Honourable Chief Minister of Gujarat, Shri Narendra Modi
Distinguished guests
Ladies and gentleman
I am honoured to be invited by H.E. Chief Minister Narendra Modi to give the inaugural address at the Vibrant Gujarat Global Investors' Summit today. I take this opportunity to congratulate Chief Minister Narendra Modi for successfully organising this important biennial event which has become a premier platform for business leaders, investors, policy and opinion makers to understand and explore business opportunities in Gujarat.
2 Looking at the impressive participants gathered today, it is clear that Gujarat remains a top investment destination in India. The economic growth indicators of Gujarat have been impressive with an achievement of an average annual growth rate of 10.4% in the last five years. With just 5% of India's total population and 6% of geographical area, Gujarat contributes to almost 26% of India's total investment, 10% of expenditure, and 14.3% of exports. Gujarat is already the leader in key sectors such as Chemicals, Petrochemicals, Drugs and Pharmaceuticals, Dairy, Cement and Ceramics, Gem and Jewellery, Textiles and Engineering. Gujarat's position as the world's largest producer of processed diamonds adds glitter to the crown.
3 Gujarat's success comes from a deep commitment to innovation, able administration and investment-friendly policies. Gujarat recognises that despite its strategic location on the west coast of India, which gives it access to India's rich hinterland and many important major ports, it cannot rest on its natural advantage. In this connection, the state has left no stones unturned in simplifying procedures for investors and e-governance to expedite business and transaction process. Gujarat's conducive investment environment, as well as its commitment to constantly innovate to improve its socio-economic environment, has already earned the state international recognition such as the "Asian Innovation Award" in 2006 for the "Chiranjeevi Yojana" scheme from Global Entrepolis, Singapore. I take this opportunity to congratulate Chief Minister Narendra Modi and the people of Gujarat. Gujarat's success would not have been so swift without the vision and passion of its Chief Minister and the energy of the Gujarati people.
4 Singapore's ties with Gujarat date back centuries. Together with the Sindhis and Chettiars, Hadramis and Jews, Gujaratis linked West Asia to East Asia from the Persian and Khambat Gulfs to the Straits of Malacca that formed the backbone of the old Asian network. In Singapore, the history of Gujaratis is a long and enterprising one. Early Gujaratis, who were mostly merchants and traders first came to Singapore in the late 19th century and prospered. I was told that bank notes printed in the late 19th century bore the denomination of the note in the Gujarati language, indicating the prominence of the community in Singapore at that time. The Gujaratis have continued to play a significant role in Singapore's business and commercial sector today. In addition to their economic success, the Gujaratis' ability and keenness to retain their tradition and culture is noteworthy. The Gujaratis, including the younger members, remain proud of their heritage and continue to establish links within their community and with fellow Singaporeans. In fact, just two months earlier, the Singapore Gujarati School officially opened its new premises and we celebrated 60 years of Gujarati Education in Singapore.
5 Today, Singapore and Gujarat are progressively strengthening its partnership. Although Singapore companies have traditionally been drawn to the IT hubs in South India and to the financial centres of Mumbai, Gujarat's rapid privatisation of its infrastructure system and its conducive investment environment makes the state an attractive investment destination for Singapore businesses. Sembcorp Engineers and Constructors (SembE&C) is currently engaged in Engineering Procurement and Construction (EPC) contracts worth close to US$350 million for the restart of the Essar Oil's refinery project in Vadinar, Gujarat, India. CPG Consultants will be providing full design consultancy for the new international terminal building at Ahmedabad Airport.
6 Singapore is committed to deepen its cooperation with Gujarat, and India as a whole. The signing of the Comprehensive Economic Cooperation Agreement (CECA) in June 2005 has already served as an important milestone in our economic ties. Figures from India show that Singapore's imports from India were almost 4 times that before CECA negotiations began. Singapore is currently India's 2nd largest investor and was the top destination for Indian outbound investments from April to December 2007, at US$7.3 billion, comprising 37% of all Indian FDI overseas. Indian companies now form the 3rd largest foreign corporate contingent in Singapore with the likes of Tata Consultancy Services and Tech Mahindra setting up their regional HQs in Singapore.
7 While business links between Singapore and India have no doubt flourished since the signing of CECA, these links will be tested in the current uncertain global economic climate. No country is immune to the unfolding economic crisis, no matter how strong its fundamentals are. But what is also clear is that India, along with other Asian economies such as China, will continue to register relatively higher growth rates than many developed countries. In fact, India's and China's shares of global GDP growth will continue to grow albeit at a slower pace. This not withstanding, the strong presence of Japanese businesses and substantial long-term investments in India, and Gujarat in particular, is a clear indicator of the high level of confidence that major foreign investors have in its future prospects.
8 The terrorist attacks in Mumbai on 26 November 2008 may have exacerbated the uncertainty; but from my interactions with the business community the mood is resilient. The Tata Group led the way and reopened its Taj hotel, as did the Oberoi, for business just weeks after the terrorist attacks. Many others also showed great resolve and courage to rebuild their businesses and lives. They recognised that the aim of the terrorists was to create panic and destroy the social fabric of India's pluralistic society. They didn't give in. The measured response of the Indian government so far has been well received by the international community, which is banding together to defeat the scourge of terrorism.
9 Corporate governance issues have taken centre stage after the founder of Satyam Computer Services, B Ramalinga Raju, admitted to committing fraud. Although the timing is unfortunate - coming at a time of an unfolding global credit crisis - the Indian government has moved decisively to contain the damage and restore confidence. It has replaced the board of directors. Regulators are now delving into how auditors, investors and analysts were not able to pick up for years that there was something amiss. Still, the Satyam scandal is a wake-up call that holds lessons not just for Indian companies but also non-Indian companies.
10 Gujarat has a good track record for good governance. Along with its strong fundamentals, Gujarat is well-placed to make more strides in economic development. Gujarat must step up its efforts to engage more global players to strengthen its economy at all levels and also build strong cultural and business ties with foreign countries. In this connection, Singapore is committed to work together with Gujarat and India at many different levels. In October 2008, Singapore hosted the Pravasi Bharatiya Divas - the first time the conference was held outside India. More than 750 delegates from 20 countries in the Asia-Pacific and Middle-East attended the conference, which was officiated by Prime Minister Lee Hsien Loong. The event underlined Singapore's strong support for the Indian diaspora and our strategic position in the region. I take this opportunity to urge Gujarat businesses to make full use of Singapore's locational advantage and excellent infrastructure to expand their operations. Singapore is a gateway to Southeast Asia and East Asia. Like Gujarat, we also have good links to the Middle-East countries and capitals which will serve Gujarat companies well. Indeed, Gujarat should take a closer look at this Middle East - Singapore - East Asia nexus to enhance its own connectivity to the world.
11 The Singapore business delegation, who is with me in Gujarat, will be happy to meet Indian businessmen to explore future business collaborations in Gujarat. They in turn will be able to tell you more about the business opportunities in Singapore for Indian companies.
12 I wish you all a fruitful and successful summit.
13 Thank you.