The assets managed by Singaporebased fund managers grew by 24% to almost $ in 2006. 4  BIS Review 76/2007  Second, the sources of funds flowing into or through Singapore continue to diversify. The Middle East has becoming increasingly important, along with South Asia. Funds sourced from the Middle East and South Asia grew by 21% and 36% respectively year-on-year. One of our local banks, DBS Bank, recently formed a joint venture with a group of Arab investors to set up Singapore’s first Islamic bank. This will spur the development of Islamic financial products in Singapore. I understand that Japan is also moving into Islamic finance. We can learn from each other and work together. Third, the critical mass of asset management activity in Singapore is continuing to grow. In 2006, 57% of the total AUM in Singapore was invested in the Asian region. Fund managers continue to use Singapore as their regional headquarters because they see Singapore as a prime location to service clients, raise capital from the region, as well as invest into the region and beyond. Singapore has also grown as a centre for hedge fund managers. Not only have these alternative investment managers contributed to the growth of our asset management industry, they have also added to its breadth and depth. Why has Singapore seen such strong growth as a financial centre? I think much of it has to do with our continuous efforts to enhance Singapore’s position as a gateway to Asia by transforming Singapore into a global city.
When India diversifies its economic base in this way, its weight will increase, and its effect on the region will be felt more keenly. Despite several changes of governments and Prime Ministers, India and its leaders have continued on the reform path. A billboard at the 2006 WEF meeting in Davos proclaimed: “15 years, 6 Governments, 5 Prime Ministers, ONE DIRECTION”. The message is clear: reform and liberalisation in India are irreversible. China serves both as an example of what a large country can do and a compelling reason for India to grow faster to keep up. I believe that India will continue to grow at a high rate. I have met Indian leaders across the political spectrum. I am persuaded that they will continue to open up the economy and welcome foreign investments. Take the case of West Bengal in Kolkata, a state that has been under communist rule for 30 years. The Chief Minister, Buddhadeb Bhattacharjee, one of the politburo members of the Communist Party of India (Marxist), candidly said that he welcomed foreign investment, “whatever the colour – be it yellow, red or white”. 2  BIS Review 76/2007  Against this dynamic backdrop, individual ASEAN countries have been strengthening their economies and competitiveness. Collectively, ASEAN integration is quickening and deepening. In January this year, ASEAN Leaders committed to establish by 2015 – five years ahead of the original target – an ASEAN Economic Community.