22 Mar 2012 Posted in Speeches
Thank you for inviting me here this morning to speak to you.
As all of us know, the world economy is uncertain across Europe, US and even Asia.
But most of us recognize that there continue to be opportunities in Asia.
And the world economy will bounce back and, when it does, Asia will rebound strongly.
There are, of course, the two very strong economies in Asia that are continuing to grow, India and China, along with the rest of Southeast Asia and Australia as well.
- It is in this context in the last few years that we have been very clearly focused on making Singapore a global legal hub.
- And this is a government that understands what needs to be done to achieve that.
- If we take the economic context for Singapore, we are within a seven-hour flight radius of half the world’s population, and also offer easy access to major Asian business centres like Jakarta, Mumbai, New Delhi, Beijing, Shanghai, Hong Kong, Tokyo and Seoul.
- It is an old adage in Singapore that neither population nor resources by themselves make an economy. But the changing context in Asia is that the population is on the move and the resources are now being put to better use than they have ever been.
- We can look at Singapore and the region in terms of concentric circles.
- The first concentric circle encompasses South Asia and Southeast Asia.
- Singapore is the logical entry point to as well as base of operations for both South Asia and Southeast Asia.
- This is really not a role that Hong Kong can realistically play, because of proximity, linkages and deep business relationships.
- The Southeast Asian economy, which is not fully appreciated, has a population of 600m people – young and energetic, with a belief that tomorrow will be better than today.
- And they are prepared to work for it.
- Regional GDP is about US$2.3 trillion and the real rate of growth is about 5.0%.
- If we look at some countries within Southeast Asia:
- Indonesia – with a population of 250m, a GDP of just under US$1 trillion and a real growth rate of 6.3% – has an economy based on natural resources but has a growing consumer economy.
- Vietnam is growing at 6.3%.
- Thailand is growing at about 5% and, more significantly, is now engaged in the post-flood reconstruction which, it is estimated, will cost over US$45 billion.
- Myanmar, an extremely resource-rich country, is increasingly opening up. While the reforms are not yet irreversible, and will be closely watched, they offer opportunities.
- And everyone knows about India.
- Singapore offers a natural platform for moving into India.
- As a matter of fact, a lot of India work is already being done out of Singapore.
- In the last couple of years, we have seen an increasing outflow of Indian firms, needing a base outside of India, coming into Singapore. We have over 6000 reasonably-sized Indian firms now located in Singapore – and the number is growing by the day.
- Many big law firms now use Singapore as an “aircraft carrier” to service the regional economy. It serves as a base for financial, corporate, legal as well as ancillary services.
- Singapore is also a place to which people from around the region come because it is a cosmopolitan, international city with a lot to do, and also because there are financial and other services available here.
- So, that is the first concentric circle.
- The second concentric circle covers Australia and China, markets to which Singapore – secondarily – offers relatively easy access.
- Australia has a US$1.6 trillion economy with a real growth rate of about 3.3%. Its growth and resources complement Asia – a fact increasingly recognised in Australian foreign policy.
- Together, Southeast Asia and Australia have a combined GDP of almost US$4 trillion.
- There is, of course, no need to say much about China.
- Hong Kong is the established legal hub servicing North and Northeast Asia, although Singapore has a secondary role in that market as well.
- But, if we are looking at South and Southeast Asia, then a presence in Singapore is essential.
- This has been increasingly recognised by many. If I may quote a Magic Circle firm, already in Hong Kong and now moving back into Singapore:
"Singapore is being talked about all the time as the firm's next strategic move. Hong Kong has become a greater China hub and Singapore is becoming the hub of Southeast Asia. A Singapore office is definitely something people would like to see happen -- and soon. All of the big global firms have a base there, so for us, it's really a must.”
- Singapore, on its own, is a thriving economy with a GDP of just under US$290 billion, significant for a fairly small population.
- This compares very well against Hong Kong’s US$270 billion or so.
- Singapore’s growing legal sector has registered positive growth, despite the economic conditions.
- Singapore is ranked the most competitive city in Asia and the third most competitive in the world, after New York and London.
- It has strong capital and financial markets, with a steady flow of lucrative work.
- It has a well-educated, multilingual (in particular, English-speaking) population and, of course, offers social and political stability that is unmatched anywhere in Asia.
- It has a strong belief in the rule of law, as well as excellent infrastructure and connectivity.
- In my opinion, however, the most important aspect is the political will in the heart of the government to make sure Singapore succeeds, with the necessary legal soft as well as hard infrastructure in place to ensure it succeeds in business – including the legal services.
- That is the philosophy the government has consistently articulated and put into practice.
- I will outline a few of the changes we have made in the past few years to ensure we continue to be attractive.
- We have started awarding licenses to foreign law firms to practise Singapore law.
- These are called Qualifying Foreign Law Practices (QFLPs) and they are allowed to practise in what we call the “permitted areas” which are a broad swathe of corporate and financial service areas.
- Six licenses were awarded in 2008, and we have about four or five big local law firms, so with one stroke, we increased the competition by more than 100%. And we have made the point clear that there is no turning back. This is not a government that makes U-turns. The only question is how fast the liberalisation proceeds from here.
