Speech by Minister for Home Affairs and Law K Shanmugam, Singapore Corporate Counsel Association Asia Pacific Legal Congress 2023
3 May 2023 Posted in [Speeches]
Attorney-General Lucien Wong,
Ms Renita Crasta & Mr Daniel Choo, Co-Presidents of SCCA,
Mr Wong Yi & Mr Stanley Park, Co-Chairs of today’s Conference
1. Thank you for inviting me here this morning.
2. I was wondering what I was going to say to you and the same issues are captured in the two lines of Dickens. “It’s the best of times, it’s the worst of times.” So do I be unremittingly optimistic, or tell you all the things that can go wrong?
3. I think as lawyers, we provide advice, services, to businesses – so it is useful, I think, once in a while, to look at the broader picture, understand what is happening in the business environment, and in the world today.
4. And when you emerge out of your legal work, and you do that, the top line news, whether you look at geopolitics, or the world economy, is unremittingly worrisome.
AN ECONOMICALLY VIBRANT REGION
5. But I I decided to be cautiously optimistic, as there is an audience here that covers across the Asia Pacific, as well as, I understand, Europe and the Americas. I think there are good reasons for continuing to be cautiously optimistic about the Asia Pacific region, subject to some caveats. And Stanley spoke about all the different issues - AI, technology. In my very short speech, I decided to focus on one fundamental, which is economics. And because everything else flows from there.If the economics does not go right, none of you will have a job. So we start and speak about that.
6. Asia, it’s a cliché, has become a key engine for the global economy, and it is poised for even stronger growth.
7. Asian countries are now amongst the world’s leading economies.
· China: 2nd largest
· Japan: 3rd largest
· India: 5th or 6th largest
8. Many APAC economies are linked by the Regional Comprehensive Economic Partnership (RCEP), including China, Japan, South Korea, and Singapore.
9. The RCEP is the world’s largest Free Trade Agreement, covering 30% of the world’s population, and contributing to about 30% of global GDP and FDI inflows.
10. It is assessed that by 2040, the APAC region may account for about 40% of the world’s GDP. So if we look at where we are now, that is going to be extremely strong growth. The growth is here in this region.
11. ASEAN, in itself, also has tremendous potential.
12. It was the world’s 5th largest economy in 2021, with a combined GDP of more than US$3 trillion.
13. By 2030, that’s seven years away, ASEAN is projected to become the 4th largest economy. It is estimated that ASEAN will generate US$600 billion more per year in manufacturing output. So, if you look at 2030, you have China, you have Japan, you will have India, you will have ASEAN, all in this region, in the top five economies in the world.
14. And there are several driving factors:
· A large, young, energetic population in ASEAN, of 650 million people, 60% of whom are under 35.
· Rising living standards. By 2030, Bangkok, Jakarta and Manila may see a doubling of upper, and upper-middle-income households. For Ho Chi Minh and Hanoi, that number is expected to be four times today’s number.
· And you have a keen interest in education and relatively high-quality education, albeit in pockets in many of these countries.
· And considerable access to technology.
15. If you look at North Asia, China of course is on a continued trajectory of growth. The Greater Bay Area alone, has a GDP of US$2 trillion today, and is poised for tremendous growth.
16. Looking specifically at Singapore, our stable political situation, transparent laws, and investor-friendly policies make us a key hub for doing business, and investing in Asia.
(1) 40% of global MNCs have their Asian headquarters in Singapore.
(2) Looking at just one aspect, in 2021, Singapore received nearly S$450 billion dollars of inflows of Assets Under Management. That is nearly double the pre-COVID inflows.
(3) Family offices have almost doubled in the past 2 years, from 400 at the end of 2020 to around 700 today.
SINGAPORE: A LEADING LEGAL SERVICES HUB
17. As business grows in the region, there will be more work for companies & lawyers.
18. Over the years, we in Singapore have built ourselves into a leading legal services hub.
19. I will touch briefly on 4 aspects in this context:
(1) The range of dispute resolution services available here. In-house counsel stationed in Singapore would know these things, but not quite the others.
(2) Our Judiciary
(3) Our legal framework
(4) The Legal expertise available in Singapore.
