John Austin summed up a few important themes in his concluding session of the Southeast Asia-New Zealand Dialogue.

He started off emphasizing East Asia's economic growth as being unprecedented. It is changing the world and New Zealand needed to be on board in order not to face irrelevance.

The second theme that Dr Austin put across was the changing nature of relationships that globalization has brought about. New Zealand and Southeast Asia share a history of common enemies and being part of the British Empire. However, this relationship is slowly being replaced by market dominance, economies of scale and strategic trade alliances with defence relationships still being close and in operation.

New Zealand is perceived from the Asian perspective as being isolated and having a small economy based on agriculture, tourism and education. New Zealanders view themselves as being niche players, innovative, creative, working and leading hi-tech industries in such areas as film, designer foods, biomedical and information technology. They are reputed to be reliable partners, who come detached without any political baggage.

Summarizing the day's key points, Dr Austin said New Zealand was in transition towards becoming a more Asian- oriented society. Although New Zealand and ASEAN offer highly complimentary products and services, New Zealand's trade with ASEAN countries had nevertheless stalled and was relatively small compared to its overall trade flows with other regions of the world. This was surprising as ASEAN trade flows with New Zealand's neighbour, Australia, occupy top positions. To rectify this problem, Sir Dryden Smith highlighted the importance of trade reform, free trade and the regional trade agreements. Dr Chin Kin Wah and Professor Gary Hawke held similar views. Professor Tongzon suggested that new forms of strategic corporate alliances that could be formed.

The third session on ASEAN integration and towards an East Asian Community stressed the importance of the East Asia Summit in building a new regional architecture to help in trade.

In his opening address on the New Zealand-Singapore relations session, Mr Austin shared his perceptions gathered from the prior two days of meetings in Singapore where they met with businessmen, officials, academics and New Zealand companies based in the country.

He observed that Singaporeans were concerned with attaining world class standards in the areas of business, academia and even politics. This preoccupation was compounded by a fear of losing out to India and China. Hence, although Singaporeans valued historical relationships, they were more focussed on dealing with the present competition in the globalizing world.

Singaporeans viewed New Zealand as a nice, green and clean agricultural country. However, due to its distance from Singapore, it was off the radar screen for most Singaporeans.

Mr Austin lamented the lack of awareness of the deep military ties which existed between the two countries and was disappointed that New Zealand was seen as an extension of Australia. Despite the modest levels of bilateral trade and the increasing business links, only a few New Zealand companies were truly internationalizing their businesses in Singapore.

He urged New Zealand companies to show Asians that it was not simply a scenic paradise, empty of people but a powerhouse of creativity, innovation and leading technology which is accessible to world.

Representing the Singapore Economic Development Board (EDB), Mr Wong spoke of the possibilities that Singapore could offer to New Zealand companies and which could maximize opportunities between the two economies.

Mr Wong started the presentation by introducing the EDB. He pointed out that it is the “lead government agency” involved in planning and in implementing strategies that will sustain Singapore's environment as a “compelling business and investment hub”. He pointed out that the EDB fosters sustainable growth by promoting industry clusters and entrepreneurship, attracting foreign investments and by enhancing the general business environment.

In particular, Wong stressed Singapore's role as a vibrant business hub. He argued that Singapore is a “springboard” to Asia with nearly 7,000 multinational companies (MNC's) choosing to operate from here. There are a number of features that make Singapore attractive, especially its predominantly English-speaking workforce, high literacy (98 per cent), open immigration policy (a quarter of the total population is comprised of non-Singaporeans), its reliability as the most protective intellectual property regime in Asia, excellent physical connectivity to other parts of the world (in terms of sea, air and Internet connectivity) and its highly pro- business environment.

Focusing on the current state of New Zealand companies in Singapore, Wong said that their participation has rapidly increased. In fact the number of such companies has doubled since 2002 and currently stands at 202, including major firms like Fonterra, Beca, Baycorp, Fisher & Paykel, among others. He pointed at the Singapore-New Zealand Joint Fund that has come to serve as a launch pad for New Zealand companies, and of the New Zealand Technology Centre (NZTC) that will serve as a “beachhead for New Zealand companies to commercialize their technologies and launch their businesses globally”.

With regard to prospects for cooperation between New Zealand and Singapore firms, Wong said that Singapore is emerging as a digital media capital “where Singapore creations are made for global consumption”. He highlighted the many digital media companies that have set up bases here. These include Lucasfilms, Koei, Electronic Arts, Southern Star and Digipen.

When the topic of ASEAN integration is being discussed, it is often assumed that ASEAN economic integration is being broached. According to Mr Severino, ASEAN economic integration has political and cultural elements. All elements are essential for regional integration to take place and to make ASEAN economic integration possible.

