Singapore

SINGAPORE MARKET REPORT 1/2010


CONTENTS

SINGAPORE MARKETS .............................................................................. 5
S'pore bets on global and Asia links ................................................................5
Singapore ranked 7th in the world for innovation ...............................................5
Five steps to a bigger, better S'pore ...............................................................5
Asia’s ageing population presents investment opportunities ................................6
S’pore up two notches in office costs ranking ...................................................7

ECONOMY ................................................................................................ 7
Sales of private homes up 130%....................................................................7
MAS Monetary Policy Statement..................................................................... 8
S’pore ‘to benefit from the recovery in Asia’ .....................................................8
Stronger Sing dollar won't hurt exports ...........................................................9

INTERNATIONAL TRADE ......................................................................... 10
Singapore and EU complete first round of negotiations on free trade agreement .. 10
Gazprom among big boys eyeing S’pore LNG trade ......................................... 10
Singapore signs FTA with Costa Rica............................................................. 11
S'pore and China commence review of China-Singapore FTA ............................ 11

RESEARCH AND INNOVATIONS ............................................................... 11
DNV Establishes Clean Technology Centre in Singapore ................................... 11
S’pore to host Asean economic research unit ................................................. 12
Eye research institute aims to be among world’s top 5 .................................... 12
Panasonic sets up R&D centre for new growth areas ....................................... 13
A*Star launches MEMS group for joint research .............................................. 13

ENERGY ................................................................................................. 13
Experts recommend differentiating strategies for Singapore's Clean Energy
industry ................................................................................................... 13
Best long-term options - solar, nuclear power ................................................ 14
S’pore to still consider use of nuclear energy ................................................. 15
Nuclear energy: Learning the ropes .............................................................. 15

ENVIRONMENT ....................................................................................... 16
Singapore to go ahead with carbon emission cuts .......................................... 16
Confucianism and moral sentiments ............................................................. 17
Benefits from riding the green wave ............................................................. 18
The S’pore way of going green .................................................................... 18

CHEMICAL INDUSTRY ............................................................................. 16
Biomedical Sciences Companies Strengthen Partnerships with Singapore to Address
Industry Challenges ................................................................................... 19
S'pore top choice for biomed hires in region: Survey ....................................... 20

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Seeking foreign expertise in innovation ......................................................... 20
Singapore draws global contract clinical research organisations......................... 21

INDUSTRY AND COMPANIES ................................................................... 22
S'pore banking sector outlook stable: Moody's ............................................... 22
Investment boost seen for electronics this year: EDB ...................................... 22
Singapore's dynamic electronics industry is poised for further development ........ 23
Seeking business? Head to Africa, SEA firms urged ......................................... 24
S'pore firms reacting to China's development ................................................. 25
Big jump in firms’ intangible asset value ....................................................... 25

CONSTRUCTION BUSINESS ..................................................................... 26
Construction sector to get $250m boost ........................................................ 26
$15m boost for green building practices ........................................................ 27

TRANSPORT ........................................................................................... 27
Marine insurance starts to recover ............................................................... 27
Sharpening S’pore’s maritime edge .............................................................. 28
Bridging S'pore and Johor with trains, water taxis ........................................... 28
Strongest growth in 6 years for Changi Airport ............................................... 29

TOURISM INDUSTRY .............................................................................. 27
Singapore's tourism sector overview ............................................................ 29
S'pore, Vietnam work on aviation, cruise tourism ........................................... 30
From mind to heart and spirit ...................................................................... 30
New union for leisure sector ........................................................................ 31
Visitor arrivals rise for fourth straight month .................................................. 31
S'pore opens second casino ........................................................................ 32

INTERNATIONAL RELATIONS.................................................................. 32
Singapore-KL ties ‘strong and improving’ ...................................................... 32
Irish Chamber of Commerce launched in S'pore ............................................. 33
S'pore may become AfDB member ............................................................... 33

ASIA AND ASEAN MATTERS .................................................................... 34
Reforms needed for Asia to thrive ................................................................ 34
Asia needs to work on institutions for growth ................................................. 35
ADB expects 7.5% Asia growth, but risks remain ............................................ 35
Asean shows way to a single market ............................................................ 36

LAW ................................................................... Error! Bookmark not defined.
'General law will prevail over fatwa' .............................................................. 37

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TAXATION AND ACCOUNTING ................................................................. 26
Singapore aims to be leading global accountancy services hub.......................... 37
3 ways for accountancy reform .................................................................... 38

EDUCATION ........................................................................................... 37
Education R&D centre opens ....................................................................... 38
Schools to develop 'soft skills' ..................................................................... 39
NUS, NTU, SMU raise fees........................................................................... 39
Schools Share Best Practices on Integrating International Students at Inaugural
Symposium .............................................................................................. 40

MEDIA ................................................................................................... 40
MDA unveils new animation fund ................................................................. 40
Funding boost for large-scale media projects targeting the international market .. 40

DEFENCE INDUSTRY ............................................................................... 41
Five new F-15SG fighter jets fly home .......................................................... 41
Malacca Strait threat: How Singapore reacted ................................................ 41
Rise in arms imports means drop in stability .................................................. 42

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SINGAPORE MARKETS
S'pore bets on global and Asia links
4.2.2010 The Business Times

SINGAPORE can become the location of choice for businesses outside Asia seeking to tap the
region’s potential and Asian firms looking to expand to the rest of the world, Economic
Development Board (EDB) chairman Leo Yip said yesterday.

As it looks to its next phase of growth, Singapore should aim to develop a deep pool of pan-
Asia talent, industry knowledge and expertise that isn’t focused on just its own market or its
immediate neighbours’, to attract more companies to use Singapore as their base to expand
in the region, he said. If successful, the strategy could give it an edge over rivals such as
Hong Kong in attracting firms to set up their Asian headquarters here, even if the firms
already have country offices in bigger markets such as China, said Mr Yip.

As companies come into Asia, initially their focus may be China, India or South-east Asia. But
eventually companies will look to expand to the rest of the Asia and they will need a single
strategic location to manage their operations throughout the region. The Economic Strategies
Committee (ESC) has recommended the government seek to lure not just MNCs, but ‘hidden
champions’ among smaller firms that excel in particular niches, as well as fast-growing Asian
enterprises looking to expand outside their home country.

Singapore ranked 7th in the world for innovation
5.3.2010 The Straits times

SINGAPORE is the seventh most innovative economy in the world, ahead of the likes of Japan
and the United States, according to the latest Global Innovation Index (GII). While
Scandinavian nations such as Sweden and Denmark dominated the top 10 rankings, the Lion
City emerged as the second most innovative in Asia after Hong Kong, which came in third.

The latest rankings put Iceland on top, followed by Sweden, Hong Kong, Switzerland,
Denmark and Finland. Singapore managed to outperform the Netherlands (eight), New
Zealand (ninth) and Norway (10th). The US – last year’s top innovator – fell to 11th place,
while traditional powerhouses like Japan (13th), Britain (14th) and Germany (16th) all dropped
out of the top 10. The index measures how specific aspects of an economy can stimulate
innovation.

The GII report credited Singapore’s successful free-market economy and its open and
corruption-free environment for its high ranking. The Republic, it added, was an excellent
example of how a visionary and effective government strategy can impact a nation’s progress.
The move to encourage business innovation has been a major talking point since Budget 2010
was announced on Feb 22. In his Budget speech, Finance Minister Tharman Shanmugaratnam
introduced a new Productivity and Innovation Credit plan, which allows companies to claim
additional tax deductions for spending in areas that make them more innovative.

Five steps to a bigger, better S'pore
9.3.2010 The Straits Times

1 Broaden expertise in fast-moving technology sector
2 Seize new opportunities as old sectors merge

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3 Bring in new types of firms for more vibrant mix
4 Tap Asean links to help local companies
5 Bank on trade pacts to help firms expand

PILL-SIZE cameras that can be swallowed to give doctors images of a patient's insides are
one of several cutting-edge technologies Singapore has identified as new growth areas. There
will be an increasing demand in these bioelectronics solutions as the developed world ages,
and Singapore intends to position itself to take advantage of that, Trade and Industry Minister
Lim Hng Kiang said in Parliament yesterday.

Mr Lim cited these products as one way to grow and deepen Singapore's key electronics
sector, which has been a stalwart of the economy since the 1960s but which undergoes rapid
changes. To keep up, Singapore companies must now also venture into green electronic
products such as energy-efficient lighting, security technologies like biometric systems, and
plastic electronics, including flexible e-book displays, Mr Lim said during his ministry's
Committee of Supply debate yesterday.

Broadening expertise in important clusters is one of five growth strategies that the Ministry of
Trade and Industry (MTI) will focus on to grow the economy over the next decade and create
better jobs. Another policy it will pursue is to seize new opportunities that are emerging as
the traditionally separate manufacturing and service sectors begin to collide. 'Many
manufacturing firms no longer simply transform raw materials into finished products,' Mr Lim
said. Instead, they are moving beyond production to offer a full suite of services including
research and development, design and after-sales support - activities that Singapore is 'well
placed to capture'.

A third approach that MTI will take is to bring in new types of companies to create a more
diverse and vibrant mix of firms. These include mid-sized companies from developed
economies that want to expand into Asia, as well as fast-growing Asian conglomerates looking
to step out into the global market, Mr Lim said.

