Transcript of Minister for Foreign Affairs Dr Vivian Balakrishnan's Remarks at the Singapore Symposium, 31 October 2017 at ITC Maurya, New Delhi

Excellencies

Ladies and Gentlemen

Friends    

            I say friends because I can honestly say that when I look around the room, there are many old friends. When I say old, I don’t mean the white hair variety although the fact that Gopinath Pillai refers to me as a schoolboy appearing before you as a judge; that was several decades ago. Nevertheless, it is an honour to be here and to participate in this Symposium.

            I was told to talk about “India, Singapore and ASEAN: Shared History, Common Future”. But you know nowadays, in the days of the Internet and Twitter, most people have attention deficits. So let me quickly run through the key points that I am going to make before I launch into the speech proper.

            Basically, there are three key points that I want to leave with you. The first point I am going to deal with is on the transformation of Global Value Chains (GVCs). The second is on connectivity and the third is on the digital aspects of connectivity going forward. I want to preface my comments by saying I am not going to be politically correct. Some of the things I am going to say, I hope, would not cause a diplomatic incident but may not necessarily be politically correct for planners, both in Singapore and India. The reason why I am doing so is because if I am going to take up your precious time, I might as well make it worthwhile, if not provocative. So a little bit of excitement in the relationship.

            Let’s start first with situating our time and space. This is 2017. We have celebrated 25^th anniversary of ASEAN-India relations this year and I want to say that in fact, within ASEAN, within Southeast Asia, Singapore has been a key advocate, a key champion for India and India’s engagement in Southeast Asia. Many times, people think of Asia, when they actually mean East Asia and they don’t naturally think about South Asia link’s with the larger Asia.

            I want to tell you that Singapore has always been a believer in India’s role in Asia and in ASEAN. I can say with all honesty that we have always spoken up for India, we have always encouraged India to engage us and we have always done our best to ensure that there is a seat at the table. Now, the next thing you have to ask me is why has Singapore done so? There are a variety of reasons: history, kinship, relations, culture, language, trade and politics. Let’s start with history. We all know that India is a great ancient civilisation. You don’t need a foreigner to come to India to tell you that. But it is a fact, and India is a great ancient civilisation that has left an inedible legacy on Southeast Asia. In fact, there was a time where Southeast Asia was even considered part of a cultural region known as Greater India. This was certainly way before partition and the political arrangements that have occurred in the 20^th century. Therefore India exerted a profound influence on us through trade and religious missions. Even the story of Hinduism, Buddhism and Islam in Southeast Asia is intertwined with this narrative of the Indian engagement with Southeast Asia. Generations of Indian traders found fortunes on our shores. They were seeking spices, gold, silk, porcelain. In fact, there are even writings dating back to the 1^st century AD, where Greco-Roman mathematician Ptolemy wrote on the region called the Golden Chersonese. For those of you who are not familiar with this, the Latin term was Chersonesus Aurea – The Golden Peninsula. He was referring to the Malay Peninsula. In his writings, you can see evidence of early trade between India and China. Of course today, that route is often trademarked as the Maritime Silk Route. The point is that such activity was already happening, and we are not talking in terms of decades or centuries, but millennia.   

            I mention the impact of religion. Hinduism and Buddhism defined many ancient Indianised Southeast Asian kingdoms. Names like Funan, Chen-la and Angkor empires in modern Cambodia to the Srivijaya and Majapahit empires in the Malay Archipelago and even Siam. If you travel to these countries today, you can see the ancient inedible footprints of Indian culture. You look at the Angkor Wat in Siem Reap, the Buddhist temple in Borobudur and the Hindu Prambanan temple in Yogyakarta, just to mention a few. If you look at the scripts of Southeast Asian languages, you can easily see the Indian origin, thick with Sanskritic influence. Many examples, but just to cite one, the Thai alphabet, created in 1283, is modelled on Sanskrit and Pali. In short, pre-modern India left profound influences on our culture, religion, language, politics and business.

