Tuesday 18 November 2014

S'pore set to benefit from boost to global economy: PM Lee

He says vibrant world economy will support exports, draw investments
By Fiona Chan, Senior Economics Correspondent, In Brisbane, The Straits Times, 17 Nov 2014

SINGAPORE'S economy is likely to get a lift if the world's top leaders deliver on their promise to boost global growth by an extra 2.1 per cent over the next four years.

Although domestic growth is currently constrained by labour and land limitations, a stronger world economy will support trade-dependent Singapore's exports and draw more investments here, Prime Minister Lee Hsien Loong told reporters yesterday.

In an interview on the sidelines of the Group of 20 (G-20) summit, PM Lee said Singapore has "every interest in a vibrant global economy" as "our markets are around the world".

G-20 leaders agreed yesterday to put in place a package of measures to add 2.1 per cent to global growth and create millions of new jobs by 2018.

PM Lee also spoke about other topics that surfaced at the Brisbane summit over the weekend, including infrastructure projects, climate change and the impact of the Republicans' recent sweep of Congress on the United States' foreign policy.

Infrastructure, one of the key pathways by which the G-20 aims to heat up a cooling world economy, is of particular interest to Singapore, he said. Many local firms - including Keppel Corp, Sembcorp Industries and Hyflux - are infrastructure specialists. Singapore is also home to the World Bank's Infrastructure Finance Centre of Excellence, which advises countries on how to structure the financing of their projects.

If multilateral initiatives like those kicked off by the G-20 and World Bank succeed in promoting more infrastructural developments in rapidly growing South-east Asia, Singapore firms can capitalise on these business opportunities, PM Lee added.

In response to a question on climate change - which entered the G-20 agenda after the US and Japan pledged US$4.5 billion (S$5.8 billion) over the weekend to help poor countries invest in clean energy and cope with extreme weather - PM Lee said more will be discussed at upcoming meetings of the United Nations Framework Convention on Climate Change.

But he hailed the pledge by the US and Japan to the Green Climate Fund as "a good sign" and welcomed the surprise US-China agreement last week to curb carbon emissions. "These are the two biggest emitters in the world. And if they can work something out, I think the rest of the pieces have a chance of falling into place."

Turning to the US, PM Lee noted that the Republicans have generally been keener on free trade and have taken a more "internationalist" view of the US' role in world affairs, including in Asia, than the Democrats.

But whether a "thoroughly Republican" US Congress will agree to work with a Democrat president, even if they agree on the same principles, remains to be seen, he added.

Yesterday, PM Lee rounded off his trip to Brisbane with a dinner reception at the Tattersalls Club, attended by about 270 Singaporeans based in the Australian city. He gave a speech exhorting them to maintain their links to home, especially during Singapore's 50th birthday celebrations next year.

Mr Thompson Wong, 24, said it was a "timely reminder". The final-year communications student at the University of Queensland added that his school's Singapore Students Society plans to organise a few "special surprises" next year for Singaporeans in Brisbane.

G-20 must retain focus on growth, reforms: PM
Global financial crisis mostly over but structural issues remain, he says
By Fiona Chan, Senior Economics Correspondent, In Brisbane, The Straits Times, 17 Nov 2014

THE global financial crisis that led to the first G-20 summit in 2008 is mostly over, but the grouping of the world's largest economies must not lose focus of its core mandate of getting global growth back on track, Prime Minister Lee Hsien Loong said yesterday.

In closing remarks at the two-day Group of 20 summit, he reminded world leaders that "we have not solved all the structural issues" that led to the financial crisis in the first place.

"The panic has subsided, but given time, the problems can come back in a slightly different form to hurt us," PM Lee cautioned at a working lunch towards the end of the Brisbane meetings, in which issues such as climate change and the Ebola outbreak edged in on host Australia's growth-focused agenda.

Each country must, therefore, undertake structural reforms and work together to improve trade freedoms, multilateral institutions and infrastructure investments, PM Lee added.

"We have to deal with our own domestic constituencies to build support for reforms, be it in trade and labour markets, or rules for domestic and financial institutions," he said. "Without national reforms, no amount of global cooperation or consensus will succeed in boosting growth."

