'Committed To Carry Reforms Forward'

Minister George Yeo : There is almost completeagreement on the importance and the mutual benefit of  close relationsbetween India and Singapore. We share a common vision of the future and a commoninterest in a greater coordination between the two sides.

Prime Minister Vajpayee proposed, among other things, aJoint Study Group for the establishment of a closer economic partnershipagreement between the two countries. He envisages the agreement to cover manythings, including trade promotion, trade facilitation, research and development,education, customs simplification and so on. He has suggested that the JointStudy Group should include not only officials, but also business leaders andmembers from the academia. Prime Minister Goh Chok Tong respondedenthusiastically to the idea. Prime minister Vajpayee expressed some impatiencethat the Study Group should be established within a month and the completion ofthe study should be done within a year. He also invited Prime Minister Goh ChokTong to visit India again. Prime Minister Goh Chok Tong responded gladly to theinvitation and he expressed the wish, half in humour the other half seriously,that when the study is completed that we may proceed to sign an agreement, andhe will be there in India to do so.

Both sides recognized that this closer economicpartnership should not in any way down play or ignore the traditional areas ofcooperation. It should also give particular emphasis to the new knowledgeindustries ; the Indian side mentioned in particular about technology andaerospace. This is of course in addition to IT cooperation for which MinisterShourie and Minister David Lim have just signed an MOU. So it has been a verygood meeting, a very extensive work plan has been drawn up for Ministers andofficials to follow up on and we look forward to making progress in many ofthese areas. Thank you and if I may hand over to Mr. Shourie to say a few words.

Arun Shourie: The Minister has covered all theimportant points, among the points that the Singapore Prime Minister emphasizedwith great effect, I think was, he said that one of the outcomes of the studywill be in the process itself which will come through like similar work done forinstance with Japan by Singapore, which has meant that over a year theMinisters, the officials and others at all levels developed deeper understandingabout each other’s concerns and thereby those things could be addressed. Andone of the objectives, he said, was that our partnership should anchor talent inthe region itself as we keep loosing talent to other regions elsewhere in theworld and one of the great achievements of our cooperation would be to routetalent here.

For India, Singapore is a catalyst. We really must learntheir work culture. Every visitor to Singapore sees this. Both the PrimeMinisters recognize this role that Singapore would bring to India and second,that it would be the window to much of the region itself. And in that whether itis tourism, one of the points emphasized was on sponsored research. In India, wehave developed a lot of expertise in R&D facilities for instance in thepharmaceutical industry. The Minister himself has visited some of our companies.And in Singapore you have almost 6000 multinationals which are in factcontracting research and are looking for new areas in which to do research sothere are many such areas in which fruitful cooperation between our twocountries can be of great assistance to all of us. It was emphasized that thishas been the context of cooperation with many other countries. Prime MinisterGoh mentioned for instance the agreements that had been signed with Japan andextension of ASEAN to the three East Asian Countries.

Similarly for India, the Indian Foreign Minister hasjust had very fruitful meetings in Myanmar with the Foreign Ministers of Myanmarand Thailand. The Indonesian President was just in India. Prime MinisterVajpayee is just going to Cambodia. So there are many such developments takingplace which will knit India and the region together for the prosperity of thepeoples of all sides. And we will continue meeting tomorrow, in many ways, andwe hope that you will visit India soon again and we look forward to that.

Minister George Yeo: Always a pleasure to visitIndia. Your questions please.

Q: Has the slow pace of reforms in India discouragedinvestors?

Arun Shourie Actually that is an important point.I have studied privatization processes in almost fourteen, fifteen countries andthey have taken 10 to 17 years. In India in the last 10 months we have completed18 transactions. Even as we talk now work is going on in almost 25 othercompanies. Some of which we hope to conclude within a month and even more thanthis is that we have put in place a process which has stood the test of thecourts. There were about 19 challenges in different courts and the processreceived the highest seal in an elaborate and detailed judgement of the SupremeCourt of India. That itself has been a very major step forward. Second point isthat the fact that the companies have great hidden value is now being shown upbecause we have unlocked the value in governmental companies in the stockmarkets for instance. Inspite of developments in the region there has been astrong rally in the stock markets in India which has been led by governmentcompany stocks which were just dead stocks for a long time. A third point thatcomes up is that many of my friends in the Indian media used to be quitecritical of the prospects of these companies after privatization. But in fact inthe media itself the correspondents who have been to the companies after theyhave been privatized, are reporting that the companies’ work culture ischanging, expansion programmes are now being thought of and most important, theworkers themselves are seeing the benefits of privatization, for instancebecause of higher wages, long term wage agreements being contracted, managerswho used to be sitting far away in Delhi are now working on site. So many thingsare coming about. I am confident that this will gather pace and one of thefactors which in the coming year will give an impetus to all this is that manyof our provincial governments are now on the verge of beginning their ownprivatizations, including those whose leaders had opposed privatization lastyear. So I am confident that the pace will gather speed, and the commitment ofthe government certainly remains to carry reforms forward.

