KEYNOTE ADDRESS BY DR VIVIAN BALAKRISHNAN, ACTING MINISTER FOR COMMUNITY DEVELOPMENT, YOUTH AND SPORTS AND SENIOR MINISTER OF STATE FOR TRADE & INDUSTRY AT THE INAUGURAL INTERNATIONAL CONFERENCE ON SOUTH ASIA ON 28 JANUARY 2005 @ 9.00 AM AT ORCHARD HOTEL
ENGAGING SOUTH ASIA:
CHALLENGES AND OPPORTUNITIES
Chairman
Distinguished Guests
Ladies and Gentlemen
Yesterday we marked the launch of the Institute of South Asian Studies. I congratulate Mr Gopinath Pillai for his success in establishing this Institute.
Appropriately, the Guest-of-Honour at yesterday's official launch was Senior Minister Goh Chok Tong. As many of you well know, the Senior Minister sparked off " India fever" in the early 1990s. He has been the driving force in the effort to focus our attention on the potential of South Asia and retains a keen interest in both the challenges and opportunities that this region presents to Singapore.
Physical Proximity
Two recent events have underlined the geographical proximity of our two regions.
On November 22nd last year, India 's Prime Minister, Manmohan Singh, flagged off the first-ever India-ASEAN Car Rally in Guwahati , Assam . The overland journey covered some 8,000 kilometres through Myanmar , Thailand , Laos , Vietnam , Cambodia , Malaysia , Singapore and Indonesia . In a mere 18 days, the convoy arrived in Singapore before proceeding by ferry to Batam.
On December 26th last year, the tsunami triggered by an earthquake off Indonesia devastated many parts of Asia and resulted in great loss of life. This tsunami travelled from its epicentre to the South Asian countries in only about two hours.
We truly live in a small world. South and Southeast Asia cannot afford to be unfamiliar with one another. We need to work together to be better prepared not only for natural disasters but also emerging opportunities. To do this, we will need to know more about South Asia - its history, culture, politics and economics.
The Opportunities of South Asia
South Asia will join China as an engine of global and regional economic growth. A recent Goldman Sachs report asserts that India could potentially become the third largest economy in the world in 30 years time. With its combined population of nearly 1.4 billion people, South Asia is a gigantic market. As long as India , Pakistan and Bangladesh stay on the course of economic reform, they will become more competitive, attract more foreign investment and create new jobs. India's huge pool of professional young talent will turbocharge its IT and pharmaceuticals industries.
South Asia therefore has the potential to be another economic dynamo in Asia . The World Bank's growth outlook for South Asia is positive. Despite the earthquake and tsunami that devastated many coastal communities in Sri Lanka and India , economic growth is not likely to significantly set back.
The Challenges for South Asia
Nonetheless, there will be challenges. Most South Asian countries have modest GDP per capita that do not exceed US$3,000. The governments of South Asia will have to manage the widening income disparity. Urbanisation and population growth will also bring social and environmental disruptions.
Although foreign direct investment (FDI) in South Asia has risen from the early 1980s, the net inflows of FDI remain low. Given its potential, South Asia must not be content with the status quo and should aim to catch up with, if not surpass, China which alone received US$54 billion in FDI in 2003. In comparison, South Asia as a region received US$6.1 billion. Trade as a share of GDP also remains smaller in South Asia than in any other developing region.
Barriers to foreign investments will still need to be lowered and physical infrastructure will need to be upgraded. If the South Asian countries can overcome the protectionist reflex and successfully implement economic reforms the region will prosper.
South Asian countries must also address the political and security challenges that remain unresolved. Kashmir could prove a dangerous flashpoint although we are heartened by the ongoing dialogue between India and Pakistan . In Sri Lanka , the ceasefire continues to hold. But if two decades of civil conflict are to finally end, definitive peace talks must resume. In Nepal , the deteriorating security situation threatens to divide the society.
