Ladies and Gentlemen,

It gives me great pleasure to be with you at the IE Singapore Awards 2002. This evening marks Singapore's new partnership with a range of global companies in the business of trading and shipping. These companies will be receiving awards for the Global Trader Programme (GTP), the Approved International Trader (AIT), Approved Oil Trader (AOT), the Approved International Shipping Enterprises (AIS) and the Approved Cyber Trader (ACT). The awards are an acknowledgement of the companies' success and their commitment to the development of international trade in Singapore. My congratulations to all the recipients.

Singapore is becoming a global city � a venue for management, financing, networking, and other activities of international businesses. As part of this emerging economic rubric, International Enterprise Singapore or IE Singapore is seeking to develop Singapore into a major trading and logistics hub for Asia and the world.

IE Singapore has succeeded in attracting a strong cluster of premier international trading and shipping companies to establish regional operations here, over the past 10 years. Over 150 companies from the US, EU, China and Japan, under the GTP/AIS/ACT programmes, conducted over US$100 billion in offshore trade last year, incurring more than S$4 billion in local total business spending. They created significant spin-offs for Singapore.

These companies have re-shaped the development of Singapore�s international trade sector. The presence of oil majors such as ExxonMobil, BP, Caltex and Shell have helped to position Singapore as the world�s third largest refining and oil trading centre and the price determination centre for the Asia-Pacific region. Similarly, the presence of established rubber players such as Goodyear and Marubeni has contributed to Singapore�s position as Southeast Asia�s top rubber trading centre. 7 of the 10 largest consumers of rubber in the world, which are mainly tire producers, undertake purchasing operations in Singapore.

Singapore has also made significant progress in the maritime sector. With the consolidation of leading global shipping companies such as American President Lines (APL), IMC Shipping Co. Pte Ltd, NYK Bulkship Singapore, and Odfjell Tankers Asia Pte Ltd, in Singapore, we recently surpassed the traditional maritime centre, the UK, to become the 9th Most Important Maritime Nation, controlling 20.6 mil dwt (dead weight ton) or 2.8% of the world's total tonnage. We are also the largest ship registry in Asia and the 7^th largest in the world, with a total fleet size of more than 1,700 in 2000.

Trading and logistics have defined Singapore as a global centre since the days of the East India Company. However, the business of trading has changed dramatically not just over the last century and a half, but even over the last two decades. It is now a highly sophisticated activity, going well beyond the basics of intelligence gathering, marketing, and the physical transfer of goods. It now requires increasingly complex risk and capital management, logistic planning, and trade financing.

Advances in technology have also enhanced the efficiency of information flow, resulting in a more competitive environment. Proprietary knowledge has diminished. Trading intermediaries are at increasing risk of being bypassed. Margins have narrowed in the traditional business of intermediation. Traders have to strive to add value by leveraging on integrated supply chain management capabilities, innovative storage solutions, financial skills, and the ability to make effective use of technology. And as always, however, old-fashioned business acumen remains a key ingredient for success in trading.

Ikea Asia Pacific Pte Ltd, an award recipient this evening, is one of the several examples of a trading company that has developed additional value-added functions. Besides being the regional trading and procurement centre for Ikea Group, it has also established logistics and design services to provide a total solutions package and create a competitive edge for the IKEA retail group.

Home to over 6,000 multinational companies, Singapore is now a key partner in global business. Our reputation as a trusted and reliable partner, together with our pro-business policies arestrong selling points to companies as they seek to expand into Asia. We have to continue to stay relevant as the needs of global business change. We have to offer customised solutions and unique value for companies to use Singapore as a springboard to the rest of Asia and the world.

Our growing business ties and networks with China and India, the two most important emerging markets in Asia, position us well as a base for companies wishing to venture into these two continental scale markets.

Singapore�s trade with China is growing rapidly. For the first half of this year, Singapore's trade with China increased by 18% compared to a year ago. Our total trade with Greater China (China, Hong Kong, Taiwan) has also now exceeded that with the US, and is second only to Singapore�s trade with Malaysia.

We are also seeing more high growth Chinese companies using Singapore as their business hub. Sinoying, an award recipient this evening is one such example. As Singapore and the region's links with China expand, we will attract more companies like Sinoying to conduct their regional trading activities from Singapore.

India is another rising opportunity in global markets. India�s trade with the world has been increasing steadily, growing by 9 per cent per annum on average over the last 10 years. India�s trade with Singapore has risen as well. In fact, it continued to grow last year despite the 9.4 per cent contraction in Singapore�s overall trade. There is considerable space for us to further strengthen our trade and other economic linkages with India.

Companies will also find a growing case to base themselves in Singapore to reach our traditional markets � Southeast Asia, which remains a valuable economic hinterland for Singapore, and the developed markets further afield. These opportunities would be greatly enhanced by our bilateral and multilateral Free Trade Agreements (FTA), which we have been actively pursuing with our key trade partners. FTAs facilitate trade and investment flows through lower tariffs, and improved market access for people, goods and services. They provide a framework for businesses to grow and expand regionally and globally.

As part of ASEAN, Singapore has access to the ASEAN Free Trade Area (AFTA), for which 60% of the tariffs would come down to 0% while 90% of the tariffs would lie between 0 to 5% by 2003. In time, when the ASEAN-China FTA is likely to be established, we would also have access to the largest free trade area in the world. ASEAN and China would together have a market of 1.7 billion people, a combined GDP of US$2 trillion and total trade of US$1.2 trillion (based on last year�s figures).

The ability to respond with agility to new challenges and opportunities is the hallmark of traders. It must also be the hallmark of Singapore, as it aspires to be a great place for business.

On this note, I wish to congratulate all the recipients of the various IE Singapore Awards again. I encourage you to continue to leverage on Singapore�s capabilities and connectivity, and use Singapore as your international business hub in Asia.

Thank you.

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