Q: Did Singapore highlight any specificproblems that investors are facing in India …?

Arun Shourie :       Neither of these two points were mentioned by either Prime Minister. Butcertainly whatever difficulties facing Singaporean investors as any otherforeign investor in India, it is our duty to attend to them completely. A pointmentioned by Prime Minister Vajpayee was on the Special Economic Zones that arebeing set up by India and to which Singapore industrialists and other companiesmay want to pay special attention and to the prospects that they would open up.

Q: What is going to be the future of Air India on theissue of privatization? Will it be on offer again?

Arun Shourie : On Air India, yes I think that itwas a great missed opportunity for India, that a deal which had almostfructified, in the end did not go through. I had counselled some friends to be abit more patient, they were I think not prepared for the loud decibel level ofmany of our persons in public life and we are accustomed to in India and we knowthat all storms subside, especially verbal storms. But it was also a fact thatSingapore Airlines developed other interests at that time and saw otheropportunities for instance in ANSET and other airlines in the region but I feelit was a missed opportunity for both, certainly for India. Since then as youknow many things have happened especially after 11 September, the aviationindustry itself has gone through great difficulties and, therefore, from ourside we do not propose to revive this question. From our Ministry we do notexpect to revive this privatization proposal for Air India in the next fewmonths. I can’t say about the future, but at the moment I am just leaving itaside. There are major investments which the government is thinking of puttingin, in the government airlines of India both domestic and Air India so that theycan become more competitive, and whether they are privatized or made into jointventures, they would be much stronger airlines.

Q: Is Singapore excited about investing in Indiaafter the announcement of the EXIM policy on 31 March?

Minister George Yeo :  On the question onFDI - Tariffs in India are coming down. We recognize that the process of reformand opening up in India is complicated. There are domestic and politicalconsiderations to take into account. Singapore respects that there are thesedifficulties. So our Study Group will certainly look into some of theadvantages of a FTA. We should go beyond that and not be exclusively seized bythat idea.  Trade facilitation, simplification of procedures,simplification of customs, greater coordination in investment, all these areaswill be equally important.  

Let me summarise Singapore’s positionvis-à-vis India. Prime Minister Narasimha Rao more than 10 years agochanged India’s policy on economic development. We had from India visits byFinance Minister Manmohan Singh and Commerce Minister P. Chidambaram. They gavespeeches here, and they explained the change in policy direction. And since thenwe decided to position ourselves strategically to be a long-term partner ofIndia.

We recognize India as a huge democracy where the politicalprocess is complicated and that there is a strong tradition of law there whichmeans that certain procedures cannot just be ridden rough or over. Processesmust be adhered to.

We accept that the process of reform and opening up inIndia will be quite different from that which we see in China. Nevertheless,there are sectors which have been opened up; some dramatically like IT andsoftware. There are other sectors which are opening up like tourism andinfrastructure and there are states which are more active than the othersbecause the process of devolution, decentralization in India is a historicalone. So our policy in Singapore is to follow closely the developments in Indiaand as the opportunities open up, we should prepare ourselves for cooperating inthose areas. Where there are sensitive areas which India feels less ready toopen up too quickly then we are quite prepared to wait. So it is a relaxedapproach, but it is one where we position ourselves strategically to be along-term friend and partner of India. And it was against this perspective thatwe have been very ardent advocates of a stronger Indian role in Southeast Asia.This year for the first time the Indian Prime Minister will be meeting the ASEANleaders in Cambodia and we hope that there will be many other areas throughwhich India can cooperate more closely with Singapore and other countries inSoutheast Asia.

Q: Was terrorism discussed ?

Arun Shourie: The matter will certainly be .. viewson this were exchanged but I would leave it to the professionals to say anythingmore specific on that.

George Yeo: Thank You