The fourth growth strategy is to make use of Singapore's links with its Asean neighbours to
help local companies. This can be done in two main ways, said Mr Lim. First, with a huge
middle class of more than 75 million people, Asean nations provide an intuitive and growing
market for Singapore firms, which companies such as fashion retailer Raoul and restaurant
chain Crystal Jade have already taken advantage of.

The MTI's fifth strategy for growth is to bank on Singapore's existing free trade agreements -
and pursue new ones - to help home-grown firms internationalise. Last year, companies
based here saved more than $700 million in tariffs as a result of these agreements, noted Mr
Lim. This year, new trade pacts are being signed: with the European Union, and with seven
other Asia-Pacific Economic Cooperation (Apec) economies.

Asia’s ageing population presents investment opportunities

THE ageing population, often seen as a looming time bomb for Asia, has been repackaged as
a business opportunity. The soaring number of elderly people in the region means more jobs
and investment openings, said speakers at the Ageing Asia Investment Forum.

It was Asia's first integrated retirement living forum designed to discuss the business
opportunities arising from the 'silver tsunami'. Estimates suggest 857 million elderly people
aged 65 and above will be living in Asia by 2050. That prospect has led to rapid job creation
in the health and social service sectors. Property developers are also cashing in by building

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multimillion-dollar integrated retirement villages and private residences catering to the needs
of the elderly.
With better health care and low birth rates, Singapore is no exception to this greying
phenomenon. The Republic is expected to be among the 10 fastest ageing economies globally,
together with Hong Kong, Japan and South Korea, according to a UBS report in 2008.
However, local developers have not found it easy to ride this wave by developing integrated
retirement homes. Land scarcity here has led to high bid prices, which have made the
commercial viability of such projects difficult since affordability is key, say developers.

Singapore's successful public housing policy - with studio apartments having 30-year leases
for the elderly and newly launched inter-generational homes - was also cited during the forum
as factors that have muted demand here. Property developer Daniel Teo, however, insists
that with Singapore's strong medical care and safety record, there is a ready market of
potential buyers for a retirement village housing concept here.

S’pore up two notches in office costs ranking

SINGAPORE has risen two notches on the latest bi-annual list of the world’s most expensive
office locations. But Singapore’s competitiveness – in terms of office occupancy costs –
continued to improve, as the gap between rents here and in the other major financial centres
widened, the report by Colliers International found.

Colliers’ second-half 2009 global office real estate review tracked space in 154 cities
worldwide from June to December last year. Singapore was ranked 24th most expensive – up
two notches from 26th in the H1 2009 survey. Hong Kong was again the most expensive office
location, followed by London’s West End and then Tokyo.

Although Singapore’s ranking rose, the gap between office rents and those in rival centres
grew bigger. This is because Singapore is a laggard – worldwide and regionally – in the office
market recovery, Colliers said. Many cities posted gains or recorded milder declines in office
rents in H2 2009.

‘This phenomenon is to Singapore’s advantage,’ said Tay Huey Ying, director of research and
advisory at Colliers. ‘The resultant growth in the gap in office occupancy costs against other
key financial centres improves our competitiveness and makes Singapore the choice location
for business set-ups.’ Rents for Grade A office space in central business district bottomed out
in Q1 2010, rising 0.5 per cent quarter on quarter to end the quarter at $6.38 per sq ft per
month, Colliers said.

ECONOMY
Sales of private homes up 130%

Private home transactions – for both new and resale homes – jumped by more than 130 per
cent last year, despite the downturn. Singaporeans were the main drivers of the surge: There
was an overall rise of 144 per cent in private property transactions by them last year –
23 516 compared with 9649 in 2008. In the non-lended segment, Singaporean purchases
rose almost 159 percent. The rise in lended property purchases was nearly 83 per cent.

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But comparatively lower prices here as a result of the credit crunch, the influx of expatriates
and the attractiveness of Singapore property also led to more purchases by foreigners. The
number of purchases by foreigners, including permanent residences, rose 114 per cent overall
last year. The bulk of the increase was in the non-landed segment, which rose by 118 per
cent.

MAS Monetary Policy Statement
14.4.2010 The Monetary Authority of Singapore

The recovery of the Singapore economy has been stronger than expected, and more
entrenched since the beginning of this year. External demand has picked up appreciably,
particularly for IT-related products. According to the Advance Estimates released by the
Ministry of Trade and Industry today, Singapore’s GDP surged by 32.1% on a quarter-on-
quarter seasonally adjusted annualised basis in Q1 2010. The growth was broad-based, with
strong performance recorded in the manufacturing and services sectors. With the Q1
expansion, the Singapore economy has now fully recovered the output lost during the
recession, and economic activity in a broad range of industries has exceeded its pre-crisis
peak. As a result, the economy’s output gap turned positive in Q1 2010.

Looking ahead, domestic economic activity is likely to be sustained at a relatively high level,
even as the growth momentum slows in the coming quarters. External demand conditions
are expected to be supportive in the transition towards more sustainable private sector-driven
growth as governments around the world exit from their expansionary policies. Growth in
Asia will likely remain firm, supported in part by robust domestic demand. Against this
backdrop, and in view of the surge in growth seen in Q1, Singapore’s GDP growth forecast for
2010 has been revised upwards to between 7% and 9%, from 4.5% and 6.5%.

Domestic CPI inflation averaged 0.6% in the first two months of 2010, increasing from -0.3%
and -0.8% in the last two quarters of 2009 respectively. On a sequential basis, consumer
price inflation has trended higher since Q3 last year, largely due to the rise in global
commodity prices and private road transport costs. These two factors will continue to drive
headline inflation rates up for the rest of 2010. Meanwhile, other domestic sources of
inflationary pressures, though subdued presently, could be expected to emerge in the coming
quarters. The labour market has tightened, with the seasonally adjusted resident
unemployment rate falling from 5% in September 2009 to around its pre-crisis rate of 3% in
December. Wage growth will begin to pick up this year, while commercial rentals are also
likely to rise given improved economic conditions. Overall CPI inflation in 2010 is projected to
be between 2.5% and 3.5%, slightly higher than the 2-3% forecast earlier.

The Singapore economy has rebounded from the downturn and is expected to continue on its
firm recovery path given the more favourable global economic outlook. At the same time,
inflationary pressures are likely to pick up, driven by rising global commodity prices as well as
some domestic cost factors.

S’pore ‘to benefit from the recovery in Asia’

THE global financial crisis and slump in world trade had a deep impact on Singapore’s
’exceptionally open economy’ but the recovery in global trade projected for this year along
with a pick-up in financial flows ’bode well for Singapore’s outlook’, the Asian Development
Mank (ADB) said in its Asian Development Outlook 2010.

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‘In particular, the economy will benefit from the V-shaped recovery in Asia, a region that
accounted for about 60 per cent of Singapore’s total exports in 2008. The share of exports
shipped to industrial economies, including Japan, was about 30 per cent.

‘Merchandise exports surged by 35 per cent and imports by 31 per cent on a customs basis in
the first two months of 2010, from a relatively low base in the prior-year period. Stronger
external demand for goods and services will have spillover effects throughout the economy.’

Manufacturing production in Singapore rose by just over 29 per cent in the first two months of
this year, the ADB noted. Fiscal policy has shifted focus from dealing with the recession and
the immediate recovery to the medium and long-term goals of upgrading the economy and
reducing dependence on foreign labor. Fiscal stimulus is being gradually removed.

‘Investment is forecast to rebound in 2010, stimulated by the better global trade and financial
climate and an accommodative monetary environment. Business confidence strengthened in
the second half of 2009. In particular, investment is expected to strengthen in financial and
business services, tourism, and manufacturing. Construction investment will be supported by
strong demand for residential property and the infrastructure projects.

Stronger Sing dollar won't hurt exports

A stronger Singapore dollar will not hurt Singapore's exports and turn away tourists,
according to Lim Hng Kiang, deputy chairman of the Monetary Authority of Singapore. He told
Parliament yesterday that a big chunk of the inputs that go into producing Singapore's
exports are imports that will become cheaper because of the appreciation of the Singapore
currency.

So lower production cost will help keep Singapore's export prices competitive in the long run,
even with a stronger Singapore dollar, Mr Lim said. For tourists, Mr Lim, who is also the
Minister of Trade and Industry, said while the exchange rate is a big factor that draws them
here, a bigger reason is Singapore's attractions. 'In the longer term, the steady appreciation
of the exchange rate is in line with our strong economic fundamentals,' he said. 'It keeps
inflation low and stable, which helps to preserve the purchasing power of Singaporeans'
income and savings.'

A stronger Singapore currency is expected to stem from the shift to tighter monetary policy
early this month. This also offers a stable and conductive environment for long-term
investments, boosting Singapore competitiveness and providing the basis for sustained
economic growth, Mr Lim said.

He said that being an open economy, Singapore adopts an exchange rate-centred monetary
policy to keep prices stable for economic growth over the medium term. 'Given the small and
open nature of our economy and our dependence on trade, the exchange rate has a
significant influence on domestic prices which, in turn, is critical for the economic decisions of
households and businesses,' Mr Lim said.

