American trade, investments, technology are vital. The US is also the preponderant military power which underpins regional stability. This is something which the region, including ASEAN, India and China, welcomes. Europe remains another important political player. It is also a major trading and investment partner. Asia also welcomes other players and regions like Russia, the Middle East and Latin America to engage us. When we engage each other, there is potential for finding common ground. And when we find common ground, we think of ways to share experience, collaborate and grow together. BIS Review 76/2007  3  Asia and the Middle East rediscovering each other What has transpired between Asia and the Middle East recently is a good example. Over the past few years, Asia and the Middle East have started a process of rediscovering each other. Asia and the Middle East have had a long, fruitful and ancient history of exchanges. But this flow ebbed some time in the last century or so. Recent global developments have drawn countries from these two regions closer again. Post-Sept 11, Middle Eastern countries became more interested in Asia. Their leaders began stepping up engagement with Asia for collaboration in management, science and technology, education, governance systems and development models. At the same time, Asian countries began to recognise that the Middle East is an increasingly important global player. Strategically, the leaders in the Middle East are committed to harnessing the various forces to tip the region in the direction of peace, cooperation and development.

Economically, high oil prices have given many Middle East countries an unprecedented opportunity to diversify their economies and invest in capacity-building for the future. Indeed the Middle East today stands on the threshold of a new era of unprecedented infrastructural development and economic activities. Asia and the Middle East have concurrently become aware of each other’s dynamism and the mutual benefits of closer ties, frequent interaction and a stronger partnership. Some observers have dubbed the flourishing trade and business linkages between the Middle East and Asia as a “New Silk Road”. But the ties between the two regions will surely become much more multi-dimensional in the years to come. How Singapore is remaking itself How is Singapore responding to these dramatic changes in its external environment? We have used the last 10 years to remake Singapore, strengthen our competitiveness and expand our economic space. 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 cutting edge scientific research and strengthening Singapore’s attractiveness as an R&D (Research and Development) hub is a priority. In the services sector, we have strengthened the key areas of tourism, healthcare, education and financial services. More of Singapore’s growth will come from innovation and knowledge. We are also looking outward towards the rest of Asia and beyond. Singapore is located at the heart of Southeast Asia, with China to the East and India and the Middle East to the West.