There are two levels to ASEAN economic integration. The first level is integration within ASEAN itself. The second level is integration with its external partners. Each level has two stages; in the case of ASEAN, it progressed from economic cooperation to economic integration to form an ASEAN economic community. In the second level, the relationship between ASEAN and its external partners has evolved from a donor-recipient relationship to one where the economies are now more closely cooperating.

In the Bangkok Declaration when ASEAN was founded in 1967, all references to economic cooperation were used to mask political objectives. Economic cooperation was only institutionalized and acquired its form before the ministerial meetings of the ASEAN Summit in February 1976. During that time, the main pillars of ASEAN economic integration consisted of preferential trading arrangements (PTA) and the intended establishment of large ASEAN industrial projects. The PTAs that were adopted were based on negotiated lists of products to which preferences (note that these were margins of preferences) were given. The industrial projects that were initiated and directed by the governments were also protected. These projects were not market driven. This protectionist direction that certain ASEAN member countries adopted resulted in the very slow pace that ASEAN economic integration took. Nevertheless, the positive outcome was that the processes established during the early periods of economic cooperation between the ASEAN states later paved the way for future successful communication.

The twin trends of globalization and worldwide regionalization pressurized ASEAN to propose the ASEAN Free Trade Area (AFTA). This resulted in attracting investments from multinational corporations, economies of scale in the regional markets and lowering transaction costs. Additionally, ASEAN had more clout to negotiate in international economic forums.

This presentation sought to provide a comprehensive review of the economic, demographic and technological developments in New Zealand with the object of exploring the benefits that Singaporean businesses can accrue from collaboration with New Zealand. Mr Donald Christie attempted to demonstrate how a dynamic population and, small but liberal economy with a favourable geo-political situation can help create a collaborative and innovative culture such as the one in New Zealand.

Mr Christie started the presentation by narrating a remark by the ASEAN Secretary-General Ong Keng Yong in New Zealand. Mr Ong had cautioned New Zealanders that it would be a mistake on their part to think that they could realize major economic growth in the future by relying on dairy and milk products. Christie regarded this as “blunt feedback” that should be taken seriously to avoid complacency. It was with this concern that Christie launched into his primary concern: What can New Zealand offer to its prospective partners in Asia?

To flesh this out Christie elaborated on the emergent trends in New Zealand, starting with demography, which he claimed reveals new dynamic trends. These trends include the fast growth rate among Asian, Pacific and Maori groups which has had the effect of making the country more multicultural and dynamic. He alluded to the dynamism of immigrant groups and how this is a factor in the case of New Zealand with nearly 20 per cent of its population being first generation New Zealanders. Christie also mentioned the role of nearly one million New Zealand passport holders who live overseas who tend to return home with their vast supply of ideas, experience and contacts that contributes to businesses in the country.

Christie described the economic environment in New Zealand, which he argued provided for a suitable business environment. He pointed out that the country has a strong economy and a developed education, health and legal system.

Professor Gary Hawke's presentation on the long-term prospects and challenges between New Zealand and Southeast Asia encompassed a number of perspectives. As an economic historian, he commenced by providing an outline of economic relations between New Zealand and Southeast Asia. It essentially started as a small thin stream of exports and imports for ASEAN members and subsequently thickened into a tidal flow in the 1990s. In addition to the economic relationship, there was an aid and defence relationship. The economic relationship has evolved substantially and now involves trade, investment and policy dialogue. In the early 80s, New Zealand officials were always engaged in debate about the relative importance of the New Zealand-Southeast Asian relationship. Professor Hawke feels that this focus will shift towards (a) a bilateral relationship between New Zealand and individual ASEAN countries, (b) the relationship between New Zealand and ASEAN, and (c) the relationship between New Zealand and ASEAN and the wider East Asia region and the Asia Pacific region.

The present-day New Zealand and Southeast Asia relationship features certain issues, including tariffs, rules of origin, government procurement services, investment and movement of natural persons. However, Professor Hawke pointed out that diplomats and businessmen involved in the New Zealand- Southeast Asia relationship must be wary of the application of the agreements to specific products and specific markets. He predicts that the current New Zealand-Southeast Asia relationship is going to change in the future due to two reasons: (i) the increasing role of services and (ii) the increasing importance placed on regional trade agreements (RTAs). To the latter point, Professor Hawke underlined Sir Dryden Spring's statement “the importance of ensuring a compatibility of a RTA multilateral system. It is not going to be easy and is going to take a particular mechanism to ensure that we do get a progressive form of relationship in the future.”