- We will be looking at awarding more licenses later this year.
- We have also encouraged the formation of joint law ventures which allow a foreign law firm to combine with a Singapore law firm to offer a broad suite of services in the “permitted areas”.
- There are eight joint law ventures now, involving firms from Australia, the UK, the US and China.
- The consensus is that the entry of QFLPs – which have registered positive growth and are happy – has introduced a different dynamic into the market.
- In addition, we have just changed our law to also allow foreign law firms to collaborate much more closely with local law firms, permitting p rofit sharing arrangements up to 33%, as well as concurrent partnerships for both Singapore law firms and foreign law firms when they are in a venture together.
- We have also introduced the Foreign Practitioner Examinations (FPE) which allows individual foreign lawyers to practise in the “permitted areas” once they have taken the exam.
- We put in place – just last month – amendments which will allow more scope for English Queen Counsel, and counsel of equivalent distinction from other jurisdictions, to appear in our courts to argue cases.
- As a result of these changes, our legal sector has come a long way in a short time.
- In 2007, we had about 60 foreign law firms in Singapore; that has gone up to 110 as of early this year.
- There were 630 foreign lawyers in 2007; we now have more than 1000.
- Eight of the world’s top ten law firms by revenue have a presence here.
- If you compare, for example, the growth in the number of foreign law practices – Hong Kong had 56 in 2007 and 72 this year – this suggests a strong international recognition of Singapore as a primary gateway for that first concentric circle.
- And we expect these numbers to continue to grow.
- We intend to take further steps to make sure we stay at the forefront in this field.
- If I could illustrate my points by taking arbitration as an example:
- We have a completely liberalised regime.
- We believe that the only way to become an international arbitration centre is to make sure clients have completely free choice, and are able to choose arbitrators from any jurisdiction, as well as counsel from any jurisdiction, to arbitrate in Singapore.
- Also, Chinese and Indian legal and business entities increasingly promote Singapore as the dispute-resolution venue when a neutral venue and law are needed – and that goes for most of the rest of Asia as well.
- Singapore is now recognised as the leading international arbitration centre in Asia.
- Discounting local arbitrations, construction-related disputes and domain name disputes, and focusing on pure international commercial arbitrations, Singapore is the clear leader.
- According to a 2010 White & Case International Arbitration Survey, Singapore is “ clearly… the most popular Asian seat” and the third most preferred by corporations (tied with Paris and Tokyo, after London and Geneva).
- We will hold the International Council of Commercial Arbitration (ICCA) Congress in June this year.
- The key reasons why our approach has put Singapore on the international arbitration map are that we:
- allow lawyers from any place in the world to appear in Singapore for arbitration cases;
- have a legislative framework that incorporates international best practices and that we keep changing to ensure relevance;
- have a judiciary that is respected and that has a philosophy of supporting arbitration and respecting party autonomy;
- have a business-friendly environment.
- We also have the hardware, Maxwell Chambers, which is the world’s first – and, I believe, so far only – integrated dispute resolution centre, designed with state-of-the-art facilities focused on arbitration.
- The Global Arbitration Review called the opening of Maxwell Chambers one of the “Best Developments” in the arbitration industry in the world.
- Since Maxwell’s establishment in 2010, various international institutions have set up there, including the American Arbitration Association (AAA), the Permanent Court of Arbitration (PCA), ICC’s International Court of Arbitration (ICA), the International Centre for the Settlement of Investment Disputes (ICSID) and chambers from the UK as well.
- We also have a highly-regarded Singapore International Arbitration Centre (SIAC), the body which administers arbitrations. It is one of the fastest-growing arbitral institutions in the world.
- In 2010, it was shortlisted by the Global Arbitration Review as one of the top arbitral institutions in the world.
- Our approach to the SIAC has been that, in order to be a recognised international arbitral institute, it must be international in outlook. So, its Board of Directors is headed by an Australian and has recognised international arbitration experts from all over the world.
- That is an example of our commitment to being an international arbitration hub.
Legal education hub
- All of this is underpinned and supported by a commitment to excellence in legal education.
- We have two well-regarded law schools. The National University of Singapore (NUS) Law School is considered the best in Asia and is ranked 24th in the world.
- We have about 400 law graduates produced locally, taken from the cream of applicants. The best of our high school graduates apply to law school, so it is one of the most difficult to get into.
- Singapore law graduates, who speak both English and Mandarin, are highly sought after, not just in Singapore but all over.
- So, there is ready access to talent.
- We also have a lot of law graduates who come back from overseas universities.
- Over the past four to five years, we have thought through and mapped out a clear strategy to place Singapore at the forefront of all aspects of business, including legal business.
- The Economist Intelligence Unit mentions Singapore’s “increasingly highly regarded reputation internationally”.
- But we consider this to be the beginning and a journey. We never assume that we have arrived, and we will continue to strive, taking the best practices from the world.
- In the end, however, the product will have to speak for itself.
- On that note, thank you. I wish you a successful conference.
Last updated on 25 Nov 2012