MAS's shift to a tighter monetary policy position is in keeping with a strong economic recovery
that's expected to continue, given an improved prospects for the global economy, he said.
The move was also timely to counter inflationary pressures that are likely to pick up with
rising global commodity prices and domestic costs, according to him. Mr Lim also said the
upward revision in economic growth projection for 2010 - from 4.5-6.5 per cent to 7-9 per
cent - doesn't suggest that, if realised, the economy will grow beyond its potential, which is
about 4-6 per cent.

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INTERNATIONAL TRADE
Singapore and EU complete first round of negotiations on free trade
agreement
12.3.2010 European Commission & Ministry of Trade and Industry, Singapore

SINGAPORE and the European Union (EU) completed the first round of negotiations on the
EU-Singapore Free Trade Agreement (EUSFTA), held in Singapore from 8 – 12 March 2010.
The EUSFTA marks a milestone in the EU’s longstanding relations with Singapore.

Negotiations on the FTA were officially launched by Minister for Trade and Industry Lim Hng
Kiang and EU Trade Commissioner Karel De Gucht in Singapore on 3 March 2010. The two
sides had constructive discussions on a range of issues. These include trade in goods, rules of
origin, trade remedies, trade in services and investment, intellectual property, government
procurement, customs procedures, sanitary and phytosanitary measures, technical barriers to
trade, competition, sustainable development and dispute settlement.

Singapore and the EU enjoy close economic ties, which will be boosted by the EUSFTA. The
EU is Singapore’s largest trading partner and foreign investor. Bilateral trade exceeded € 55
billion in 2008. Conversely, Singapore is the EU’s 15th largest trading partner and largest
trading partner among ASEAN states. Both sides also enjoy robust bilateral investment ties.
Over the years, Singapore and the EU have invested over € 100 billion in each other’s
economies.

Already today EU companies in many sectors have chosen Singapore as a hub from which to
serve the Pacific Rim region, and the FTA would seek to create additional trade and
investment opportunities. The ASEAN markets have been identified as priority markets for EU
exporters. Last December, EU Member States gave the green light for the Commission to
pursue negotiations towards free trade agreements with individual ASEAN countries,
beginning with Singapore.

Gazprom among big boys eyeing S’pore LNG trade

THE Big boys – such as Russia’s Gazprom, which has just set up operations here – are eyeing
trading liquefied natural (LNG) gas here, just as Singapore prepares to break ground at the en
of this month for its $1,5 billion LNG terminal. Gazprom Marketing and Trading (GM&T), a
subsidiary of the world’s biggest gas producer, is among several new Middle East and Russian
upstream players which reportedly entered the oil trading hub here recently.

Lawrence Wong, the CEO of Energy Market Authority – which took over the LNG project –
disclosed last November that it was in discussions with several international players which are
keen to trade LNG on a spot basis here, once the Jurong Island terminal starts up in 2013.
The LNG terminal here will have additional capacity from the start to allow traders to lease
capacity for temporary storage of LNG while waiting to re-export it to other markets
worldwide. There are also provisions in the terminal’s design for LNG reloading, the EMA said.
Singapore is well-placed to become a major player in the Asian LNG trade, Gazprom said,
adding that its new trading office here will allow it to leverage on Singapore’s strengths as a
major global shipping hub to LNG suppliers and customers in the region. Singapore’s LNG
terminal will have an initial capacity of 3.5 million tonnes per annum, with an option to
expand to 6 million tpa, especially if LNG trading ex-Singapore takes off.

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Singapore signs FTA with Costa Rica
7.4.2010 the business times

SINGAPORE and Costa Rica yesterday signed the Singapore-Costa Rica Free Trade Agreement
(SCRFTA), strengthening bilateral ties between the two countries. The agreement was signed
by Costa Rica's Minister for Foreign Trade, Marco Ruiz, and Singapore's Senior Minister of
State for Trade & Industry and Education, S Iswaran.

Both countries announced in December 2008 that they would negotiate a bilateral free-trade
agreement (FTA). Formal negotiations started last April and concluded after four rounds.
Under the agreement, Costa Rica will eliminate customs duties for 90.6 per cent of its tariff
lines, with the tariff on the remaining products to be eliminated over a period of 10 years.
Singapore will grant all imports from Costa Rica immediate duty-free access.

The agreement also covers increased trade facilitation, a liberalising framework, the
promotion of socio-economic development in both countries, and mutual commitment to
ensure that companies from either country can compete on an equal footing with domestic
suppliers for government procurement contracts, above certain thresholds. Costa Rica is
Singapore's eighth largest trading partner in Latin America, with trade in 2009 valued at
$413.7 million. Singapore is Costa Rica's second largest trading partner in South-east Asia,
and the largest destination for Costa Rican intelligent cards and medical prostheses in the
region.

S'pore and China commence review of China-Singapore FTA
15.4.2010 Ministry of Trade and Industry

Singapore and China have commenced the initial round of the 1st Review of the China-
Singapore Free Trade Agreement (CSFTA). The review was held in Singapore from 14-15 April
2010.

The CSFTA came into force on 1 January 2009 and is the first comprehensive bilateral FTA
that China has signed with an Asian country. The agreement marked a major milestone in
Singapore-China bilateral relations. Underscoring the strong bilateral relations between China
and Singapore, the CSFTA has brought significant benefits to both countries.

China is currently Singapore’s third largest trading partner and largest investment destination.
The review reaffirmed Singapore and China’s commitment to improve the quality and
smoothen the implementation of our bilateral trade agreement. During the review, officials
from both sides welcomed the CSFTA’s continued progress in boosting flows of goods,
services and investments in both directions.

RESEARCH AND INNOVATIONS
DNV Establishes Clean Technology Centre in Singapore
18.3.2010 Economic Development Board Singapore

The DNV Clean Technology Centre (CTC) in Singapore is a proposed 100-researcher centre
that will undertake R&D to help DNV develop new, Cleantech-specialised risk management
services in Singapore. These services include: (1) Technology qualification & certification; (2)
Risk Assessment; and (3) Asset Management. DNV plans to offer these services out of the

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CTC with a view that Singapore will be the designated Asia-Pacific hub for the incubation &
provision of these services

The DNV CTC will cover the following 6 cross-sectoral focus areas: (1) Clean Energy (New
technology areas include: Offshore wind, carbon capture & storage, etc); (2) Green Shipping
and Offshore Design; (3) Green Ports; (4) Climate Change Adaptation; (5) Carbon Market
Services; (6) Sustainable Cities and Urban Solutions

S’pore to host Asean economic research unit

SINGAPORE will be a home to a new independent economic surveillance office next year that
aims to prevent South-East Asia from falling into a financial crisis similar to the one that
gripped the region back in 1997.

This research unit – called the Asian-plus-three Macroeconomic Research Office (Amro) – will
be a ‘professional, objective and rigorous’ organisation, Prime Minister Lee Hsieng Loong said
yesterday as he described broadly what he hopes it can achieve. ‘It should be able to
command respect, give useful advice and be accepted as a basis on which countries can make
decisions, and whether or not and how to help a particular country in distress, ‘ he told the
Singapore media in Hanoi.

On Thursday, finance ministers from the 10-member Asean bloc announced that they were
committed to setting up Amro – the first such organisation in East Asia – by May 2011 in
Singapore. The high-power unit will see to the interests of the 10 Asean members together
with China, South Korea and Japan.

Eye research institute aims to be among world’s top 5

THE Singapore Eye Research Institute (SERI), an arm of the Singapore National Eye Centre
(SNEC), aims to be one of the world’s top five eye research institutes in five years.

As Asia plays a growing role in worldwide economic growth, the same thing will happen in
research, says SERI director Wong Tien Yin. ‘Asia is very important part of the equation and
Singapore has the ability to lead it,’ he says. ‘SERI prepared the ground for this for about 15
years before bio-medical research was identified in Singapore as a useful engine for growth.’

SERI is one of the largest eye and vision research institutes in the Asia-Pacific in terms of
staff numbers, grant income, the number of research initiatives and the output from such
projects, according to Prof Wong.

One area in which Singapore has an edge over other Asian countries is its multi-ethnic
population, he reckons: ‘Therapeutics and diagnostics that have been tested in the West may
not be directly applicable to Asia. While bigger and emerging markets such as China and India
offer lower costs, there are other issues to contend with in these countries, such as the
regulatory and legal framework and protection of intellectual property (IP) rights, he says.
Singapore, in the other hand, is known for clear government guidelines and strong IP
protection.

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Panasonic sets up R&D centre for new growth areas

PANASONIC Electronic Devices (PED) will spend $20 million over five years on a research-
and-development centre here that will be the first outside Japan to focus on new growth areas
such as medical and green electronics. ‘We are currently engaged in the audio-visual,
automotive, and computer and communications sectors,’ said PED managing director Hiroji
Okamoto. ‘Our strategy is to expand our services to the energy-oriented and medical
electronics industries. By serving these five different industries, we aim to be the world’s No 1
electronic devices manufacturer.

Trade and Industry Minister Lim Hng Kiang said at a ceremony yesterday that new growth
areas make for exciting times in the electronics industry. ‘These smart products currently
contribute about 10 per cent of Singapore’s electronics output,’ he said. ‘By 2020, we hope to
see that figure increase to 30 per cent. PED – through its Technology Development Centre
and focus on medical, energy and environmental applications – is well positioned to capitalise
on these growth areas.’