Mr Paul White drew from the experience of Beca Asia to demonstrate the creative ways by which companies in Southeast Asia and New Zealand can successfully synergize their operations in both regions. Mr White started his presentation by outlining the work of Beca in Asia. Beca is one of New Zealand's largest privately owned engineering service providers. Catering mainly to the hubs of Singapore, Australia and New Zealand, Beca offers services in engineering, planning, project management and valuations to clients on a global scale.

Mr White elaborated on Beca's early growth in Southeast Asia, which started from the late 1970s. The company established a local presence in areas with the promise of suitable engineering work and recruited local staff to support its senior New Zealand personnel. He said that the “Kiwi desire” to give their business partners a “fair go” complemented the Singaporean partners desire for a long-term “family relationship” and this helped both sides forge a relationship with common values. Local leaders — who rose to be directors in local entities — were encouraged to take up shareholding in the company and this, Mr White pointed out, was “critical” to the growth of Beca in Singapore, Indonesia, Brunei, Malaysia and Papua New Guinea.

Mr White went on to describe the three main “synergies” that mark the company's Singapore-New Zealand business initiatives:

1. The eschewal of patch protection: White emphasized that Beca “cannot afford to be territorial” and thus patch protection had to be avoided fully. Expertise from different offices would be continually required to make what is essentially a “one Beca” product. He said that this was fundamental to Beca's success especially in times when resources are stretched. Further, this provides a basis for technology and management skill transfer.

2. Promoting inter-operability: White pointed out that the open sharing of systems and best practices was critical to both standardization and the avoidance of reinventing the wheel. The ISO 9001 quality system in Singapore for instance was an adaptation of the New Zealand system. Similar such interoperability has been employed in risk mitigation procedures, among others.[…]

Mr Richardson started his presentation by suggesting that New Zealand's geographical distance from Southeast Asia and its political-military distance from the policies of the various U.S. administrations — unlike its neighbour Australia — have made it less controversial (although less substantial) and indeed more acceptable to the states of Southeast Asia.

Richardson predicated his analysis of ASEAN-NZ-Australia relations on a close examination of the character of relations between New Zealand and Australia. While the two sides have diverged in the past, there have also been important instances of cooperation between the two neighbours. Troops from both countries, for instance, have served together in wars and conflicts overseas: for instance, the Malayan Emergency in the 1950s and 60s, the Indonesian Konfrontasi in the mid-1960s, in Vietnam, Papua New Guinea, and most recently, in the Solomon Islands.

Apart from military and peacekeeping cooperation, the Australian and New Zealand governments also consult on a wide range of domestic and foreign policy concerns. The signing of the Closer Economic Relations (CER) agreement in 1983 has been crucial to the high degree of economic integration of Australia with New Zealand. The CER, which has provided for free trade in most agricultural products and almost all services between the two countries, has significantly integrated employment, banking and financial services in both countries.

Mr Richardson pointed out that while Australia and New Zealand have engaged separately with Southeast Asian states, they have also converged to pursue common approaches and strategies on certain trade, diplomatic and security issues relating to the region. The joint-negotiations by Australia and New Zealand over a liberalized trading and investment pact with ASEAN, their membership of the Five Power Defence Arrangements (FPDA) and their participation in the inaugural East Asia Summit in 2005 are notable instances of such cooperation. Richardson emphasized that while Australia and New Zealand maintain separate and individual bilateral ties with Southeast Asian states, there is now a growing importance of, and movement towards, joint Australia- New Zealand links with Southeast Asia.

An ASEAN perspective on defence and security relations between New Zealand and ASEAN was presented by Dr Zakaria who elaborated on the character of strategic relations between the two actors and the form this relationship could take in the future.

Dr Zakaria opened his analysis by pointing at the changed context of the post-Cold war period. While New Zealand has moved away from its dependence on U.S.-led alliances to espousing independent initiatives on its security, Southeast Asia has changed in substantial measure from being a theatre of inter-state tension and conflict to a region of growth seeking peaceful evolution in international politics. Dr Zakaria expressed this change by quoting Thomas Freidman's theory, the “world is flat”.

Dr Zakaria went on to describe the Southeast Asian perception of New Zealand in defence and strategic terms. Identifying it as a “small power with limited capacity and modest objectives” Dr Zakaria pointed out that New Zealand's defence reach is limited with regard to Southeast Asia. However, New Zealand derives its strength from being perceived as a country that is “benign and non-threatening”, that possesses significant human resource capacity and which has a government that is committed to Southeast Asia.

