Minister in the Prime Minister’s Office and Second Minister for Education and Second Minister for Foreign Affairs Dr Mohamad Maliki Osman made a working visit to Belo Horizonte, capital city of the State of Minas Gerais, Brazil from 24 to 26 July 2024.
Minister Maliki was hosted to breakfast by Vice Governor of the State of Minas Gerais Mateus Simões de Almeida, and met Municipal Secretary of Planning, Budget, and Management of the City of Belo Horizonte André Reis. Both sides welcomed growing ties between Singapore and Minas Gerais. They agreed to strengthen cross collaborations between Singapore and Minas Gerais in areas such as trade in agriculture and critical minerals, and education.
Minister Maliki also received briefings on opportunities for investment and trade in Minas Gerais by President of the Agriculture Federation of Minas Gerais Antônio Pitangui de Salvo, President of the Federation of Industries of Minas Gerais Flávio Roscoe, and Director of Management and New Business at Invest Minas Gustavo Garcia. Minister Maliki also engaged key corporate leaders based in Minas Gerais, during which they had wide-ranging discussions on the business and investment climates in Minas Gerais and Singapore, as well as on regional developments.
Minister Maliki visited the Dom Cabral Foundation, where he delivered a speech and engaged students on Singapore’s economic trajectory, the deepening of our warm and longstanding ties with Brazil, and the potential for greater collaboration with Minas Gerais in new frontier areas such as innovation, sustainability, and the green transition. Minister Maliki also visited the Shopee sorting centre in Minas Gerais, which was established in 2023 and is one of the company’s key investments to expand its logistic capabilities in Brazil.
Minister Maliki departs Belo Horizonte for Singapore on 26 July 2024.
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MINISTRY OF FOREIGN AFFAIRS
SINGAPORE
27 JULY 2024
TRANSCRIPT OF REMARKS BY MINISTER IN THE PRIME MINISTER’S OFFICE, SECOND MINISTER FOR EDUCATION AND SECOND MINISTER FOR FOREIGN AFFAIRS DR MALIKI OSMAN AT THE DOM CABRAL FOUNDATION, MINAS GERAIS, BRAZIL, 26 JULY 2024
His Excellency Mateus Simões de Almeida, Vice Governor of the State of
Minas Gerais;
Professor Antonio Batista,Dean and Chairman of the International Advisory Council of the Dom Cabral Foundation;
Mr Fábio Galindo Silvestre, CEO of FutureCarbon Group;
Associate Professor Gustavo Donato;
Dear Friends,
I am honoured to be here in Belo Horizonte and to speak at the Dom Cabral Foundation. I recognise that Singapore and Belo Horizonte are almost on opposite sides of the world, and so we may not be very familiar with one another. In fact, is the first time a Singapore Minister has made an official visit to Minas Gerais.
As such, I thought that this would be a good opportunity to give you an introduction to Singapore, highlight present collaboration between Singapore and Brazil, and discuss how Singapore intends to deepen ties with Brazil at the federal and state levels. My speech today will cover three themes: (i) Singapore’s economic journey, (ii) Singapore-Brazil bilateral engagements, and (iii) developing future areas of collaboration.
As an island-nation and city state, Singapore’s history is one of transformation: from a modest trading port to a global economic and financial hub. As early as the 13th century, Singapore has been a bustling port of call along the Strait of Malacca, serving trade routes between China, India, and the Malay Archipelago. Singapore eventually became a trading post for the British East India Company, and subsequently developed into a major port city under British rule in the 1800s.
However, the modern state of Singapore was established after independence was thrust upon us in 1965 when we had to separate from Malaysia. Singapore was faced with a dire situation then, having no natural resources, a small population and rising unemployment. We had also lost a common market of 12 million consumers from Malaysia to support our growth. Singapore’s leaders decided that the only solution was to rapidly industrialise the economy by pursuing an export-oriented industrialisation strategy and opening our borders to foreign investors and businesses. It is worth noting that Singapore had gone against the grain to pursue this policy, during a time when other countries were adopting nationalist or protectionist policies – which may seem not too different from today.
The economic rationale behind courting foreign investors was twofold. First, foreign companies had the necessary expertise and networks that would allow Singapore to quickly scale up certain industries. They also had the financial capital to invest in Singapore’s infrastructure. Second, Singapore sought to capitalise on knowledge transfer from foreign companies to local enterprises. This would enable local companies to acquire the necessary technical expertise to start building local industries in the longer term. We managed to persuade large companies such as Texas Instruments, Fairchild Semiconductors, and Seiko to set up their production bases in Singapore. Over the years, sustained efforts to attract foreign investments have paved the way for Singapore to become a global economic and financial hub. Today, Singapore is the trusted and leading gateway to our region. There are around 4,200 multinational corporations making Singapore their regional headquarters in 2023, the highest number in Asia Pacific in the past 10 years.
