More importantly, ASEAN has made two important strategic moves: •  First, deepening linkages with external partners; and  •  Second, accelerating intra-ASEAN integration. Enhancing links with external partners ASEAN has stepped up its links and integration with external players and major trading partners. ASEAN regards China and India as two powerful engines which will help the region lift off. ASEAN has already started negotiations for Free Trade Agreements (FTAs) with both China and India. We target  BIS Review 47/2007  1  to complete them by 2010 and 2011 respectively. These FTAs will provide even greater connectivity and opportunities for businesses. They will increase trade and investment flows. Besides China and India, ASEAN is also enhancing links with other economic centres. ASEAN signed a regional Trade and Investment Framework Arrangement (TIFA) with the US last August. It is negotiating FTAs with Japan, South Korea and Australia and New Zealand. And last week, ASEAN and the European Union decided to launch FTA talks. This shows that ASEAN is confident and outward-looking. These agreements will form the economic spokes radiating from the ASEAN hub. Accelerating ASEAN integration ASEAN knows that the hub itself must be strengthened if it was to grow and benefit from external linkages. Hence, ASEAN is pressing ahead with closer and deeper economic integration, and strengthening the organisation politically. This will also help ASEAN to overcome the challenges of globalisation and global economic competition. Our aim is to transform ASEAN into the third engine of growth in Asia.

With further harmonisation of rules and regulations and increasing capital market linkages, we look forward to the deepening of ASEAN market liquidity. As financial and capital markets in the region become more integrated, there will be seamless flows of investments and capital. ASEAN has also made a strategic decision to strengthen its organisation politically. ASEAN is finalising a Charter that will lay out a bold and visionary future for ASEAN. It will also provide an institutional framework for the grouping and transform it into a more effective and efficient rules-based organisation. The Charter will be signed at the Singapore Summit in November. Singapore – a global city As for developments in Singapore, we have used the last 10 years to remake ourselves, strengthen our competitiveness and expand our economic space. We have also continued with efforts to enhance Singapore’s position as a gateway to Asia by transforming Singapore into a global city. We have enlarged our economic space by aggressively pursuing FTAs. We have concluded 11, including with the US, India, Japan, South Korea and Australia. We are negotiating 11 more FTAs, including one with China. We have progressively restructured and diversified our economy. Manufacturing will continue to play a key role but we are also moving into more technology- and knowledge-intensive manufacturing. Fostering world-class scientific research and strengthening Singapore’s attractiveness as an R&D (Research and Development) hub is a key priority. More of Singapore’s growth will come from innovation and knowledge.