis will make us stronger or weaker. Much will depend on the response of ASEAN leaders and their collective determination to maintain solidarity under trying conditions. We cannot be sure now how they will react.

5 During the Asian Financial Crisis, many analysts thought that it would spell the end of ASEAN. In fact, the opposite happened. Despite economic and political upheavals, leaders and ministers continued to meet and make tough decisions. Somehow there was a deep instinct to keep together. Our Asian dialogue partners, China, Japan and South Korea, also stayed close. It was during the Asian Financial Crisis that the ASEAN+3 grouping was formed. We persisted in our trade liberalisation agenda and began a series of free trade initiatives which put ASEAN in a much stronger position today.

6 There is therefore reason for us to be cautiously optimistic that ASEAN will come together even more during this crisis.

7 It is fortunate that we face this crisis with the ASEAN Charter already in force. When we embarked on the process of drafting the Charter a few years ago, there was considerable scepticism. Despite divergent views in the early stages, the Eminent Persons Group (EPG) under Tun Musa Hitam's chairmanship concentrated on the major issues and presented a historic report to ASEAN Leaders in January 2007. A year before, Malaysian Prime Minister Abdullah Badawi in the ASEAN Chair commented that “the Charter is a momentous undertaking” and he instructed the EPG to “be bold and visionary in proposing major steps”, adding that “in order to provide the Eminent Persons the greatest flexibility, ASEAN has not stipulated any Terms of Reference”. It was a blank sheet of paper that was provided to the EPG.

8 Based upon the EPG’s report, the Charter was drafted chapter by chapter, never easily, by the High Level Task Force which was chaired first by Ambassador Manalo, and later by Professor Tommy Koh. I am so happy that Ambassador Manalo is here to join us for this afternoon’s launch of the book. Foreign Ministers met many times to settle key points in different parts of the world. Often we started our discussions not knowing whether we would come to any decision at the end of it. But, somehow, there was always a strong political will to settle, move forward and a helpful spirit of compromise.

9 I remember two particular decisions which many of us feared might long remain deadlocked. One was what "ultimate dispute settlement" by the Leaders meant. If decisions were always by consensus, how could recalcitrant behaviour be disapproved of and sanctioned against? And if you could not impose sanctions, then what was the purpose of the organisation, what discipline could it enforce? Gradually, we came to the conclusion that the Leaders acted as a college of peers, who could establish their own rules of discussion and decision-making. We could not limit their freedom of action. It was a deep view, not a cop out. To specify more was not only unrealistic but needlessly disputatious.

10 A second decision was the establishment of an ASEAN human rights body. Views were polarised not because any ASEAN country was against human rights, but because some rightly feared that such a body might be used by external powers to pressure them. By seeing the issue from each other's point of view, we were able to make some progress - enough for a provision to be made in the Charter, but not enough for that provision to be fleshed out in the Charter. This is of course a subject that remains under intense discussion and will be on the agenda when Foreign Ministers meet in Hua Hin in two days' time. Well, I doubt that whatever body established will have teeth, but it will certainly have a tongue and I certainly hope it will be a sharp one.

11 After the Charter was signed by ASEAN Leaders in November 2007, we could not be sure that all ten countries would ratify it within a year. But all did eventually, miraculously, and the coming into force was celebrated at the ASEAN Secretariat in Jakarta last December 15th despite the postponement of the Summit. Secretary-General Surin Pitsuwan has been energetic in getting the Charter implemented. The Secretariat is being strengthened and a Committee of Permanent Representatives is being formed.

12 The ASEAN Charter will help us get through this economic crisis together. All three pillars of ASEAN must be strengthened in a balanced way. While the current emphasis is obviously economic, this can only happen if there is sufficient political will backing it. That political will in turn requires support of the ASEAN idea among ordinary citizens. In other words, for the ASEAN Charter to be part of our collective DNA, it must be internalised in the minds and hearts of the people of ASEAN. Last December when we celebrated the coming into force of the Charter, we also released the new ASEAN Anthem. I hope that every school child in ASEAN will learn to sing the anthem one day, memorizing it by heart the way we do for our national anthems. I suppose this must begin with leaders and ministers.