However, Singapore remains acutely aware of how easily small countries like us can lose our relevance. It is imperative for Singapore to remain nimble and responsive in addressing new challenges. Powerful structural trends and disruptions such as Generative AI, the focus on sustainability and climate change, and navigating US-China strategic competition are some examples. While there are no easy solutions to these challenges, one thing is clear: in an increasingly fragmented world, Singapore must remain open to the world and deepen our knowledge of markets everywhere. Our businesses and people must also be innovative, bold, and willing to grasp the opportunities offered by this new environment. Now that I have explained Singapore’s economic strategy, I will now discuss how Singapore and Brazil can stand to benefit by deepening cooperation.
Brazil was the first Latin American country to establish diplomatic relations with Singapore in 1967 and has become an important partner and friend of Singapore. To underscore Singapore’s interest to strengthening ties with Brazil, we opened our Embassy in Brasília in July 2012. This is our first and only Embassy in Latin America to date.
Trade and economic relations between our countries are good. Brazil is Singapore’s largest trading partner in Latin America and Singapore is Brazil’s largest trading partner in Southeast Asia. Bilateral trade between Brazil and Singapore has increased significantly, by almost three-fold between 2016 and 2023, reaching 40 billion real (S$10 billion) in 2023. Agrifood trade is a major pillar of our trade relations. With Brazil being a major source of Singapore’s supply of frozen proteins, such as chicken, pork, and beef. Brazil is a major source of Singapore’s supply of ferroniobium which is deployed in a whole range of components and finished products manufactured in Singapore. In 2022, total bilateral trade in services amounted to 24 billion real (S$6 billion). In 2022, Singapore’s cumulative investment in Brazil amounted to 8 billion real (S$2 billion).
Brazil is Latin America’s largest country by size, population, and economy, and a key member of MERCOSUR. It is an attractive new market with huge growth potential and a gateway to Latin America. Around 90 Singapore-based companies have business interests in Brazil. It is good to see that Singapore companies have found success in Brazil in both traditional sectors like agriculture (Olam) and manufacturing (Sunningdale, Sakura Tech), as well as new and innovative sectors like mobile gaming and e-sports (Sea Group) and AI solutions (CrayonData, Profileprint).
Similarly, more Brazilian companies should consider tapping on Singapore’s position as the gateway to ASEAN – which cumulatively forms the fifth largest economy in the world (after the US, China, Japan, and Germany). There are about 125 Brazilian companies in Singapore. Some of Brazil’s largest companies have already established a presence in Singapore, and many of these use Singapore as a regional base to serve their Asian customers. Examples include Embraer, Braskem, BRF, Vale, and CBMM. Of note, Singapore carrier Scoot had ordered nine new Embraer jets, and have started operating flights with these jets from May this year. Embraer also recently launched its E2 full flight simulator in Singapore, the first of its kind in the Asia-Pacific.
Through EnterpriseSG, we are actively cultivating partnerships between Brazilian and Singaporean firms, and welcoming Brazilian start-ups to join Singapore’s start-up ecosystem. Singapore hosts events such as Food & Hotel Asia, the Singapore International Water Week (SIWW), Singapore International Energy Week (SIEW), Singapore International Agri-Food Week (SIAW), Singapore Fintech Festival (SFF), and Industrial Transformation Asia Pacific (ITAP), which are useful platforms for companies to meet and explore opportunities together.
Institutional trade-enabling infrastructure between Brazil and Singapore is strengthening. In December 2023, both countries signed the MERCOSUR-Singapore Free Trade Agreement (MCSFTA) which will spur greater business interactions and trade flows between Singapore and MERCOSUR countries. The agreement will lower tariff rates, establish transparent and predictable investment conditions, and foster cooperation in areas such as trade facilitation, entrepreneurship, digitalisation, sustainable development, security of food supply, and SME development. Brazil and Singapore are each other’s largest trading partners in our respective regions, and the MCSFTA will present many opportunities for our companies. As the first trade deal between MERCOSUR and Singapore, the MCSFTA is also a stepping stone to broader and deeper engagement between our two regions.
