Remarks by Minister of State for Foreign Affairs Zainul Abidin Rasheed at World Islamic Economic Forum

REMARKS BY THE MINISTER OF STATE FOR FOREIGN AFFAIRS OF THE REPUBLIC OF SINGAPORE, MR ZAINUL ABIDIN RASHEED ON "ARAB-ASIA-AFRICA SYNERGY: OPPORTUNITIES FOR ENHANCED BUSINESS AND ECONOMIC COOPERATION" AT THE WORLD ISLAMIC ECONOMIC FORUM, 1 OCTOBER 2005, PETALING JAYA, MALAYSIA

Bapak Setyanto Santosa,

Excellencies,

Ladies and Gentlemen

It is a privilege for me to join so many distinguished friends at today's Inaugural World Islamic Economic Forum. The Forum's theme "Forging Alliances for Development and Progress" has long been a guiding principle for Singapore's own survival and development growth. As a small country with few natural resources, our growth depends on fostering closer political and economic linkages with the rest of the world. This is not only within our immediate neighbourhood of Asia or with the major powers of the West, but also with countries further away in the Middle East and Africa. I am therefore pleased to be invited to speak on the opportunities for enhanced business and economic cooperation among the Middle East, Asia and Africa.

2 The people of our three regions have known one another for a long time. In Asia, our commercial and cultural ties with the Middle East go as far back as the 7th century when resourceful Arab traders established trade routes among us and established Islam in our region. In fact, many Asians are descendants of the Arab traders. Over in Africa in the 15th century, China's Ming Dynasty Explorer Admiral Cheng Ho threw open Asia's trade links with Africa when he made his historic voyage from China to present-day Kenya. Swahili Arab traders travelled along the coast of East Africa, establishing trading ports in Zanzibar and Mozambique. With the advent of globalisation, the ancient links between businessmen, academics and religious leaders across the Middle East, Asia and Africa are now being re-established. While we once traded in spices, porcelain and silk, today we trade in modern goods and services, creative ideas and innovative business solutions.

3 Two recent events have ushered a momentum for rediscovery among Asia, Middle East and African nations. These were the April 2005 Asian-African Summit in Jakarta and the Inaugural Asia-Middle East Dialogue (AMED) held in Singapore in June 2005. It is therefore timely for us to explore how to forge ahead with our exciting journey of rediscovery.

B) Rationale for Closer Economic Cooperation

4 The rationale for closer economic cooperation is compelling. The three regions bring together 73% of the world's population, a combined GDP of US$9.3 trillion and an abundance of natural resources. Significant changes are taking place in our three regions. We can secure our future by seizing the opportunities for closer economic cooperation.

5 Significantly, all three regions are experiencing fast growth at the same time. Within Asia, Southeast Asia is growing at an average of 6% in 2004. China and India have grown faster at 9% and 7% respectively. Sub-Saharan Africa has seen GDP growth accelerate to 5.1%, the highest in almost a decade. In the Middle East, governments are diversifying their economies away from the traditional dependence on oil and have opened up their economies to international trade and foreign investment. In Africa, the New Partnership for Africa's Development, or NEPAD, has led to economic improvements across the continent. These positive changes have tossed up exciting new investment opportunities. The Middle East is looking for alternative investment opportunities while Asia and Africa are looking for new investment partners. We have what you seek. You have what we seek.

6 Facing young populations and growing unemployment, many Middle East and African governments are keen to develop their domestic economies. Apart from relying on traditional Western countries for knowledge and advice, many have also adopted a policy of looking East to tap the developmental experiences and economic opportunities in Asia. Many of these countries are going through a phase which many Asian countries had undergone. Where our developmental experiences are relevant, we would be happy to share them with our Middle East friends. We need not re-invent the wheel. A small contribution that Singapore has made in this area is our Singapore Cooperation Programme (SCP) which has brought together participants from 18 countries in the Middle East and 46 from Africa in areas of mutual interest. Many other Asian countries also run similar programmes.

7 With fast growing incomes and a sizeable middle class, East and South Asia are major markets for Africa's primary commodities. Exports from Africa to Asia are growing faster than with any other region, recording a yearly growth of 10% during the past decade. Complementarity also exists in the Middle East's demand for Asia's expertise and professional services. In Oman for example, a Singapore company Ascendas is currently managing several industrial parks. In the area of oil and gas, the Middle East and Africa are key producers of energy resources which Asian economies require in increasing quantities. At present, China imports 40% of its crude oil from the Middle East. India is set to become the world fourth-largest consumer of energy by 2010. This opens up opportunities not only for trade but also cooperation in upstream and downstream oil and gas activities. In March 2005, India's largest state-owned oil explorer, Oil & Natural Gas Corp (ONGC), won a contract to develop Qatar's offshore Najwat Najem oil field. Saudi Arabia and China are also working jointly to establish oil refineries in China's Fujian Province. As a major oil refinery centre in the world, Singapore is also well-positioned to participate in the industry's growth.

C) Specific steps towards greater economic cooperation

8 Recognising current opportunities will only bring us so far. I would therefore suggest three specific steps to capitalise on this positive momentum to facilitate greater economic and business cooperation. First, governments can build a more conducive business environment by negotiating Free Trade Agreements (FTAs) and introducing other trade liberalisation measures to strengthen inter-regional trade and investments flows. These minimise market inefficiencies by reducing tariffs, eliminating non-tariff barriers and enhancing business links. Second, there must be a willingness to venture into new markets to develop closer business links. Exploration is the mother of discovery. Business associations can lead trade missions to promote greater business awareness. Government leaders can also help. One example is the Malaysia-Singapore Third Country Business Development Fund (MSBF) which enables Singaporean and Malaysian companies to jointly undertake feasibility studies for joint investment and business projects in third countries. Third, we should continue to build more bridges that will promote greater awareness and understanding among the Middle East, Asian and African regions. Fora such as the Asia-Middle East Dialogue (AMED) and the World Islamic Economic Forum (WIEF) play useful roles in building people-to-people networks. We should also encourage trans-continental tourism. Such activities help to overcome cultural stereotypes that may impede business.

9 The road to closer Middle East-Asia-Africa economic cooperation will not be easy. Despite our historical linkages, our three regions remain diverse. But we can turn our diversity into an advantage by leveraging on one another's strength to build a brighter future for our people. Let's build on the new momentum we see today.

10 Thank you.