Speech by Minister for Law, Mr K Shanmugam, at the Latin American Investment Summit
11 Apr 2012 Posted in Speeches
Mr Eduardo Ramos-Gomez, Managing Partner, Duane Morris & Selvam LLP,
Thank you for inviting me for this summit.
I hope that our Latin American friends who are visiting Singapore for the first time will find us hospitable. We thank Duane Morris for having this inaugural summit.
It recognises the importance of legal services as a key enabler for cross-border commerce.
- Global Economy
- The global economy is uncertain:
- We have the European debt crisis and the Euro Area 2012 growth forecast is at negative 0.5 per cent.
- The US has slow growth – the US 2012 growth forecast is at 1.8 per cent.
- We have geopolitical tensions – unrest in Middle East region – and a few other places.
- Asia and Latin America – bucking the trend
- In that context, the Asia and Latin America stand out as bright spots against an uncertain world economy.
- The regions were resilient through the recent crises, and experienced robust economic growth and continue to grow.
- In 2012, the growth forecast for key Asian markets is much higher than advanced economies:
- China at 8.2 per cent and we consider that to be slow
- India at 7.0 per cent,
- The ASEAN 5 of Indonesia, Malaysia, Philippines, Thailand, and Vietnam are expected to grow at a combined rate of 5.2 per cent
- The Latin America and Caribbean are expected to grow at 3.6 per cent.
- Stronger trade ties between Asia and Latin America
- Resilience in these two regions is underscored by a substantially increased bilateral trade between our respective regions.
- Asia is driven by an appetite for Latin American commodities.
- Latin America is driven by an appetite for finished Asian goods and trade networks.
- Singapore Latin american engagement - Impressive
- Bilateral trade between Singapore and Latin America was $37.9 billion in 2011:
- It was a 38.3 per cent increase over 2010.
- It represents 3.8 per cent of Singapore’s total trade and there is substantial room to grow.
- Our top exports to Latin America in 2011 were in the area of ship-building, aircraft bunkers, light vessels.
- Our top imports from Latin America include petroleum oils, telecommunications equipment and electronic integrated circuits.
- Over 120 Singapore-based companies such as Keppel Offshore & Marine and Sembcorp Marine have over 500 points of presence operating in Latin America.
- Close to 20 Latin American countries use Singapore as a hub for further expansion into Asia, including:
- Brazil – Energy giant Petrobras, mining company Vale.
- Chile – Wine producer Concha y Toro, and various others.
- We are actively pursuing Free Trade Agreements (FTAs) between Singapore and the Latin American region:
- Panama, which entered into force in July 2006.
- Peru entered into force in August 2009.
- Costa Rica, signed in April 2010 and awaiting Costa Rica’s ratification.
- We are currently negotiating the Trans-Pacific Partnership FTA with eight other countries including Peru and Chile.
- A Memorandum of Understanding which was signed between International Enterprise Singapore and Development Bank of Latin America (CAF) provides for greater collaboration in areas such as infrastructure development.
- The International Enterprise Singapore organised the eighth edition of the Latin Asia Business Forum last year. This is the region’s premier event for Asia’s leaders to network with their Latin American counterparts. We consider this to be important because it brings together top business people from most regions.
- All of this is also reflected in the increased establishment of diplomatic relationships. We will be opening our embassy in Brazil which will be the first resident diplomatic mission in Latin America for Singapore. Ecuador recently established an embassy in Singapore as well, to drive the economic agenda in the region.
- Singapore - a natural partner in Asia for Latin America
- What does Singapore mean in this context for Latin America? Our strategic geographical location between East and West also offers easy access to major Asian business centres.
- Half of the world’s population live within a seven-hour flying radius.
- There is excellent infrastructure and connectivity.
- Singapore is ranked the most competitive city in Asia and the third most competitive in the world, after New York and London.
- Eduardo spoke about New York, and about Singapore being the new New York. The difference today is that they are not the only two centres in the world. There are important centres that are developing in Latin America and in Asia, simply because trade and trade volumes, and the economy and governance have all changed and improved.
- It is no longer possible to do business from one region in the world. If you want the presence in Southeast Asia, you are looking at an economy where in the case of Indonesia alone, is just under a trillion dollars, with GDP growing at six per cent.
- If you look at Southeast Asia together, it is slightly above $2 trillion. If you look at Australia and Zealand, as part of this market, which is a natural market, we are talking about almost three-fifths of China’s GDP just in this region.
- If you then look at South Asia as a natural point to service from Singapore, which had Indian companies coming over, in large numbers and raising capital, people servicing their markets from Singapore, then the picture is very different.
- That is a fairly compelling argument for people focused on South Asia, Southeast Asia with Australia, which are important centres.
- Strong capital and financial markets and steady flow of lucrative work (IPOs etc) exist here.