G-20 leaders yesterday signed off on about 800 measures to grow their combined economic output by an extra 2.1 per cent - or about US$2 trillion (S$2.6 trillion) - by 2018. They also agreed to create a Global Infrastructure Hub in Sydney, as part of an initiative to better match infrastructure projects with private investors, and to push forward with the stalled Doha free trade talks.

Apart from promoting trade and infrastructure, progress must be made on reforming the International Monetary Fund (IMF) to give emerging countries more heft, PM Lee said. He joined the G-20 leaders in urging the United States to ratify the IMF reforms.

Focusing on all these economic issues will leave global leaders "a bit of energy and time to discuss other issues", he added.

Elaborating on this in an interview after the lunch, PM Lee told reporters that while the G-20 should also talk about "urgent" matters such as Ebola, it "ought to focus on its core mission".

For instance, it cannot become a "super security council" for the United Nations, he said.

The summit was shadowed by tensions between the West and Russia over Ukraine and the downing of Flight MH17, which had been carrying 38 Australians.

PM Lee also highlighted the continuing importance of the G-20 as a forum for dialogue about and coordination of global economic issues, since the grouping strikes "the right balance in terms of focus and inclusivity".

He added that the Brisbane summit - the ninth G-20 summit since 2008 - was a valuable occasion for small countries like Singapore to have their say.

Singapore is not a member of the G-20, which comprises the world's biggest economies representing nearly 90 per cent of global economic output. But the Republic was invited to Brisbane by Australian Prime Minister Tony Abbott in recognition of its role as an international financial centre and convenor of the Global Governance Group (3G), PM Lee said.

The 3G is an informal coalition of smaller and medium-sized UN members. This is Singapore's fourth time at a G-20 summit.

S'pore firms invited to take part in Queensland projects
By Fiona Chan, The Straits Times, 17 Nov 2014

SINGAPORE companies have been invited to participate in infrastructure projects in Queensland, Australia's second-largest state.

Prime Minister Lee Hsien Loong told reporters yesterday that Queensland Premier Campbell Newman has plans to divest or lease out some state-owned assets, such as ports and power infrastructure.

Mr Newman welcomed Singapore companies to "come and invest and take up these projects", PM Lee said after a bilateral meeting with Mr Newman on the sidelines of the Group of 20 (G-20) summit.

"I said we'd be happy to look at them because we've got good relations with Australia," he added.

Singapore has a free trade agreement with Australia and both countries are in the midst of concluding a strategic partnership agreement that is due to be signed next year.

Therefore, "businessmen know that, on both sides, the mood is friendly and they can proceed with confidence", PM Lee said.

During their meeting, he also thanked Mr Newman for hosting Singapore's troops in exercises held in Queensland, such as the recent seven-day Exercise Trident conducted earlier this month.

The two leaders also reaffirmed the close ties between Queensland and Singapore, especially in the areas of defence, education and a wide range of economic activities.

Mr Newman further expressed interest in building on bilateral exchanges of people, especially under the new Colombo Plan where Australian students can study in Asian countries including Singapore.

Yesterday morning, PM Lee also held a 20-minute meeting with Saudi Crown Prince Salman Abdulaziz Al Saud, in which both leaders reaffirmed the strong relations between Singapore and Saudi Arabia.

In addition, PM Lee thanked the Crown Prince for Saudi Arabia's support of the free trade pact between the Gulf Cooperation Council (GCC) and Singapore. The GCC-Singapore free trade agreement took effect in September last year.

PM Lee also expressed gratitude for the kingdom's hospitality towards the pilgrims from Singapore during the Haj.

For his part, Prince Salman welcomed closer economic ties between the two countries.

Leaders agree to take action to spur growth
The Straits Times, 17 Nov 2014

BRISBANE - Group of 20 (G-20) leaders representing the bulk of the world's economy have committed their countries to reform measures to lift their collective growth by an extra 2.1 per cent by 2018, despite evidence of a slowdown in some major nations.

The pledge - known as the Brisbane Action Plan - will push their economies' combined growth beyond the 2 per cent initially targeted in the drive to rehabilitate sluggish economies and create jobs.

"This will add more than US$2 trillion to the global economy and create millions of jobs," leaders including US President Barack Obama and his Chinese counterpart Xi Jinping said in a summit declaration yesterday.

The communique also agreed to a global initiative to help address a US$70 trillion (S$90.8 trillion) gap in infrastructure needed by 2030 to improve productivity, by cutting red tape and matching private investment with capital projects.

