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Swiss-Singapore ties at new high
Question: As Singapore and Switzerland mark 50 years of diplomatic relations this year, how do you view the state of relations between the two countries both at the political and economic levels?
Tommy Koh: The bilateral relationship is in excellent order. Switzerland has not only been a very important role model for Singapore but also a very important economic partner and we continue to learn many valuable lessons from Switzerland. Over the last 50 years in our own economic progress and evolution, many Swiss companies have been our partners. They have accompanied us on this journey, as we go up the value chain; they've gone up the value chain with us. So in terms of trade, in terms of investment, in terms of transfer of technology and knowhow, Switzerland has been our very important partner.
Thomas Kupfer: For Switzerland, Singapore is a key partner in South- east Asia and in Asia in general. If we look at the trade numbers, for example, Singapore is by far our most important Asean trading partner with over 50 per cent of trade volume and across Asia it's our most important economic partner after the two big ones, China and Japan.
The importance of Singapore is also reflected by the fact that there are over 400 Swiss companies based here. It's an excellent location for doing business specifically in South-east Asia but also Asia in general. Besides that, we have about 5,000 Swiss people working and living here. Overall, our relations politically and particularly in economic and other fields like science and academia are very intense.
All the big Swiss companies, the multinationals like Nestle, the banks, and the logistic companies are here. But also many small and medium-sized companies are present, because Switzerland is a country based also on small and medium-sized companies.
I would say about 30 of the 400 Swiss companies here are multinationals and the rest are either medium or small. We would be happy to see more Singaporean companies locating in Switzerland, if they decide to come to Europe.
Prof Koh: Since we are talking about Swiss companies, one of the areas in which we admire Switzerland's achievement is that, although a small country with eight million people, it has 15 Swiss companies in the Fortune 500 list. This gives us hope that although we are small, one day, we can produce global champions like Switzerland. We need not be limited in our ambition by saying "well, we are too small". Some of our leaders think that we are too small. We will never produce a global champion. I say: "Look at Switzerland".
Mr Kupfer: Interestingly some of these Swiss companies are quite historical. They are 100 to 150 years old, and still continue to exist successfully and even in this world of mergers and globalisation remain Swiss-based companies with their headquarters in Switzerland. They continue to promote Swiss values and Swiss quality.
Prof Koh: But your talent pool is not exclusively Swiss.
Mr Kupfer: This is a very interesting point, because that differentiates us from big countries like Germany or France. The companies there are mostly run by nationals. Those countries have a bigger human capital reservoir. We have no such big reservoir, so we have to think more global. Therefore, many of our companies are chaired on the board or as CEO by other nationals.
Prof Koh: Your long tradition of welcoming immigrants has paid off for Switzerland. Some of the leading companies were founded by immigrants. So this long tradition of welcoming immigrants, of promoting basically meritocracy paid off for Switzerland. A well-known example would be the person who saved the Swiss watch industry from collapse: Nicolas Hayek, who is an immigrant from Lebanon.
That's why I sometimes get worried when Singaporeans are becoming inward looking, anti-immigrant and I say: no, this is bad, because like Switzerland our long tradition of welcoming people from all over the world to come and live here, do business here, settle down here, has made us strong and has made us progressive. We should never close our doors!
Mr Kupfer: Singapore's first Prime Minister, Lee Kuan Yew, positioned Singapore very successfully as an open place for international companies. The doors were open so that international companies could settle here and do business out of here. That's also one of the reasons why so many Swiss companies are here for a long time.
Question: What have been some of the high points in the growth of Switzerland and Singapore relations over the past 50 years?
Mr Kupfer: The relations have very much diversified over the years. They are much more than just economic and trade relations. We have for example in the academic area very good relations. Some of our top universities are here, like the ETH Zurich, invited by the National Research Foundation to be part of CREATE. St Gallen University, the top European Business University, is present here and I am pleased to mention that the EHL (École Hôtelière de Lausanne), the top hospitality university from Lausanne, is planning to open a campus in Singapore.
Another aspect is that we have had many high-level visits in the last few years. President Tony Tan Keng Yam was in Switzerland on a presidential visit in 2014 and last year our then President Johann Schneider-Ammann was in Singapore on a State Visit.
Prof Koh: I think the broadening of agenda is one point to know, that our cooperation with each other has gone beyond just trade and investment, to so many other areas, for example research, science and technology. Looking at the new, fourth industrial revolution, how to prepare ourselves for this new industrial revolution, hence the emphasis on innovation. We are learning from each other on urbanisation, sustainable development, and so on… Also, the conclusion of Singapore's FTA with EFTA (European Free Trade Association) is something worth noting. It is our oldest FTA with European countries.
Mr Kupfer: This was the first free trade agreement Switzerland, as a very free trade oriented country like Singapore, concluded in Asia in 2003 between EFTA, which brings together Switzerland, Norway, Iceland and Liechtenstein, and Singapore. Since 2003 it has worked smoothly and has helped a lot to promote trade between the two countries. And it reflects the importance of trade between Switzerland and Singapore. More than 50 per cent of our Asean trade is done with Singapore - with and through it.