A*Star launches MEMS group for joint research

THE Institute of Microelectronics (IME), a research institute of the Agency for Science,
Technology and Research (A*Star), has announced the launch of the Micro-Electro-Mechanical
Systems (MEMS) Consortium. The MEMS Consortium will bring together eight multinational
corporations and local enterprises from the MEMS supply chain in public-private sector
research collaboration with the aim of growing the MEMS industry in Singapore.

The consortium has a wide spectrum of deep capabilities in research and development, wafer
fabrication, integrated device manufacturing, assembly and test, design and computer- aided
design, and equipment and materials. Supported by A*Star and the Singapore Economic
Development Board (EDB), the Consortium will develop a platform to share information and
techniques on standardising MEMS design, developing technical expertise to facilitate MEMS
development in Singapore, promoting collaboration among companies for an integrated
solution to MEMS manufacturing, and training manpower in MEMS-related technology.

The MEMS device market is an area experiencing rapid growth. Worth US$6.9 billion last year,
it is expected to grow at a compound annual growth rate of 12 per cent until 2014.

ENERGY
Experts recommend differentiating strategies for Singapore's Clean
Energy industry
3.3.2010 Economic Development Board Singapore

The International Advisory Panel on Clean Energy concludes that the Republic’s green plans
are well on track, and identifies focus areas to further strengthen the industry. Increasing
demand for cleaner and more sustainable technologies and solutions to combat global trends
like climate change, fossil fuel depletion and urbanization, has led Singapore to identify
Cleantech as a strategic economic growth area.

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With the Republic globally recognised as a city-state that has attained world-class standards
in environmental sustainability, Cleantech companies can leverage the nation's strong
infrastructure, capabilities and skilled manpower in electronics and semiconductor, chemicals
and precision engineering to develop, test and commercialise cutting-edge Clean Energy
solutions.

Identifying Electric Vehicles (EV), Smart Grids, Green Buildings and Districts, and Waste-to-
Energy as burgeoning sectors, the Panel urged Singapore to move quickly to capture
opportunities arising from these promising areas. Using the EV sector as an example, the IAP
suggested that the city-state take advantage of its strengths in infocomm technology,
electronics and power engineering to develop competencies in EV charging infrastructure,
vehicle diagnostics and energy storage. The IAP also affirmed the recent launch of an
Intelligent Energy Systems pilot in Singapore as an important test-bed that would help
advance the development of smart grid solutions in demand management, smart pricing and
create export opportunities.

Another promising area the IAP pointed out was Singapore’s expertise in systems-level
innovation. In this respect, the country can create a distinctive advantage by inviting
companies to use the nation as a “Living Lab” to create, demonstrate and commercialise
cutting-edge solutions here, before scaling-up for the rest of the world.

Lastly, the IAP urged Singapore to capitalise on its status as a model for sustainable urban
development in the region. Citing the nation’s success in water technologies as an example,
the Panel recommended that a framework be created to allow the nation to export its
expertise in sustainable development.

The IAP also endorsed the establishment of the Solar Energy Research Institute of Singapore
(SERIS), a world-class research facility jointly supported by the Singapore Economic
Development Board (EDB) and the National University of Singapore (NUS). With a total
budget of S$130 million (US$93.5 million), SERIS will be a technology vanguard for Singapore
in the area of industry-oriented research and development, and engage in collaborations with
the international solar industry. SERIS will also strengthen the country’s Clean Energy
industry ecosystem, developing cost-efficient, commercially viable solutions for solar
electricity generation (photovoltaics) and for energy-efficient buildings.

Best long-term options - solar, nuclear power

SOLAR and nuclear power are among Singapore's best options for electricity generation in the
long term. The two are part of the range of options to meet the challenges of the future, said
Senior Minister of State for Trade and Industry S. Iswaran. He told Parliament yesterday that
the nation remains exposed to the 'vicissitudes of global energy markets' because it imports
almost all of its energy. This means it will be affected by price volatility even as energy prices
continue to rise over the long term. Singapore is also affected by competition for energy
supplies and carbon constraints as part of a global climate change deal.

Solar energy has been touted as the best option for Singapore given the climate, although
there are obstacles as the cost of solar-generated electricity is still about twice that of grid
electricity and heavy cloud cover means it is unreliable.

The idea for studying the feasibility of nuclear energy was raised by the Economic Strategies
Committee and backed by the Government, but it has generated some public concern. Mr
Iswaran said the Government is considering the nuclear option now because it meets all three

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of its energy policy objectives: enhancing energy security, reducing carbon emissions and
mitigating the impact of volatile oil and gas prices.

'The Ministry of Trade and Industry will lead a multi-agency effort to undertake the feasibility
study, which will commence later this year. Mr Iswaran also said electricity imports could help
the country gain access to alternative energy sources such as hydropower and so free up
valuable land.

S’pore to still consider use of nuclear energy

MOVES for greater global efforts to tighten nuclear security would not affect Singapore’s plans
to consider the possible use of nuclear energy, Prime Minister Lee Hsien Loong has said in
Washington. A two-day summit nuclear security there ended on Tuesday with 47 world
leaders adopting a communique and work plan that would boost efforts to lock down or
destroy vulnerable atomic materials. Tjhe summit is part of United States President Barack
Obama’s broader plans to toughen the international regime against nuclear proliferation, and
to eventually rid the world of atomic weapons.

Asked if these developments would in any way affect Singapore’s plans to consider nuclear
power as a source of energy supply, Mr Lee said: ‘No, it doesn’t. Many countries use nuclear
power, and more wish to study the possibility. But there must be a proper safeguards as to
how the reactors work, how the materials are secured, and in fact what sort of materials to
use because there are reactors which use highly enriched uranium which can be used to make
bombs. ‘So these are considerations which we have to take seriously. But they should not
hinder the project.’

He stressed that final decision had not been made, and that government was just beginning
to study long term feasibility of nuclear power for Singapore.

Nuclear energy: Learning the ropes

PRIME Minister Lee Hsien Loong announced at the Nuclear Security Summit in Washington
recently that Singapore would soon begin 'a careful and rigorous examination of the technical,
economic and safety aspects of nuclear energy'.

Since both the technology and the economics of the energy industry are constantly changing,
the outcome of such a feasibility study is uncertain. But if Singapore does decide to go ahead,
the country will need to embark on capability building and manpower training immediately. A
decision not to go ahead, however, will not necessarily mean that the country has turned its
back on the nuclear energy option forever.

Nuclear power reactors are being built all over the world to satisfy electricity demand, ensure
energy security and address climate change concerns. Whatever the outcome of the feasibility
study, Singapore should build up its nuclear science and engineering capability in case it
needs to exercise the nuclear energy option in the future. A nuclear research reactor would be
a practical tool for training manpower. It would also provide opportunities for a variety of
peaceful applications.

Typically a nuclear power reactor costs $3 billion to $5 billion per installed gigawatt of
electrical generating capacity. International nuclear agencies expect nations constructing such
reactors to meet high safety standards. They are also required to have a disaster

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management plan, deal with radioactive waste, and comply with the international norms and
conventions. Regulators also require countries that construct such reactors to comply with
non-proliferation safeguards.

Vendors expect the host nation to provide the specifications, select a design and share the
financial risks and responsibilities. This implies that any nation aspiring to generate electricity
from nuclear power reactors needs to have a high level of in-house nuclear capability.
The best way to nurture such in-house capability is by 'learning by doing' - that is, by
investing in a reactor for research. Research reactors are designed to operate using low
enriched uranium so as not to pose nuclear proliferation threat.

According to the World Nuclear Association, the nations with the most nuclear power reactors
are the United States (104), France (58), Japan (54), Russia (32) and South Korea (20). All of
them began with research reactors. Asean countries such as Vietnam, Thailand, Indonesia
and Malaysia have been operating nuclear research reactors for decades.

Asia is now the most important builder of new nuclear power plants. This means that
Singapore needs to possess advanced sensing capabilities to detect nuclear accidents.
Singapore, being a major hub for international trade and best shipping practices, will also
have to further upgrade its ability to detect illegal transshipments of unauthorised nuclear
materials. Experienced staff working in a local research reactor would be able to help the
country meet many of these requirements, while ensuring that the country is well placed to
participate in the region's growing nuclear industry.

ENVIRONMENT
Singapore to go ahead with carbon emission cuts

THE Failure to reach a deal on climate change at Copenhagen last month will not stop
Singapore from implementing steps to reduce its carbon emissions, said Dr Yaacob Ibrahim,
the Minister for the Environment and Water Resources, yesterday. These measures,
announced under the Sustainable Singapore Blueprint launched last April, will reduce about 7
per cent to 11 per cent of Singapore’s emissions below business-as-usual (BAU) levels by
2020.

When legally binding climate change deal is finally reached, Singapore will implement
additional measures to achieve the full 16 percent reduction below BAU by 2020, as it
previously pledged to do, Dr Yaacob told Parliament. Still, climate change is a key issue for
many Asean countries as ‘we are collectively and individually vulnerable to the adverse impact
of global warming’, he added.

But Singapore is doing what it can to improve its resource efficiency and reduce carbon
footprint. In response to a request by NMP Mildred Tan, Dr Yaacob highlighted that $1 billion
has been set aside over five years to implement initiatives under the sustainable blueprint.

And since last April, various incentive schemed and other investments in sustainable
development have been announced. These include $100 million to improve the energy
efficiency of existing buildings, $43 million to implement cycling infrastructure in some HDB
towns, and $31 million to test-bed solar technology. A further $680 million has been allocated
to build new capabilities in clean-energy and water technologies – sectors that could create an
economic value-add of $3,4 billion and generate employment of 18 000 by 2015, he noted.

