Singapore has confidence in India’s growth and wants to increase collaboration with the South Asian country in areas such as skills development and urban infrastructure, Singapore Deputy Prime Minister Tharman Shanmugaratnam told a symposium in Mumbai.
“Macroeconomic stability” has returned to India, Mr Tharman noted, adding that the two countries can learn from each other through deeper collaboration.
“It frankly gives me confidence in India, not just based on what has been happening in the last few years of GDP growth above 7 per cent, but confidence that this is now a new journey that we in Singapore want to be part of, contribute to and want to benefit from at the same time,” he said, listing financial connectivity, air connectivity, education and skills and smart cities as areas of further collaboration.
He also noted that the focus in countries should be on “fundamentals of the real economy which have to do with skills, technology, and connectivity”.
Mr Tharman, who is also Coordinating Minister for Economic and Social Policies, was speaking at the Singapore Symposium on Partnering for Growth in Uncertain Times yesterday.
About 250 mostly business leaders and policymakers were at the event organised by the Institute of South Asian Studies (ISAS) of the National University of Singapore. Its local partner was the Confederation of Indian Industry.
Singapore and India have close political and economic ties which grew after they inked a Comprehensive Economic Cooperation Agreement in 2005. Singapore is among the top foreign investors in India, contributing US$5.98 billion (S$8 billion) in foreign direct investment in 2014.
Recent collaborations include developing two townships and setting up a skills centre in the northern desert state of Rajasthan and helping southern Andhra Pradesh state to build its new capital city.
Mr Tharman, who had an interactive session with India’s central bank governor Raghuram Rajan, called for greater coordination against exchange rate volatility.
“We can’t keep hoping that the US Fed will postpone normalisation of interest rates,” he said.
“Emerging markets especially will be on the receiving end of the volatility in exchange rates and capital flows,” he noted.
“So what we need, for a period, is some form of coordination with regard to the major exchange rates.”
Mr Tharman’s remarks came before Group of 20 officials meet in Washington next week to discuss the state of the global economy.
Competitive currency devaluation has been a key area of discussion and an area particularly worrying for emerging economies.
Mr Rajan, who noted that the Reserve Bank of India had intervened to reduce volatility in the rupee, said India’s aim “was to make the exchange rate less and less an issue that investors have to worry about”.
He said he appreciated some of the steps taken by Singapore, highlighting in particular the govern- ment’s move to set aside money for the education of Singaporeans.
The Singapore Symposium has been a forum for discussions on bilateral and world issues.
The first two editions were held in New Delhi in 2009 and 2012 and helmed by former prime minister Lee Kuan Yew and Prime Minister Lee Hsien Loong, respectively.
In the wake of the leak of the so-called Panama Papers, which showed that about 500 Indians had offshore assets, the issue has been in focus in India.
Fielding a question on whether Singapore is emerging as a tax haven for Indians, Mr Tharman noted that the Republic is an open country.
“Singapore is totally open to scrutiny.
We are not some shady offshore centre. Everyone should be open to scrutiny, and that includes the state-level jurisdiction within the US. We don’t protect any holy cows in Singapore,” he said.
This article was first published on April 9, 2016.
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