Prof Koh: The World Economic Forum annual meeting in Davos, Switzerland, has become one of the most important platforms as it brings together leaders of the world from government, business, civil society and the arts. Singapore has been a strong supporter of it. Every year, we send a leader to attend the Forum. We also take seriously the St Gallen Symposium, which is run by students.
Mr Kupfer: Indeed, Singapore is a very active partner of the St Gallen Symposium. On the political level, President Tan attended the forum in 2014, then in 2015 Deputy Prime Minister Tharman Shanmugaratnam, in 2016 Minister Chan Chun Sing attended and this year Minister Ong Ye Kung. All of them as keynote speakers. And we have always a good Singapore business delegation. And finally, we have every year, the Leaders of Tomorrow, which is part of this forum, a big delegation from Singapore - students or young professionals. This is a very nice connection between Switzerland and Singapore.
Prof Koh: Another Swiss institution that we work with is the International Committee of the Red Cross (ICRC). It is a unique Swiss institution and it is indispensable to the world, because it is the custodian, but also promoter, of international humanitarian law. And some of us have worked closely with ICRC all over the world. I once served on its international advisory committee.
Question: What would you say are the strengths of the strong bilateral relations between the two countries?
Prof Koh: Our world view is similar. Shared values, mutual respect, mutual admiration and two - I don't want to say "small countries" - but two relatively small countries, which have punched above their weight and determined to maintain their independence.
We are both small, for our own survival we need to promote a world order based on rules. So for Singapore and Switzerland the rule of law is one of our core values. But there is some difference between us. One difference is that we belong to a regional organisation, Asean, and Switzerland does not belong to the regional organisation, European Union.
Mr Kupfer: I think that finding good solutions with our big neighbours in respect of the rule of law is essential in our international policy. As small countries, only the rule of law can help us find solutions.
Singapore has chosen from the beginning to be politically international, helped to create regional organisations like Asean and ASEM and being an active member. To protect its security Switzerland, on the other hand, in the old times was more of the opinion that participation in international organisations could question our neutrality and our identity. That's the reason why Switzerland never joined the European Union or the Nato.
But over the years Switzerland has become much more participative and is today a very active member of the United Nations, not only because the European headquarters of the United Nations are in Geneva, but also because we are willing to contribute our share to the international community. Today, we have an active international policy with humanitarian assistance, promoting the humanitarian law, development cooperation, and also for environment and climate protection.
Question: As both Switzerland and Singapore are relatively small countries, what are some of the secrets of a small state's success?
Mr Kupfer: I think the secrets of a smaller state's success are that lines of command are shorter, normally the relation between population and government is closer and there is usually less bureaucracy in smaller states. A small country also has to make bigger efforts to be and to remain innovative, to be modern and develop itself because you cannot just relax. One always has to reinvent and modernise itself.
Prof Koh: Both our countries have tried to turn our liability into an asset by pursuing open economy, recreate by attracting foreign talent, by educating and training our people well, by investing in the future, by looking at future opportunities, scanning the horizon, getting our people to accept change, to embrace technology and to prepare for the next revolution.
Another area in which we turn our potential liability into an asset is our diversity. I think that most people may not know that Switzerland like Singapore has four national languages. You have German-speaking Swiss, French-speaking Swiss, Italian- speaking Swiss and Romantsch-speaking Swiss. And both of us have succeeded in creating a united nation, where people of different races live harmoniously together.
Question: As prominent players in their respective regions - South-east Asia and Europe, how do you see Singapore and Switzerland playing a key role in connecting their regions with each other more effectively going forward?
Mr Kupfer: Switzerland in the centre of Europe is a country which incorporates many European elements like the languages, the people, and we are a part of and a very active and successful partner of the integrated European economy. But we are not a member of the European Union. It was a decision by the people to stay independent and neutral.
So on the political and the security side, Switzerland is not a major player in Europe, but we cooperate intensively and we are doing generally well with our European friends and partners, but we are also worldwide oriented. In Asia we joined ASEM, the Asian European gathering and we also became a member of ASEF (Asian European Foundation). We also have become a Sectorial Dialogue partner of Asean last year. So we are now a partner to all the 10 Asean countries. We have become an active participant in the Shangri-La Dialogue, just held in Singapore with the participation of our Swiss Defence Minister. We try to use these Asian forums to exchange views, to listen and for partnership.
Prof Koh: I think it was on Singapore's agenda to bring Switzerland into our institutions. So we promoted sectorial dialogue partnership between Asean and Switzerland, and we championed Switzerland's membership of the ASEM (Asia-Europe Meeting). We see Switzerland as a valued partner, although Switzerland is not part of the EU, it has great influence in Europe.
Mr Kupfer: We should not forget that both our countries are very important financial centres. They play a very crucial role in their regions as a financial hub. We are not competitors, we are rather complementary because Singapore is mainly an Asian financial centre and Switzerland is a European global financial centre.