Beyond those initiatives that I have just outlined, there remains many exciting opportunities to deepen engagement between Singapore and Brazil. Brazil is the world’s fifth-largest country by area and the seventh most populous. Beyond cooperation at the federal level, there are many more opportunities for Singapore to enhance ties and connections with key states in Brazil. Minas Gerais has the third largest economy among Brazilian states and the second largest population in the country. Belo Horizonte is the first large, planned city in Brazil, with its well-designed streets, traffic circles, and diagonal boulevards. As a city that is similarly focused on urban planning, there is much Singapore and Belo Horizonte can learn from each other. Singapore recognises the economic importance of Minas Gerais and Belo Horizonte. That is why I decided to visit this week.
Minas Gerais is a powerhouse in mining and is responsible for supply more than half of Brazil’s mineral production. While we are familiar with mining giants like Vale and CBMM which have their offices in Singapore, we are interested to get to know Minas Gerais better and to explore business opportunities both for Singapore companies as well as for Brazilian companies based here, that may be interested to establish a presence in Asia. We also understand that Minas Gerais is trying to diversify its economy by investing into sustainability and entrepreneurship. These are areas with fresh opportunities for collaboration with Singapore. I personally find the themes of sustainability, technological innovation, and education to have the most promise.
As climate change continues to take its toll worldwide, sustainability efforts become not only important but necessary. Brazil has been a stalwart leader in sustainability. Brazil has made good progress since the launch of the Ecological Transformation Plan at COP-28 last year, and with its work to pass a new bill that will facilitate the regulation of carbon markets. Singapore is interested in collaborating with Brazil on green economy initiatives. For carbon credits, Singapore is keen to explore collaboration aligned with Article 6 of the Paris Agreement, when Brazil is ready. I encourage Brazilian companies to look towards Singapore for financing towards climate projects to generate carbon credits in the voluntary carbon markets. Singapore is well positioned as a regional carbon services and trading hub, with more than 120 companies in our ecosystem. These firms provide a range of services including project development, consultancy, audit, certification services and insurance. This is an emerging area that both countries can support to drive private capital towards climate-positive projects.
As technology advances, it becomes increasingly important for our top talent to collaborate and learn from one another. I am delighted to share that EnterpriseSG was able to host 14 Brazilian startups in 2023 under our Startup Outreach Programme, and they took part during the annual Singapore Week of Innovation and Technology or SWITCH. The programme actively supports Brazilian startups to gain market entry into the region. This year, Brazil has confirmed plans to field a delegation of 12 Brazilian companies to SWITCH in October. Additionally, EnterpriseSG also actively supports Brazilian startups to gain market entry into our region through our “Startup Outreach Programme”. We are eager to welcome more Brazilian startups to our region. EnterpriseSG has also supported Singaporean start-ups in gaining exposure in Brazil. There was another successful run of “ScaleUp” in Brazil in October last year. Five Singapore startups visited Sao Paulo for the first immersion trip of the programme. The startups returned to Brazil in February 2024 for the second immersion trip to explore further opportunities.
It is also a great pleasure to know that Minas Gerais has its very own tech hub in Belo Horizonte, buzzing with great ideas waiting to be unleashed. “San Pedro Valley”, the home to Brazil’s celebrated e-commerce unicorns like Hotmart and Samba Tech, has much to offer on the world stage. Beyond e-commerce, Brazilian companies have been spearheading digital transformation and making significant advancements in various critical sectors. As a global financial hub, we take great interest in Brazil’s innovative strides in FinTech, especially in revolutionising banking and payment systems. It comes as no surprise that Brazil boasts one of the fastest digital payment uptakes in the region. Singapore is also the leading healthcare and medical centre in Asia. While we have not traditionally cooperated in this field, technology offers a unique opportunity to bridge the gap. There is much potential for our companies to work together to improve healthcare delivery and advance medical research.
Lastly, education plays a crucial role in all these endeavours. Schools are the launchpad from where all these opportunities should begin. Therefore, it is essential for our best and brightest to engage each other to foster more meaningful connections. I am happy to note that three of our universities have partnerships and student exchange agreements with Brazilian educational institutions. In Singapore, my portfolio covers the Technical and Vocational Education and Training (TVET) sector - something I am deeply passionate about. I am happy to note that Minas Gerais is committed to developing inclusive education programmes that cater to the specific needs of the state, particularly through initiatives led by the Federal Centre for Technology Education of Minas Gerais. By growing our collaboration in TVET, Singapore and Brazil can provide more options and choices for our citizens to expand their network and enhance their prospects.
I hope you have learned more about Singapore, our current engagements with Brazil, and how both sides can strengthen collaboration going forward. Thank you for your attention.
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Minister Maliki speaking during a panel discussion on Singapore’s and Minas Gerais’ development and innovation plans at the Dom Cabral Foundation, 26 July 2024.
Photo Credit: Ministry of Foreign Affairs, Singapore