13 It is good that Ambassador Manalo, Attorney-General Walter Woon and Professor Tommy Koh came together to edit this book of contributions from many of those who were involved in drafting the ASEAN Charter. These reflections will help future generations understand the Charter's overall design, why it looks the way it does, and why and how certain key provisions were drafted in a particular way. I am delighted to join all of you here for the launch of the book this afternoon, and to add my congratulations to the many which the authors must have already received.

14 Thank you.

 

With AG and Ambassador Manalo

  

The Book "The Making of the Asean Charter" 

 

Group Photo

Youtube:

White Tiger by Aravind Adiga

Over the weekend, I finished reading the book 'White Tiger' by Aravind Adiga, winner of the Man Booker Prize 2008. This riveting novel telling a story about contemporary Indian society was recommended to me by Ambassador Gopinath Pillai. As social commentary, it is powerful, even lacerating. Our hero-murderer Balram started life in Bihar where caste politics ruled, near Bodh Gaha which I'll be visiting later this week. It ends with him starting a new life as an entrepreneur in Bangalore. Written as a letter to Wen Jiabao (yes, China's PM), the book is both funny and sad. The details in Adiga's narration reflect what goes on everyday in India - the despair and the hope, the claims of family, the corruption, the social and economic injustices, the drama of Indian democracy, the promise of the future. For those who love India, this short book is worth reading.

George Yeo

   

REPLY BY MINISTER FOR FOREIGN AFFAIRS GEORGE YEO TO THE SUPPLEMENTARY QUESTION IN PARLIAMENT DURING

Mr Zainudin Nordin: A point of clarification: would the Minister be able to elaborate on the benefits from the [GCC-Singapore] FTA?  Are there many Singaporean companies who will benefit from that and what kind of anticipation that we are expecting from the growth in businesses between Singapore and the Middle East countries?

 

Minister: MTI will be briefing businesses about the opportunities which will flow from this FTA.  We are seeing a greater flow of Middle Eastern funds into Singapore. As you know, Islamic finance is growing nicely.  Singapore is a strong jurisdiction and in times of crisis, there is always a flight to strength and we should exploit this opportunity.  Under the FTA, there is also recognition of MUIS’ halal certification, and we see here a new opportunity for many of our food exporters.  And in fact I’ve been asked to officiate at the launch of a seminar precisely on halal exports in a few weeks’ time.  There are many opportunities. Our businesses are now all over the Middle East.  They are well regarded; we are considered a brand name.  We must continue to protect our reputation, establish a good track record.  And I believe many benefits will accrue to our businesses and to Singapore individuals in the coming years in different countries in the Middle East.

 

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REMARKS BY MINISTER FOR FOREIGN AFFAIRS GEORGE YEO IN PARLIAMENT DURING COMMITTEE OF SUPPLY DEBATE

In response to questions by Members of Parliament:

· Ms Indranee Rajah, Mr Hawazi Daipi and Dr Mohamad Maliki Bin Osman on the Regional Situation and ASEAN

· Mr Hawazi Daipi on Bilateral Relations with Neighbouring Countries, China and India

· Ms Indranee Rajah and Ms Irene Ng Phek Hoong on APEC

· Ms Indranee Rajah on Bilateral Relations with the US, China, India and Japan

· Mr Michael Palmer on US-Singapore and US-ASEAN Relations

· Mr Ang Mong Seng on Singapore-China Relations

· Mr Zainudin Nordin and Dr Mohamad Maliki Bin Osman on the Middle East

DRAMATIC CHANGE OF GLOBAL SITUATION

1 Mr Chairman, Sir, let me first thank Members of this House for their comments and questions on Singapore's external relations.

2 We live in dramatic times.  In the coming months, the global economic crisis will cause millions of people to lose their jobs around the world.  In some countries, mass unemployment will lead to political crisis.  Over the next few years, there will be a major re-pricing of assets, of factors of production, of entire countries, even of ideas.  Out of all this will emerge a multi-polar world with China, India, Russia, Brazil and other countries sharing power with the West and Japan.  The US will, however, remain the leading power for a long time to come.

3 In this shifting configuration, we are presented with both threats and opportunities.  The tides are changing in a complex and uncertain way.  Unless we adjust comprehensively and reposition ourselves nimbly, we may miss the flow and be stranded high and dry.

4 Whatever the scenario, however, the strategic importance of ASEAN is unchanged.  Indeed, ASEAN will become more essential to all the countries of Southeast Asia as China and India re-emerge as major powers on the global stage.

