SPEECH BY MR LEE HSIEN LOONG,PRIME MINISTER, AT OPENING CEREMONY OF THE ASEAN BUSINESS AND INVESTMENT SUMMIT, 17 NOVEMBER 2007, 10.00 AM AT SUNTEC CITY CONVENTION CENTRE

Mr Stephen Lee, Chairman, SBF,

Mr Robert Yap, Chairman, ABAC,

Mr Ong Keng Yong, Secretary-General of ASEAN,

Excellencies and Distinguished Guests,

Ladies and Gentlemen,

Introduction

1. Let me extend a warm welcome to all of you, especially our overseas guests. The ASEAN Business and Investment Summit (or ABIS) provides a useful platform for the exchange of views between the private and public sectors, and I am happy to join you this morning to share some thoughts on the outlook for our region.

2. People think of globalisation as a modern phenomenon, but the exchange of goods and movement of people across the region is in fact an age-old tradition. In the 8^th century, during the Tang dynasty, Chinese farmers along the Yangtze were already planting rice strains from the green padi fields of Vietnam. An “expatriate” community of 5,000 foreigners lived in Chang-an, the starting point of the Silk Road in China. They included Turks, Persians and others from along the Road, as well as Japanese, Koreans and Malays from the East. The subsequent arrival of the Western powers in Asia in the 16^th century further intensified the long distance exchange of goods, particularly in Chinese porcelain, silk and tea, Indian textiles and spices, and Javanese tropical produce. By the 1850s, half of the yarn produced in Bombay was exported to China and Japan.

3. Today, intra-regional trade in East Asia alone is as substantial as that of the EU’s. A growing web of free trade agreements is linking countries together. Cross-border production networks are being formed all over the region, to diversify the supply chain and exploit the comparative advantages in each country. All this is spurring more exchange of goods, services and investments. With greater integration, Asia has tremendous potential to grow and develop for many more years to come.

One ASEAN at the Heart of Dynamic Asia

4. ASEAN has a central role to play in this process. We have travelled a long but fruitful road since our creation. This year marks our 40^th birthday. ASEAN is now a grouping of ten countries with a market of more than half a billion people and a combined GDP well over US$500 billion.

5. The theme of this year’s Summit is therefore very appropriate – “One ASEAN at the Heart of Dynamic Asia”. Asia is a major driver of global growth, and ASEAN is right in the centre of the action. Our countries offer complementary advantages to businesses, and a neutral core around which the rest of Asia can build economic ties, and a regional framework of cooperation. To sustain this, ASEAN has to become more integrated and cohesive. Only thus can we keep up with larger and stronger economies like China and India.

6. This is the driving force behind our efforts to establish the ASEAN Economic Community – a single market and production base with a free flow of goods, services, investments and skilled labour. ASEAN is bringing forward the target date for realising the Economic Community by five years, from 2020 to 2015. We have developed a Blueprint with clear commitments, targets and timelines for implementation, to guide member countries towards the goal. A Declaration of this Blueprint will be signed by the Leaders at the Summit next week.

7. The ASEAN Economic Community Blueprint has four pillars: (i) a single market and production base; (ii) a highly competitive economic region; (iii) a region of equitable economic development; and (iv) a region fully integrated into the global economy. These pillars ensure that the Economic Community is built on a firm basis, which will not easily be shaken.

8. Closer economic integration will benefit the peoples of ASEAN in many ways. They will enjoy cheaper and more easily accessible products. More jobs will be created as the region attracts new investments. Incomes and standards of living will rise as the region develops and grows. With wider recognition of qualifications, those with the necessary skills will have more opportunity to work in other countries. In addition, it will be easier to travel in the region at more competitive fares and without visa restrictions.

9. Businesses also stand to gain. The Blueprint sets out clear milestones for removing trade barriers among member countries, and for implementing smooth and efficient business processes across borders. This will help companies to operate more easily within the region. For example, the ASEAN Telecom Regulators’ Council has agreed that no further testing will be needed for telecommunications equipment exported from country to country within ASEAN. Exporters can therefore look forward to faster time-to-market of products, which will translate into greater operational efficiencies and cost savings.

10. A more integrated ASEAN will be better placed to strengthen relations with its key trading and investment partners. ASEAN has been actively negotiating free trade agreements (FTA) with its Dialogue Partners. Much progress has already been made. We have completed the Goods and Services chapters of the FTA with China, and are now working on the Investments chapter. We concluded the Goods chapter of the FTA with South Korea last year, and at the ASEAN-Korea Summit next week, both sides will be signing the Services chapter. With Japan, we have just reached a substantive conclusion in our FTA negotiations. At the same time, FTA negotiations with India, Australia and New Zealand, as well as the EU are underway.

11. While Governments provide the overarching framework for cooperation and integration, it is ultimately companies that will drive the process forward, finding innovative ways to collaborate, build alliances, and seize opportunities together. Many ASEAN enterprises have risen to this challenge. In the ABIS this year, we recognise excellence among ASEAN businesses with the very first ASEAN Business Awards. The finalists for these awards come from a diverse range of industries, from paper to pharmaceuticals, but they all embody qualities that are important for successful global firms of the future. I hope that they will encourage other ASEAN companies to become world-beaters in their respective fields.

Challenges Ahead

12. The Award finalists are proof of the vitality of ASEAN businesses and entrepreneurs, and of the potential of the region to compete and prosper even more as we build the ASEAN Economic Community. ASEAN can therefore look forward with confidence and optimism. But we still have many challenges ahead.

13. First, there is a need for further economic integration so that ASEAN remains attractive as an investment destination. The Economic Community Blueprint provides a comprehensive plan for this, but it must be followed up by systematic and committed implementation. The ASEAN Charter, which will also be signed at the forthcoming Summit, aims to steer ASEAN in this direction. The Charter moves ASEAN towards a rules-based organisation which, coupled with transparent regulations, is critical in enhancing ASEAN’s credibility and attracting investors. I am confident that with the right attitude and political will, we will achieve this.

14. Second, economic progress does not stand alone. As countries become more affluent, their economies will consume more resources, and often impose greater strains on the environment. Higher standards of living and growing urbanisation will increase demand for basic necessities such as food, clean water and energy. Energy, in particular in the form of fossil fuels, is a major global concern. With fears growing about greenhouse gas emissions and climate change, there is greater impetus to accelerate the deployment of emission-reduction technologies, promote energy efficiency, and protect the existing carbon sinks such as forests.

15. In its own interest, ASEAN will have to balance the competing demands of economics, energy and the environment. Unbridled growth without heed to environmental consequences will ultimately be disastrous. But neither can countries lightly sacrifice economic growth and higher living standards for our peoples. Southeast Asian countries need to play their part as responsible members of the United Nations, and participate in the global effort to find effective solutions. This is why we have made “Energy, Environment, Climate change and Sustainable Development” the overall theme for our meetings in Singapore.

16. Third, the benefits of globalisation and growth need to be spread widely, especially to the poor in each country. The forces of globalisation have the potential to lift millions around the world from dire poverty, but they can also cause social tensions as they sharpen the differences between rich and poor within the same society. We will have to find ways to deal with these issues, and ensure that vulnerable members are not left behind in the race for greater prosperity. The third pillar of the Economic Community Blueprint on equitable economic development will aid us in this process, providing guidelines for the sharing of experience through capacity building and collaboration.

Conclusion