Mr Speaker, Fellow Parliamentarians,
Ladies and Gentlemen
1. Six years ago in 1999, as Foreign Minister, I officiated at the opening of the inaugural Forum for East Asia-Latin American Cooperation (FEALAC) Senior Officials meeting in this hotel. Today, I am pleased to be here again to address the inaugural meeting of the FEALAC Young Parliamentarians Forum (YPF).
Birth of FEALAC
2. In 1998, FEALAC was conceived by then Prime Minister Goh Chok Tong as a way to bridge the "gap" between East Asia and Latin America. It would form the "missing link" between our two regions as there were already links between Asia and North America and Asia and Europe. In 2001, the Foreign Ministers' inaugural FEALAC meeting was held in Santiago. Since then, FEALAC's membership has increased from 27 to 32. The Dominican Republic has also recently indicated its interest in joining FEALAC.
3. Since 2001, Asia has recovered from the financial crisis and regional economies are on the rebound. Driven by the rise of China and India, old linkages are being revived and new ones forged between Latin America and Asia. Trade between the two regions have increased. At the same time, transborder threats such as terrorism and Severe Acute Respiratory Syndrome (SARS) have reinforced our sense of shared vulnerability. Does this mean that regional fora such as FEALAC have become less important in this increasingly global landscape?
4. FEALAC is well-positioned to address the challenges confronting our two regions by bringing together political leaders, policy makers, the media, academia and other opinion-shapers to discuss the issues. Under the FEALAC umbrella, there is now an institutionalised framework for strengthening consultation and cooperation in diverse areas such as politics, culture, education, economics, science and technology.
A Tale of Two Regions
5. The biggest story of this century is the re-emergence of China and India. Their economic resurgence is reshaping the global political and economic landscape. With a market of more than 1 billion people, China's global trade in 2004 was about US$1.5 trillion. India's growth rate exceeded 6% a year for the last ten years. Its growth last year was close to 7% and projected to grow at 6-8% for many more years. The Chinese economy is predicted to overtake the US to become the world's largest economy by 2041. India is likely to overtake Japan to become the third largest economy in the world in 30 years.
6. ASEAN itself is becoming more integrated. ASEAN's concerted responses to SARS and the Tsunami in Aceh have strengthened regional cooperation. The agreement to establish the ASEAN Community by 2020 and the proposed ASEAN Charter will help chart the future directions for ASEAN. The East Asian Summit (EAS), comprising of the 10 ASEAN countries, China, Japan, Korea, Australia, India and New Zealand, at the end of the year, would continue ASEAN's engagement with the wider Asia-Pacific region.
7. In Latin America, the key economies in the region are expected to continue growing at a healthy 3.5-5% for the next 4 years. With its rich natural resources, Latin America has become a leading producer of metals and minerals, oil and gas, as well as agriculture and meat products. Mercosur, the Customs Union comprising Brazil, Argentina, Paraguay and Uruguay, has been successful in linking up with other associate members from Latin America. The Brazilian National Development Bank's US$500 million worth of loans for projects in neighbouring South American countries would help stimulate infrastructure development targeted towards greater regional connectivity.
FEALAC - Fostering Closer Latin America-Asian Economic Relations
8. There is significant untapped potential in the economic relationship between Latin America and Asia. Fast growing demand for commodities has led to a significant increase in Latin America-Asia trade. China's imports from Latin America have increased by more than 600% over the last five years to reach US$21.7 billion.
9. China's engagement with Latin America is historically unprecedented. China's forays are part of a broader "peaceful rise" doctrine aimed at cultivating countries near and far. China's growing diplomatic presence in Latin America is part of this wider global strategy, with implications beyond our two regions.
10. Other Asian countries are also aggressively entering the region. This is seen through the increased trade and investments from countries with strong historical links such as Japan, as well as more recent entrants like India and South Korea. Indian companies for instance, have set up many new joint ventures in Brazil involving areas like health care, IT services and auto parts. Singapore recognises the economic potential of Brazil and Latin America as well. In September 2005, I will officially open Singapore's Trade Office in Sao Paolo, Brazil. This is our second trade office in Latin America after Mexico and we hope it will help create more business opportunities and trade links between Singapore and the region.
11. Reflecting the two-way trade and investment, Latin American companies are increasingly seizing opportunities in Asia. Examples include Brazilian aircraft manufacturer Embraer, oil company Petrobras and Argentina sweets company Arcor, whose aeroplanes, petroleum and candies are now found in different parts of Asia. However, overall, the Latin American presence in Asia is still small and there are many more opportunities waiting to be exploited.
12. The growing number of bilateral Free Trade Agreements (FTAs) which have been or are in the process of being concluded between countries of our two regions will help promote greater economic ties. We can also do more by increasing air links between our two regions. Bilateral air services agreements between the two regions are useful starting points.
13. The Southeast Asian countries are well placed geographically between India and China, and have built up considerable familiarity with the business environment of these two countries. With its strong IPR regime, network of FTAs as well as its established infrastructure and facilities, countries like Thailand, Malaysia and Singapore are uniquely placed to function as a launch pad for Latin American businesses into the rest of Asia.
14. Latin American countries can also better market itself to Asia. There is still relatively little awareness among Asian businessmen of the opportunities available in Latin America. Investment promotion agencies could help by organising delegations to visit Asia. Chambers of Commerce could foster links with Asian export promotion agencies to facilitate visits by Asian business delegations to Latin America. Latin America should market itself as a tremendous growth area with an increasing demand for goods and services. Also, with vast tracts of unspoilt natural beauty, magnificent heritage sites and vibrant cultures, Latin America is well-placed to attract a large proportion of the increasing numbers of affluent Asian tourists. To facilitate greater trans-regional business interaction, IE Singapore initiated an annual Latin Asia Biz Forum in 2004, which is now in its second year. In this regard, FEALAC provides the overarching framework for these interactions to take place. The Forum is well-placed to help strengthen trans-Pacific ties.
15. Fellow parliamentarians, your participation today underscores the increasing interactions between our two regions. The spirit of FEALAC is to foster greater awareness and understanding. As representatives of the people, the discussions you will have over the next two days will help to enhance mutual understanding through open, and I am sure, lively exchange of ideas and views. As parliamentarians, I hope that you will help to bring this message of friendship back to your constituencies.
16. As the theme of the YPF highlights, we are different people with common goals. And there is much both regions can learn from each other. I hope that your time in Singapore will be one where bonds are forged, friendships nurtured and understanding enhanced. I wish you fruitful discussions ahead.
17. Thank you.