ASEAN

5 Ms Indranee Rajah and Mr Hawazi asked about the progress of ASEAN; Mr Maliki expressed concern about the delay of the summit meetings.  All worried about ASEAN’s credibility. 

6 Despite domestic political problems in some member states, the political will for a strong ASEAN among all ten member states remains firm.  Despite significant disagreements at first, we were able to draft the Charter and get it ratified at the end of last year.  Despite doubts and difficulties, we are not only implementing the Charter in a determined way, we are also consolidating the larger regional architecture around ASEAN.  I refer in particular to ASEAN+3, the EAS (East Asia Summit) which draws in India, Australia and New Zealand, and the ASEAN Regional Forum.  In addition, ASEAN also plays an active role in ASEM (the Asia-Europe Meeting) and FEALAC (the Forum for East Asia-Latin America Cooperation).  And last year, we held the first ASEAN-MERCOSUR Meeting of Foreign Ministers in Brasilia.  This May, the first ASEAN Foreign Ministers' meeting with the Gulf Cooperation Council Foreign Ministers will be hosted by Bahrain.  To coordinate the vastly increased workload, the ASEAN Secretariat, under the energetic leadership of Dr Surin Pitsuwan, is being strengthened and the ASEAN Charter is being implemented.

7 It is true that the Thai chairmanship of ASEAN has been affected by domestic political discord.  The ASEAN Summit has had to be postponed from December last year to the end of February this year.  That could not be helped.  Because of the conflicting travel schedules of leaders, the Chair has not yet been able to fix the dates for the ASEAN+3 Summit and the EAS.  This is not good because urgent decisions like the increased currency swap lines under the ASEAN+3 Chiangmai Initiative have got to be made.  But we must persist in supporting the Thai Government and making sure that ASEAN continues to push forward in the face of the global economic crisis.

8 Singapore's chairmanship of ASEAN from July 2007 to July last year turned out to be more eventful than we had planned for.  We were able to progress the ASEAN agenda well enough, especially the drafting of the Charter.  What intruded unexpectedly was the violent crackdown on peaceful demonstrators, including Buddhist monks, in Myanmar in September 2007.  ASEAN Foreign Ministers were in the UN for the General Assembly at that time.  We had to convene an emergency meeting to express our collective revulsion.  We also supported the use of the Good Offices of the UN through the Gambari mission.  However, the Myanmar Government objected to Professor Gambari meeting ASEAN leaders during the Summit in Singapore at the end of 2007, making it clear that Nay Pyi Daw wanted to deal with the UN and the international community directly.  Thereafter, ASEAN stood aside until the tragedy of the Cyclone Nargis hit in early May 2008.   For two weeks, there was a standoff between a paranoid Myanmar Government on one side, and foreign governments and international aid agencies on the other.  Singapore in the Chair convened an emergency ASEAN Foreign Ministers meeting and persuaded Myanmar to agree to the formation of an ASEAN Humanitarian Task Force and the Tripartite Core Group to oversee the flow of international assistance.  That process worked very well, much better than anyone had hoped for.  With the help of ASEAN, some trust was thereby re-established between Myanmar and the international community.  And all this added considerably to our workload in the Chair.  Although political progress in Myanmar remains slow and difficult, ASEAN did make a significant contribution to the people of Myanmar, especially in preventing a second wave of deaths from famine and hunger.

9 The credibility of ASEAN is a challenge to us in these trying times, and so it was too during the Asian Financial Crisis when some commentators felt that ASEAN would become diminished.  But in actual fact, under the pressure of crisis, leaders met, acted, and we became stronger as a regional organisation.  This present economic downturn presents a fresh challenge to us and there are domestic political difficulties, there are bilateral political problems like Preah Vihear.  But I believe because of the changes in the world, because of the rise of China and India, the countries in Southeast Asia have no choice but to stay united and proceed with even greater determination on the integration of our economies, closer political coordination, and a gradual outreach to young people, to make the ASEAN Community not only a legal reality but a reality in our hearts and in our minds. 