A hub to coordinate the G-20's work on infrastructure by bringing together governments, the private sector, multinational development banks and other international organisations will be headquartered in Sydney.

"The benefits of that growth will be felt worldwide, not just in G-20 member nations," G-20 host and Australian Prime Minister Tony Abbott said of the 2.1 per cent target.

"The Brisbane Action Plan and individual country growth strategies and employment plans have been made public so people around the world can see our commitments, hold us to account and witness our progress."

World Bank chief Jim Yong Kim said higher and more inclusive growth was essential to cut poverty and reduce inequality, welcoming the commitments as "a much-needed boost to G-20 countries and beyond".

Last Saturday in Brisbane, Mr Obama said the US cannot "carry the world economy" and that other G-20 nations must do more to spur growth and create jobs.

Buoyed by unemployment at its lowest level since July 2008, the US economy is motoring at a time when other parts of the global engine room, notably Europe and Japan, are starting to splutter.

Australian Treasurer Joe Hockey said moving even further beyond the 2.1 per cent target would be possible if European Union leaders start pumping billions of dollars into the stalling euro zone economy, where Germany and France have only narrowly escaped recession.

In a report ahead of the summit, the International Monetary Fund (IMF) said the world economy faced stiff headwinds from sluggish growth in Europe and Japan and a slowdown in emerging economies. It trimmed its global growth forecast for the year to 3.3 per cent, from 3.4 per cent.

IMF managing director Christine Lagarde told the leaders that in order to avoid the "new mediocre" of low growth, low inflation, high unemployment and high debt, all tools should be used at all levels, she said at a press conference in Brisbane yesterday.


Main outcomes of the summit
The Straits Times, 17 Nov 2014

Economic growth

The leaders of the world's most powerful industrial economies pledged to grow their combined economic output by an extra 2.1 per cent by 2018.

Infrastructure investment

The summit agreed to launch the Global Infrastructure Initiative to unlock private financing for infrastructure investment worldwide.

Trade liberalisation

Increased global trade will be a requirement if the Group of 20 (G-20) is to achieve its growth target. The leaders committed to implementing all elements of the Bali package and swiftly defining a World Trade Organisation work programme on the remaining issues of the Doha Development Agenda to get negotiations back on track.

Tax and financial regulation

G-20 leaders agreed to complete by the end of next year an implementation plan to fight tax avoidance by multinational companies.

They also vowed to strengthen financial institutions, protect taxpayers from having to fund bailouts of "too big to fail" banks and make derivative markets safer.

Gender equality

The summit won a commitment from countries to close the male-female gap in labour force participation rates by 25 per cent by 2025. This will bring about 100 million more women into the labour force by then.


The summit had a session dedicated to global energy issues for the first time, and it was agreed that energy would now be at the heart of the G-20's agenda.


While the Ebola issue was not on the official agenda, leaders expressed support for an urgent coordinated global response to the crisis raging in West Africa.


G-20 leaders committed to addressing the challenge of climate change, including communicating post-2020 domestic climate targets as soon as possible and preferably by the first quarter of next year.


Resolve maritime spats peacefully: US, Aussie, Japan leaders
The Straits Times, 17 Nov 2014

BRISBANE - The leaders of the United States, Australia and Japan called for peaceful resolutions of maritime disputes, a day after US President Barack Obama warned of the dangers of outright conflict in Asia as China contests disputed territory.

In a joint statement, Mr Obama as well as Australian Prime Minister Tony Abbott and Japanese PM Shinzo Abe urged "freedom of navigation and overflight, and the peaceful resolution of maritime disputes in accordance with international law".

The trio said they were committed to deepening their already strong security cooperation in the Asia-Pacific, which comes amid China's increasingly assertive expansion in the region.

Beijing is locked in dispute with four South-east Asian countries over lonely outcrops in the South China Sea, and with Japan over another group of islands in the East China Sea.

The three leaders, meeting on the sidelines of the Group of 20 summit, said their partnership aimed to ensure a peaceful, stable and prosperous future for the Asia-Pacific.

"They noted that this partnership rests on the unshakable foundation of shared interests and values, including a commitment to democracy and open economies, the rule of law and the peaceful resolution of disputes," the statement said.

