Transcript of remarks by Prime Minister Goh Chok Tong, Chairman 4th AIS, at the Press Conference, 25 Nov 2000

Before I invite questions from the floor, let me say a few words. First, it''s the mood of the meeting. I felt that the mood is very good, there was a meeting of minds, first among ASEAN leaders, and later on, the ASEAN leaders with the East Asian leaders from the Northeast. In particular, we focused on the medium term and longer term prospects for ASEAN, the present difficulties are there but we focused on how to get ASEAN back on track and there were a number of measures and programs discussed at the meeting. The central backbone of the various programs would be the initiative for ASEAN integration. Of course, this will include keeping the ASEAN free trade area on track and expanding on the ASEAN investment area, e-ASEAN, and all those projects which will keep the ten countries integrated. But the special emphasis on this integration is on the four countries, which are regarded as newer members of ASEAN - Cambodia, Laos, Myanmar and Vietnam. And there was quite a bit of discussion on the Mekong Basin and how we can use the Mekong Basin projects to integrate the countries with ASEAN because that would bring about economic growth for this part of ASEAN.

And Singapore''s own contribution will be on Human Resource development of the human capital in these four countries. We''ll be setting up institutes in each of these four countries, institutes for training trainers, so the trainers themselves can in turn train the workers in Cambodia, Laos, Myanmar and Vietnam. We would also of course be welcoming trainers to be trained in Singapore for relevant skills and that initiative is not just for Singapore alone, it''s a framework, whereby other countries within ASEAN may also have their own voluntary programs to help the 4 countries to integrate with the rest of ASEAN. And we''re happy that China, Japan and Korea are also having their own initiatives, which can form part of this wider framework of initiatives for ASEAN integration.

The other important idea, which came about, was e-ASEAN. OF course it''s no more new but it''s a new concept, and the agreement has been signed. We suggested that instead of talking about e-ASEAN being expanded to E Asia, which is a very huge geographical area which boggles the mind, it is better for us to talk about an IT belt - an Asia IT belt. This belt will link up the cities of IT excellence. We can start from Malaysia, Kuala Lumpur, then Singapore, go through Bangkok and Shanghai, Tokyo and Seoul. We are thinking in terms of cities within countries. That is much more practical, that is much more meaningful, that is much more vivid. And of course later on, we can expand the belt to the other ASEAN cities which are now not so well equipped for the digital revolution. But if we emphasize human resource development, especially in IT for countries like Cambodia, Laos, Myanmar, Vietnam, in time to come, they can also form part of the belt. And of course we can also expand the belt westwards, to include cities in India. If you can create such a belt in the minds of players in IT, then they''ll come to Asia. They can see that there are tremendous opportunities, which are linked to one another as a result of IT belt. I believe we can attract a lot of talent to work in Asia and we can become the Asian equivalent of the Silicon Valley in North America. So that''s one project which we will be working on.

I get a sense that the leaders are now talking about an East Asian community. Now the mechanism of ASEAN +3 has been used for several years now. So increasingly, the North East Asians are talking about an East Asians community and the ASEAN community are also beginning to nurture such an idea - how over time we can develop the ASEAN +3 process into some kind of a East Asia summit. It''s not going to happen immediately. It''s something which will require some study, but I can sense that there''s this desire on the part of the participants to begin to evolve an East Asian community. I think it''s for the good but this will take time. This can''t be forced - when we''re comfortable, of course an East Asian community will come about. But meanwhile, I believe the ASEAN +3 process is the best forward because ASEAN is not yet completely integrated. So I would still want to focus on ASEAN integration, getting the four new members to gel with the rest of ASEAN and ASEAN +3, and we''ll let the process evolve quite slowly.

Now I invite questions from the floor.

Q: (Richardson, IHT) I have a question about the study group that is being proposed to look at closer economic and political cooperation for East Asia. Who will select members of that study group? Will they include private sector representatives as well as officials? When will the group start? Will they be mandated to report by the time of the next Summit meeting in Brunei? And related to that, how does ASEAN can ensure that if a new East Asian grouping emerges, that it does not eclipse ASEAN, and dominate the smaller ASEAN [inaudible].