RELATIONS WITH MALAYSIA, INDONESIA AND THAILAND

10 Mr Hawazi Daipi asked about our relations with Malaysia, Indonesia and Thailand.

Malaysia

11 With Malaysia, our relations have improved considerably under PM Abdullah Badawi.  In November last year, Foreign Minister Rais Yatim hosted the Singapore delegation for the Wisma Putra-MFA Games in Johor with great warmth.  With the judgement of the ICJ (International Court of Justice), our bilateral dispute over sovereignty of Pedra Branca has been resolved, but to be sure, to neither side's complete satisfaction.  Maritime boundaries around Pedra Branca are, however, yet to be delineated.  We hope to do this expeditiously through the Malaysia-Singapore Joint Technical Committee in a constructive spirit.  Both sides have also been discussing the implementation of the Points of Agreement.  On Iskandar Malaysia, the Joint Ministerial Committee has met a number of times with good results.  With the economic crisis, it is all the more important for the two countries to cooperate for mutual benefit.  And the recent decision to free up the KL-Singapore air sector to competition has brought down fares.

12 When PM Lee Hsien Loong met Malaysia Deputy Prime Minister Najib in Lima last November, he expressed the hope that bilateral relations could be raised to an even higher level.  Deputy Prime Minister Najib responded positively and PM Lee suggested the development of an iconic project in Iskandar Malaysia to express this common aspiration.

Indonesia

13 Our relations with Indonesia are also very good.  Apart from the ET/DCA (Extradition Treaty/Defence Cooperation Agreement) issue which both sides agreed to set aside for the time being, Indonesia and Singapore cooperate closely on a wide range of issues.  Just last month, President Yudhoyono inaugurated the Batam/Bintan/Karimun Free Trade Zone drawing the two countries closer together.  To facilitate to-ing and fro-ing, Singapore will establish a Consulate in Batam this year.  Relations between the TNI and the SAF are excellent with regular joint exercises conducted by all three services.  We are completely on the same side in our fight against terrorism.  We work together on fighting bird flu in Tangerang in West Java and fighting forest fires in Jambi.  On ASEAN and the regional architecture, Indonesia and Singapore share almost identical positions.   And recently, after six rounds of negotiation, both sides agreed on the delineation of our sea border in the western part of the Singapore Strait.  Foreign Minister Hassan Wirajuda and I will be signing the agreement within a few weeks.  This agreement would have to be ratified by the Indonesian DPR (House of Representatives).

14 We must continue broadening and deepening our relations with Indonesia in the coming years. In contrast to the Soeharto era, Indonesia's power structure has become much more complex.  In Jakarta, we need better links to the legislative branch of the government.  Our MPs should get to know their DPR counterparts better and develop personal relationships.  Indonesia has a lively media which we must be ready to engage.  Indonesia has also devolved much power to the provinces and kabupatens (regencies) and it behooves us to build stronger links to the provinces and kabupatens that are closer to Singapore.  We should also pay attention to people-to-people links including exchanges among scholars, students and artists. 

15 Whatever the outcome of the elections in Indonesia in the coming months, the relations between Indonesia and Singapore will remain strong because both sides need it.

Thailand

16 As for our relations with Thailand, they are back to normal.  We have to deal with whoever is in authority.  We do not know how long the political uncertainty will continue.  But whatever the domestic political situation in Thailand, we have to rise above it and keep formal bilateral relations on an even keel because that is in the best interest of both countries.   All of us know that there is considerable mutual affection between Thais and Singaporeans.  Many of us know Prime Minister Abhisit personally.  Singaporeans visit Thailand by the hundreds of thousands every year.  We were very touched last year when Princess Ubolratana chose Singapore to screen the international premiere of her movie "Where the Miracle Happens".  Princess Sirindhorn visits Singapore regularly in connection with her work on technology for the handicapped and on philanthropy. 

 

APEC

17 Ms Indranee Rajah and Ms Irene Ng asked about our hosting of APEC in November this year and how Singaporeans can benefit from it.

18 This will be a major event because the leaders of 21 economies in the Asia-Pacific will be attending, including new leaders like President Barack Obama of the US and President Dmitry Medvedev of Russia.  The world's media spotlight will be on Singapore that week.  It is important that we host the meeting well.  At the last APEC Economic Leaders' Meeting in Lima, Peru, it was heartwarming the way ordinary people joyously greeted visiting delegations, waving from motorcars and sidewalks.  And as Ms Irene Ng said, we should try to do the same in Singapore so that the meeting in Singapore becomes a memorable experience for all those who come.  In addition to the APEC Economic Leaders' Meeting, we expect some leaders like China's President Hu Jintao to make bilateral visits to Singapore just before or after.