"The three leaders reaffirmed the global reach of their cooperation and the value of comprehensive US engagement in the Asia-Pacific region."

Mr Obama has repeatedly denied that the US is bent on thwarting China's economic and political emergence, but has stressed that Beijing must be a responsible actor on the world stage.

In a speech last Saturday, he warned of the dangers of outright conflict in Asia and vowed that Washington would remain anchored in the region.

The prospect of a stronger tripartite alliance, which the leaders said would include enhanced cooperation on trilateral exercises, maritime security capacity building and maritime domain awareness, may rankle China. Beijing has repeatedly warned of what it says is the danger of Japan "remilitarising" under Mr Abe, a political hawk.


Obama reaffirms 'pivot' to Asia-Pacific
He says US military presence to grow, indirectly cautions China against territorial assertiveness
By Jonathan Pearlman In Sydney For The Sunday Times, 16 Nov 2014

United States President Barack Obama said Asia's security order must not be based on intimidation of small nations by big ones, as he reaffirmed his "pivot" to the Asia-Pacific.

He said yesterday that the US military presence in Singapore and the region would continue to grow and also indirectly warned China to restrain its growing territorial assertiveness.

Delivering an address at the University of Queensland in Brisbane, Australia, before the start of the Group of 20 (G-20) leaders' summit, Mr Obama said: "An effective security order for Asia must be based - not on spheres of influence, or coercion, or intimidation where big nations bully the small - but on alliances of mutual security, international law and international norms that are upheld, and the peaceful resolution of disputes."

In an apparent swipe at China, Mr Obama cautioned that skirmishes over territories could cause the region to descend into war.

"Disputes over territory, remote islands and rocky shoals... threaten to spiral into confrontation," he said, but did not mention China explicitly.

Mr Obama also singled out North Korea's nuclear and missile programmes as another potential impediment to the region's "limitless" opportunities.

"Which of these futures will define the Asia-Pacific in the century to come? Do we move towards further integration, more justice, more peace? Or do we move towards disorder and conflict? Those are our choices - conflict or cooperation? Oppression or liberty?

"Here in Australia three years ago, in your Parliament, I made it clear where the United States stands," he said.

And three years after that visit during which Mr Obama announced the pivot, he pledged again yesterday that "the United States is and always will be a Pacific power".

By the end of the decade, he said, a majority of the US air and naval forces would be based in the Pacific.

Dismissing claims that he has not lived up to his 2011 commitments, Mr Obama said American leadership in the Asia-Pacific "will always be a fundamental focus of my foreign policy".

"No one should ever question our resolve or our commitments to our allies."

Mr Obama highlighted a series of recent US efforts to bolster ties in the region. These included an expanding presence in Singapore, where the US has been rotating naval deployments, as well as rotating marines through northern Australia, setting up new defence guidelines with Japan, cooperating on missile defence with South Korea and bolstering counter-terrorism efforts with the Philippines.

"Our presence will be more distributed, including in South-east Asia with partners like Singapore," he said. "And we'll increase military training and education, including working with the military partners we have in this region around the respect for human rights by (the) military and police."

Mr Obama has spent the week travelling through Asia and made a landmark climate change deal with Chinese President Xi Jinping.

The US leader used yesterday's speech to issue a global challenge for stronger action on climate change, saying that the landmark deal between China and the US last Wednesday could pave the way for a global target for cutting carbon emissions. He pledged US$3 billion (S$3.9 billion) to the United Nations' Green Climate Fund to assist developing countries in responding to climate change.

"If China and the US can agree on this, then the world can agree on this. We can get this done," he said.

Analysts said Mr Obama's speech consolidating his commitment to the region did not contain any ground-breaking shifts in foreign policy.

"Obama's Brisbane speech may not prove historic, but it has at least held the line," an analyst at Sydney's Lowy Institute for International Policy, Mr Rory Medcalf, said in a blog post after the speech.

Infrastructure and trade boost needed for growth: PM Lee
He highlights need to fight protectionism and the importance of smart infrastructure
By Fiona Chan Senior Economics Correspondent In Brisbane, The Sunday Times, 16 Nov 2014

Leaders of the world's biggest developed and emerging economies were urged yesterday to lower trade barriers and address infrastructure gaps in order to stimulate world growth.

