OPENING REMARKS BY LIM HNG KIANG, MINISTER FOR TRADE & INDUSTRY, AT THE SINGAPORE BUSINESS FEDERATION ON 11 APR 2006 AT 10.00 AM
Your Excellency Minister Khaled Mohammed Al Gosaibi, Minister for Economy and Planning
Distinguished Guests
Ladies and Gentlemen
I am delighted to join all of you this morning. As a region the Middle East has always been one of our most important trading partners, outside our immediate economic neighborhood in Asia and traditional markets like the US and EU. The Middle East was ranked Singapore’s 6th largest trading partner in 2004[1] up from 7th in 2003. Overall trade has more than doubled since a decade ago to S$33.7 billion in 2004.
Singapore recognizes the tremendous potential of the Middle East as a new frontier for our companies to explore. For several years now, we have been actively engaging the Middle East at both the Government-to-Government and Business-to-Business level, to increase our understanding, familiarity and awareness of the opportunities there.
The results so far have been encouraging. Many Singapore companies have started to seriously explore the Middle East market and are now actively pursuing opportunities in info-comms technology, financial services, construction and real estate services, and oil and gas supporting infrastructure sectors. Singapore's investments in the Middle East have more than tripled from 1999 to 2003. Over the same period, inward investments from the Middle East have increased by close to five times.
Saudi Arabia is a key economy in the Middle East. The economic ties between our countries are strong. Saudi Arabia was Singapore’s 14th largest trading partner in 2005 and our largest trading partner in the Middle East. Saudi Arabia is also Singapore’s largest foreign investor from the Middle East, with many key Saudi conglomerates choosing to locate their Asian trading offices here.
But there is tremendous potential for our relationship to grow. Saudi Arabia is actively liberalizing its economy and welcoming foreign participation in its economic development. Saudi Arabia’s recent accession to the World Trade Organization is an affirmation of the seriousness the Kingdom places on developing an open and level-playing trading and investment regime.
Saudi Arabia has also demonstrated its keenness to engage Singapore companies in its economic development program with the recent opening of a representative office in Singapore of the Saudi Arabia General Investment Authority.
The potential business opportunities for Singapore companies in Saudi Arabia are immense. An estimated US$624 billion worth of projects is being planned over the next 15 years. The King Abdullah Economic City is an exciting showcase project that Singapore companies could explore contributing to. This new Red Sea City will occupy 35 kilometers of the coast and will consist of a seaport and holiday resorts, along with zones for homes, educational and financial institutions, and industries.
Yesterday evening, Singapore and Saudi Arabia signed two economic agreements, in a demonstration of the strengthening bilateral economic relations between our two countries. The first, an investment guarantee agreement, is designed to promote greater investment flows between the two countries by providing a solid framework that clearly sets out investment norms and protection when investing in the other country.
The second agreement, a Memorandum of Understanding on Trade Cooperation between the Ministry of Trade and Industry and the Saudi Ministry of Commerce and Industry, re-affirms both countries’ commitment to expand and develop economic linkages, and will provide the basis for the two ministries, to work together and exchange expertise in areas such as export development and promotion, development of small and medium enterprises (SMEs) and competition policies.
I am also pleased to see that at the private sector level, the Singapore Business Federation and the Saudi Chambers of Commerce have entered into a Memorandum of Understanding to establish a Joint Business Council. The Business Council will facilitate business promotional activities between our two countries and will provide a regular forum for the discussion and planning of such activities between businessmen and industrialists of the two countries.
I thank and applaud the respective Business Chambers for this good initiative and for all that you are doing to strengthen economic relations between our two countries. I believe the future prospects of our bilateral relations with Saudi Arabia are bright, and urge Singapore companies to proactively explore the opportunities that are available.
[1] After ASEAN, Greater China (China, Hong Kong SAR, Taiwan), US, EU and Japan.