Keynote Speech by Mr K Shanmugam SC, Minister for Home Affairs and Minister for Law, at the APAC Legal Congress 2024

23 APR 2024

Honourable Attorney General Lucien Wong,

Mr. Stephen Rotstein, President of In-House Counsel Worldwide

Mr. Maribert Pagente, Secretary-General of the Asia-Pacific Corporate Counsel Alliance

Mr. Hideyuki Sakamoto, President of Japan In-House Lawyers Association

Ms. Renita Crasta & Mr. Daniel Choo, Co-Presidents of Singapore Corporate Counsel Association (SCCA)

Mr. Stanley Park and Mr. Wong Yi, Co-Chairpersons of SCCA APAC Legal Congress 2024,

Distinguished Guests

Ladies & Gentlemen

1.    Thank you for inviting me to join you here this morning.

CHALLENGES IN THE BUSINESS ENVIRONMENT

2.    We had this conference last year with about 900 participants, and this year, over the two days, it has gone up to 1,500. I think this tells you the interest that is growing and the vibrant in-house counsel community that we have.

3.    I will make three points to you. One, similar to the themes last year, but perhaps with a little bit more detail. If you look around the world, Asia Pacific – taking the Western rim of the United States, Canada, Latin America, and on this side of the Pacific - Japan, China, ASEAN, Australia - this is the place to be, and with the additional parts of Asia thrown in.

4.    And second, in that context, Singapore is the place to be. I will say that obviously. But people know that we will only say what we think is credible.

5.    And the third, I see the Singapore Corporate Counsel Association (SCCA) as a key partner. I have told my officials to see how we can elevate the capabilities of the Association to serve you better and how we can create a more vibrant, more closely coordinated in-house counsel community in Singapore and the Asia Pacific region. And we will apply our mind, and people will know that when we do that, we usually try and get something done.

6.    So, in the context of Asia, and my first and second points – law follows business. If there is no business, there is not much work for lawyers. So really, I think as lawyers, we have to understand the overall context. And the context has got to also include the geopolitical context because that is a key driver of the economic situation. So, as you see around the world, it is a complex picture to say the least.

7.    You have got two wars, one in Europe and one in the Middle East. In Europe, we recently crossed the 2nd anniversary of Russia’s invasion of Ukraine, with no end in sight. And in the Middle East, there is concern that the conflict between Israel and Hamas may well escalate into a broader regional war. The impact on the rest of the world economically, in terms of prices of commodities, shipping costs, oil, has been pretty substantial.

8.    The second major challenge that we face, is the tensions between the US and China. In the US, Democrats and Republicans disagree on many things, but they agree on one issue - China. They have publicly stated their goal to maintain “as large a lead as possible” over China, in strategic areas like foundational technologies – AI, semiconductors, and so on. In China, the leadership is convinced that the US wants to suppress China. So, they are trying to tamp down on the open hostility, but there is a huge amount of mistrust and it is not going to go away anytime soon. Whether the American strategy of ‘small yard, and high fence’, can work in a modern context, remains to be seen. There is also the risk of a flashpoint around Taiwan.

9.    The third challenge, in this particular region, is the disputes and unresolved issues around the South China Sea, and between China and India, at the Himalayan border.

ASIA’S ECONOMIC POTENTIAL

  1. So, you have all these challenges and they can completely change the picture if something does go wrong. They create uncertainty, they affect business sentiment.
  1. But, as I have frequently said, my view is that in economic terms, the secular trend in this region is up, barring a serious war, or other similar catastrophic events. For that conclusion, you look at the trends, other relevant factors.
  1. Based on World Bank figures in the last decade, annual growth in East Asia and the Pacific was about 4.4%, whereas the global average was 2.7%.
  1. Today, several Asian countries are leading world economies. If you look at this pie chart, the economies shaded represent Asia. You have China, in 2023, the 2nd largest economy. Japan, the 3rd largest, India the 5th largest, South Korea, the 12th, Australia the 13th, and ASEAN, as a whole with the 10 countries, the 5th largest. That is today, pretty big already.
  1. By 2030, that will have grown substantially, and that is just another six years away.

·       China could be the 2nd largest

·       India the 3rd largest

·       Japan will be the 4th largest

·       ASEAN, together, will be 4th or 5th largest

  1. Today, Asia receives about 50% of global FDI, and contributes 70% of the world’s growth. And, if you look at Asia Pacific, it accounts for a third of the global GDP.
  1. ASEAN, specifically, was the 5th largest economy in the world in 2023, with a combined GDP of just under US$3.7 trillion, and that is growing. By 2030, some estimates put the GDP of ASEAN at about US$6.6 trillion.
  1. And there is a lot of capital here, a lot of drive, in ASEAN, to support new innovation and entrepreneurship.

·       Young population, with 660 million people, about the size of Europe, and more than half of them under 35, with the belief that the future will be better and brighter, and willing to work hard for it.

·       The digital economy alone is projected to have a market value of over US$330 billion.

·       Private equity & venture capital assets under management are expected to be at about nearly US$70 billion.

·       Over 50 unicorns.

  1. So, when you look at Asia now, which are the World-Class Business Hubs? Because you need business hubs to service this economy. Many will refer to Dubai, Singapore, Hong Kong, Mumbai, Shanghai, and Tokyo.
  1. Each of these places has its own unique advantages - whether it is geography, easy access, strong rule of law, business ecosystem, sovereignty.
  1. But the real point is this – all of these cities will do well within their context, because Asia is going to be a huge economic giant – so diverse, so widespread geographically, you will need several business centres.
  1. So, you can have short-term ups and downs, recessions and so on, but the secular trend is up.
  1. Because the basic factors for success will push this region forward:

·       Population sizes.