Prof Koh: I think Switzerland and Singapore are probably two of the most important centres in the world for management of private wealth. We can do this because of our rule of law, transparency and the good reputation of the two countries.
Mr Kupfer: That's the reason why also our Swiss banks like UBS, Credit Suisse and Julius Bär and many others are strongly present in Singapore and also employ quite a number of people. They are major players in the banking industry.
Question: With Singapore focusing on skills development through the SkillsFuture programme and Switzerland having a long tradition in this area, how can Singapore benefit from the Swiss experience?
Prof Koh: This is an area in which Switzerland is our teacher and we are the student. We are trying to incorporate into our new education system aspects of the very successful work and study apprenticeship system in Switzerland and in Germany. So we've been sending a lot of people, both to Switzerland and Germany, to see what we can learn from them and how we can modify this to suit our own circumstances. This is clearly an area in which Singapore can learn from Switzerland.
Mr Kupfer: Switzerland has a very long tradition in dual education and vocational training and I'm happy to say that it helped us a lot to bring young people into work, making them capable to become skilful employees. Today, it is also not limited to just this basic training. Many can now go further and pursue university education later on. So they get in a way the best of both worlds. You learn a profession, you have an identity, you are already professional and then you go for further and more deepened studies.
This system was very fruitful for our industry, particularly for our small and medium-sized enterprises, because they get a really motivated and qualified workforce. I'm now five years in Singapore, and what I have seen in Singapore over the last years regarding the new focus on future skills and lifelong learning has impressed me a lot. We are glad that we can partly also serve as a model. It cannot be a copy-paste model, because each country has its own traditions.
It has been mentioned that there is still a lack of private sector support which is crucial and in Switzerland a historical tradition. It needs a real mind-set change of the parents and the students to realise that skilled jobs are also as qualified as a university job. Singapore is definitely going in a good direction to seek an education that brings the students to the real world. There are many different ways to contribute to society. I'm pleased that many Singaporean ministers and professionals have come to learn about our long experience in Switzerland. It's quite a long process, but in my view a successful development in Singapore.
Question: Looking ahead, what are some of the promising areas that the two countries should now be focusing on, building on the strong bilateral relations?
Prof Koh: In the coming years and decades we will see revolutionary changes in the way we work and in the way we live. I think Switzerland and Singapore can cooperate to better understand the changes that the fourth industrial revolution will bring. Where are the areas in which we will lose jobs? What are the new opportunities for us? And to prepare our young people to take advantage of these new opportunities.
Another challenge is geopolitical. We are seeing very important changes in the external geopolitical landscape. Some of these changes are in geo-economic relations. I think our analysts, our scholars, our think-tanks could help us better understand the changes so that both Switzerland and Singapore can position themselves better to respond to the changes.
Mr Kupfer: I believe we both face the same challenges. Both our countries are quite well positioned today in challenges like digitalisation, fintech, innovation, robotics and so on. We are sometimes handling these topics a little bit in a different way. We have mentioned many of the similarities between our two countries. Those similarities are quite impressive. Obviously, there are also some differences.
We in Switzerland are politically a very much bottom-up country, where many decisions - both political and economic - are taken directly by the population through a referendum. And in Singapore the system is a top-down system where good leadership makes the necessary analysis and then takes the decisions. Good governance in Singapore is high on the agenda and very well done. At the end of the political process, the challenges in both countries are the same and the solutions are often also quite similar.
So, I think we can really learn from each other. We can do it on all the different levels, knowing that we are in different continents but we are both in a particular position in our regions as advanced, as peace-oriented and as well-governed countries, which help us to face the challenges of the times. There is a lot to explore and cooperate in over the next 50 years of our bilateral relations.
"In the coming years and decades we will see revolutionary changes in the way we work and in the way we live. I think Switzerland and Singapore can cooperate to better understand the changes that the fourth industrial revolution will bring. Where are the areas in which we will lose jobs? What are the new opportunities for us? And to prepare our young people to take advantage of these new opportunities."
- Prof Koh
"We are both small, for our own survival we need to promote a world order based on rules. So for Singapore and Switzerland the rule of law is one of our core values. But there is some difference between us.
One difference is that we belong to a regional organisation, Asean, and Switzerland does not belong to the regional organisation, European Union."
- Prof Koh
"I think the secrets of a smaller state's success are that lines of command are shorter, normally the relation between population and government is closer and there is usually less bureaucracy in smaller states. A small country also has to make bigger efforts to be and to remain innovative, to be modern and develop itself because you cannot just relax."
- Mr Kupfer
"We in Switzerland are politically a very much bottom-up country, where many decisions - both political and economic - are taken directly by the population through a referendum. In Singapore the system is a top-down system where good leadership makes the necessary analysis and then takes the decisions. At the end of the political process, the challenges in both countries are the same and the solutions are often also quite similar."
- Mr Kupfer