Interview with Mr S.S. Teo

Attention started pouring in from the region and beyond with the revival of the ancient Silk Road. The announcement of the land-based Silk Road Economic Belt (SREB) during Chinese President Xi Jinping’s visit to Kazakhstan in September 2013 was shortly followed by his proposed construction of the 21st Century Maritime Silk Road (MSR) to facilitate greater cooperation between China and ASEAN a month later in Indonesia.

This year marks the silver jubilee milestone for the bilateral ties between China and Singapore. Mr S.S. Teo, Chairman of the Singapore Business Federation (SBF), Managing Director of Pacific International Lines (PIL) and Chairman of the Board and Governing Council of the Singapore Maritime Institute (SMI), took the opportunity to discuss Singapore’s role in the strategic initiative at the inaugural Singapore Regional Business Forum on 27 July that was attended by over 400 diplomats, policy-makers, academia and business leaders.

SMI had the opportunity to speak to Mr Teo on the 21st Century MSR under SMI Horizon, a series of commentaries, interviews and analysis by distinguished academic & industry thought leaders.

1. President Xi Jinping spoke of the “21st Century Maritime Silk Road (MSR)” in October 2013. As one of the many countries residing along the MSR, how do you think this will impact Maritime Singapore as a global maritime hub?

   Mr Teo: Chinese President Xi proposed the construction of the 21st Century MSR in Bali during his visit in October 2013. Almost a year and a half later, the 21st Century MSR and the SREB both form a major Chinese initiative and strategic framework known as “One Belt One Road” (OBOR).

   The 21st Century MSR emphasizes on connectivity, which is necessary to facilitate trade and economic growth in the region. Traditionally, the Silk Road is a sea-based network but it also includes other transportation networks like rail, road and air.

   Singapore’s role in the MSR is also bolstered by her maritime heritage. For instance, Chinese famous navigator Zheng He made nautical records reflecting Singapore as an important crossroad for the Maritime Silk Road over 600 years ago.

   As a major maritime and transportation hub with strong heritage and with its strategic geographical location, I believe Maritime Singapore is well-positioned to play a pivotal role in the region to connect China and ASEAN.

2. The construction of the 21st century MSR will rely upon strengthened maritime partnerships between China and regions like ASEAN. How would you perceive Singapore’s role as a leading maritime hub in the development of pragmatic bilateral cooperation within the region given the importance of Southeast Asia as a hub for MSR?

   Mr Teo: Besides physical connectivity as a regional maritime and air hub, Singapore’s thought leadership will be an important aspect towards greater cooperation within the region. Being the most advanced economy coupled with it being a knowledge hub in South-east Asia, Singapore is capable of bringing together various ASEAN Member States to collectively establish an open platform for the discussion of the construction of the 21st Century MSR with the Chinese. This will help to build up trust and confidence among countries along the Silk Road and China.

   The MSR is not a one-way street and has to be mutually inclusive. The inaugural Singapore Regional Business Forum that took place on 27 July discussed the need for people along the MSR to understand and appreciate the Silk Road. Besides exercising Singapore’s thought leadership towards the construction of the 21st Century MSR, it is also important for a joint-ownership of the MSR between China and ASEAN for greater investments and economic collaboration within the region.

   In order to facilitate greater cooperation and connectivity within MSR, infrastructure investment and development is seen as a critical component.

3. Beyond physical infrastructure attributes to promote commodity-driven economic incentives, how do you think Singapore as a premier smart port nation can contribute from the perspective of soft expertise to achieve knowledge-driven economic benefits?

   Mr Teo: While Singapore is in a strong position to contribute significantly as a premier smart port nation, we will have to work together with our regional partners to help enable a common understanding among ASEAN Member States on how the Silk Road should be established.

   It is important to develop both the hardware and the software. Singapore’s strength in software comes in various forms – networks and platforms (high-level seminars, conferences), Information Technology (IT), e-commerce, legal system, arbitration, insurance transparency, and even culture and tourism. Only by exercising this strength in collaboration with our partners in ASEAN can the success of MSR be ensured for the benefit of all.

4. How will MSR influence shipping and maritime commerce in the region, particularly the liner shipping sector and the strategic alliances, in the long term?

   Mr Teo: For the Silk Road to be successful, infrastructure investment is crucial. This is observed in the establishment of the China-led Asian Infrastructure Investment Bank (AIIB). Sound infrastructure brings about greater connectivity and better standards of living for the people residing along the Silk Road.

   Once realised, the OBOR is expected to cover three continents with over 60 countries, which translates into two-third of the world’s population contributing merely one-third of the world’s GDP . If the grand vision of the OBOR is successful, the production, consumption, development, and economic contributions will be raised and consequently affects the world’s GDP positively.

   This increased activities will lead to more trade and consumption, which means more cargo for shipping. Better connectivity to remote areas will be required to enable more cost effective trade and transportation of goods and commodities across the Silk Road. This can lead to more investments in infrastructure.

   While it bodes well for the shipping sector, it is still not feasible to predict if it will affect the liner consortium arrangements in the long run. We should instead focus on the promotion of the MSR concept and gather feedback from neighbouring countries for the continual evolution of the 21st Century MSR.

   Only through an open, collaborative and inclusive approach can the 21st Century MSR be successful to bring about benefits to the region and its people.

Also published in the Singapore Shipping Association’s WAVES Q3 2015 issue.