Based on a Transcript
Thank you so much.
Minister Lim [Lim Hng Kiang, Singapore Minister for Trade and Industry], I want to thank you for making sure that this APEC conference [the Asia-Pacific Economic Cooperation Meeting of Ministers Responsible for Trade] was such a success. You chaired the meeting with skill and diplomacy, but still led us through our discussions. There were a number of people around the table from various political backgrounds, all accustomed to speaking at length. But you kept us focused.
Your capability, Minister, is a credit to yourself and your government.
This visit has been a real joy for my wife and me. It is our first visit to both Singapore and Malaysia. Very soon after arriving, we knew that we wanted to come back again and spend more time. We hope we’ll be able to do that in November.
This APEC group is a trendsetter in many ways. It was quite remarkable that all 21 countries agreed to a further one-year moratorium on protectionist activity, even though we are all very concerned about the downturn. Again much of the credit goes to you, Minister.
The consensus we achieved sends out a message to other countries and multilateral organizations around the world: this is not the time to close doors for industries, businesses and workers. In fact, as history shows, this is the time to open doors.
Minister, you mentioned some of the reasons for Singapore’s success, including the fact that people here can do business openly, within a framework of good governance, accountability and transparency.
I want to reflect on those elements a little today. As you know, globally there have been some positive economic signs. We were asked when this downturn will officially end. I wish I had the answer to that question.
Most people did not foresee this downturn. I was at the World Economic Forum in Davos, Switzerland, earlier this year, along with the chairs of the world’s top banks, political leaders and top investors. In the sessions, they agreed that none of them saw this coming or had a clear view of when it would end.
Of course it is possible to evaluate whether the economic climate at a particular time is robust or weak. And there were people who noted that certain financial principles were not being followed, and that this would have serious consequences.
But the fact is that most of these people said this publicly after the downturn had happened. That reminds me of the saying that an analyst is a person who can predict an event not too soon after it has happened.
Since certain principles were not being followed, in reality we should have been able to predict what was to come.
Over the past two decades we saw some amazing things happen around the world: the end of the Cold War, the collapse of many autocratic regimes, the realization that communist dictatorship simply does not work. We seemed to be ushering in a brave new world.
Early in this period, a famous essay [by Francis Fukuyama] suggested that we were seeing the end of history. In Canada, a prominent economist suggested that we were seeing the end of business cycles, that downturns were a thing of the past. Then the tech bubble burst, taking most people by surprise. Some may have seen it coming but most of us did not.
Unlike Singapore, Canada is a land of seasons, and there are clear signs as we move from one to another. In late summer, for example, we notice that leaves start to change colour—a sign that cold weather is on its way.
In economics too, there are cycles and seasons. And I’m boldly predicting today that we are moving closer to a season of more positive and robust economic conditions. I say this because governments and businesses have learned that there really are certain economic fundamentals that, if generally followed, will lead to certain results.
Looking back, we can see that those fundamental principles began to be abandoned. People really thought that there would be no more business cycles, that this really was the end of history and that things would continue to go well. This happened not only in the United States; we all began to get excited about the new golden age that would never end.
And in some jurisdictions, controls began to be relaxed on financial institutions. I’m talking about borrowing, lending and asset requirements, capital requirements, levels of accountability and transparency. We should have recognized that abandonment of those principles is a sign of a season of poor economic health.
Here in Singapore, many of these principles were maintained and that is why the economy is weathering the storm better than other economies.
The same is being said about Canada. I would like to talk about the factors responsible.
Now I do not think that Canada has the perfect government. We all make mistakes in government. We’re human beings.
But Canada did stick to fundamentals. Before the crunch hit, we required our banks to have certain asset bases to support a certain lending level. We put provisions in place to protect against an inordinate and harmful explosion of mortgage availability.
The result is that last fall the World Economic Forum published results of a survey showing that Canada has the most stable banking system in the world.