19 We will be celebrating the 20th anniversary of APEC in Singapore.  I remember vividly the first meeting in Canberra twenty years ago.  That same week, the Berlin Wall fell.  Many of us had a sense that one chapter in history was being closed and a new chapter was being opened.  By happy chance, at the same time as we hold APEC this year, a 16-foot stretch of the Berlin Wall will be unveiled at Bedok Reservoir near Temasek Poly on the 20th anniversary of the fall of the wall in Berlin on 9 November and we will have a big party. 

20 As Chair of APEC, Singapore has the responsibility to push forward the APEC agenda, particularly promoting economic cooperation in the Asia-Pacific and resisting protectionism.  With the sharp economic downturn, protectionist sentiments will rise in many countries.  As we all know, the chance of the Doha negotiations being concluded in the near future is small.  In trade matters, like riding a bicycle, there is always a danger of falling off when you are not moving forward.  An important item for APEC is the proposal to establish as a long-term goal a Free Trade Area of the Asia Pacific.  In fact, this is the only way to operationalise the Bogor Vision of the Asia-Pacific becoming a region for the free flow of trade and investment by 2020.   The Trans-Pacific Strategic Economic Partnership, which is a proposed FTA of a number of APEC economies, will help us get there.  The US, Australia and Peru will be negotiating membership with the present members, which are Brunei, Chile, New Zealand and Singapore.  Vietnam has expressed interest too. When the 21 leaders meet in Singapore this November, we can be sure that their preoccupation will be the global economic crisis because all economies are seriously affected by it and by the end of the year that crisis will bite hard in every economy.

21 If we host the meeting well both in substance and in form, Singapore's international reputation will be enhanced, and this will be good for our economy - precisely the point Ms Irene Ng made.

RELATIONS WITH THE US, CHINA, JAPAN, INDIA

US

22 Both Ms Indranee Rajah and Mr Michael Palmer asked whether a new Administration in the US will mean a change in our relations and ASEAN's relations with the US.

23 Singapore's relations with the US are excellent and should remain so under the Obama Administration.   Whatever others might say of the previous Administration, from our perspective, US policy on East and Southeast Asia under President George W Bush was constructive and good for the region.  We expect stability of the core positions under President Obama.  We do know and we have been in contact with a number of the key officials in charge of East and Southeast Asian policy in the new Administration.   Singapore's FTA with the US continues to be a model for other countries and has helped us attract investments into Singapore and create jobs.   Our Strategic Framework Agreement with the US also enhances the security of the region.

24 As for US relations with ASEAN, we might well see an improvement under President Obama.  Because, as Mr Palmer said, he lived for four years in Indonesia as a young boy, President Obama has a feel for the region which goes beyond what is contained in briefing documents.  You know, when Ambassador Chan Heng Chee greeted President Obama at a social function in Washington DC last week, he replied in Bahasa Indonesia to Ambassador Chan’s surprise and she had to quickly search her mind for Malay words in response.  When Prime Minister Lee met then-Senator Obama in May 2007, he fondly recalled following his mother to Singapore for occasional shopping trips from Indonesia.  We look forward to welcoming Secretary Hillary Clinton to our ASEAN Ministerial Meeting in Bangkok in the middle of the year and President Obama for the APEC Economic Leaders' Meeting in November.  At her confirmation hearing in the Senate, Secretary Clinton laid out a position on ASEAN which we are very comfortable with. 

25 While we position ourselves for an increasingly multi-polar reality in the world, the fact is the US will remain the pre-eminent pole for a long time. Without the US in the lead, multi-polarity can be unstable and even dangerous.  Without the US driving the G-20 process, the reform of global institutions cannot be accomplished.  Without the US staying deeply embedded in East and Southeast Asia, the region can be destabilised, affecting prospects for peace and development.  And as for the dangers of the US turning protectionist, this will be an ongoing struggle within the US body politic itself.  We read recently how, in passing the stimulus bill in the House of Representatives, a clause was added to buy American steel first.  But because countries protested and the White House stated its position, when the same bill went to the Senate, the Senate said that it would be subjected to all international agreements being observed.  That is a good sign, but we expect this to be a continuing fight in US domestic politics because of rising unemployment. 

