I will explain why in this era of globalisation, it makes sense to strengthen the linkages between Southeast Asia and India, and how Singapore, a small and open country whose survival is totally dependent on globalisation, can play a role in deepening these linkages. ASEAN since the early 90’s For more than a decade until 1997, Southeast Asia enjoyed remarkable growth. As governments opened up economies, investments flowed in, exports grew, and prosperity was everywhere. People talked about the Asian Miracle and the Pacific Century. Then we met the darker face of globalisation. Euphoria turned to gloom when the Asian Financial Crisis struck. A seemingly minor problem in Thailand rapidly developed into a widespread panic in the region. One country after another succumbed as investors stampeded out, stock markets and currencies crashed, and economies nearly collapsed. In Indonesia, the Crisis triggered deep political and social changes, resulting in a very difficult transition. A new and very different dispensation is only now recrystallising. Even though the Crisis has passed, we have not returned to the status quo ante. The world has changed permanently. Globalisation has advanced even further, and competition is now fiercer. India and China are major new players which totally alter the landscape. From the point of view of other  BIS Review 3/2004  1  Asian countries, they are formidable competitors for investments, but also offer immense new opportunities.
Bangalore has transformed itself from a provincial capital into a world class centre for the global IT industry. Mumbai is a thriving commercial centre. MNCs are outsourcing backroom functions and call centres to India, attracted by India’s highly skilled, English speaking, and cost competitive professionals. In manufacturing, India is doing well in automobile, pharmaceuticals and chemicals. The recent BJP victory in state elections is widely seen as the Indian people reaffirming their support for reforms. The current thaw in relations with Pakistan is another positive sign. Worldwide, people are becoming persuaded that the momentum for economic liberalization that has built up is irreversible. A subcontinent is on the move. Nowhere is this more evident than in the self-confidence of Indian companies. As one consultant commented, 5-10 years ago his assignments in India were about how to withstand the competitive threat. But today the question is how to grow the companies beyond India. Therein lies an opportunity for India and Singapore to work together. Responding to globalisation Both India and ASEAN are opening up, reforming their economies, and pursuing the path of globalisation. The rapidly changing and highly competitive environment requires countries to make many changes in policies and strategies, and to cooperate more closely with others, especially in the region, for mutual benefit. Internal restructuring Singapore, being such a small and open economy, feels the need to remain competitive, adapt and upgrade most acutely. We are getting used to the fact that there is no more life-time employment or iron rice-bowl anywhere in the world.