TRADE DEVELOPMENT BOARD (AMENDMENT) BILL

Order for Second Reading read. 4.35 pm

The Minister of State for Trade and Industry (Mr Raymond Lim Siang Keat): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

The Trade Development Board (TDB) was established in 1983, with the mission of promoting and developing Singapore's international trade. TDB fulfills its mission primarily through broad-based programmes, such as organising trade missions and fairs, and helping companies navigate through foreign bureaucracies via its overseas trade offices.

Today, Singapore is the 16th largest trading nation in the world. Our exports have quadrupled from S$50 billion in 1985 to S$218 billion in 2001. Our external trade is three times the size of our GDP. We have successfully evolved from an entrepot base serving the region, to an international hub for trade and commerce.

As Singapore embarks on a new phase of economic development, we can no longer rely solely on inward foreign investments to propel our economic growth. Many of our competitors have begun adopting the same strategies to attract investments, and they are fast narrowing the lead we enjoy. At the same time, we are encumbered by the tarnishing of Southeast Asia's image as an attractive investment destination, and its loss of investor mind-share to the economies of Northeast Asia.

To overcome these challenges, we need to broaden and strengthen our base of local enterprises, to provide added ballast to our economy. We need to build vibrant and robust local companies which can serve as our additional engines of growth. In order to grow, our companies must venture overseas, given our small domestic market. We should therefore help them develop the capabilities, connections and access to capital that they need to spread their wings overseas. In other words, our aim should be to develop a corps of enterprising, competitive International Singapore Companies (ISCs) who will have their home bases and core capabilities in Singapore, while expanding and establishing a strong presence in the region and beyond.

To achieve this objective, TDB has been given a new mission to help Singapore-based companies grow and internationalise successfully. To reflect this new mission, it has been renamed International Enterprise Singapore or "IE Singapore", since 1st April 2002. IE Singapore is now the primary economic agency overseeing the growth of our external wing. It will help our local enterprises upgrade their capabilities to compete internationally, develop their access to marketing and distribution networks, and help them gain deep knowledge and intelligence about overseas markets. It will re-engineer its major activities, from offering basic-level market information to providing value-adding intelligence and capability development programmes; from organising broad-based programmes to providing customised help to enterprises; and from generating trade volume to strengthening enterprises' home bases in Singapore while they develop their overseas markets.

IE Singapore has also taken over from SPRING Singapore the responsibility of helping our SMEs expand overseas. As part of this effort, it will promote Singapore as an SME-hub by attracting enterprises from the US, European Union, Japan and other countries to be based here, so that they can collaborate with Singapore's ISCs to venture into the region. These new functions go beyond the former TDB's traditional role in trade promotion. However, as trading is the first step towards internationalisation, IE Singapore will continue to promote and develop the trade sector, including hub services like shipping, marketing and distribution.

The amendments to the TDB Act thus reflect the new name, and the enlargement of the mandate, powers and functions of IE Singapore. Let me now move on to the key aspects of the Bill.

Clause 5 of the Bill renames the Trade Development Board as the International Enterprise Singapore Board, and enables it to carry out its functions under the business name of "IE Singapore", or any other business name as the Minister may specify. This will give the Board the flexibility to change its business name as and when circumstances require, without having to change its legal name - International Enterprise Singapore Board.

Clause 6 expands the functions and duties of IE Singapore. The new functions include:

i) promoting or developing a business environment in Singapore that makes Singapore a preferred centre from which ISCs can create, develop or expand their business in foreign markets;

ii) developing programmes and activities to assist ISCs to do so; and

iii) fostering and developing business networks and linkages between ISCs and foreign businesses.

Clause 7 empowers IE Singapore to collect, compile and analyse information or commission surveys, research or studies, relating to Singapore-based enterprises conducting business in foreign markets. It also allows IE Singapore to enter into memoranda of understanding and other similar arrangements with foreign partners. This will enable the Board to gather and share valuable information about overseas markets with the ISCs, which is crucial to aiding their expansion abroad.

Mr Speaker, Sir, the proposed amendments to the TDB Act will allow IE Singapore to expand its work beyond trade promotion, and to focus on the three Cs - Competency, Connections and Capital needed by companies. IE Singapore will help companies build competencies in business processes like strategy and planning, international marketing, manpower development, financial management, as well as market information and analysis. IE Singapore will provide companies the business opportunities through its extensive network of international connections. It will also help companies gain access to a wider range of financing options for them to venture abroad. Through all these initiatives, IE Singapore aims to help many of our promising local companies become tomorrow's world-class champions, so that they can contribute to a strong and sustainable growth in the next phase of our economic development.