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Confucianism and moral sentiments

GO TO the website of any major corporation: You will definitely find somewhere the phrase
'Corporate Social Responsibility' or CSR for short. The perception is that CSR is a 'Western
value'. In fact, it is not an alien concept in the East. In a way, the idea of being 'morally
responsible' is echoed throughout Confucian literature.

Confucianism calls upon government to be responsible for the lives of its people, urging it to
focus on their 'natural morality' rather than impose rules on them. This idea pre-dates Adam
Smith's in the Theory Of Moral Sentiments, where Smith explains that shared values and
mutual understanding are necessary, if society is to function properly. The gambit of CSR may
have changed over the years but clearly the core values of 'being responsible' resonate
strongly in both Eastern and Western thought.

As the world is now emerging from the global financial crisis, CSR is not only relevant, but it
is also more important than it has ever been. The central question now is trust: The extent to
which we trust enterprises to be acting in the general interest of society will be key in
rebuilding confidence in market economies. Certainly, in Europe there is a firm belief that CSR
must be at the heart of strategies for growth, jobs and competitiveness.

CSR is essentially about companies going beyond minimum legal requirements; they must be
allowed the freedom to experiment and innovate. This approach is also reflected in the
policies of the Singaporean Government.

CSR does not need to be imported into Asia from Europe. The CSR movement is already
strong in Asia. Organisations in both regions understand that CSR is more than a question of
philanthropy and acknowledge the value of engagement with other businesses, public
institutions, community and development organisations.

Since the launch of the National Tripartite Initiative (NTI), Singapore has begun to focus on
the importance of CSR. More can always be achieved and Singapore is no stranger to
punching above its weight. More businesses and organisations need to realise that CSR is a
key to increased productivity and recognition. It represents a qualitative approach that makes
the most of the resources available to an organisation.

In the broader context, Asian and European companies can learn from one another. In today's
world, enterprises are born global even if they act locally. There needs to be a concerted
effort towards globally accepted standards in the complex field of CSR. Action in this area will
undoubtedly make businesses more competitive.

A convergence of views will also help to shape the nature of that competitiveness.
Competitiveness that comes with high social and environmental costs is neither desirable nor
sustainable. We need competitiveness models that are more sustainable and more equitable,
economically, socially and environmentally.

The concept of 'Responsible Competitiveness' helps to frame some of the challenges now
facing enterprises. It can help to address citizens' concerns over issues such as environmental
security and product safety. It can contribute to a healthy and harmonious domestic economy
and society. Any discussion about CSR cannot ignore the greatest challenge facing us today -
climate change. CSR activities can be important in minimising negative environmental actions.

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Benefits from riding the green wave
29.3.2010 The straits times

Eco-friendly workplaces are healthier and can result in cost savings

GOING green is all well and good - helps the planet and all that - but Singaporeans do not like
being denied their air-conditioning. Working in an eco-sound building can often seem more
like an endurance test in a sweatbox with desks. But employees at the Standard Chartered
(Stanchart), Citi and Xilinx offices at Changi Business Park have found that going green does
not have to be an ergonomic compromise. For them, working in a well-designed green office
means embracing the environment outside rather than being boxed in and away from it. It
means more windows to maximise natural lighting and ventilation, which also means the end
of jostling for once-rare window seats.

'Going green makes good business sense both financially and as part of a corporate's social
responsibility,' said Mr Ho Twee Teng, managing director of technology and operations at DBS
Bank. 'With better and cleaner surroundings, our organisation will benefit from healthier
employees.'

Indeed, more companies are starting to ride the green wave. Mr Tan Swee Yiow, chief
executive of Singapore Commercial at Keppel Land, observes 'an increasing trend for
multinational companies to include 'green' as one of the selection criteria when choosing office
buildings'. Keppel Land has pledged to achieve a minimum Green Mark Gold certification or its
equivalent for all its developments in Singapore and overseas, as a form of product
differentiation. Keppel does not charge higher rental costs for companies that choose
sustainable developments, Mr Tan said.

'The Green Lease is a two-way collaboration with the tenants whereby the landlord helps
them reach the centre's sustainability aspirations by providing consultancy, sustainability
tools and access to sustainable vendors and materials,' said Mr Philip Yim, development
manager of Lend Lease Retail.

The S’pore way of going green

Can Singapore play a significant role in today's worldwide green effort? It is often said that
Singapore is too small to matter globally. The Republic contributes less than 0.2 per cent of
total global carbon dioxide emissions and even if it were to achieve zero emissions, the effect
on climate change would be minuscule.

But Singapore's size has not prevented it from wanting to be, and being, environmentally
friendly. Singapore increased its green spaces by 10 per cent between 1986 and 2007. It also
reduced carbon intensity by about 30 per cent since 1990 by limiting transport growth;
switching from fuel oil to natural gas, the cleanest fossil fuel available, to produce electricity;
and by recycling more than half of Singapore's waste and incinerating much of the remainder
to provide electricity and reduce methane emissions from its landfill.

At the recently concluded Copenhagen Summit, Singapore committed itself to a 16 per cent
cut in increased emissions contingent on a legally binding global agreement being reached.
Singapore also signed and ratified the Kyoto Protocol.

Singapore can further advance the environmental agenda in two ways: First, by exporting the
Singapore model. The Republic can showcase how economic development can be pursued
while maintaining a certain degree of concern for the environment. Most of the future world

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population is likely to live in mega-cities. The key to sustainable development would lie in how
well these mega-cities balance economic and environmental needs. As a city-state that has
maintained environmental standards despite increasing affluence, Singapore offers ideas on
how to achieve success in both pursuits. Singapore is one of the first countries in the world to
experiment with managing traffic growth and road use via a quota and tax system. While the
various transport schemes primarily target congestion problems, they have also reduced air
pollution.

The second way in which Singapore can contribute to the green movement is to build up its
capacities in evaluating project proposals, and in monitoring and collecting environmental
data, especially where related to Singaporeans' attitudes. Successful environmental
protection entails lifestyle changes, which in turn requires people's cooperation. Singapore's
high recycling rate is due largely to industrial recycling; more needs to be done by the
household sector.

Nonetheless, there is some cause for optimism. Singaporeans are participating more actively
in environmental conservation and demanding a higher quality of life, including a greener
environment with more open spaces. Together with projected rising income levels, the
demand for a greener environment should continue to increase.

CHEMICAL INDUSTRY
Biomedical Sciences Companies Strengthen Partnerships with
Singapore to Address Industry Challenges
17.3.2010 Economic Development Board

Global biomedical sciences companies strengthened their partnerships with Singapore to
address the industry’s challenges in 2009, and Singapore is well-positioned to be their home-
base to harness Asia’s growing opportunities. Last year, Singapore’s biomedical
manufacturing output grew steadily to about S$21 billion and employed more than 13,000
people.

“The global biomedical sciences industry is confronted with the need to improve R&D
productivity. At the same time, they need to navigate Asia’s complexities and diversity to
effectively tap into the region’s fast-growing markets. As Asia’s leading bio-cluster, Singapore
is well-positioned to help biomedical sciences companies accelerate their innovation and
capitalise on Asia’s growth story,” said Mr Julian Ho, Assistant Managing Director, Singapore
Economic Development Board (EDB).

In 2009, global biomedical sciences companies have located strategic functions in Singapore
that include regional headquarters (e.g. Medtronic, Quintiles, Takeda), first-in-Asia and global
manufacturing facilities (e.g. GlaxoSmithKline, Illumina, Lonza, Medtronic, ResMed, Roche)
and R&D bases in Asia (e.g. Abbott, 3M, Merck, Roche, Inviragen, FORMA). These
investments will strengthen Singapore’s position as a strategic home-base to drive biomedical
sciences companies’ business expansion and innovation in Asia.
Biomedical sciences investments amounted to S$1.2 billion in total fixed asset investment and
S$700 million in total business spending in 2009. When fully implemented, they will create
more than 1,600 jobs for professionals, managers, engineers, research scientists and
engineers, and skilled workers. The investments will also contribute S$1.3 billion in value-
added per annum.

“The biomedical sciences sector provides exciting and meaningful jobs in a broad spectrum of

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activities across manufacturing, R&D and business management in headquarters for
Singaporeans across all education levels. It is an opportunity for Singaporeans to participate
in shaping the future of human healthcare,” added Mr Ho.

S'pore top choice for biomed hires in region: Survey

SINGAPORE is the top destination for biomedical science professionals in the region, according
to a recent survey by recruitment agency RSA Singapore.

The country's strong biomed industry, good standard of living, security and favourable tax
regime propelled it to first place in the survey. China was second, and Australia third. RSA
Singapore, which recruits for the sector, conducted two surveys - one regional and one
international - earlier this year and polled more than 420 professionals. It said the findings
support a trend it has observed over the past several years showing that Asia's biomed
industry continues to grow despite firms in Europe and the United States consolidating or
downsizing.

The regional survey also found that respondents were positive about the outlook for the
biomedical sciences industry this year, with all expecting salary rises. Half of those surveyed
expected pay rises of 30 per cent to 50 per cent. This compares well to the last two years,
when biomedical companies both locally and around the region saw salary and headcount
freezes, said the report. In its international survey, an overwhelming 90 per cent of
respondents cited talent management as a top priority.

