Friday, October 10,
2008
SM
Goh says impact of financial crisis on real economy is
worrying
By S Ramesh,
Channel NewsAsia | Posted: 10 October 2008
1500 hrs
SINGAPORE: Singapore's Senior Minister Goh Chok Tong, who
is also the Chairman of the Monetary Authority of Singapore (MAS),
on Friday said Asian banks have learnt their lessons after the last
financial crisis.
He was addressing a luncheon session at the Indian diaspora
conference. Replying to a question on the impact of the current
financial crisis on Asia, he answered that the impact of the crisis
on the real economy is worrying.
Mr Goh said: "Already we are seeing slower signs of growth for
Singapore and likewise for many countries in Asia. There is no
escape. US is one of our biggest export markets for most countries
in Asia, if not the biggest. Europe is also a big market for
us.
"So when the real economy begins to be affected, all of us will be
adversely impacted. That is the part I worry about. What will
growth be like next year and how long will slow growth be dragged
out for all of us?"
"This time the financial turmoil has affected more of the West, US
and Europe. Asia as of now has not yet been as adversely affected
as the economies in the West. That is partly because, in a way, we
are less sophisticated in questions of derivatives. I think it is a
good thing.
"Many of our investors want to jump into derivatives. But also
after the Asian financial crisis, the banks in Asia, they have
re-capitalised themselves.
"They are better regulated, they have better boards and management
and these are the principal factors that have in a sense prevented
us from being sucked in by the financial turmoil in the West.
"But I would say the worrying news would be how the financial
turmoil in the West is now affecting the real economy in Europe and
in the US."
- CNA/yb
SM
Goh says Singapore, ASEAN stand to benefit from India's
rise
By Imelda Saad/S
Ramesh, Channel NewsAsia | Posted:
10 October 2008 1500 hrs
SINGAPORE : Against the backdrop of a worldwide
economic slump, India, together with China, could provide the
engine of growth for the global economy.
That is the view of delegates who are in Singapore for the Global
Indian Diaspora Conference.
Speaking at the event, Singapore's Senior Minister Goh Chok Tong
also voiced his confidence in the Indian market, saying that
Singapore and ASEAN stand to benefit from India's rise.
Touching on his personal engagement with India, Mr Goh is convinced
that India will be the next engine of growth, alongside
China.
India now accounts for almost 7 per cent of the world's gross
domestic product. And by 2050, India's working population will be
50 per cent larger than China's.
It was Senior Minister Goh who started the mild "Indian fever" back
in 1993, and that has since become somewhat a global
pandemic.
Moving forward, Mr Goh said there needs to be greater engagement
between India and ASEAN, because India is one of the key economic
pillars for the region. He said that being at the heart of Asia,
Singapore can be a gateway for India into the region.
The Senior Minister said: "Dr Manmohan Singh was aware of
Singapore's strategic location when he said that if the Indian
government wanted to 'market New India', they would have to begin
in Singapore.
"Singapore shares 'New India's' pro-market ideology. We have an
inclusive cosmopolitan community which welcomes Indian enterprise
and talents. India and Singapore have shared strategic interests in
contributing to Asia's growth and stability.
"What gave me confidence in India when many people were sceptical
about the country then? One of the key factors is the Indian
diaspora.
"I had seen what the Indians outside India had achieved - in the US
and in Singapore, for example. Their accomplishments gave me
confidence in the potential of Indians as a people. If India had
not performed, it was their insular bureaucracy, amongst other
reasons.
"As I told several Indian leaders then, India should not aim just
to be economically self-sufficient. It should use its huge
population to also produce for the rest of the world, just as China
had begun to do. If India adopted a global mindset, its future
prospects would be bright."
Already, there are now more than 3,200 Indian companies in
Singapore. But more can be done.
Mr Goh pointed to obstacles in trying to establish a Special
Economic Zone with India, unlike in China where things moved along
fairly quickly with the recent groundbreaking ceremony of the
Eco-City in Tianjin.
Mr Goh said: "Land is a very sensitive issue in India. The project
has to be very commercial. It cannot be a project where the
government simply acquires the land and gives it to the private
enterprise. So we are interested, still looking for that piece of
land.
"China could move much faster with the Tianjin Eco-City project.
That does not mean China does not have sensitivity issues with the
land acquisition. Because this was supposed to be an Eco-City,
Premier Wen's approval for the project was subject to certain
conditions.
"It must not be agricultural land. The place must be short of
water. So, in fact the land given to us was 30 square kilometres of
salt pans... they had a waste pond, toxic... they had a river which
was polluted. We are now going to turn that into an Eco-City. So
India, if they can give us 30 square kilometres, whether it is
wasteland or good land, we can have a look at that."
Delegates were equally optimistic. Rajat M Naj, managing director
general, Asian Development Bank, said that the current financial
crisis will not hurt India much in the medium term. Others pointed
to the rise of Indian multinational corporations.
Vijay Iyengar, chairman, Singapore Indian Chamber of Commerce and
Industries, said: "The current economic backdrop may temporise the
engagement a bit, but the engagement is a continuous process, and I
think Indian companies have been approaching the region.
"For the last two years, we have seen a 10 to 20 per cent growth in
the number of Indian companies coming into Singapore. It might
scale down a bit, but they will still come, because India is still
in the initial stages of economic growth, so they will need to
internationalise."
Still, speakers at the conference pointed to challenges India needs
to overcome to sustain its growth momentum, like building up
infrastructure and promoting commercial agriculture in its rural
sector.
Mr Goh said: "India is a big country and given its present
supply-side constraints and infrastructural inadequacies, we can
expect development to be uneven across the states.
"An Egyptian minister once told me that Egypt's bureaucracy has a
history of 5,000 years, so it is difficult to make changes. The
bureaucracy of the Republic of India has far fewer years of
history, and changes should be easier to make." -
CNA/yb/ms