Sir, I beg to move.

Question proposed.

Mr Andy Gan Lai Chiang: Mr Speaker, Sir, the change of name to International Enterprise Singapore Board from Trade Development Board reflects the true nature of the Board - that of enhancing Singapore's competitive edge over other countries, assisting Singapore companies moving abroad, and building up of an extensive network linking Singapore businesses to their foreign counterparts.

International trade normally takes place when there are competitive advantages in doing so. For example, if country A can produce electrical products cheaper than country B, it would be logical for trade to take place between the two countries. However, if country B has entrepreneurs who can invest in country A to produce those electrical goods and export them back to country B and other parts of the world, then country B will benefit more.

Thus, IE Singapore Board should expand its role and do this beyond just assisting Singapore-based enterprises find new markets abroad and compete internationally. However, I am glad to hear the Minister has just mentioned that we are also assisting in capital provision, which is of great advantage to companies moving abroad.

IE Singapore should also assist Singapore companies identify potential areas of development in different countries, taking advantage of that country's strength and exporting these goods back to Singapore and other places in the world. It could perhaps play the role of a match-maker and marry related Singapore enterprises so as to make strategic investments in a second country with the purpose of securing a line of supply for a series of products that Singapore needs.

As we are all well aware, China is an emerging market. Its vastness means that there are sufficient opportunities for everyone. However, China's emergence has also altered the dynamics of the business environment. We cannot ignore these changes. We need to bring on a new corporate mindset as we compete with some of the best in the world to carve out a niche of our own. I read with interest the success story of Singapore media group SNP Panpac in Liaoning province in China published in the Straits Times on 6th July 2002. In less than two years, it has opened up a market for its bilingual teaching books. With the new defined role of the IE Singapore Board, I am confident that there will be many more such success stories. Perhaps, IE Singapore can look at how the networks built up by Panpac in Liaoning educationists could further be capitalised and introduce related services linked to those existing partnerships.

One of the major functions of IE Singapore is to promote, facilitate and regulate forward and futures trading in rubber and other commodities. It may be timely now to rethink Singapore's role in rubber and commodity trading. As most local rubber dealers are not large enough to be market makers, and as producers of latex and rubber sheets are bypassing them and going direct to buy, say, for example, the tyre makers, would it then be necessary now for Singapore to invest in rubber plantations abroad? It is indeed necessary, as I can see it, so as to ensure a steady supply of good quality rubber for our rubber traders to quote competitive prices, and for Singapore to expand its investment abroad in plantations, instead of just investing the money in the Singapore rubber fund on securities. To distinguish Singapore from our competitors, it is necessary for us to re-focus, and perhaps accept more risks in our ventures abroad.

Mr Speaker, Sir, I support the Bill.

Mr Raymond Lim Siang Keat: Mr Speaker, Sir, Mr Andy Gan brought up two points, ie, in terms of capability development and cluster developments. I would address the first one, which is on capability development. IE Singapore would groom ISCs by offering customised assistance at each stage of the internationalisation process. IE Singapore has created a new department known as the Capability Development Group which will focus on the following areas.

Firstly, building up companies' business capabilities. This is to support companies in developing market entry strategies, marketing techniques, appropriate product designs and manpower development programmes.

Secondly, international partnership. To support the internationalisation of companies to successful partners, IE Singapore would create and facilitate on-line and off-line international networking platforms. IE Singapore would also encourage foreign enterprises to locate in Singapore for business partnerships with Singapore companies.

Thirdly, helping companies to raise funds for overseas ventures and manage the financial risks. IE Singapore would provide programmes to raise awareness on various financing options and help companies develop financial strategies to venture abroad.

On the clusters specifically, in terms of industry clusters, IE Singapore is currently focusing on the following six technology business: lifestyle business, infrastructure business, business services, international trading and trade logistics. I would stress however that this list is not exhaustive and will be periodically reviewed.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House.

The House immediately resolved itself into a Committee on the Bill. - [Mr Raymond Lim Siang Keat].

Bill considered in Committee; reported without amendment; read a Third time and passed.