The robust job market in Singapore was underlined by the Economic Development Board
(EDB) this week, when it noted that there were about 900 new positions in biomedical
manufacturing alone last year. The jobs included both senior and entry-level positions. The
EDB tipped that the industry's output - which was $20.7 billion last year - should hit its target
of $25 billion by 2015. Growth this year could also come in at 5 per cent to 10 per cent.

While there is no lack of opportunities, the question of talent is a potential stumbling block,
according to ScienTec Consulting, a human resource specialist in biomed. It reported a 65 per
cent increase in the last two years for senior hires in the local biomed industry. 'Lack of talent
with both leadership and specialised biomedical sciences background are the main reasons
companies look for talent from places like Australia, Europe and the US,' said ScienTec
managing director Karen Tok.

Seeking foreign expertise in innovation

SINGAPORE’S ambition to become the Biopolis of Asia – an international biomedical sciences
cluster – requires establishing key building blocks in various related sectors, one of which is
medical technology (meditech) industry.

As far back as a decade ago, the Economic Development Board was working towards this goal
by encouraging overseas partnerships to facilitate innovation and knowledge transfer.
According to Leow Swee Heng, managing director of MEMS, EDB facilitated business
networking in the life sciences sector by helping match local SMES with potential overseas
customers and partners.

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The drive to encourage collaboration with overseas experts gave Mr Leow the opportunity to
apply his precision engineering skills from close to 10 years in the hard disk drive sector to
the fast-growing industry.

MEMS, set up in 2003, aims to provide automation solutions through a small and highly
skilled work force made up of professionals from the biomedical, precision engineering and
manufacturing industries. Its services include mechanical design, software development, IP
development and build-to–print projects.

Asked about the challenges faced buy local medtech manufacturing companies, Mr Leow said
one is the inclination of local hospitals and clinical laboratories to turn to overseas
manufacturers for equipment. Due to lacjk of awareness about the capabilities of local
medtech manufacturing companies, these companies often have to test their products
overseas. To overcome this, Mr Leow encouraged companies to establish overseas
partnerships to facilitate technology transfer.

Singapore draws global contract clinical research organisations
3.3.2010 Singapore Economic Development Board

The Republic presents a home base for these companies to effectively harness Asia’s fast
expanding markets.

Global contract clinical research organisations (CROs) are presented with tremendous growth
opportunities, as pharmaceutical and biotech companies increasingly tap on external research
resources, and Asia’s demand for cost-effective and efficacious medicines continue to expand.
Amidst these developments, Singapore is well positioned to offer innovative supporting tools
and strong capabilities in clinical research. Recognising the Republic’s advantages, leading
pharmaceutical and biotech companies and CROs are expanding their operations in the
nation, and locating strategic regional headquarters functions to drive their business
expansion and innovation in Asia.

Today, Singapore has established a core base of 20 leading CROs and pharmaceutical
companies (e.g. Quintiles, Covance, Bayer, Merck, Pfizer) that manage regional clinical trials
from the city-state. These international CROs offer a wide range of services, ranging from
Phase I to pharmacovigilance studies, while some are setting up innovative biomarker
discovery and validation services. As these companies seek to harness the growing base of
clinical research carried out in Asia, they are expanding their operations in Singapore, where
they can better leverage the region’s growth opportunities.

“Singapore has become a regional hub for drug development in Asia-Pacific and we now have
the capacity, the range of testing services and, above all, a highly experienced team of lab
professionals to support the growth of clinical trials in the region,” says Bob Scott-Edwards,
President, Icon Central Laboratories.

Besides growing their presence in Singapore, global pharmaceutical companies and CROs are
also locating and expanding their regional headquarters in the country. As companies expand
their clinical research activities in Singapore, they can now be assured that data from pre-
clinical trials conducted in Good Laboratory Practice (GLP)-compliant facilities will be accepted
by 30 OECD and non-OECD members that include the United States, European Union and
Japan.

Companies can now fully leverage Singapore’s GLP-compliant testing facilities to accelerate
their drug discovery and development activities, and shorten their time-to-market for new
products. Maccine, an internationally recognised contract research organisation, is one of the
GLP-compliant facilities that companies can work with in Singapore.

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“This affirmation enhances Singapore’s reputation for quality. Companies in the
pharmaceutical and biotechnology businesses can now submit safety data generated by
Singapore-based research organisations to regulatory bodies in OECD countries. This will
accelerate companies’ R&D across markets,” says Tan Choon Shian, Deputy Managing
Director, Singapore Economic Development Board.

INDUSTRY AND COMPANIES
S'pore banking sector outlook stable: Moody's

THE long-term credit ratings of the three Singapore-listed banks are still at risk despite the
recovery of the economy, mainly due to the banks' large overseas exposure, rating agency
Moody's said yesterday.

The outlook for the Singapore banking sector over the next 12-18 months is stable, but the
outlook for the long-term credit ratings of all three Singapore banks is negative, Moody's
Investors Service said in a new report. Fourth-quarter earnings at DBS Group, OCBC Bank
and United Overseas Bank exceeded analysts' expectations last month, boosted by a mix of
trading gains and a steep drop in charges for bad loans as economic conditions improved. All
three banks signaled improved earnings prospects for 2010 and a renewed push for loans
growth.

The banks have been more resilient than some of their larger international rivals throughout
the financial crisis and have maintained 'very liquid and well-capitalised balance sheets',
Moody's said. But 'all three banks also have significant exposure outside of Singapore - mostly
in East Asia, but also in the other parts of the world', said Christine Kuo, a vice-president and
senior analyst at Moody's in Singapore.

The report also highlights the Singapore banks' large exposure to the property sector as a
risk. 'We are wary of the negative impact a return of inflationary pressures could bring to
banks' asset quality, as the pace of recovery picks up in the regional economies over the next
12-18 months,' Moody's said.

Overall, however, the ongoing economic recovery in Singapore and elsewhere means better
prospects for the banks, Moody's said, with demand for loans and trade financing expected to
rise in the coming months, even as bad-loan charges fall.

Investment boost seen for electronics this year: EDB

Vital electronics sector is back in growth mode and companies are expected to make
significant investments in manufacturing activities this year, according to the Singapore
Economic Development Board (EDB). Damian Chan, EDB's director for electronics, told BT
that Singapore can expect to see companies making significant investments in capital and
knowledge-intensive manufacturing activities such as wafer fabrication and hard disk media
this year and beyond. Data released by EDB last Friday showed that the electronics cluster
grew 56.5 per cent in February on a year-on-year basis. For the first two months, the
cumulative output of the electronics cluster was 68.8 per cent higher than for the same period
last year.

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The semiconductor segment continued to perform strongly, growing 96.7 per cent in February
on the back of higher export demand, coupled with the low-base effect in the same period last
year. As BT reported earlier, the semiconductor industry body, SEMI, has said the South-east
Asian semiconductor capital equipment market - of which Singapore is an important
component - is expected to grow 65 per cent to US$2.31 billion this year, after shrinking 46
per cent in 2009. This signals new capacity building will happen this year and a lot of it is
likely to be in Singapore, the region's biggest market. February's NODX (non- oil domestic
exports) data showed the electronics sector grew a healthy 26 per cent. And this came on top
of 23 per cent growth in January.

Increased exports directly lead to more investment and job creation, which is what many
industry watchers are hoping to see this year. Mr Chan noted that manufacturing activities are
important for Singapore due to their capital, knowledge and innovation-intensive nature. In
addition, they create spin-offs for other support sectors, such as precision engineering and
speciality chemicals, he added.

Despite a weak economy last year, Singapore's electronics industry held up relatively well.
The announced investment projects in 2009 are expected to contribute $4.9 billion in fixed
asset investment (FAI), $1.8 billion in total business spending and $1.8 billion in value added
per annum to Singapore's GDP when they are fully implemented. Notably, FAI commitments
in electronics accounted for 41.5 per cent of Singapore's total manufacturing FAI in 2009.
Some 2,800 skilled jobs are also expected to be created, Mr Chan said. The EDB official noted
that manufacturing will continue to be a cornerstone of Singapore's electronics industry.

Singapore's dynamic electronics industry is poised for further
development
3.3.2010 The Singapore Economic Development Board

The Republic’s full value chain of activities, supportive government and new growth areas look
set to seal the country's industrial future.

Singapore’s electronics industry has been an important pillar of the country’s economy over
the last 40 years. It is also a key demand driver for the chemicals, logistics and precision
engineering industries, as well as an important capability enabler for various sectors like
avionics, medical technology and clean energy.

As a testament to its strengths, top electronic companies have chosen the city state as a base
for their activities in manufacturing, supply chain management and regional headquarters
responsibilities. The country holds global leadership positions in several sectors like
semiconductors and hard disk media, while it also hosts a range of R&D activities, such as
component and product development.

Thanks to Singapore’s capabilities, the city-state has attracted more high quality projects in
2009 which are capital-, knowledge- and innovation-intensive. And with the Singapore
Economic Development Board’s (EDB) continued focus on R&D and product development
projects, high-paying jobs and careers for the country's workforce will be created.

