Goh Chok Tong: Developments in Singapore within the last 10 years Speech by Mr Goh Chok Tong, Senior Minister of the Republic of Singapore and Chairman of the Monetary Authority of Singapore, at the Singapore International Chamber of Commerce's (SICC) 170th Anniversary Dinner, Singapore, 25 May 2007. *  *  *  Distinguished guests Friends and Fellow Singaporeans I congratulate the SICC (Singapore International Chamber of Commerce) on your 170th Anniversary. You are one of Asia’s oldest chambers of commerce, and have contributed much to Singapore’s development. Ten years ago, in May 1997, I spoke at your 160th Anniversary Dinner. Little did I know then that within months, the Asian Financial Crisis would erupt and devastate many countries in Asia, plus a few outside. Singapore suffered collateral damage but our economy was relatively unscathed. What was the big lesson learnt? It was not just about having a flexible exchange rate or better supervision of the financial industry. It was: get your fundamentals right, build a strong economy with good governance. Then, you will better survive any unexpected financial or economic earthquakes. Following the Asian Financial Crisis, the world was hit by the dot.com bust and the September 11 attacks in 2001. The global economy slowed down and ours went into recession. Within one year, 23,000 jobs were lost. Just as we were recovering, we were hit by SARS (Severe Acute Respiratory Syndrome).
Traders from both sides of the border are forced to carry cash and must first convert funds into United States Dollars from their respective countries and then into the domestic currency of the country they are purchasing goods or services from. By so doing, cross-border traders face many risks including theft, exchange losses and other conversion costs. Ladies and Gentlemen, although there have been some bilateral efforts towards formalising and facilitating small-scale cross-border trade in Southern Africa, these have not been  BIS central bankers’ speeches  1  enough. For instance, Zimbabwe signed a memorandum of understanding with Malawi to facilitate informal trade, especially between small and medium-sized enterprises. Mozambique and Zambia also signed a memorandum of understanding to facilitate the repatriation of currencies of the two countries that are accumulated by traders located along the common border areas. It is expected that this memorandum of understanding will be expanded to include Malawi. The lack of financial and payment services has not only hindered small-scale cross border trade but also led to the establishment and entrenchment of parallel currency markets at the borders. Needless to say, these are associated with vices such as counterfeiting, facilitating illegal trade, as well as enhancing cross-border money laundering activities. Moreover, to us monetary authorities, illegal cross-border local currency circulation creates the potential for complicating the conduct of monetary policy, especially if a significant amount of a country’s domestic currency is being used outside its jurisdiction.