In a time when large pools of capital are looking for a place to go and investors are wondering where there is predictability, where there is long-term security, we believe Canada has much to offer. People used to look at our banking system and say it was boring. Now “boring” is the new “exciting.” And in talking about our system, we get about as excited as Canadians can get.
Our business taxation system has also been evaluated as the most competitive among G7 countries. Further, we have laid out our tax plans all the way to 2012. As a result, people have predictability not only in banking but also in taxation. They know that if their investments pay off, they will be subject to predictable levels of taxation that are the lowest among the G7. And that’s another message we are proud to proclaim around the world.
No regulation system is perfect. We tell our friends in the business community that we need some level of taxes and regulation. But governments can get carried away. And when they overtax and over-regulate, they begin to hurt business. They take away the incentive, the creativity, the productivity, and the innovative drive of individuals and organizations, who might feel they’re going to be unduly impeded and punished for their efforts.
The Economist Intelligence Unit said earlier this year that Canada was the best-positioned going into this downturn and will be the best-positioned coming out of it. That is because of some of the basic principles we have put in place. And so we can say to you as a business community: if you are thinking of investing in Canada, you can be confident of a season of relatively good returns.
Added to what I have mentioned are some important confidence-building factors. Canada has an education system of the highest quality, offering the high-tech skills needed for the businesses you’re running. That system gives rise to a motivated, highly skilled workforce.
On the infrastructure side, we look at key areas of potential development. We have what we call the Asia-Pacific Gateway, where we have invested $2.3 billion over the last few years. The aim is to build up the infrastructure at our ports in Vancouver and Prince Rupert so that we can offer world-class destinations and alternatives to those who might be shipping to the west coast of North America.
Depending on the Asian port you’re shipping from, if you’re shipping to Vancouver or Prince Rupert, the sailing times are two to three days shorter than if you’re shipping to certain other ports on the west coast. Because the ports are not overly congested, the dwell time for containers is often less than 30 hours. And with our infrastructure investments, we are integrating rail and road lines so that your products can be into the very heartland of North America, into Chicago and Omaha, within 100 hours of landing.
These are very significant advantages, which we are aggressively promoting around the world. We’re particularly delighted to promote them in Singapore, the largest port in the world, where shipping decisions are being made all the time.
I believe the future relationship between our countries and peoples will be very positive in the areas of education, investment and infrastructure. And there is a real synergy between Canadian companies and businesses from Singapore.
The predictability provided here and in Canada can unleash the energy that’s needed to create jobs and wealth, and to raise prosperity levels for our citizens.
No system is perfect. But history has taught us that where people are free to move their capital around, where they are free to be enterprising, where systems are rules-based and transparent and accountable, and where contracts are backed by law, there will be more prosperity for all people than if those systems were not in place.
It was Winston Churchill who said, “The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries.”
Again, if you allow people freedom to invest their capital, whether a small or large amount, and to do it in a rules-based environment that is open and transparent and fair, you will have more prosperity than otherwise.
That’s why we look forward to ongoing engagement, exchange of information and product development with you. Here is one example of innovation: I ran into an individual at the meeting before we came into this room. His particular product is a device that can fit into a shoe, making it possible to identify the person wearing that device. Each person has a way of walking as unique as our fingerprints. Being able to recognize and analyze that will help governments keep track of who is coming into their country, while still moving product quickly.
The device can be useful in all kinds of applications. For instance, in a nuclear plant you have to know where people are at all times. And there are many other possible uses.
You might think that changing shoes with someone else would make it possible to circumvent the device. But that won’t work because we each walk differently. This is an example of the creativity unleashed when people believe they have the opportunity to develop the product of their dreams.
A much greater example of innovation is Singapore itself. You can be proud of your history, which shows that when you take a small fishing village and allow people the ability to freely invest their capital and move it around the world without being unduly punished, and when you have a system that is based on openness and fairness and rules, the outcome will be prosperity at virtually unprecedented levels.
I appreciate the example that Singapore and its government have set. We want to join with you to make our peoples prosperous and promote a global increase in prosperity and health