            The Indian influence remerged in our region during the British Raj in the 19^th century. As Britain’s crown jewel and source of power in the Far East, it should not surprise us that India was a springboard for even the British to gain access to Southeast Asia. Consequently, there were many immigrants who established the Indian diaspora in Southeast Asia. Our cities prospered from trade through and from, and to India. So one may then ask quite legitimately, where was Singapore in all this unfolding narrative? And the answer is that although Singapore has always been small, but through history, we have been the forerunners in engaging India. We serve as a gateway for India’s interactions with the region, in particular through the Maritime Silk Route because of our location. We are the southernmost tip of the Asian continent, one and a half degrees north of equator. Pre-colonial Singapore was part of the Srivijaya and the Majapahit empires and there was evidence that ancient Singapore served as an important staging post for India. If you come to Singapore and visit Fort Canning which overlooks the Singapore River, it was depicted as a seat of power for ancient rulers, with royal and sacred associations to the Hindu Mount Meru concept. As early as 1822, the British had documented ruins of a Hindu or Buddhist temple on Fort Canning, almost certainly originating from India. Two of Singapore’s most important pre-colonial artefacts are the “Singapore Stone”, inscribed with an Indic script, and a gold armlet bearing the design of Kala, the Hindu god representing time and destruction.

            Our colonial histories are therefore deeply intertwined. Sir Stamford Raffles founded Singapore with 120 sepoys of the Bengal Native Infantry in 1819. He was there as emissary of the British East India Company. The British ruled the Straits Settlements from Calcutta under the Presidency of Bengal, with Singapore as the administrative centre. Modern Singapore was also the gateway for India’s trade with Southeast Asia, facilitated by the British. That’s why one of my favourite reminders to the Indian bureaucrats when we meet, is that Singapore historically has been the eastern most port of India. Indian migrants played a catalytic role in creating the modern commercial world of Southeast Asia in the late 19^th and 20^th centuries. Many Indians that served the British stayed behind to build new communities and countries when the colonial yolk was lifted.

            Fast-forward to today, we can see some aspects of history repeating itself. Singapore’s ties with India are as deep as in the early days, perhaps even deeper. Because today, we are commanders of our own destinies and not as a result of a colonial hangover. We continue to support and facilitate India’s engagement with the region, which in the modern context is the political entity known as ASEAN. Singapore remains the hub for India to do business, trade and interact with the region.    

            Bilaterally, we have celebrated 50 years of diplomatic relations in 2015 and elevated ties to a Strategic Partnership during Prime Minister Narendra Modi’s visit to Singapore in November 2015. We continue to build on institutional mechanisms for cooperation in areas like trade, defence, finance, culture. But ultimately the proof of the pudding is in the eating. And if you bear with me, let me share some statistics. They may sound dry, but these statistics would, I hope, prove the depth and the value of the India-Singapore relationship.

            In 2016, India was Singapore’s 10^th largest trading partner while we were the 2^nd largest foreign investor in India. I am always shocked to recite this statistic and I always ask my staff to double check. Can it be that a city-state with 5.5 million is the second largest investor in India and the largest foreign investor in China? Shocking as those statistics are, they are true. Cumulative Singapore FDI to India from the period 2000 to 2016 is US$45.9 billion. This represents I believe about 16 per cent of Indian FDI. We have significant investments across India – let me name a few. Earlier this afternoon when I met External Affairs Minister Sushma Swaraj, I recited the same numbers and I am certain these are real investments in India. Let me cite examples. Ascendas-Singbridge operates IT parks across India worth close to S$2 billion. PSA is developing the Bharat Mumbai Container Terminal, worth US$1.32 billion. Sembcorp has a 2,640 MW power complex in Andhra Pradesh worth US$3 billion. Singapore Airlines has partnered Tata to form Vistara. All these investments are real. They are not done for political reasons. These investments are proof that we believe in India’s potential and future.