Despite its limitations in being a major defence actor, New Zealand has played a significant role through the Five Power Defence Arrangement (FPDA). Dr Zakaria stated here that ASEAN itself is a complex and diverse organization which can be understood in terms of three tiers: the original five members and Brunei, “Indochina” (Vietnam, Laos and Cambodia) and Myanmar. Among these states, New Zealand is particularly important for Singapore and Malaysia as all three are members of the FPDA.

He went on to comment that the FPDA is still “intact and functional”, and that it has gone beyond its original objectives. Dr Zakaria noted that within the FPDA, New Zealand has been efficacious as a small power and its military ties with Malaysia and Singapore have been complemented by inter-state cooperation, training of military personnel and exercises.

Mr Tim Hunter spoke on the tourism relationships between New Zealand and the ASEAN countries. He noted that tourism was an outstanding vehicle to build cultural and economic understanding between both regions.

Twenty years ago, many New Zealanders thoughts of travel to Southeast Asia as essentially a city experience in either Singapore or Bangkok, and that too was as a short stopover. Today, however, the perception is very different. Thirty-seven per cent of long haul travellers from New Zealand visit ASEAN countries. Annual growth in visits from New Zealand to ASEAN countries over the last ten years has increased 70 per cent.

Furthermore, the speaker added that the tourism experience of New Zealanders in Asian countries, combined with healthy immigration from the region, had infused increasing Asian influences into the everyday life of New Zealanders.

In addition, Mr Hunter noted that while no U.S. or European carriers flew to New Zealand, the country continues to be served by eight Asian carriers that contribute a massive 60 per cent share of the total long-haul capacity into New Zealand. Asian carriers have grown air capacity to New Zealand for three reasons:

1. New Zealand has seasonally balanced inbound and outbound tourism flows with multi-sector long-haul traffic feed in two directions.

2. Demand for long-haul travel by New Zealanders has grown rapidly over the past four years as the NZ dollar has strengthened.

3. New Zealand in-bound tourism consistently exceeded world average growth rates between 2000 and 2004. The growing demand for New Zealand as a tourism destination can be attributed to New Zealand's reputation as a “peaceful” destination, the success of the “Lord of the Rings” trilogy, and Tourism New Zealand's own very successful brand campaign “100 per cent Pure New Zealand”.

Separately, Southeast Asia has been the investment source for more than 30 per cent of New Zealand's three and four-star hotel stock in the major cities and tourist destinations.

Mr Nowell examined the business and trading ties between Singapore and New Zealand and how the untapped potential could best be realized.

Singapore was an important trading partner for New Zealand and ranked high on its list of ASEAN trading partners. However, total bilateral trade still only amounted to NZ$1.3 billion dollars, which was low by international standards. Considering Singapore's immense strength as a regional launching pad, Mr Nowell believed that there was scope for improvement.

Singapore is New Zealand's largest source of imports from the ASEAN region but only the fifth largest destination for New Zealand exports with diary products forming the bulk of the trade. However, as an economy with a high per capita income, there should be greater interest in the wealth of innovative high- quality products that New Zealand was capable of producing.

Singapore exports had experienced healthy growth in the last few years. In particular petroleum, oil and fuel transmission apparatus saw a 100 per cent increase from 2003. Meanwhile, New Zealand exports to Singapore had languished.

It was an indication that Singapore had utilized their strategic strengths in the trading relationship but New Zealand's strategic strengths had not gone far.

On the tourism front, New Zealand continued to be an attractive holiday destination for Singaporeans. But tourist numbers were disproportionately small in comparison to its population size. Mr Nowell argued that New Zealand had many unique features and was a much cheaper and nearer destination than the United States or Europe. He was also alarmed that few young Singaporeans were choosing to study in New Zealand and vice versa.

Potential Areas for Improvement

New Zealand companies must leverage off their strengths as a primarily pastoral, agricultural nation especially when clean, safe food is presently of utmost concern. Isolation had also bred inventiveness particularly in its agricultural, biotechnology and food processing industries. In the areas of creative IT solutions and a number of expert service capabilities especially in engineering, New Zealand companies have proven to be winners.

Winston Ho, International Enterprise Singapore

(IE Singapore)

Mr Ho began by stressing two points. Firstly, New Zealand was an interesting market which Singaporean companies should explore instead of focusing on the traditional markets. Secondly, New Zealand companies should also view Singapore as an Asian base for development.

The years from 1993 to 2003 were a decade of regionalization for Singapore as the government encouraged local companies to move beyond the domestic market. Singapore invested heavily in flagship projects such as the Wuxi and Suzhou industrial parks in China, the Bangalore IT Park in India and other regional industrial parks.

