'Diversity Is The Proud Source Of India's Unity And Strength'

Your Excellency Prime Minister Goh, Esteemed Heads of Trade and IndustryAssociations, Distinguished Guests, Ladies and Gentlemen,

It is a pleasure for me to address the business community of this remarkablecity-State. There is no parallel in modern history of a city that fashioneditself into a sovereign nation only a few decades ago, charted out a noveleconomic strategy of export-oriented growth, converted this small, naturalresource-poor land into one of the richest countries, and became a shiningmiracle of Asia and the world. It is a fitting tribute to Singapore that, on thebasis of its citizens’ average income, it is richer than its erstwhilecolonial master.

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

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

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

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

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

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

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

This morning, we agreed to set up a Joint Study Group to consider acomprehensive Economic Cooperation Agreement between India and Singapore. Thiswould help us engage more effectively over a broader economic spectrum includingtrade facilitation, customs cooperation, intellectual property, financial sectorcollaboration, etc. The Group will be set up within a month and we should aim atconcluding the agreement within a year.

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

Biotechnology is a specific area of immense potential for cooperation. I amhappy to inform you that we have agreed this morning to set up anIndia–Singapore Biotechnology Park. This will help in shared research andcommercialization in areas as diverse as pharmaceuticals, agriculture, food anddrinks, manufacturing, and environmental technology. We have agriculturaluniversities with huge captive areas of well-developed land, which youragro-biotechnology firms can use beneficially.

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

Friends, Singapore’s economy has shown tremendous strength in difficultconditions, and is once again demonstrating the phenomenal energy of itsbusinessmen. The Year of the Horse will hopefully see an end to the difficultiesof last year. The Indian economy has also proved its resilience by maintaining arelatively healthy growth rate. In the financial year just ended, our economy isexpected to grow by more than 5 percent. Even during the Asian crisis of1997-98, India’s growth rate stood at 6 percent. This shows the strongfundamentals of the Indian economy and point to India being a good destinationfor those making long-term investments.

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

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

We want to promote trade and business not just between our two countries, butalso with the entire South East Asia region. We are looking forward to the firstIndia–ASEAN summit in November this year. It will help us to considerinitiatives to promote our economic links with the ASEAN member countries. Justlast week, India, Myanmar, and Thailand have decided to build a highway to linkthe three countries. This highway will go a long way in reviving the traditionaleconomic and people-to-people contacts between India and our extended culturalneighbourhood in South-East Asia. Since Singapore is our largest trading partnerin ASEAN, I am sure that Singaporean businessmen will benefit much from greaterIndo–ASEAN trade.

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

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

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

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

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

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

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

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