·       Attitude of the populations.

·       Age of the populations.

·       Resources.

·       Relatively high-quality education in many countries, and the ability of the populations to access technology through that high quality education.

·       Strong traditions that encourage savings and hard work.

  1. All of these point towards continued growth.

SINGAPORE’S POSITION

  1. Of all these places, one stands out, in my view – Singapore. Because it is not a city within a larger economy. It is sovereign, it is standalone, and therefore, offers many advantages that cities within larger economies cannot offer. You also have stability, you have Rule of Law, you have easy access to logistics, and a separate country.
  1. We are a unique gateway for international capital to Asia, particularly for those looking to invest in Southeast Asia. We have one of the best business environments in the world. The business landscape here includes over 7,000 MNCs, around 300 venture capital and private equity funds, nearly half of Asian regional HQs, and the largest concentration of unicorns in Southeast Asia . We are also one of the top FinTech centres globally, and we are building up a sustainable finance ecosystem to help channel green capital to the rest of the region. In Southeast Asia, we are also a key hub for trading, finance, aviation, professional services and shipping. And, we have a wide network of 27 Free Trade Agreements around the world.
  1. In Asia, Singapore was always a great place to invest, and seen as a launchpad into the region. Businesses know the fundamentals are strong – Rule of Law, long-term planning, stable policies, and commitment to ensuring access to talent, and connectivity to the Asian market.
  1. Post-COVID-19, the common consensus is that Singapore has emerged even stronger, as one of the places to be. The handling of COVID-19 – a lot of people found that Singapore has a world-class healthcare system. Their lives are safe, and their money is safe as well. A lot of people realised how important both are.
  1. If you look at net inflows of assets under management into Singapore, a report released in November 2023 showed more than $430 billion of inflow in 2021 and 2022, which is a significant increase from pre-COVID-19 amounts of $200-260 billion - double.
  1. And Singapore is in a very strong position to continue to be attractive because people know that the Government has the mandate to continue to keep Singapore investor-friendly, and Singapore makes sure that businesses have an environment where they can do well.
  1. We know the feedback on rising business costs. The relevant Ministries and agencies are monitoring this feedback, assessing our position, our competitiveness, very closely. We are a high-cost place, in terms of land and salaries, but overall factor of productivity and economic competitiveness – we need to make sure that we are competitive vis-a-vis everyone else, and the Government is focused on that. We are constantly planning, looking ahead, investing in the economy – R&D, AI systems, infocomm technology, and many other areas. By 2030, digital transformation efforts are expected to contribute around $65 billion to our GDP.
  1. As long as two conditions are fulfilled: (i) Asia, or at least significant parts of it, grows; and (ii) Singapore remains sensible in its policies on employment, tax, and business, we will do very well.

GROWING SINGAPORE AS A REGIONAL IN-HOUSE COUNSEL HUB

  1. What does this mean for you, specifically?
  1. As I said earlier, law follows business. As the economy grows in the region, and Singapore looks to attract businesses, legal professionals here, including in-house counsel, will see more work, and will have a very important role in supporting the economy. The in-house counsel community here has grown over the years. In 2015, we had around 3,600 in-house counsel. Today, there are 4,800. We expect the trend to continue, as business activities continue.

34.  And the Ministry of Law is completely committed to better support in-house counsel. What does this mean? We will look for partnerships with SCCA. We will see how we can support it organisationally. And we will work with them. We will look at the whole gamut of structural issues today, start on a clean slate, and make sure that there is one organisation which is attracting in-house counsel, which takes care of them, and provides a range of initiatives for in-house counsel. The Government will come in to support. We will look at the legal tech space too, to try and promote innovation and digitalisation of legal activities from Singapore. We can do more.

  1. And we will strengthen the capability building of in-house counsel.
  1. Earlier this year, the Reform of Legal Education Working Group recommended the development of a national Legal Competency Framework.

·       This will better help to identify areas of demand for legal professionals, and focus training and upskilling efforts.

·       SCCA is working closely with us, and also with the Singapore Academy of Law (SAL), but we will look at the structure and see what makes sense. We will try and co-develop the In-House Counsel Career Track for the Competency Framework.

·       The Framework will be complemented by a proposed Training Roadmap to assist in-house counsel in identifying relevant and suitable training programmes, tailored to their career stage and aspirations.

  1. We will also recognise SCCA as the national association to support in-house counsel.

·       Since it was established slightly more than 20 years ago, SCCA has been one of the key platforms for convening meetings of in-house counsel here.

·       We will support SCCA to significantly scale-up its capacity, and play a more central role in the professional development of the in-house counsel community as a whole, and we will support SCCA to increase its training courses. We will also work with SCCA as the national training partner for the professional development of in-house counsel.

  1. We look forward to having an open channel of communication with SCCA, on the ways in which we can support in-house counsel in Singapore, and how SCCA can work with regional organisations.

CONCLUSION

  1. These are challenging times. But, as I said, I think we can move forward with a considerable degree of optimism, although with the usual caveats that something catastrophic does not happen somewhere in the world, particularly this region.
  1. I wish you a fruitful conference. Thank you.

Last updated on 23 April 2024