The East Asia mission group was proposed by Korea last year. And Korea suggested an East Asia study group, which can then overlap with this mission group, which has submitted a report. So I would expect that the Koreans, working with the ASEAN secretariat, will drive this study group, and each country will be required to nominate some members into the study group. And I believe we normally would like to involve people from the private sectors so we get a comprehensive look into the implications of East Asia working together. So I would expect both public sector, the academia, as well as the private sector, would be on this group. And certainly, we would mandate the study group to submit the report. I think there was a suggestion that the group should try to complete its report by next year for Brunei but I''m not sure if it can be done so quickly because the project is a huge one. I would expect some kind of progress report next year. I''m not too sure we can have a total report but I don''t want to foreclose any possibilities at the moment. I''ll leave it to the study group to work out its plan for the future.

There is of course the risk that ASEAN may be eclipsed by the wider East Asia grouping. If you put ASEAN members together with the East Asian grouping up north - well economically we pale by comparison. Our contribution in terms of GDP for East Asia will be, I think maybe, less than 20% as compared to what North East Asia would have. In terms of population size we''re not too bad. We have about 500 million people but it is in terms of economic power that we are much smaller players. So there is that risk, and that of course would require deep study by ASEAN members themselves. Whether when we move into that kind of forum or that kind of grouping, whether ASEAN''s interests would be served. So I myself, speaking for Singapore, would prefer a gradual approach because I think I would emphasize ASEAN solidarity first. Until ASEAN is strong enough, I think we should not move too quickly into that kind of grouping because there is a danger that ASEAN may be eclipsed. But if ASEAN is strong, we''re acting as one, we''re cohesive, then I would worry less about ASEAN being eclipsed in such a grouping. But it is desirable to study a move in that direction in the longer term.

Q: (Ramesh from CNA) Several initiatives have been announced from the Summit but Prime Minister, how has it been ensured that these initiatives don''t slow down - the implementation don''t slow down - or they are derailed as a result of political developments in some of our ASEAN countries.

First, all the leaders recognise that we have been talking about these initiatives for quite some time. So one of the decisions taken at this meeting was action. Less talk and more action. And we''ve mandated the next meeting in Brunei to do a report card kind of assessment of the initiatives. So at the next meeting, there will be a checklist of initiatives, and we would assign some scores to the implementation of these initiatives.

Will the initiatives be derailed by political instability in some countries over here? Well it may affect the participation of that country but as I said just now, at this meeting, we focused on the medium term measures of ASEAN. So these countries, even though they might be affected by their own domestic difficulties, will not diminish their interest in the wider initiatives for ASEAN, which is medium term. But you must expect some effect - I doubt whether its going to derail the measures, which we are planning for ASEAN. And of course the more measures you have, the more interdependent the countries become, the less likelihood you''re going to have of domestic problems spilling over to another country. Because interdependence means a certain understanding and accommodation between countries in working out the longer term programmes for the region.

Q: (Yang Razali, BT) Prime Minister, talking about the integration of ASEAN - as you know [inaudible] ASEAN before this Summit have been rather incohesive. So given the theme for this Summit, to what extent has the different ASEAN countries actually come together politically, if not economically.

I feel that there is a strong sense of wanting to integrate the economies and the point was made that it should not just be economics, it should extend to the cultural side, the political side, as well as the social side. So we would therefore work on this integration. I think that the strong sense had carried through - because we all know that alone we are weak if we negotiate with others outside ASEAN but together, if we can really be integrated, we will be strong. And the integration goes beyond the normal discussion of free trade area. We are now talking about physical integration as well. Our highways, especially in the northern part of ASEAN - there were several proposals on how the roads could be built and China, Japan, Korea have all offered assistance to do these highways, to connect up the different countries. And it''s possible to drive, even now, from Kunming down through the peninsular to Singapore. But of course you need the use of four-wheel drive. But in future, we can perhaps use a Ferrari to speed all the way from Singapore to Kunming and that is the kind of integration we are talking about.