I. Dispute resolution services
20. First, on dispute resolution, there is a very strong ecosystem now for dispute resolution in Singapore.
21. Several large institutions are here.
· The Singaporean institutions include the Singapore International Arbitration Centre (SIAC), the Singapore International Mediation Centre (SIMC), and the Singapore International Commercial Court (SICC).
· And if you look internationally, some of the world’s most established ADR institutions also have a presence in Singapore, including the International Chamber of Commerce (ICC), the Permanent Court of Arbitration, the American Arbitration Association International Centre for Dispute Resolution, and WIPO’s Arbitration & Mediation Centre.
22. Singapore is now tied with London as one of the two most preferred seats of international arbitration in the world.
23. Specifically, SIAC is now the 2nd most preferred arbitral institution in the world, and among the top 5 across all regions, including Latin America.
24. In terms of mediation, a survey of legal & business professionals last year by the Singapore International Dispute Resolution Academy (SIDRA) showed that SIMC is also very highly regarded.
25. The Singapore Convention on Mediation, adopted in 2018, which is an UN Convention has helped considerably in making mediation a more effective dispute resolution mechanism.
26. Apart from these institutions, we also have Maxwell Chambers, a purpose-built, integrated dispute resolution complex, equipped with good facilities.
27. During the pandemic, like many others, they have had to pivot to provide for remote hearings, and now they are making that a key part of how they do business.
II. Strong judicial networks
28. The second aspect is our Judicial system.
29. The Singapore Courts have, over the years, built up strong networks with their foreign counterparts, and in terms of ranking and standing internationally, it’s ranked higher than many judiciaries in Europe and the Americas. And the networks that our Singapore courts have built up help to facilitate better, the resolution of cross-border commercial disputes.
30. Let me give you 2 examples :
(1) The Standing International Forum of Commercial Courts (SIFoCC) is an international community of commercial courts from over 30 countries, and our Supreme Court & the SICC are part of it.
· It is a platform for the top commercial courts in the world to meet regularly, share best practices, and collaborate in finding solutions for emerging problems.
· For example, during the COVID pandemic, SIFoCC published memoranda which drew together the experiences & lessons learnt from different courts, and how technology was used to sustain the delivery of justice during the pandemic.
(2) Second, the Judicial Insolvency Network (JIN) is a network of insolvency judges from across the world.
· Its inaugural meeting was held in Singapore, in 2016, and led to the adoption of a set of guidelines for court-to-court communications in cross-border insolvency matters.
· The JIN Guidelines have been adopted by more than 15 courts, including several bankruptcy courts in the US, the Chancery Division of England & Wales, and our own Supreme Court.
· These guidelines have received international recognition and have already been applied, invoked in a number of cases.
III. Clear laws
31. Third, the legal framework in Singapore is strongly supportive of our dispute resolution ecosystem, and they are quite clear. The framework is also regularly reviewed & updated to cater to the evolving needs of the market.
32. We have also progressively allowed things like third party funding and conditional fee agreements for international arbitration proceedings, domestic arbitration, certain SICC proceedings, and related court & mediation proceedings. So pretty much anything with an international aspect, now has these features.
33. For international restructuring and insolvency matters, our laws were also substantially amended last year to clarify that foreign lawyers may make submissions before the SICC in a number of proceedings, with the permission of the Courts.
IV. Legal expertise
34. Fourth, Singapore has a very substantial pool of legal expertise.
· There are 6,400 local and 1,400 foreign lawyers.
· Singapore law practices are among the largest, in fact, they are the largest in Southeast Asia.
· And around 40 of the world’s top 100 global law firms, judged by revenue, are present in Singapore.
35. So, a strong legal community that provides a full range of services and advice on the major legal systems.
36. In conclusion, I will say the region holds much promise, and it means good news for lawyers.
37. But I did say, subject to some caveats.
38. The biggest caveat is that one can be somewhat optimistic, as long as the current tensions between the US and China don’t spill out into something more intense. Linked to this, a related point is that if the situation relating to Taiwan becomes more volatile, then we will all be looking at a very different picture, not just in Asia Pacific, but across the world.
39. There are many things that can go wrong, in economics, in politics (more politics than economics), in the short and medium term.
40. If we can avoid them, then the secular trend for the Asia Pacific region is clearly upwards.
41. I wish you a fruitful conference.
42. Thank you.
Last updated on 3 May 2023