Mr Narayana Murthy, Chairman Infosys,

Distinguished guests

China, India and ASEAN are the fastest growing areas in the world. They are making the new Asian economy. China has been averaging growth rates of between 7-8%, India 5-6% and ASEAN 4% over the last 3 years. ASEAN, once growing at over 7%, has slipped and its economies face some uncertainty in the current climate. But even today the ASEAN countries together remain one of the most rapidly growing regions of the world. If they continue to make competitive reforms and move to neutralise the emerging pockets of political extremism, ASEAN will surge again.

China, India and Asean are also the fastest reforming regions in the world. Even during these difficult economic times, they are pressing ahead with economic reforms, and opening up to external competition. In a span of 10 years, India’s maximum tariff rate fell from 385% to 38.5%. It is planning to further reduce its tariffs to meet East Asian levels. China, already dramatically transformed since the 80s, will see accelerated reforms now that it is a WTO member. In ASEAN, tariffs among the ASEAN-6 will be between 0-5% by January next year. And the Asean countries have embarked on a spate of FTAs, with Singapore leading the pack.

We are entering a new phase of the Asian economy, which is seeing the rebuilding of the old Asian network. The old Asian network flourished for many centuries. Indeed, trade between India and China was the largest between any two countries in the world till around the 12^th century. South East Asia was at the nexus of this trade. It benefited both from direct trade with these two major Asian civilisations as well as from being the middleman. Southeast Asia was moulded, economically and culturally, by the movement of people and merchandise between India and China.

Indian influence on South East Asia is therefore deep, extending across time and from many corners of the subcontinent - from Orissa, the headquarters capital of the Kalinga empire in early times, subsequently to the Cholas in the south when they dominated the seas, and to the Gujeratis in the West. It was a many-faceted civilisational intercourse. Chola princes married into Javanese families. Some of the influence ran in reverse. Today, we can still find the ruins of an Indonesian Buddhist monastery in Nagapatnam. The Asian network took on new forms during the colonial era. The British East India Company plugged itself into the same trading routes, exchanging opium for tea in China, buying spices from other parts of Asia in exchange for Indian textiles, and creating immense wealth for itself in the process. But they were still only a part of a whole Asian trading network, dealing alongside Chettiars, Sindhis, Gujeratis and Parsees, and the Jews, the Hadramis and the Chinese.

Paradoxically, the Asian network weakened with the end of colonialism, and the emergence of independent Asia. India turned inwards, and protected itself from foreign influence. China turned to central planning. Southeast Asia had to create new networks. It strengthened its economic links with the US, Europe and Japan, its three main trading partners for many decades to come. In addition, we sought to increase intra-ASEAN economic links. These new links launched an era of unprecedented growth and prosperity in ASEAN.

When China started opening up in the 80’s, we were quick to position ourselves for China’s growth. ASEAN-China links have been growing rapidly since. This year, Singapore’s trade with Greater China (China, Taiwan and Hong Kong) overtook Singapore’s trade with the US. Malaysia is experiencing the same patterns. In Cambodia earlier this month, ASEAN and China signed an agreement to put in place an FTA in 10 years. This will be the largest FTA in the world.

ASEAN’s post-war experience with India has been positive but different. Many Indians went to seek their fortunes in the US and Europe. Young Indians educated in American universities learnt the American way of doing business. Unlike their forefathers, they were less familiar with South East Asia. During the IT boom, in every other start up in the Silicon Valley, there was an Indian involved. Young Indian eyes were focused on the West. Yet, the success of Indians in the US and the emergence of a large, US-fuelled IT economy in India has changed global perceptions of India. The fact that over a quarter of Microsoft’s employees are Indian, for example, has changed the way the world looks at the fifth of its population that is Indian.

The knowledge-based economy is also setting the stage for a new era of India-ASEAN linkages. Trade in knowledge-based services in particular, led by Indian exports of IT and IT-enabled services, has been growing much faster than trade in merchandise goods. In spite of the Asian slowdown, Singapore’s trade in services with India increased by nearly 50% from 1998-2000.

We are therefore seeing the re-emergence of the old Asian network, in new form: driven by a manufacturing supply chain between ASEAN and China, and a services supply chain between ASEAN and India. There are, of course, other large opportunities that will shape economic ties between ASEAN and India - for example investments in Indian infrastructure. But the biggest driver is in IT and IT-enabled services. In coming years, other services such as health care, legal and education services will also blossom.

As India and China continue to open up and grow, and expand their presence in the knowledge-based economy, the nature of these Asian corridors will change. Singapore will have to be flexible and nimble to stay plugged into these changing Asian networks and the new knowledge based Asian diaspora. Our position as trade, logistics and finance intermediaries, for China, India and ASEAN, will give us relevance. Singapore’s strengths in the technology and manufacturing, and our more trusted regime for intellectual property protection, will also give us a growing role. For this reason, the number of Indian companies incorporated in Singapore has increased by an average of 60 new Indian hi-tech companies per year. In Singapore today, we have nearly 1000 Indian companies incorporated. Most of India’s top IT companies have established a presence here.

Our cultural proximity to all three growth poles of the new Asia will remain a major advantage. Knowledge-based corridors will involve more contacts, interaction, openness and understanding. They are, intrinsically, human corridors. We must keep our corridors open to human capital, keep our cultures open to each other, keep our value as a cipher for these great Asian civilisations, and keep multiplying their ideas.

This evening, it gives me great pleasure to be presenting Mr Narayana Murthy with the Global Indian Achiever’s Award. Since Mr Murthy founded in Infosys in 1981 with six other software professionals, he has taken the company to the top echelons of the industry. Even today, while others in the industry are downsizing, Infosys has managed to find new business opportunities and is actually hiring. Mr Murthy epitomises the knowledge-based economy, the combination of knowledge with entrepreneurship. He also captures a remarkable spirit of humility.

I would finally like to congratulate GOPIO Singapore for organising the first ever GOPIO Global Indian Achievers’ Award.

Thank you.

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