            Interestingly, and I am sure Tarun Das would be able to vouch for this, the start of Singapore’s “India Fever” in the 1990s coincided with India’s “Look East” policy also in the early 1990s. We were very fortunate that our second Prime Minster, Mr Goh Chok Tong, believed especially in India and helped light the fire for the “India Fever”. That’s why since the beginning, Singapore was India’s strongest proponent in ASEAN. We actively pushed for India’s elevation to full Dialogue Partner status in 1994. I am glad in the years since, India’s relations with ASEAN have broadened and deepened considerably. India became a Summit-level Partner in 2002 and a Strategic Partner ten years later. There are about 30 dialogue mechanisms established from trade, tourism, agriculture to energy.

            This brings me to the 25^th anniversary of ASEAN-India relations this year. This is timely not only because we are celebrating our shared history and reflecting on our current achievements but also charting a common future. Many of you are familiar with our calls to promote greater economic integration, especially through the Regional Comprehensive Economic Partnership (RCEP). Now, I am not going to run through all the usual talking points for that. But let me suggest three concrete ideas to advance India-ASEAN cooperation, which I believe Singapore as a maritime, aviation and financial hub can play a catalytic role.

            First is the point on GVCs. We are living through another Industrial Revolution. Some people call it Industry 4.0. Others say it is a digital age or a computer revolution. Whatever it is called, the fact is that there are simultaneous advances in pervasive computing, in broadband and mobile connectivity, advances in Artificial Intelligence and material science, and the new potential for additive manufacturing. The fact is that we live in a day and age where we are always connected. These simultaneous advances are transforming the way we live, work, play, make a living, organise ourselves and modernise our societies. And if you look at the history of previous industrial revolutions, the reason why we are speaking English today, the reason why we spoke about the British Raj, was because the last Industrial Revolution began in England and then Europe, and the ultimate beneficiary was the United States.

            Now, there is another revolution. The key question is whether we will be ahead of the curve or caught in its backwash. If you just think about GVCs, in the last industrial revolution, value chains became dispersed, from the places where the raw materials were extracted, components were built and subsequently assembled into finished products and ultimately reaching their global markets. This is a game which Singapore understood well because 50 years ago, before globalisation became a catch-word, Singapore was cut off from its hinterland and were forced to welcome back foreign companies because we needed their technology, management, networks and markets. We did not have the luxury of import substitution. We were forced to plug into globalisation 50 years ago, before it became fashionable. That gave Singapore a head-start. Our per capita GDP when we were independent was about US$500. Today, it is in excess of US$50,000. That kind of transformation occurred for a variety of reasons. One of these was that we were plugged into GVCs at the right time and place. The question now and taking additive manufacturing as a point - today, if you open containers you either find finished products or sub-components on the way for assembly. If tomorrow, additive manufacturing or 3D printing really becomes the interface, the contents of containers are likely to contain precursors rather than components. Containers will become denser and there will be less air in the packaging. But that’s not all. In the day and age when the cost of energy in the US is cheaper than China, and I suspect even in India, the markets are still there. The locus of manufacturing is not going to change. What all this means is that transport, logistics, shipping and existing routes, modalities and containers are all going to be transformed.

            If you want to have an even more fanciful idea, today we talk about 20, 30, 40 foot equivalence containers. Imagine a future of one cubic foot containers, where each of these containers have some electricity to maintain for instance, refrigeration and climate control. You can almost imagine a world of logistics, where things move in small packets and in a distributed way. It’s the way packets of information are transmitted on the Internet. GVCs are going to be completely disrupted, certainly for a port city like Singapore. We are focused on that, because if we don’t move ahead, then we lose our status as a key node for international shipment and logistics. India will also need to rethink its GVCs, its position in that chain, and how it will engage and connect with ASEAN, given that ASEAN has one of the highest GVC participation indices globally today, especially in electronics. So I leave that first thought with you, because it is a reminder that indeed India will have to be engaged in more, not less, with Southeast Asia.

