SPEECH BY MR THARMAN SHANMUGARATNAM, MINISTER FOR EDUCATION, AT THE LAUNCH OF TATA INDICOM CABLE AT RAFFLES HOTEL ON WEDNESDAY, 3 NOVEMBER 2004 AT 3.15 PM

SPEECH BY MR THARMAN SHANMUGARATNAM, MINISTER FOR EDUCATION, AT THE LAUNCH OF TATA INDICOM CABLE AT RAFFLES HOTEL ON WEDNESDAY, 3 NOVEMBER 2004 AT 3.15 PM

Mr Ratan Tata, Chairman of the Tata Group

Distinguished guests

Ladies and gentlemen

Good afternoon.

It is my great pleasure to be here for the launch of Singapore’s latest submarine cable to India.

2 This is a momentous occasion. It is a statement, firstly, of how the Tata Group, India’s largest private sector group and an old friend of Singapore, is deepening its engagement with us. The Tata Group was an early investor in Singapore, when it opened Tata Precision Industries here in 1973. I asked EDB how well that investment did. They tell me that the plant, which made components for computer-related industries, made revenues of about $10 million over five years – not a small sum at that time. Since then, Tata has branched out to invest in trading, IT services, telecoms and steel in Singapore, among many other activities.

Connectivity: Driving Growth in Asia
3 The Tata Indicom Cable brings a new dimension to the Tata Group’s engagement with Singapore. It is also a major new link in a rapidly growing network of ties that is bringing India and Singapore together, in trade, finance, investments and services and communications.

4 It is also, more broadly, a statement of the importance of connectivity in the new Asian economy, an economy that is increasingly driven by linkages between India, Greater China and Southeast Asia. And it is a statement of Singapore’s growing role as a hub in this new Asian connectivity.

5 The Tata Indicom Cable has a bandwidth of more than 5 Terabits per second - equivalent to nearly 77 million simultaneous phone conversations. It will increase Singapore’s total connectivity to India by 60%, to 13.6 Terabits per second. It will also increase Singapore’s connectivity to the world by over a fifth, to 27.6 Terabits per second, strengthening our role as an Asia Pacific telecom hub.

Singapore and India: natural partners in shared services and BPO
6 This new cable will open up and catalyse new business possibilities. There is, in particular, huge opportunity for synergy between our two countries in the areas of shared services and business processing outsourcing, or BPO.

7 India’s preeminence in the global BPO market needs no highlighting. Singapore is a smaller player, but a natural partner for India in shared services and BPO. A recent US Department of Commerce report named Singapore as the second fastest growing hub for offshoring of business processes by US corporations, after India. In fact, US MNCs’ offshoring to Singapore has grown by 22% per year over the last decade (compared to 23% for India).

8 We are taking a growing slice of the high-value added segment of the shared services and BPO business. It is a business that plays to Singapore’s strengths - our extensive physical connectivity, our trusted business environment, our security infrastructure, the skills of the Singapore workforce, and the fact that we are a centre for human talent in Asia. It also builds on the large presence of global companies in Singapore. Today, we have more than 7,000 multinational corporations in Singapore, with 60 per cent of them carrying out some form of regional headquarters functions from here.1

9 There is an encouraging momentum in the relocation of business processes to Singapore. In fact, later today, Barclays Capital will open an International Business Centre in Singapore - a cutting edge, global processing centre that will complement what it does in London and New York.

10 Singapore and India have distinct advantages in the BPO business. There is considerable potential for us to work to maximise our complementary strengths, to offer global customers solutions that lower costs while mitigating risks. The Tata Indicom Cable will help spur this development in the BPO space, as well as all the other economic opportunities that rely on efficient and fast connectivity.

Deepened Engagement through CECA
11 Our partnership with India is now broad-ranging. Tata and its associated company, VSNL, are among the many Indian companies who find value in using Singapore as a launch-pad to regional and international markets. About 1,400 Indian companies now have operations in Singapore, including 19 of the top 20 Indian IT firms.

12 The Comprehensive Economic Cooperation Agreement (CECA) between Singapore and India, which is on track to be concluded by year-end, will be a major leap forward in our bilateral relationship. It will strengthen both Singapore’s and India’s competitiveness. India will be advantaged by its extension into Singapore. And Singapore will be buoyed by its Indian wing.

Gaining advantage by having ‘India Inside’
13 Beyond business, we are also strengthening our links in education. Our universities are actively pursuing collaborations with Indian universities, including the Indian Institutes of Technology or IITs. I am told that there has been good progress in this area. The IITs have responded favourably to EDB’s and the Singapore universities’ proposal for them to actively collaborate with us in three key activities: a joint or dual postgraduate degree programme, collaboration in R&D, and forming strong linkages with MNCs and local companies based in India and Singapore. We look forward to having an IIT presence in Singapore soon.

14 It will add to the presence in the education sector of the two Indian schools which have set up here, Bhavan’s Indian Central School or ICS, and the prestigious Delhi Public School. And many Indian students are choosing to study in Singapore, over other locations like Canada, USA and Hong Kong.

15 Whether as students, scientists, technologists, businessmen or tourists, there is a growing flow of people between our two countries. It gives both countries an advantage. It gives us a sense of comfort in our dealings with each other, deepens our sense of cultural proximity, and lays the basis for deeper business and economic engagements over time.

16 Singapore will get increasing advantage by having a bit of ‘India Inside’, just as we hope India will gain by having a bit of ‘Singapore Inside’.

17 So we will keep our corridors wide open to India, as we will do for China, Southeast Asia and the world. We will stay open to others and to their cultures, and keep multiplying their ideas.

Conclusion
18 Finally, my congratulations once again to VSNL and Tata Indicom on the launch of the Tata Indicom Cable. I wish you every success ahead, and look forward to Singapore’s and India’s growing engagement with each other.

_____________________________________________________________________

[1] For example, SAP, ExxonMobil and DFS have each chosen to consolidate and centralise their corporate finance, IT, legal and HR functions here in Singapore.