Riding on Asia’s manufacturing wave, Singapore has become a world-class electronics
manufacturing hub with end-to-end R&D capabilities. Presently, the industry is made up of
various important strands. The biggest area is in semiconductors, which consists of integrated
circuit (IC) design, wafer fabrication and assembly and test activities. The sector employs
around 3,500 R&D engineers working on IC design, process development, packaging and test
engineering and embedded software development.

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Another sector is electronics components, which is composed of six groups: advanced
substrates; batteries and power electronics systems; display; passive components; storage;
and peripherals. The electronics systems industry, responsible for network storage solutions,
electronics manufacturing services (EMS) and consumer electronics and lighting, is another
contributor to the success of Singapore’s electronics industry.

The fourth pillar in this industry is infocomm product manufacturing, which includes
computing hardware like PCs, servers, point-of-sales equipment, mobile phones and data
networking equipment. The nation’s strong capabilities in this sector mean that it will continue
to be the preferred location for companies to create and manage new markets, products,
processes and applications.

Looking ahead, EDB has identified four growth areas for the industry – green electronics,
bioelectronics, plastic electronics and security products. Currently, these smart products
contribute about 10 per cent of the country’s electronics output, but that figure is now
targeted to increase to 30 percent by 2020.

Green electronics refer to energy efficient solutions for applications such as lighting,
automotive and computing. Another novel method of reducing reliance on traditional sources
of energy is through energy harvesting. Such IC designs are able to capture and convert
ambient energy into electricity.

Improving healthcare remains a top priority, and developing bioelectronics will be beneficial
for all. Singapore is ready to propel this new growth segment forward with its base of core
electronics capabilities and existing strengths in material physics and biotechnology.

Plastic electronics refer to circuitry created out of conductive ink which uses a wide variety of
printing technologies. It is used in next generation devices such as portable multimedia
displays, low-cost solar cells, photo-sensors and printed flexible batteries.

Another type of electronic product that will be in demand are those for security purposes.
Developing this area means incorporating electronics into sophisticated security solutions such
as video surveillance cameras and biometrics or access control. What’s more, these products
aim to increase the safety that surrounds electronically transmitted information and create
measures to protect people and equipment.

Seeking business? Head to Africa, SEA firms urged

BUSINESS opportunities abound in Africa, speakers at an Africa and South-east Asia Business
Forum said yesterday. They urged South-east Asian firms to capitalise on hot investment
opportunities on the continent in fields like renewable energy, the management of seaports
and airports and water treatment.

Yesterday’s forum heard that Togo, which is expanding the capacity of its seaports, is seeking
partners for their construction and management. With the deepest seaports in West Africa,
the country is a regional commercial and trade centre, exporting goods to landlocked African
nations. In another West African nation, Mali, Singapore firms could seek a role in building
and running a proposed new airport.

Singapore firms in the renewable energy sector can look to a US$1 billion (S$1.4 billion) fund
set up by the government of South Africa, African Development Bank, World Bank and the
International Finance Corporation among others, intended for investment in energy efficiency.

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Companies operating in the areas of banking, software development, agriculture and
petroleum are also greatly sought after in Africa, speakers said. No other market offers as
high a rate of return as Africa, Singapore's High Commissioner to Nigeria, Mr Shabbir
Hassanbhai, said, citing investment returns of between 20 and 30 per cent.

Many companies strike off Africa as an investment option owing to a negative impression
created by the media, speakers said. However, many African nations have seen an
exponential improvement in the past decade, and the risk of doing business there is the same
as in any other emerging market. Those planning to invest in Africa are advised to: first,
develop a strategy; second, make the right business connections; and third, gain more
knowledge by personally venturing to the continent.

S'pore firms reacting to China's development

Foreign investments flowing into China increasingly head for its rapidly developing non-
coastal regions. Singapore companies have been part of this shift - though not as quickly.
Western and northern provinces such as Tianjin, Sichuan and Shaanxi ranked among the top
10 destinations for Singapore investments in China in 2008, according to figures from the
respective provinces and municipal cities. Just five years ago, none had made that list. Others
such as Liaoning and Shandong have also risen in the ranks.

But there is much potential yet for Singapore's investments to grow in these regions. In west
China, Singapore is now Sichuan's top country investor as investment growth mirrored the
recent sharp spikes in worldwide foreign direct investment (FDI) into the province. But
Singapore investment into Shaanxi, whose capital Xi'an is set to be a high-tech base, and
high growth Chongqing, has not risen as quickly as total FDI from elsewhere in the world.

China's central government's regional development plans - the 'Go West' strategy and
preferential policies to revitalise the north-east - have a large part to play in the shifting FDI
flows. IE Singapore group director for China Ignatius Lim observed three sweeping trends
parallel to these developments, which Singapore companies might capitalise on: rapid
urbanisation, changing demographic anchors of consumption, and shifts in the geographical
centres of production.

Soh Swee Ping, IE Singapore's regional director for West China, China Group, said that
changes in local authorities' stance are favorable to Singapore's SMEs too: 'In the past, they
were more focused on the big MNCs and huge projects, but now they are willing to speak to
congregated players from a single country as the government recognises that these
companies' good experiences of investing in the city would be a good marketing tool for the
city as well.' For north China, key opportunities arise out of the rising urbanisation and
affluence of the population.

Big jump in firms’ intangible asset value

AN ANNUAL study has revealed a strong post-crisis rebound in the increasingly important
intangible asset value of Singapore’s listed companies. These non-physical assets include a
company’s reputation, branding and intellectual property.

This figure had shot up 38.8 per cent to US$163 billion (S$227 billion) as of the end of last
year, consultancy Brand Finance said. Although the figure has not returned to pre-crisis 2007
levels, the rebound is in line with the economic recovery.

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The report also highlighted the growth in intangible assets disclosed on company balance
sheets, such as trademarks and licenses, to US$27 billion, a rise of US$1.6 billion from the
figure in 2008. ‘Slowly but steadily, Singapore companies are acknowledging the importance
of acquiring intellectual property for growth and expansion,’ said the report.

The study also found that the total enterprise value of Singapore’s top 10 sectors had grown.
The top 10 sectors here are banking, agri-business, real estate, telecommunications,
engineering and construction, hospitality, transportation, distribution, holding companies
(diversified businesses), and electronics. This figure now stands at US$299 billion,
representing 71.5 per cent of Singapore’s total enterprise value of US$418.5 billion. It is just
5 per cent short of the pre-recession levels in 2007.

Banking, the worst hit sector during the global financial crisis, remained the largest sector last
year with an enterprise value of US$84.7 billion, a rise of 92 per cent from the previous year’s
figure. The agri-business sector saw the largest growth, with a 113 per cent rise in enterprise
value. This makes it the second largest sector here at US$44.3 billion.

The Brand Finance report also revealed the top 100 brands in the Republic, with Singapore
Airlines once again topping the chart with a brand value of S$5.135 billion. Rounding up the
top five brands here are Wilmar International, DBS Group holdings, Keppel Corp and SingTel.

CONSTRUCTION BUSINESS
Construction sector to get $250m boost

THE construction sector, under pressure from impending hikes in foreign worker levies, will
soon get a $250 million shot in the arm to adopt new technology and upgrade its capability.
The money will be spent on upgrading courses, skills assessments of workers, as well as
scholarships to attract more local professionals, managers, executives and technicians to join
the sector.

Companies will get funds to adopt new technology and equipment, like moving scaffolds
instead of static ones, or cable-pulling machines that reduce the number of workers needed to
lay underground cables. Firms will also get aid to take on higher-value and more complex
projects, through funding for postgraduate scholarship programmes and immersion
programmes. All the money will be disbursed on a co-funding basis, to encourage firms to
take ownership of their upgrading.

The construction sector is the biggest target of a concerted push by the Government to make
the economy more efficient. It employs more than 200,000 mostly low-skilled foreign
workers. The easy availability of cheap foreign labour, coupled with reluctance by locals to go
into the trade, has caused the industry to lag behind others in productivity.

The $250 million devoted to the construction sector makes up a quarter of the new $1 billion
National Productivity Fund announced last month. This is on top of a new 250 per cent tax
deduction on any investments companies make on innovation.

The construction sector is widely expected to be hit hard by the increased foreign worker levy,
which will be raised in phases over the next three years. From July 1, the levy for most work
permit holders will go up by between $10 and $30 a month. A new tiered structure - to kick in

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by next year - will also make it more expensive for construction firms to hire less-skilled
workers. Ms Fu yesterday estimated the levy hike could cause 1 per cent to 2 per cent
increase in costs for the construction industry.

Other than increasing the levy, the Building and Construction Authority intends to nudge
contractors towards efficiency in another way: by cutting the number of workers they can
import for their projects. These manpower entitlement cuts will be phased in from July, to hit
25 per cent by 2012. Singapore's construction demand peaked at $36 billion in 2008 and
dropped to $21 billion last year. For the next three years, it is expected to range between $18
billion and $27 billion.

$15m boost for green building practices

THE building industry got a leg up in its recycling efforts yesterday with the launch of a $15
million fund to help companies adopt more sustainable processes. Demolition contractors,
recyclers and ready-mixed concrete suppliers can now tap the Sustainable Construction
Capability Development Fund to introduce and upgrade their recycled building products, said
Senior Minister of State for National Development Grace Fu. If need be, the Government may
look into topping up the fund in the future, she said, speaking at the opening of a recycling
technology project by local company Samwoh Corporation.