Terrorism, especially the mutant form that has hijacked the hearts and minds of a very small minority of Muslims, remains a threat to both our regions. The voices of moderation in South Asia must speak out against divisive militancy, extremism and terrorism.
Singapore and South Asia
Singapore has always believed that our security and prosperity are intertwined with that of our neighbours.
Many languages, religions, philosophy and customs that originated in South Asia are today an integral part of Southeast Asian culture. Angkor Wat, Borobudur and Bali are physical reminders of South Asian influences on our region over thousands of years.
Southeast Asia and South Asia have been intertwined for centuries by trade, cultural exchanges and the movement of people. Indeed, India 's maritime prowess helped entrench the strong civilisational ties that exist between India and Southeast Asia to this day. Those trade ties have propelled Southeast Asia's prosperity, and reinforced our role as the crossroad between East and West Asia.
Singapore too has prospered from these links. We owe this to our location, history as an entrepot port, immigration and strengths as a transport, commercial and financial hub. It is worth remembering that Stamford Raffles came here as an official of the East India Company.
Ironically, the tide of history is returning. Several South Asian countries, notably Bangladesh and India , have embarked on a "Look East" policy. As countries in South Asia embarked on their economic liberalisation programmes, many have turned to East Asia and Southeast Asia for investments, capital, goods and services, and new markets. South East Asia has rediscovered the value of the long ties of language, culture and family.
However, there is a big difference this time. Never before in history have we been on the threshold of simultaneous economic resurgence in the continental sized economies of South Asia, China (including North East Asia) and South East Asia . If we manage to ride this incoming tide without capsizing, the opportunities will be almost unimaginable.
Hence the need to study and understand South Asia deeply from a South East Asian perspective. Many Singapore companies have built up a storehouse of knowledge about doing business in South Asia . There is also a pool of talented nationals from South Asia working in Singapore who bring with them valuable insights, skills and connections.
The Role of ISAS
Where then does ISAS fit into this new matrix?
Singapore's engagement of South Asia will be enhanced by a deeper understanding of developments in the region. The value of this Institute will be in the quality of the research it produces and the access it gives to a wide range of end-users, including academics, students, policymakers, businesspeople and the general public.
The ISAS has come a long way since the need for such an institute was first recognised. It was established last year under the able chairmanship of Mr Gopinath Pillai. The mission of ISAS is to promote research on contemporary South Asia , with particular emphasis on developments in the political, economic and social spheres of these countries. The ISAS is well placed to fulfil these objectives. As an autonomous research institute within the National University of Singapore, the ISAS will complement and build on the NUS' strength as a centre of research excellence.
Therefore the role that ISAS can play cannot be overstated. Many research institutes and think tanks in Singapore are focused on Southeast Asia and East Asia . Building linkages with South Asia's intelligentsia through our respective universities and think tanks would form a key component of our overall engagement of South Asia . The ISAS will thus be a useful conduit linking the academia of South Asia, Singapore and other research centres on South Asia worldwide. Through such exchanges, the ISAS would help promote Singapore 's status as a regional intellectual hub.
ISAS, however, must not be an ivory tower insulated from the realities of the South Asian environment. ISAS should also build up a storehouse of knowledge that can be tapped by the business community in search of economic opportunities in South Asia . While Singapore businessmen may have acquired better knowledge of India , they may have difficulty obtaining good information on the rest of South Asia . ISAS could also provide valuable trend analyses and projections. This would help businesses align their investment plans and strategise more effectively.
I hope that South Asians would also find ISAS to be of great value of them. Researchers and visiting fellows will invariably bring back with them a greater understanding of Southeast Asia which can in turn be tapped by South Asian policymakers and businessmen.
I am confident that the ISAS will achieve its aims and objectives. Beyond its own mission, it is my fervent wish to see the ISAS grow to become the intellectual nerve centre for South Asian scholars and researchers, and a leading authority on South Asia . I hope you will all have a fruitful exchange of views and discussions at this inaugural conference.