            The second point I wanted to make is on the need to enhance maritime and aviation connectivity between India and ASEAN. On maritime connectivity, India can tap into Singapore’s expertise in ports. PSA has been a global player and are involved in India, Sri Lanka and other places, and can certainly do a lot more. PSA has strengthened Research & Development, developing driverless automated guided vehicles and other augmented reality platforms for use in equipment maintenance, trouble shooting and repair.

            On aviation connectivity, India has many airports ready and available to connect to many more points in ASEAN. Here’s where I want to be a little bit provocative with my Indian colleagues. India needs to boldly liberalise its Air Services. My favourite statement when I meet Indian bureaucrats on this is the following: the interests of the state outweigh the interests of the state airline. Let me give you some figures. Singapore, a city-state of 5 and a half million people has more than 16 million tourists a year. When I say 16 million, I exclude the people who come across the causeway, the world’s busiest land crossing. Just by air, tourist volumes are 16 million vis-à-vis Singapore’s 5 and a half million population. In other words, the ratio of tourists to population is roughly 3 to 1. I ask my staff just now, how many tourists come to India every year? The number is half the number of tourists that visit Singapore: about 8.2 million. Of course, that number will grow. However, if you think about India’s size, population, natural resources, history and culture, it cannot be that India is content with 8.2 million tourists. In fact, if India was to adopt Singapore’s ratio, there should be 3.6 billion tourists. I specified this as an example of untapped potential if you are willing to boldly liberalise some sectors. It’s no surprise that India is among the five fastest growing aviation markets globally. A study commissioned by The International Air Transport Association found that a 10 per cent increase in air connectivity can boost India’s economy by US$600 million. Like I said to you just now, the potential is so vast, you can plug in any number you like and you can generate huge numbers of jobs and value-add. One of the key things about tourism is that it does really generate jobs and provides for value capture within the country, which is quite different from manufacturing and participating in GVCs. So I make my point again that a more liberal air services regime will create an entire ecosystem of airports, infrastructure, tourism, businesses and service industries.

            My third and final point is on digital connectivity. I have already talked about the digital revolution and its impact on GVCs. But we actually need to think about the intangible aspects of digital connectivity. We already know that in fact, one of the key side effects of going digital is to reduce the friction for transactions. Even more important than that, if you really go digital, you ultimately reduce or even remove human intervention in transactions. It reduces the License Raj and even the possibility of corruption. You know as well as I do, this is why Prime Minister Modi launched demonetisation, why he has launched a nation-wide electronic identification system, the Aadhaar system, and why he is moving so much of India’s commerce onto digital platforms. It is not just going digital for digital sake’s but the fact that it completely transforms the way transactions are executed, reducing scope for human intervention and enhancing transparency and efficiency. Hopefully, this will accrue more value to primary producers and add value to the economy.

            One area we hope there will be more interaction between Singapore, ASEAN and India is in this digital world. We already have commercial projects such as NETS (NETS is the electronic payments system in Singapore) with RuPay. Singapore can potentially serve as RuPay’s first overseas market. We can explore connecting our e-payment systems such as Unified Payments Interface and iFAST Financial in Singapore. We can ride on Aadhaar to implement and facilitate cross-border Know Your Customer accounts for seamless on-boarding and for tracking of customers across both countries’ markets. We can create Smart Financial Centres through new Fintech initiatives, such as an innovation village for start-ups to co-create in India and across Southeast Asia.

            In sum, there are many new exciting opportunities for us to engage in game changers. And in a sense we do all of these: new industrial revolution, transformed GVCs, expanded connectivity in India and Southeast Asia, and game changing developments in the digital arena. All these are in a sense actually repeating history. We will see again the march of Indian culture, literacy and economy branching out across the world and Southeast Asia. You will see renewed forms of engagement. That’s why I have spent a fair amount of time on history and try to connect how this new revolution allows us to repeat history but at a far higher plane than achieved before. I will stop there and leave these thoughts with you. Hopefully, sufficiently provocative for some tough questions, but not so disruptive as to mess up diplomatic relations.

            Thank you all very much.

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