Your Excellency Mangala Samaraweera, Foreign Minister of Sri Lanka,
Distinguished guests,
Ladies and Gentlemen,
For more than a thousand years, South Asia and Southeast Asia have been interlinked. Our destinies have been intertwined. We have been connected by trade, by the spread of culture, religion, and language. The many opportunities for trade led to merchants coming to our part of the world from Europe, from the Middle East, from Northeast Asia, to ply the trade routes between our ports.
The centuries of people-to-people interaction also led to the exchange of ideas and strong cultural links. Hinduism, Buddhism, and Islam spread in successive waves from South Asia to our region along these trading routes. Angkor Wat, for instance – which is probably the largest temple complex in the world – started off as Hindu, then gradually transformed into a Buddhist temple. If you go to Malaysia, in Kedah’s Bujang Valley, there are a number of Hindu-Buddhist candis, or temples, and other monuments which are estimated to date as early as the 2nd century CE.
The flow of people and ideas went both ways. Nalanda University in India, founded in the 5th century CE, is an example of the strong socio-cultural connection between Southeast Asia, South Asia, and East Asia. For over 800-years of its existence, the original Nalanda University attracted thousands of scholars from Korea, Japan, China, Indonesia and Sri Lanka to study religion, metaphysics, philosophy, literature, medicine, mathematics and astronomy. The Nalanda site – which also includes some remains which date back even earlier to the 3rd century BCE – has just a few days ago been inscribed on UNESCO’s World Heritage List at the 40th session of the World Heritage Committee. Supported by the East Asia Summit, Nalanda University has been re-established, taking in its first batch of students in 2014, albeit at a temporary campus while the new campus is in the process of being built.
Many of the countries in both our regions also share a common colonial history and heritage. Even for Singapore, you will remember that we were at one time governed out of Bengal, in British India by the British. During the colonial era, many South Asians and Chinese – our ancestors – set up roots in Southeast Asia. Today, the descendants of the immigrants and the many regional local people constitute the dynamic mix of our population in Singapore, and indeed in our region.
At present, the economies in the region are among the most dynamic globally. The combined economic output of Southeast Asia, East Asia, and South Asia in 2015 constituted nearly a third of the world’s GDP. And, more importantly, it has the potential to rise even further. The World Bank named South Asia as the world’s fastest-growing regional economy in 2014. The Asian Development Bank (ADB) forecasted that Southeast Asia would become the world’s fourth-largest regional economy by 2050.
There is one crucial competitive advantage that both South Asia and Southeast Asia share. Both our regions possess young populations. For example, South Asia currently has the world’s largest working-age population, while Southeast Asia’s working-age population will account for more than two-thirds of our population by 2025. In other words, the demographic dividend has not yet been fully harvested in our two regions. This stands in marked contrast to the situation in Northeast Asia.
However, we are also confronting a period of immense changes brought about by both globalisation and the digital revolution. These two changes present both profound opportunities and profound challenges. If you look in terms of opportunities, let me just cite two brief examples. Given our geographical proximity and historical linkages, closer economic engagement and connectivity will allow us to tap into a larger market and a larger talent pool. According to a recent ADB report, Southeast Asia’s share of South Asian trade is only 10 percent, while South Asia’s share of Southeast Asian trade is only 4 percent. Even if we forget the numbers the key point that it is very, very small. Therefore, the potential to increase this several-fold exists. We can, and must do more to enhance trade between our regions. We are making some headway: Six free trade agreements (FTA) have already come into effect between our two regions since the 1990s. These include landmark agreements such as the ASEAN–India Comprehensive Economic Cooperation Agreement, and the ASEAN-India Free Trade Area, which removes 80% of import tariffs from bilateral trade.
The ASEAN Economic Community, which will transform ASEAN into a regional free market with an estimated GDP of US$2.5 trillion and over 620 million people, is taking form. ASEAN countries are working closely to gradually and progressively remove barriers to the movement of goods, services and skilled labour. As an economic bloc, ASEAN has been successful as a platform to attract countries like Australia, China, Japan, Korea, and New Zealand to consider Free Trade Agreements with us, which quite frankly may have been more difficult for us individually. Many of our other existing and potential partners, including Norway, Turkey, Germany and the EU, have also expressed strong interest in stepping up their engagement of ASEAN.
We are also currently negotiating the Regional Comprehensive Economic Partnership (RCEP), which covers trade in goods, services, trade, investments, economic and technical cooperation, and this has the potential to transform the East Asian region into a single integrated market, comprising 45 percent of the world’s population and about a third of its current GDP. It is estimated that there will be an increase of US$260 billion worth in trade if an East Asia and South Asia free trade area is established. The estimates indicate that countries such as Cambodia, Myanmar, Thailand and Vietnam would stand to gain over 5 percent of growth in their GDP, while India herself will gain over 2.5 percent.
This morning, we announced the commencement of Free Trade Agreement negotiations between Sri Lanka and Singapore. Over lunch, our Prime Ministers have told the two of us and our respective economic ministers to get it done, and to get it done quickly.
