Singapore: Asian countries cannot avoid the impact of weakening US, European and Japanese economies, Lee Hsien Loong, Prime Minister of Singapore, said today.
Speaking at ‘Pravasi Bharatiya Divas, Singapore’, a conference of global Indian diaspora, organized jointly by Singapore Indian Chamber of Commerce and Industry (SICCI), Ministry for Overseas Indian Affairs, Government of India and the Confederation of Indian Industry, (CII), in Singapore, Lee observed that Asian banks had been lucky to have avoided the problems afflicting the US and European banks. Yet, globalization meant that equity markets in Asia had been “hit by events in the Wall Street”.
“We must prepare for a tough ride at least over the next year, and quite possibly longer,” he said, addressing the 400-member strong audience of non resident Indians from across the world. “The trust and confidence between banks, which lie at the heart of finance intermediation, will take time to restore,” he said.
The conference is a (Asia-Pacific) regional version of the annual Pravasi Bharatiya Divas event that is held in India every year. The ‘PBD Singapore’ is the second such ‘mini PBD’, after the one held in New York in 2007.
He said that though Singapore’s economy was also slowing down, the country’s financial system is sound, thanks to the steps taken in the last few years. “This will mean new and better jobs, even if some old ones are lost,” he said.
Largest expat community in Singapore
Singapore has around 200,000 Indian expatriate communities, “one of the largest expatriate communities here”. Since the signing of the Comprehensive Economic Cooperation Agreement in 2005, bilateral trade between India and Singapore had boomed, reaching $24 billion in 2007.
Union Minister for Overseas Indian Affairs, Vyalar Ravi, said that “bilateral trade between the two nations was $24 billion and Singapore with a cumulative investment of over $2 billion, was the fourth largest investor in India.”
The Minister attributed the ills afflicting the global financial system to derivatives trading, especially short selling. “Short selling is an invitation to market manipulation,” he said. “The global economy today is so integrated that what happens in one part of the world does affect a completely different part of the world. We, therefore, need to take a medium-to long-term perspective of sustainable and strategic economic engagement in Asia,” he said.