Projections for Singapore's trade with the world indicate a twofold increase up to 2015. Foreign direct investment likewise is set to increase twofold in that period. Asia is currently the fastest growing region in the world with East Asia heading the pack followed by Southeast Asia. Thus Singapore and New Zealand companies should look to collaborate in order to invest in Asia.

Mr Ho identified a few key sectors where Singapore-New Zealand collaboration would be beneficial:

1) ICT

The ICT sector was an area where firms from New Zealand and Singapore could embark on joint collaborations or partnerships. The Singapore government agency A*STAR has launched initiatives to allow Singapore-based Infocom local enterprises to enhance their position by working with global players like Motorola to form R&D centres in Singapore.

2) Media

The media industry was another promising sector where collaborations could take place. New Zealand and Singapore recently signed a co-production agreement for screen productions. This enables companies from both countries to share resources and expand the distribution network for quality exportable content.

3) Biotechnology

Both Singapore and New Zealand have invested heavily in local companies to help them start new projects and to commercialize new technologies for the international market.

IE Singapore has an I-Partner scheme which brings together locally-based companies to hunt for projects overseas.

I have great pleasure to warmly welcome all of our friends to this Inaugural Seminar between ASEAN and New Zealand. We in ASEAN are particularly appreciative of the friendship and support, which New Zealand has shown to us for decades. For instance, New Zealand was the first dialogue partner to negotiate an FTA with ASEAN. We in Singapore also remember with gratitude the tremendous efforts in the area of defence cooperation that New Zealand has helped us with since World War II through the Malayan Emergency to Confrontation and the FPDA, until today, when our Singapore Armed Forces trains in New Zealand.

Several ASEAN countries are small states, except for Indonesia, Thailand, Vietnam, Philippines, and Myanmar. We all admire and appreciate what a small state like New Zealand has achieved on the world stage. In world sports like sailing, rugby, cricket and others, New Zealand has shown that a small population is no hindrance. In economics, she has been a pioneer in economic reforms. In opera, a New Zealander, Dame Kiri Te Kanawa is a world-class singer. In terms of beautiful scenery, famous movies like the “Lord of the Rings” series have show-cased New Zealand, now also known as Middle Earth. The wines of New Zealand are excellent and win awards. In innovation, Kiwis are famous for their No. 8 wire hands-on approach to problem solving. So ASEAN members have a lot to learn in terms of best practice from New Zealand. This seminar provides a platform for an exchange of ideas between the two sides.

As a research institute, ISEAS is particularly interested in the exchange of ideas and information. Analyses and policy-oriented research are our focus and raison-d'être, particularly when the wider region is changing rapidly, with the rise of China and India, and the establishment of new moves like the Trilateral Security dialogue between the United States, Japan and Australia, and closer ties between India and the United States. New Zealand shares certain common interests with us as fellow members of ARF, APEC, ASEM, EAS and as an ASEAN dialogue partner.

Dr Chin's commenced his lecture by questioning ASEAN's position in East Asia as there has been much mentioned about the centrality of ASEAN. He doubted that ASEAN has yet to self reflect and consequently make amendments to stay competitive with the rise of East Asia.

Dr Chin started by recalling the background to the East Asia Summit (EAS). A combination of factors has shaped the EAS and it has been indeed a very long process. The 1970s and 1980s saw the Koreans and Japanese trying to underpin the economic connectivity of the wider Asia region. However, the Cold War brought its own set of problems and it was only after the 1990s that someone like Malaysia's ex-premier, Dr Mahatir Mohammad, was able to openly and expansively discuss the East Asia grouping which was subsequently reincarnated into the East Asia Economic Caucus (EAEC). By 1992, despite some of the open reservations expressed by this type of community building, Singapore Senior Minister Goh Chok Tong, stated that the concept of the EAEC needed to be embraced. It was also suggested that among other things, there needed to be an East Asian response to other mega-regional enterprises that were being conceived around the same time such as North Atlantic Free Trade Agreement (NAFTA) and the European Union (EU). In 1994, the Asia Europe Meeting (ASEM) enforced a concerted process where the Asian side (of ASEM) was driven to think more cooperatively and engage in the ASEM Dialogue. By 1997, the ASEAN plus three (APT) had begun to meet on annually. The other major watershed was the 1997/98 East Asian economic crisis that triggered earnest East Asian responses to address the negative spillover effects of the existing economic connectivity. From 1998 to 2001, a series of measures were discussed which eventually culminated in the idea of the East Asia Summit (EAS) meeting. The exit of Dr Mahatir Mohammad as Malaysia's Prime Minister opened the doors for New Zealand and Australia (and India) to participate in the EAS.