The Building and Construction Authority plans to increase demand for recycled materials by
requiring building owners aiming for the top grades of its environmentally friendly building
programme to adopt sustainable construction methods. Currently, those aiming for the
'Goldplus' and 'Platinum' standards under its Green Mark scheme can opt out of these
measures by beefing up other areas such as greenery and accessibility to public transport.
But the changes make mandatory a prescribed minimum level of effort in this regard.

To give users more confidence in the reliability of recycled concrete, the Government will also,
from October, require all ready-mixed concrete makers for the Singapore market to be
certified according to new standards. Ms Fu said the industry has 'a long way to go' in
adopting more sustainable processes. 'We need both the regulators as well as industry
players, both the suppliers as well as developers and constructers, to come together,' she
added.

Singapore imports almost all of its construction materials like granite aggregate and sand,
which are major components of concrete. Recent supply disruptions, rising material costs and
shrinking landfill space have made the task of recycling demolition and construction waste
urgent. The National Environment Agency said 98 per cent of construction and demolition
waste was recycled last year.

TRANSPORT
Marine insurance starts to recover

NOT spared the rippling effects of last year's global recession, marine insurance took a
beating as trade and cargo volumes plunged. It is only gradually beginning to recover.
Last year, marine cargo premiums fell nearly 30 per cent from 2008, says Satoshi Hanzawa,
managing director of Sompo Japan (Singapore).

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Anwar Bin Saadan, regional marine risk manager for QBE International, 'Basically, you have
less cargo move, which means we underwrite less cargo. On the vessels' end, if they have
less cargo to ship and are laid up not doing anything, we will see lower volumes too.' He
estimates that premiums fell about 10 per cent last year too, but compared to the larger drop
in cargo volumes, it wasn't so bad, and his unit still managed to turn in a profit. Marine
insurers are now counting on revived consumption to trigger a resumption of production at
the manufacturers' end, which they hope will lead to more trading.

Mr Hanzawa thinks that the sharp decline of the motor industry this recession has had an
especially large impact on marine cargo insurance. And, as that industry has not recovered as
quickly, recovery in the marine insurance sector has been tepid too. 'At the moment, the
home electronics industries are picking up rapidly and helping marine cargo insurance, but
not motor.'

Sharpening S’pore’s maritime edge

The government is continuing its efforts to make S’pore a one-stop shop for all in the cluster
– one of its backbone industries.

A leading international maritime centre (IMC) comprises many components. Among these
would be a large port, serving a hinterland as a transshipment hub, a thriving cruise and
recreational sailing market, busy shipyards and a strong representation of international ship-
owners/operators.

Underlying all these would be a comprehensive community of specialised maritime service
providers providing ship financing, ship broking, accounting and legal services (including
arbitration), ship management, insurance, ship classification services, etc. There should also
be the presence of reputable training institutions to ensure that the IMC sector is supplied
with the right caliber of well trained people.

The most helpful role of the government has been to provide attractive business policies to
strengthen Singapore as a leading IMC. This cluster contributes at least 7 per cent to
Singapore’s annual GDP. As Singapore’s ports, shipyards and shipping industry are well
developed and world-class, the 2010 Budget announcements for the maritime sector were
meant to give a leg-up for the ancillary support services sector in the field of ship financing,
ship management and ship broking, as well as that of trading of forward freight agreements
(FFAs).

Bridging S'pore and Johor with trains, water taxis

EFFICIENT trains and water taxis - not building another bridge - are the best solutions to
enable more people to commute between Johor and Singapore quickly. This is the view of
Iskandar Investment president and chief executive Arlida Ariff, who said that the future
growth of the tourism sector for both places would largely depend on jointly providing an
efficient public transportation system that could cater to the ever-increasing numbers of
people making the trip across.

'People choose private transportation because it's the easiest, but future growth cannot
depend on this. We need public systems that include the rail and waterways,' she said. Johor
ruler Sultan Ibrahim Ismail ignited a long-standing debate recently when he suggested that a
bridge should replace the Causeway to boost connectivity between Malaysia and Singapore.

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Said Ms Arlida: 'Trains would be the best because it's fast, easy and safe. The trains can take
you right into the city. The biggest stumbling block, however, is how to connect (the two
sides), which makes it a bilateral issue.'

An idea bandied about by her team at Iskandar Malaysia is having a water taxi service that
can ferry tourists from hotels in Iskandar to major tourist attractions in Singapore, such as
the two integrated resorts.

Strongest growth in 6 years for Changi Airport

Changi Airport registered the strongest growth in six years in February, when passenger
numbers shot up 21.5 per cent year on year to 3.11 million, helped by the Chinese New Year
holiday and the Singapore Airshow. It was the seventh straight month of growth as the
industry rebounds from a slump that began in late 2008.

In January, Changi's passenger throughput grew 10.1 per cent to 3.38 million people. At 6.49
million passengers, combined throughput for January and February translates to a 15.3 per
cent jump from the same period in 2009.

February's growth was driven by full-service carriers (FSCs) and low-cost carriers (LCCs).
FSCs chalked up the first double-digit increase - a 12.8 per cent rise in traffic - since the
economic downturn began. Last year, LCCs provided solid support as they continued to add
flights and launch new routes during the downturn, when the FSCs were grounding planes
and cutting capacity.

Traffic to and from all of Singapore's top 10 country markets posted year-on-year growth in
February. Services to and from Indonesia, Malaysia, Thailand, Hong Kong and China chalked
up particularly strong growth. Aircraft movements were also up, climbing 11.4 per cent year
on year to 19,617 for the month, with FSCs and LCCs showing increases. LCCs accounted for
almost 28 per cent of all flights at Changi in February. On the cargo front, air-freight
throughput in February was up 16.2 per cent year on year to 130,578 tonnes. For January
and February combined, air freight was 271,637 tonnes, which was 18.4 per cent higher than
the same period in 2009. As at March 1, Changi was served by 84 airlines operating 5,000
flights to some 200 cities in 60 countries and territories.

TOURISM INDUSTRY
Singapore’s tourism sector overview
19.2.2010 Economic Survey by Economics and Strategy Division, Ministry of Trade
and Industry

Singapore’s tourism sector has shown a certain degree of resilience during the recent
recession. Visitor arrivals recovered strongly in the second half of 2009 on the back of the
global economic recovery and various initiatives implemented by the Singapore Tourism
Board to promote Singapore as a tourist destination. In fact, monthly visitors to Singapore hit
an all-time high of 971,452 pax in December 2009. Compared to the 1997/98 recession, the
decline in visitor arrivals during the recent crisis was less severe and the recovery was faster.
This can largely be attributed to the resilience seen in visitor arrivals from ASEAN source
markets which helped to cushion the slowdown in other markets.

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Looking forward, the prospects for the tourism sector are positive. The global tourism outlook
has improved, with the United Nations World Tourism Organisation (UNWTO) recently
upgrading its growth forecast of global tourist arrivals to 3 – 4 per cent in 2010. In fact, the
UNWTO expects arrivals into Asia to show the strongest rebound.

S'pore, Vietnam work on aviation, cruise tourism

SINGAPORE and Vietnam are looking to cooperate further in the aviation and cruise tourism
sectors, as well as have Vietnamese companies dual-list here. Minister for Trade and Industry
Lim Hng Kiang and Vietnam's Minister of Planning and Investment Vo Hong Phuc discussed
these issues at the fifth Connectivity Ministerial Meeting held in Vietnam on Saturday.

Talks could soon be underway between Singapore Cruise Centre and Vietnam's Da Nang Port
Holding on a possible collaboration in the Port of Da Nang, after both parties signed a
Memorandum of Understanding at the sidelines of the meeting. A statement from the Ministry
of Trade and Industry (MTI) said that Mr Lim had encouraged Vietnam to continue developing
ports of call to tap into the region's growing cruise tourism industry. Within the aviation
sector, there may be room for greater liberalisation in the passenger and freighter services
segments, the statement added.

This comes after the two countries liberalised the air access for passenger services ahead of a
plan shared among Asean members to phase in unlimited passenger services among capital
cities by the end of the year.

From mind to heart and spirit

MENTION Singapore and chances are most people would think of a country that has sound
policies, good infrastructure, is safe, reliable and efficient. But such core strengths are no
longer sufficient to set Singapore apart in the global war to woo talent and investments,
Acting Minister for Information, Communications and the Arts Lui Tuck Yew noted yesterday.
He revealed that Singapore intends to embark on a new national effort to brand the country
differently, with a message that goes beyond those which just appeal to the intellect and the
mind.

'We need also to have a message that reaches out, that touches the heart, moves the spirit
and stirs emotions...,' he said at a public communications conference organised by the Civil
Service College. 'These are the qualities we need to work on. We need to better strengthen
and position ourselves going forward. It is not to dilute the brand we built up over the years,
for which people know us well. But it is evolving the brand so that it offers far more than what
people know of us in the 80s and in the 90s.'

Agencies have already branded Singapore in various ways, with taglines such as 'Uniquely
Singapore', and 'Your Singapore, City in the Garden, World of Opportunities'. Rear-Admiral
(NS) Lui said such individual campaigns have been successful to some degree, but 'none has
shown how broad the richness of what Singapore has to offer as a whole'.

Singapore had to ensure its brand is something the country can live up to. To provide people
with a brand to remember and which is consistent and true requires the Government to have
a common brand platform - a task lying with the national marketing team at his ministry.

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