China

26 Ms Indranee Rajah, Mr Hawazi Daipi and Mr Ang Mong Seng asked for an update of our relations with China.

27 China will become increasingly important to our well-being in Singapore as its economy and influence grow.  In December last year, we commemorated the 30th anniversary of Deng Xiaoping's visit to Singapore around the time he launched China on its new path of reform and opening up, a decision which was historically decisive for China and the world.  Over the years, we have built up our links with China and our China account is now considerable.  A few months ago, we concluded our FTA with China, which complements ASEAN's FTA with China.   And later this year, both sides will be celebrating the 15th anniversary of the Suzhou Industrial Park, which has become one of the most successful parks in China.  That project deepened mutual understanding, created trust and facilitated cooperation across a wide range between the two sides.  The new Tianjin Eco-City Project will take our bilateral relationship to a new plane.

28 During this economic downturn, China's economy will continue to grow.  Last week in Davos, Premier Wen Jiabao reported that China would strive to achieve 8% GDP growth this year.  MFA will work with MTI and the various economic agencies to open up more business opportunities for Singapore businesses in China in the coming months and years.

29 Mr Ang Mong Seng asked about the state of cross-strait relations and Singapore's relationship with both sides of the Taiwan Strait.  Under President Ma Ying-jeou, cross-strait relations have improved considerably. “San Tong” (三通) benefits not only Mainland Chinese and Taiwanese but everyone else in the region.  I was in Xiamen last month and could feel the sense of optimism about the future.  Within Singapore's "One China" policy, we maintain good unofficial relations with Taiwan.  We will benefit from the new situation and will try to make a positive contribution to cross-strait relations.

30 2011 marks the Centennial of "Xinhai Geming" （辛亥革命）, the great Republican revolution which transformed Chinese society worldwide.  Singaporeans played a significant role in that revolution and subsequently paid a heavy price for it when the Japanese came.  The Singapore Chinese Chamber of Commerce & Industry will organise a big celebration at "Wan Qing Yuan" (晚晴园), a monument revered by Chinese on both sides of the Taiwan Strait.  In 2011, at about the same time, Singapore will also be hosting the World Chinese Entrepreneurs Convention.  The Convention was initiated by Singapore's Chinese business leaders and launched by then-Senior Minister Lee Kuan Yew in 1991.  We are delighted to play host again in Singapore after 20 years.

Japan and India

31 Ms Indranee Rajah also asked about our relations with Japan and India.  Mr Hawazi Daipi asked about our relations with India. 

32 Our relations with Japan and India are very good.  As maritime nations, Japan and Singapore share common interests in many strategic areas.  We appreciate Japan's positive contributions to the economic development of Singapore and Southeast Asia.  We support the inclusion of Japan and India as permanent members of the UN Security Council. 

33 This year, President and Mrs Nathan will be making a state visit to Japan following the successful visit of Emperor Akihito and Empress Michiko to Singapore in 2006.  These visits symbolise the close relationship between our two countries.

34 With India, our relations continue to grow in a multi-faceted way – political, economic, defence and cultural.  Like China, India will continue to grow at a good clip during this economic downturn.  At Davos, Indian Commerce Minister Kamal Nath expected India's GDP to continue growing at 7 to 7.5% this year.  Like for China, we will work hard to open up new opportunities for our businesses in India both at the centre and in the states, capitalising on our position as one of India's major investors. We also want a strong reflection of India in Singapore.  Over 3,600 Indian companies now operate out of Singapore.  Last year, the first overseas meeting in the region of Non-Resident Indians, Pravasi Bharatiya Divas, was successfully held here strengthening our links to the worldwide ethnic Indian network.

MIDDLE EAST AND GAZA

35 Mr Zainudin wanted an update about the state of our relations with countries in the Middle East.

36 As Members would have noticed in media reports, the flurry of high-level bilateral visits between Singapore and the Middle East continues unabated, and President Nathan will soon be visiting the Middle East again.  The Middle East is an important new frontier for us.  Despite the drop in the price of oil and the collapse of real estate bubbles, the region will stay wealthy because the cost of producing oil and gas is very low.  I remember one Kuwaiti minister telling me that it only costs US$1-2 to extract a barrel of oil in Kuwait; no need to pump because the oil is already under pressure and will gush out on its own.