And on the railway side, the Malaysians have submitted a report which identified certain gaps which got to be built in order that we can have a railroad linking Singapore through Malaysia, Thailand, up to Kunming, and of course a spur to Myanmar. Well the suggestion was made that we should perhaps look at one part of the railway - the easiest part to build. And of course it must be viable. Let''s build up that gap first instead of the plan to build up everything at the same time, it''s not possible, it''s not viable. And of course, for this to be viable, we''ll require some aid, some grants, some subsidized loans from countries like Japan and China, and these are matters which should be in progress. So physically the countries are going to be much more integrated then before if these plans are put through.

I also suggested we should look at the aviation - air services. The western part of China for example is remote relatively. So I put forth the proposal to Prime Minister Zhu Rongji, that China should consider allowing ASEAN airlines to fly direct from their countries to the western provinces of China instead of going through Shanghai or Beijing before going to the western provinces of China. So he was agreeable. And of course to make the flights viable, we should also explore the possibility of ASEAN countries giving fifth freedom rights for such airlines. For example, Singapore could fly to an ASEAN destination and from there we can pick up passengers to go to the western provinces in China. If these ideas are implemented, then physically you can see ASEAN being much more integrated and this time also with parts of China. So these ideas have been accepted by Premier Zhu Rongji. He says "Yes", he would consider allowing airlines to fly direct to the western provinces of China.

Q: (Sultan, Radio Indonesia) Prime Minister, Can you tell us if there had been any discussions about the ASEAN-EU relations? Bearing in mind, the recent decision made by ILO to impose sanctions on Myanmar, and if so, if there had been any consensus reached on the situation in Myanmar?

Yes, there was some discussion amongst the ASEAN leaders and the point we made was a simple one. Myanmar is a member of ASEAN and we would meet the EU together as an ASEAN group. And we would go so far as to say that if EU wants to exclude Myanmar and the dialogue is going to be called off, then let it be called off. Because we can''t allow an external organisation to dictate who should be in ASEAN when we have such a dialogue. So there was this discussion

Q: [inaudible] Mr Prime Minister, can you explain to us what [inaudible] initiative of an East Asian community will mean for free trade areas in Asia [inaudible] I mean Singapore [inaudible] with some free trade agreements [inaudible] AFTA [inaudible]

There were two interesting proposals. One is an East Asia free trade zone but in a longer term. There was another proposal of China-ASEAN free trade zone. Of course the China-ASEAN free trade zone is smaller than the East Asia free trade zone. But all the leaders understand that these are all ideas for studies and if they are to be implemented it will be over the long term. But it is interesting that at this point of time, two ideas have been floated that we should be thinking in terms of a larger free trade zone outside AFTA. And the point was also made that ASEAN should of course liberalise its economies first and get AFTA in place before we actually expand to consider free trade area arrangements with countries who side ASEAN.

Q: (Mr Gerry Thomas from Voice of America) [inaudible] there was much discussion on the effects of globalisation - social effects of globalisation. Did that discussion carry over here among leaders? And also, what effect does globalisation have on the bedrock principle ASEAN has on non-interference? [inaudible]

We discussed globalisation quite extensively in several forums outside here. I would say starting this year with the UN Millennium Summit Roundtables. I chaired one and we discussed globalisation. We also discussed this in Seoul at the Asia-Europe meeting and of course at APEC in Brunei, globalisation was also extensively discussed. So by the time we arrive at this meeting in Singapore, there was mention of impact of globalisation - there wasn''t any extensive discussions because many members here have also participated in earlier fora.

Well the impact of globalisation depends on how each country responds to it. I made a point in earlier discussions in other forums that there are benefits, there are also negative impacts on globalisation but it is for each country to decide on how it wants to respond to globalisation. In the case of Singapore, we also see some dangers for us. For example our society will be much more open, we are going to be more cosmopolitan as a society in future. If we embrace globalisation, we''re going to have more foreign talent working in Singapore. But we thought this over, we think the benefits are much more for Singapore. So we embrace globalisation. We embrace it because this is a force that has come about, and in fact globalisation allows Singapore to seize opportunities outside Singapore. If there is no globalised economy, and if Singapore''s economy has got to fend for itself within Singapore, I think it''s worse off for Singapore. So each country has got to work out the pluses and minuses and decide on how it wants to respond. My sense is listening to the arguments that all countries realise the importance of globalisation and they do want to embrace globalisation. It is the pace of globalisation that worries them. So some countries would try to slow down the pace for themselves because they are not quite ready yet to open up the way Singapore has open up our telecommunication and financial sectors - to globalised competition.

