Asean is at an inflexion point, as the open and rules-based multilateral trading system, regional integration and economic cooperation come under mounting pressure, Minister for Trade and Industry Chan Chun Sing said yesterday.
In his keynote speech at The Business Times Leaders' Forum held at the Shangri-La Hotel, Mr Chan told an audience of almost 300 business leaders that trade frictions between major economic players will lead to spillover effects in the region.
"Against this backdrop, Asean must reaffirm our resolve to abide by open regionalism, press on with deepening integration, and come together to make a strong statement for a free, open, rules-based and interdependent system," he said.
Despite Asean's many advantages, such as its youthful population and expanding middle class, the region's positive outlook cannot be taken for granted, said Mr Chan.
"Asean has done well in eliminating tariffs and gradually reducing services barriers. However, non-tariff barriers still hinder the free flow of goods, and the investment landscape is uneven and lagging behind many other emerging economies," he pointed out.
Technological advancements also mean that other parts of the world can more rapidly leapfrog what Asean has taken decades to achieve incrementally, he said.
"If Asean does not collectively build a compelling vision for in-novation and the digital economy, we will be left behind," Mr Chan warned.
AREAS FOR IMPROVEMENT
Asean has done well in eliminating tariffs and gradually reducing services barriers. However, non-tariff barriers still hinder the free flow of goods, and the investment landscape is uneven and lagging behind many other emerging economies.
MINISTER FOR TRADE AND INDUSTRY CHAN CHUN SING
With the challenges that lie ahead, the regional bloc must press on with economic integration and strive to achieve a greater level of connectedness among members, he said.
He outlined three ways of doing so. First, Asean must ensure that the trade architecture is continually updated and enhanced towards greater coherence. Second, the bloc needs to ensure that its economies are digitally connected and digitally enabled. Finally, Asean needs the capacity to innovate and create to maintain its competitiveness in the long run, shifting the region up the value chain.
The prospects for Singapore and Asean growth were a theme also picked up during a panel discussion, during which Mr Chan, as well as Changi Airport Group and Surbana Jurong chairman Liew Mun Leong, Lazada Singapore chief executive officer Alexis Lanternier, Singapore Business Federation CEO Ho Meng Kit, and Enterprise Singapore assistant CEO Tan Soon Kim spoke on the challenges and opportunities in the grouping. The session was moderated by BT's deputy news editor Lee U-Wen.
Mr Chan said China's Belt and Road Initiative consists of more than just large-scale, infrastructure projects, and Singapore can be an effective partner for China to enter the region if it plays its cards right. "The Chinese are looking to invest in Asean and many other parts of the world in non-infrastructure projects - we should not miss that opportunity," he said.
One-third of all Chinese outward investments go through Singapore, due to the attractiveness of the city-state's system of rules, laws, arbitration, syndication of loans and syndication for projects.
For Singapore to effectively capture opportunities in Asean and beyond, securing talent is key, said the panellists.
Among the questions posed by the audience was one on Singapore's economic relations with Malaysia, following the change in government in Kuala Lumpur after the latest election.
As the two economies are closely intertwined, with a lot of areas of mutual interest, Singapore will work with the Malaysian government of the day, both on the bilateral and multilateral front, Mr Chan said.
On the Kuala Lumpur-Singapore High Speed Rail, Mr Chan said that it is premature to say if Malaysia will review this. "On our part, we will be fully committed to what we have undertaken under the bilateral agreement, and we look forward to working with the Malaysians on this," he added.
Standard Chartered Bank was the presenting sponsor of the forum.