37 Particularly in these difficult times, we must explore new openings in the Middle East.  Many countries there want closer cooperation with us, seeing lessons they can draw from Singapore's developmental experience.  They also appreciate our integrity and our forthrightness.   The appointment of Prof Shih Choon Fong, former President of NUS, as the President of the new King Abdullah University of Science and Technology is a compliment not just to him but to the Singapore education system. When the new Libyan Ambassador called on me recently, he expressed a strong hope that our bilateral relations will flourish.  The signing of the Free Trade Agreement between Singapore and the GCC in December last year, which is the first to be signed by the GCC with any country or region, benefits both sides.  We have to continue building up our knowledge and expertise on the Middle East.  Mr Zainudin talked about the Middle East Institute which is gradually building up layers of expertise. It will take time as this is a long-term undertaking, but it is making good progress. Together with MTI, we will build up our stock of Arabic speakers and send more officers to the countries which offer us the most opportunities.   With the developed countries in recession, we will give particular emphasis to new opportunities in the Middle East, in addition to China and to India.  These will be our areas of concentration.

38 I shared Mr Maliki's abhorrence at the unending cycle of violence in Palestine, in particular recently in Gaza.  When Turkey's Prime Minister Erdogan stormed out from the panel in Davos last week, he expressed the anger which many people feel about the lives lost in Gaza when the Israeli Army moved in to stop the firing of rockets by Hamas into Israeli towns and villages.   Singapore has good relations with both Israel and the Palestinian Authority in Ramallah.  While we understand the legitimate right of Israel to self-defence and understand the fear they face when rockets could suddenly explode in their midst in the middle of the night, we were however dismayed by the disproportionate response.  We hope the present ceasefire will hold.  We support a two-state solution with the Palestinians having their own sovereign state on the West Bank and in Gaza.  This can only happen if Hamas is prepared to work with Fatah and accepts the PLO's (Palestine Liberation Organisation's) commitment to renounce violence and recognise Israel. And Singapore has stated this position repeatedly at the UN and in various media releases.

CONCLUSION

39 With the world in disarray, Mr Chairman, MFA expects this to be a busy year.  The international configuration is changing dramatically.  We have to be alert to changes that could affect our well-being, avoiding dangers and seizing opportunities.  We must continue to nurture good relations with all our neighbours and with all the major powers, and I thank Members of this House for your full and consistent support.

 

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Davos

What a contrast this year's WEF at Davos makes from last year's. I remember being on the same panel as Shimon Peres, Henry Kissinger and Goldman Sachs' CEO Lloyd Blankfein. Then the concern was mostly with the sub-prime collapse and over how much Asia has decoupled from the US. Since then, the collapse of financial institutions has been followed by a full-blown global economic crisis. No one now doubts how much globalisation has coupled together all the major economies of the world.

Till today, economic historians argue over the causes and lessons of the Great Depression in the 30's. I've just read John Kenneth Galbraith's very readable account of the Great Crash 1929 which can almost pass off as an account of the present crisis. How history repeats itself when human memory fades. Karl Marx once observed that history repeats itself, the first time as tragedy, the second time as farce.

The fact is that no one knows how deep or long this downturn will be. Some weeks ago, Financial Times said that Fed Chairman Bernanke was flying blind. I don't think any government today is flying with clear vision at all. Singapore's Budget recently was premised upon an uncertain future to which further responses might be necessary. We are running into a big storm. What we can do is to move into a different state of alertness and readiness, and be mentally prepared for all eventualities, as best we can.

Provided we don't make major mistakes, Singapore will pull through better than most other countries because of our strengths. Our key strength is a people with a practical mindset - working hard, saving, responding to change, making sure our kids know that no one owes them a living, so better study hard and get a good education. The basics don't change. The Government has always been careful and frugal, building up the reserves when we could, so that we have something for a rainy day ... Well, this is going to be more than a passing shower.

2009 will be a dramatic year. The whole world is watching what a new Obama Adminstration will do to fix the US economy. Hundreds of billions of dollars will be spent this year alone which must either be financed by foreign borrowing or by printing money. There are no easy choices and all are painful. The least painful may be the most costly in the long run. Many countries will be politically destabilized. In MFA, we are girding ourselves for a busy year.

George Yeo