Q: (Jenny [inaudible] United [inaudible] News) Prime Minister, talking about East-Asia summit and the East-Asia free trade zones, would it include Taiwan in as a member just like [inaudible]

Well, it depends on how this evolves and how the study group recommends. If it is a question of economies - we are talking about economies - then Taiwan could be considered because Taiwan is an economy. But if the study group talks about countries or sovereign countries, then I am afraid Taiwan would not be included

Q: (inaudible) This is my question. Given the fact that this is the year of the century. Now the second part of the century was marked by two severe wars, Korean and Vietnam in Asia. And you have established very progressive and positive ASEAN [inaudible] Let me say this is a kind of ASEAN way. [inaudible] treaty and Treaty of Amity and Friendship of Southeast Asian countries [inaudible].

Well there is an old proverb, I don''t know from which country, which says that anyone who can predict the future, especially one century from now is a liar. Because the moment he starts claiming he can do so, he''s already lying. So I will not know what the end game would be a few years from now, but I can say that we will put in place a certain framework. And we start off by having a study group to look at the framework and then we move I think from the study group to perhaps discussion and then implementation.

Q: (Alan Wheatley, Reuters) Can I ask you about the Chengmai initiative, which you endorsed yesterday. Given the fact that the swaps will be actuated essentially as part of IMF programmes. Does this mean that any talk within Asia of short-circuiting IMF [inaudible]?

I do not think that that will be the end result. The swap arrangements were worked out because the countries affected very much by the crisis want to have an arrangement, which will prevent a repeat of future crisis - that when it happens there would be some facility which would allow us to help each other before we get deeper into trouble. And all of us are very aware of the moral hazards involved and we believe that IMF has a role to play and IMF''s role may have to be reformed if necessary to make it more effective. So the swap arrangements are, I would say, an immediate facility for countries over here to deal with immediate problems before the IMF is called in.

Q: [inaudible] German , Mr Prime Minister, has been some concern from some amongst ASEAN members about Singapore''s way to go ahead with free trade arrangements.

Well, I think one minister from Malaysia has expressed some concern that Singapore is moving ahead with FTA and therefore Singapore may divide ASEAN solidarity. But another Malaysian minister, she''s the Minister in-charge, that''s Minister Rafidah, has said that Singapore''s FTA is consistent with WTO and therefore there''s no problem with Singapore going ahead with the free trade arrangements. And I read in the Kyodo news report in October that Malaysia had in fact asked Japan to consider a bilateral arrangement for free trade agreement. So I don''t know which view prevailed in Malaysia.

But speaking for Singapore, we have bigger reasons than just thinking of Singapore ourselves. Because we are an open economy and if you analyse the partners we''re working with, they do not have too much benefits from Singapore with the free trade arrangements. Yes our telecoms, our professional services may have to be more open to them but the benefits to them in economic terms are marginal. But all are interested in Singapore because they see the possibility of working with Singapore - a higher standard of FTA, which they can then use with other countries. And very importantly, these countries are signalling their interest in ASEAN, that''s Singapore''s interest. ASEAN at the moment is not quite ready to do an FTA with other countries but Singapore is. So I told the leaders in other countries that ASEAN requires some attention. They''ve got good medium term plans. Short term - we are not too interesting because of our individual difficulties but you have to show interest in ASEAN. So the FTA for Singapore will be WTO consistent. There will be WTO plus we will be open to anybody who wants to sign on the terms, which we have negotiated with the others. It is not a closed FTA. It is meant to be an arrangement which will put negotiations for freer trade on a fast track, so that others can follow later on.

Q: (inaudible) [inaudible]

I would say leave it to the study group to work out the feasibility of having such an arrangement first. And the study group would have to look into the process - how long it would take. But realistically speaking, if you were to ask for my view, I think it would take quite some time before we can actually implement a free trade area for East-Asia. I think its a good idea, its a good idea, but I think for the time being there would be too many complexities and complications for this to be implemented very quickly. But it''s a long term idea. I think it is something worth pursuing

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Issued by the Media Secretariat, 4th ASEAN Informal Summit, Singapore, 25 Nov 2000