SINGAPORE - South-east Asia's economy as a whole is expected to recover in 2021, and strong consumer sentiments and efforts to diversify in the Middle East provide potential for greater economic engagement between the two regions, Second Minister for Trade and Industry Tan See Leng said on Tuesday (Feb 23).
Speaking at the Middle East Institute's annual conference held virtually, he said Singaporean companies, for instance, could find opportunities in the food and beverage industry in the Middle East.
He pointed out that the disposable incomes of consumers in Gulf Cooperation Council (GCC) countries are growing at two to three times the global average. They are also becoming increasingly reliant on supermarkets and hypermarkets, instead of small traditional grocery stores.
More than 30 Singapore food companies are doing business in the Middle East, and the hope is that more will follow, said Dr Tan, who is also Second Minister for Manpower.
Speaking in a pre-recorded video, he said: "Evidently, there is a wealth of potential that can be unlocked through mutual participation in the economic developments of the respective regions."
Singapore is also the ideal launchpad for Middle Eastern companies to access South-east Asia, he said. Singapore's bilateral trade with countries in the Middle East has grown at a compound annual growth rate of 4.2 per cent over the past five years to reach US$43.2 billion (S$57.5 billion).
With low oil and gas prices and the pandemic-induced global economic slowdown, some countries in the Gulf have accelerated their economic diversification efforts, he said. This has also created opportunities in sectors such as e-commerce, health, and finance.
The recently-concluded Regional Comprehensive Economic Partnership opens up new opportunities for mutual trade and investment, he said, noting that there has been interest from countries in other regions such as the Middle East to join the pact.
This is possible because of Asean's practice of open regionalism as a way to further integrate its economies with the global economy, said Dr Tan.
South-east Asia is a region to which the Middle East should pay more attention, he said. It is projected to be the fourth largest economy in the world by 2030, and its overall GDP growth is expected to rebound to 5.6 per cent in 2021.
South-east Asia's infrastructure needs - required to sustain its economic growth - presents a large slate of investment opportunities, added Dr Tan.
The three-day conference features panel discussions with experts and policymakers on trade, technology and education. This year's theme is Meeting the Future Together: Opportunities and Challenges for the Indo-Pacific and the Middle East.
Speaking earlier at the event, Senior Minister Teo Chee Hean highlighted three areas of interactions between the Indo-Pacific and the Middle East - in economic partnerships, religious exchanges and people-to-people interactions.
Asked for his assessment of the current level of people-to-people contacts, Mr Teo, who is also Coordinating Minister for National Security, said it could be a lot better.
Both regions have tended to look at developed countries as models of growth and to take lessons from, which meant that such people-to-people ties have tended to flow accordingly, he said.
But as both regions accumulate experiences, they can share more with each other, be it in areas of governance, education, or social models, he said.
"And with that increased self-confidence and the ability to discern for ourselves what kinds of relationships or development models we want, I think there would be greater opportunity for people-to-people relationships."
The Senior Minister was also asked what lessons can be learnt from the experience of relative peace within South-east Asia as compared with the Middle East.
He said that despite the diversity of governance models and political systems in Asean, member states have been able to pursue cooperation and live in peace over the last three to four decades.
"What we have learnt is that if we are together, it is more likely that we will be able to maintain peace and stability in our region," he said.
"If we are divided, we are more likely to open up opportunities for those differences to be accentuated and to become worse and perhaps result in more disagreement and conflicts in our region than might otherwise be needed."
He added that the Abraham Accords - a series of deals between Israel and Arab states to normalise diplomatic ties - presents a chance for renewed dialogue and peace in the region.
"And if there is a desire, based on sincere and genuine wish, to settle differences in an open and fair way... then I think that there will be opportunities for these breakthroughs for a more peaceful future."