The second area is on connectivity. There is much we can do to enhance the links between our two countries and our two regions. When I talk about connectivity, I’m not restricting myself to the traditional sense of land, air, and sea, but I am also including digital connectivity. For example, one of the initiatives under India’s “Act East” policy is to connect South Asia to Southeast Asia through the trilateral India-Myanmar-Thailand Highway.
ASEAN is also working on the negotiations for an ASEAN-India Air Transport Agreement which will strengthen air links between our two regions. This will boost trade and business links. Just to cite one example of the benefits of air connectivity; according to an IATA study, as a regional heavyweight, should India be able to make a 10% increase in aviation connectivity, it would add another US$0.5 billion to its economy. This is a point that I always cite when I meet ministers in other countries: the interests of the national economy outweigh the interests of the national airline. In other words, this is a plea for Open Skies in our part of the world.
Inter-regional port connections between our two regions are also very strong, with over 90 percent of our inter-regional trade being conducted via the 377 ports in our two regions.
On the digital front, we are also expanding connectivity. There is an 8,100 km Bay of Bengal Gateway submarine cable that links Southeast Asia, South Asia, and the Middle East. This cable went live just two-and-a-half months ago. This has a throughput of 30 Terabits of data per second. The cable system has multiple landing points in South Asia in Mumbai, Chennai, and Mt Lavinia in Sri Lanka, as well as in Penang and Singapore. This will also help us connect to the Middle East. If you consider the density of the submarine cable terminations in Singapore, we become a node that connects South-east Asia, the Middle East, and Europe in the West, to North Asia and ultimately across the Pacific to the United States in the East, and also down to Australia. Just as there was a Maritime Silk Route, we are also building a Digital Silk Route.
While there are opportunities, we will also have to overcome some challenges common to our regions, in particular maintenance of peace and stability, and countering the threat of terrorism. South Asia and South East Asia stand at the crossroads of two major water bodies: the Indian Ocean and the bay of Bangal on one side, and the South China Sea on the other side. Merchant ships and littoral states in these seas and along the Straits of Malacca have historically depended on the availability of open sea lanes and freedom of navigation for maritime trade. This has gone on for centuries, or millennia, in fact. The openness of these maritime routes needs to be preserved, and they can only be preserved if there is peace and stability in these regions and in the neighbouring seas. Eighty percent of world’s seaborne trade transits through the Indian Ocean. The littoral states of the Indian Ocean possess more than two-thirds of the world’s oil reserves, and about 35 percent of the world’s gas reserves. The South China Sea is a crucial avenue through which at least US$5 trillion dollars’ worth of global trade flows through each year. About 50,000 ships travel from the Indian Ocean, pass through the Straits of Malacca every year. Approximately 15 million barrels of oil, accounting for 16 percent of global flows, originates from the Persian Gulf and travels through the Indian Ocean before passing through the Straits of Malacca every day to reach East Asia and the Pacific Rim states. Eighty percent of the petroleum imported by China, Japan and South Korea also passes through this maritime route.
We need cooperation, peace and stability, and a rules-based order in order to foster integration and engagement between countries in this region who are dependent on this maritime lifeline. We need a sense of predictability and security. For Singapore as a small state, the concept of a rules-based world order that upholds and protects the rights and privileges of all states is not a debating point or a negotiating position; it is essential for our very existence and our relevance for the future.
Lastly, terrorism is a growing threat. The sooner we come to terms with it and deal with it decisively, the better. This year alone, in South and Southeast Asia, there have been terror attacks in Lahore, Dhaka, Jakarta, and even one a few weeks ago in Puchong near Kuala Lumpur in Malaysia. Terrorism in our region is transnational, and it requires cooperation across boundaries between all the countries order to combat this common threat. There is a need for strong cooperation if we are to succeed. Terrorist groups such as the Islamic State (IS) have exploited the security vacuum, and the lack of social order and opportunities in certain parts of the Middle East to establish a reign of violence, oppression and fear. These expanding networks of terrorist groups have impacted both our regions. IS has recruited more than 36,000 foreign fighters world-wide, including about 500 from South Asia, and about 1,000 from Southeast Asia, including a few from Singapore. So this is a clear and present danger. All countries in Southeast Asia and South Asia need to work closely together to combat the terrorist threat. There is a lot more that our security agencies can do to exchange information, and – perhaps an area which has been under-emphasised in the past – for our religious scholars to get together to counter the extremist ideologies which are spreading through our countries through the ultimate expression of globalisation, the internet, where we have the phenomenon of the self-radicalisation of extremists.
Let me conclude by reiterating that our millennia-old historical links have created great opportunities for us. We have an even greater opportunity because of our demographic dividend that has not yet been harvested. Globalisation and digital technology give us another opportunity to leapfrog developments, and to become the most vibrant, dynamic economic space in the world – if we can get it right. But we need to focus on getting the basics rights: infrastructure, education, a fair society that gives opportunities to everyone, and gives everyone an assurance that they will have a fair chance to enjoy the fruits of this success. If we can do this, and can also address the current threats of terrorism, and maintain a global world order based on rules where everyone has security and peace, then there is much for us to look forward to in the decades to come.
Thank you all very much for your attention, and hope you have a wonderful time in Singapore.
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