Singapore Government Press Release

Media Division, Ministry of Information and The Arts,

36th Storey, PSA Building, 460 Alexandra Road, Singapore 119963.

Tel: 3757794/5

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SPEECH BY MR TANG GUAN SENG, SENIOR PARLIAMENTARY SECRETARY, AT THE 28TH ASEAN CHEMICAL INDUSTRIES CLUB CONFERENCE AND MEETING ON THURSDAY 12 NOVEMBER 1998 AT 9:25 AM AT MARINA MANDARIN HOTEL

 

THEME: "ASIAN ECONOMIC CRISIS – OPPORTUNITIES AND CHALLENGES FOR THE CHEMICAL INDUSTRY"

 

 

Distinguished guests, Ladies and Gentlemen

 

Good morning.

 

  1. It is my great pleasure to be here today to deliver the key-note address of the 28th ASEAN Chemical Industries Club Conference.

    THE ASIAN CURRENCY CRISIS

    2.  

  2. The Asian currency crisis started in the middle of last year and is now hurting the real economies of many Asian countries. The so-called "Asian flu" appeared to have also spread to other emerging markets in South America and is beginning to affect the US and Europe.
  3. This crisis has shown up structural weaknesses in many Asian economies. Prior to the crisis, these countries’ GDP were growing at rates of between 5 to 9 %. The growth had been fuelled largely by huge capital inflows. However, growth could have been more sustainable if a greater portion of the capital had been channeled into productive assets for tradable goods and services.

    RESTORING ECONOMIC GROWTH IN SINGAPORE

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  4. Like our ASEAN neighbours, Singapore is not immune to the "Asian flu" and we are currently undergoing a difficult period. This is because Singapore’s economy is closely linked through trade and investments with its Asian neighbours.

    5.  

  5. To put Singapore firmly back on the path of recovery, the Government has moved fast to respond to the changing economic landscape. For example, the Government implemented a S$2 billion package in June this year, which included rental rebates, property tax rebates and easier access to working capital.

    6.  

  6. Yesterday, the Committee on Singapore’s Competitiveness has recommended a comprehensive package to further reduce business costs. The proposal is for the package to reduce business costs by S$ 10 billion, equivalent to about 7 % of Singapore’s GDP. The package includes measures to reduce land costs, electricity charges, transport costs, government fees and wage costs, including a cut in the employers’ contribution to CPF. The National Wages Council, comprising unions, employers and Government representatives will be announcing its recommendations on the revised wage guidelines later this morning. The Government will be responding to these recommendations on 24 Nov 98. If the Government responds positively to these recommendations, which I believe will be the case, these will translate into positive cost savings for businesses in Singapore, including the chemical industries. These will then make your industry more competitive in Singapore.

    7.  

  7. Besides these short-term measures, we will continue to strengthen our capabilities like building a Science Hub and enhancing the Singapore ONE network. We are also stepping up efforts to upgrade the skills of our workers. As a small and open economy, Singapore is fully committed to a free market system and being a part of the global economy. We will continue to enhance our business environment to make it attractive for foreign investments, and to help businesses weather this difficult period.

    8.  

    JURONG ISLAND

     

  8. For the chemical industry in particular, we are amalgamating seven islands to create a whole new island - Jurong Island - to build an integrated petroleum / petrochemical industry. The S$7 billion reclamation project demonstrates Singapore’s commitment to develop a world-class chemical cluster. Jurong Island will become a self-contained and well-integrated petroleum, petrochemical and chemical complex. Besides having infrastructure like roads and pipeline corridors in place, Jurong Island will have supporting facilities that include centralised multi-storey carparks, mini bus terminal, air-conditioned food court, convenience stores and medical clinics. An added boost to the infrastructure of the island is a road link joining Jurong Island to mainland Singapore. In view of the potential fire and chemical risks, a fire station is also being constructed on Jurong Island to ensure the fastest possible response to any serious incident.
  9. Jurong Island will offer exciting opportunities. Chemical businesses setting up operations on the island will find their suppliers and downstream business partners in close proximity. Companies may find it easier and more economical to share facilities. Specialised logistics companies will provide the critical link between the oil companies, their products and their markets. The result is quick time-to-market, lower costs, and minimal capital requirements. When the project is fully developed, the chemicals cluster will contribute even more towards the resilience and growth of the Singapore economy.

    10.  


    INTO THE FUTURE

     

  10. Despite the current gloomy economic outlook, we have good reasons to be optimistic about the future. ASEAN countries have strong fundamentals for long-term sustainable growth. Over the last three decades, ASEAN countries have invested in infrastructure like seaports, airports and industrial parks. We have also invested heavily in education and training to create a base of technical and management skills to support the growth of industries.
  11. Furthermore, despite the current economic downturn, ASEAN as a whole remains firmly committed to the ASEAN Free Trade Area or AFTA. When fully implemented, AFTA will lead to further liberalisation of regional trade. It will cut tariffs, remove barriers and enhance economic cooperation. ASEAN’s attractiveness as a market for the world will be further enhanced. ASEAN's manufacturing sectors will also be able to become more competitive in the global market.

    12.  

  12. In addition, ASEAN Ministers have signed the Agreement of the ASEAN Investment Area or AIA. When the AIA is implemented, ASEAN countries will collectively become even more attractive to international investors. With the right government policies and necessary actions by both the private and public sectors, it is only a matter of time before the ASEAN region recovers and emerges stronger and more competitive.

    PROMOTING CHEMICAL INDUSTRIES

    13.  

  13. I note in your programme that apart from deliberations on the economic crisis, restructuring and harmonisation of trade policies, the conference will also cover topics such as Responsible Care and the Education Outreach programme. I understand that the programme involves representatives from the chemical industry sharing with lower secondary school students how the chemical industry has helped peoples of the world achieve higher standards of living. These are important areas in promoting the chemical industry. There is much we can do to foster greater co-operation in the areas of environmental protection and promotion of the chemicals sector within ASEAN. I have no doubt that your discussions over the next few days will yield many meaningful initiatives.

    14.  

    CONCLUSION

     

  14. It leaves me now to wish you all every success and a fruitful time at this conference.

    15.  

  15. Thank you.