Speaking at a working dinner for leaders at the Group of 20 (G-20) summit, Prime Minister Lee Hsien Loong noted that both trade and infrastructure are key to improving the global economy, but that there have been recent "worrying" trends.

Trade has become more restrictive and its progress has slowed significantly in recent years and has lagged behind the pace of economic growth, PM Lee said.

In the last two years, world trade grew an average of 2.2 per cent, lower than 3.4 per cent global growth, according to data from the World Trade Organisation and the International Monetary Fund.

To address this, more must be done to fight protectionism and facilitate trade, PM Lee said.

While the G-20 countries - which represent some 90 per cent of the world economy and 80 per cent of global trade - have pledged to halt moves that hamper trade, the results have been "disappointing". Protectionism must be reduced to help companies "access opportunities globally", he added.

PM Lee also welcomed last week's breakthrough on the Trade Facilitation Agreement, after India and the United States resolved food security issues, but said that this was only one "modest" aspect of the Doha world trade talks that are still at an impasse after 13 years.

"We must apply the same political resolve as we did to settle the Trade Facilitation and food security issues to the rest of the Doha Development Agenda," he said.

More work also needs to be done on infrastructure, which not only spurs growth but, when enhanced with technology, can also improve the quality of life, PM Lee added.

Such "smart infrastructure" will enable emerging cities to leapfrog more developed ones, he said.

He cited the examples of Santiago in Chile, which is using sensors to monitor highway congestion and vary toll charges in real time, and Singapore, which has invested in technologies to recycle used water into affordable clean water.

But to realise the full potential of smart infrastructure, governments must improve how projects are managed and financed, he said.

PM Lee also highlighted the importance of recent multilateral initiatives, saying new players such as the new Asian Infrastructure Investment Bank - of which Singapore is a founding member - should work with the World Bank and Asian Development Bank to meet "immense" infrastructure needs.

Trade and infrastructure are major themes at this weekend's summit, as host Australia aims to focus the G-20's attention on boosting global growth by another 2 per cent by 2018.

This would deliver "spillover" effects allowing non-G-20 economies to grow a further 0.5 per cent in the period, according to a report by The Australian newspaper yesterday that cited a draft copy of the G-20 Brisbane Action Plan. Singapore is not a G-20 member but is one of six countries invited to this year's event.

Structural reforms are also high on the agenda. On the summit's sidelines, China has said it will take steps to solve its economic problems while the US has urged Japan to use reforms as well as fiscal and monetary easing to fight deflation.

Meanwhile, G-20 leaders have agreed to set up a global infrastructure hub, which may contribute an additional US$600 billion (S$780 billion) to global economic output by 2030.

PM Lee, Abe discuss Asia-Pacific trade pacts
By Fiona Chan, Senior Economics Correspondent, In Brisbane, The Straits Times, 18 Nov 2014

THE progress of trade talks in the Asia-Pacific was discussed in an early-morning meeting yesterday between Prime Minister Lee Hsien Loong and Japan's Prime Minister Shinzo Abe.

The two leaders met in Brisbane a day after the Group of 20 (G-20) summit ended, and spoke about regional trade agreements, including the Regional Comprehensive Economic Partnership (RCEP) and the Trans-Pacific Partnership (TPP), PM Lee's press secretary, Ms Chang Li Ling, told reporters after the meeting.

Japan and Singapore are party to both trade pacts, which are currently being negotiated. The RCEP involves the 10 Asean member-states as well as Australia, China, India, Japan, South Korea and New Zealand, while the TPP - which aims to be a high-quality agreement - covers 12 countries in Asia and the Pacific including the United States but excluding economies like China and India.

PM Lee and Mr Abe, who last met in May during the Shangri-La Dialogue in Singapore, noted that the RCEP was "making good progress and was important to facilitating closer trade cooperation in East Asia", Ms Chang said.

They also said the countries involved in the TPP are working hard at concluding the negotiations, but that its conclusion is additionally dependent on each country's process of ratifying the treaty.

At yesterday's meeting, which took place before Mr Lee left Brisbane for Singapore, Mr Abe reiterated Japan's commitment to regional peace and stability.

Both leaders also discussed regional security and political developments. In addition, Mr Abe noted the frequency of the close interactions between the leaders of Singapore and Japan. Singapore's Foreign Minister, Mr K. Shanmugam, called on Mr Abe when he visited Japan last month.

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