- We encourage global companies to set up headquarters here.
- We get socio-political stability and security almost unrivalled in Asia, which is nowadays a given for business to flourish.
- We have an efficient, progressive government committed to the rule of law.
- We have a well-educated, multilingual (in particular, English-speaking) population.
Legal sector – open for business
- Specially focusing on the legal sector, the Government recognises that this is an open legal sector that has to be open for cross-border, so that business can flourish.
- MNCs need to cross legislative and regulatory hurdles when investing overseas.
- We have taken a number of steps in the last few years to encourage a greater diversity of international law practices and legal services to set up in Singapore to service businesses in their global operations, and to integrate Singapore into the global market.
- We have introduced a number of structures, vehicles and frameworks to allow Foreign Law Practices (FLPs) more scope to practise Singapore law. One of them is the Qualifying Foreign Law Practices (QFLPs), which allows FLPs to practise Singapore law.
- We awarded six licences in 2008 and are looking to award more licences this year or early next year. We also allow foreign law firms to form Joint Law Ventures (JLVs) with Singapore law firms, and practise a number of areas.
- There are currently seven such ventures including firms from Australia, UK, US and China.
- We have also allowed various other forms of closer collaboration with foreign law firms and Singapore law firms Formal Law Alliances, as well as enhanced partnership arrangements and taking of equity.
- It is quite flexible, because there is a recognition that we need to go down this road, and not to be restrictive or protective.
- Purely domestic work – criminal law work and domestic family law type work – which is of not much interest to international law firms remains restricted. Appearance in the bar has been liberalised to the extent that internationally recognised senior barristers can be admitted to practise on a case-by-case basis.
- As result of policy changes, the legal sector has come a long way in short time:
- In 2007 we had over 60 FLPs in Singapore. This year, we have – close to double, more than 110.
- In 2007 we had more than 630 Foreign Lawyers (FLs). Today, it is more than 1,000. In the context of the economic crisis that the world has gone through, that is quite impressive.
- Eight of the world’s top 10 law firms by global revenue now have a presence in Singapore.
- We believe that the numbers will continue to grow as the regional economy has moved forward, and there is also a greater international recognition of Singapore as a primary gateway to South and Southeast Asia.
- We hope to extend that reach to farther parts of the world, including Latin America.
- We are now recognised as the leading international arbitration hub in Asia.
- According to a 2010 White & Case International Arbitration Survey , Singapore, it said that we are clearly the most popular Asian seat. In this context, we are not talking about local construction arbitration or domain name disputes, but if we talk about international arbitrations, Singapore is the leading seat, and it is the third most preferred seat by companies, tied with Paris and Tokyo, and after London and Geneva.
- The very important International Council of Commercial Arbitration (ICCA) Congress will be held here in June 2012.
- The key reasons for Singapore’s status as a pre-eminent seat for arbitration is our business-friendly environment, with the very open approach where we allow the disputing parties to bring in their lawyers from any part of the world and appoint anyone they choose as arbitrators, and a legislative practice that incorporates the best practices from the world.
- On Monday, I just took some amendments to the International Arbitration Act through Parliament to bring in new practices from the Model Law.
- We also have a judicial philosophy which emphasises party autonomy and arbitration.
- I would like to invite most of you to visit Maxwell Chambers if you have the time. It is the world’s first integrated dispute resolution centre, that is custom-designed with state-of-the-art facilities for arbitration. People have commented that it is a first-class place.
- Global Arbitration Review called its opening one of “Best Developments” in arbitration industry.
- Since Maxwell Chamber’s establishment in 2010, renowned institutions have set up offices there, including:
- American Arbitration Association (AAA)
- Permanent Court of Arbitration (PCA)
- ICC’s International Court of Arbitration (ICA)
- International Centre for the Settlement of Investment Disputes (ICSID)
- UK Chambers of 20 Essex Street, Essex Court Chambers and Bankside Chambers
- We also have a very well-known arbitral body, the Singapore International Arbitration Centre (SIAC). It is one of the fastest-growing arbitral institutions in the world. It has administered more than 1,200 cases, of which 80 per cent are international. In 2010, it was shortlisted by Global Arbitration Review as one of the top arbitral institutions in the world, with the Board of Directors that reflected our philosophy – chaired by an Australian, with a blue ribboned board from across the world. We have taken an international approach for this whole centre.
- I will conclude my address by saying that these are exciting times for exciting opportunities in Latin America and Asia.
- Our integration into the global legal market allows us to strengthen our position as a financial and legal hub for the region.
- Latin American businesses, professionals and countries can take advantage of Singapore’s openness to use it as a base to reach out to investors here or in the region.
- We will continue to strengthen our role and continue to increase our partnership with Latin America.
- On that note, thank you and have a successful Summit.
Last updated on 17 Jan 2013