In this respect, I am pleased to note that Singapore capital markets has already facilitated the funding of projects such as Hyflux water treatment plants in China via a SGX listed business trust IPO completed last year. Underlying all the initiatives I have just mentioned is the potential demand for environmentally sustainable solutions. The promise of such solutions, besides in offering economic opportunities, lie in their potential to address the rising challenges of urbanization, increasing energy prices and shortage of clean water. Asian businesses should position themselves for the gradual shift towards greener living as such technologies are not only socially acceptable, but also socially demanded. Corporate governance Before I conclude, let me share one final thought. Asian SMEs, in their bid to become top Asian and global companies, should devote attention to corporate governance. A sound corporate governance structure will help to ensure proper management practices, robust internal processes, and prudent controls. In the long term, these practices will help foster a strong reputation and increase the franchise value of the company, paving the way for Asian SMEs to expand into global markets. Indeed, global competition will require companies to be held to such high standards, especially those demanded by institutional shareholders. Closing To sum up, Asia and Asian businesses are poised for exciting times in an era of rising prosperity and growth. There will be both challenges and opportunities. One need not be daunted by the challenges. However, there is a need to manage and mitigate the risks that come with the opportunities.
Let me share a few thoughts on some of the current issues which have a bearing on Asia’s growth and the global environment ahead. Rising global food prices The first, and perhaps most pressing issue that the world faces, is spiraling inflation. Global food prices have spiked in the recent months due to a confluence of factors. Demand has increased to feed a growing global population with a rapidly expanding middle class in the developing Asian countries. This demand is compounded by competing uses for food sources to generate biofuel and feed. Meanwhile, sources of supply have been hit by rising energy costs, increased competition for arable land, and the erratic weather. As a result, prices of many food commodities including wheat, corn, and rice, a staple for all Asians, have soared. The United Nations has declared the drastic increase in food prices “an unprecedented challenge of global proportions” and established a task force to tackle the food crisis. This is indeed a global issue and cannot be resolved overnight. Many of these factors are structural and will take time for the demand-supply equilibrium to be established. On the Asia Pacific front, the Asian Development Bank has recently announced $ million of immediate budgetary support to help countries that have been worst hit by rising food prices. With increasing food prices and high oil prices, mitigating the impact of strong inflationary pressures will remain a key priority for many Asian governments.