This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government
Foreign Office Minister the Rt Hon Hugo Swire MP spoke at the Asian Business Leaders Award dinner at Banqueting House in Westminster on 22 October 2012.
Thank you Michael and Sir John for your warm introduction.
I have been an admirer of Asia House and their work for a considerable time, so it is a great pleasure to be here this evening. I would like to extend a special welcome to Ms Lubna Olayan, who is, of course, the reason we are all gathered here!
You will be relieved to hear that I do not intend to detain you for long: we are all looking forward to dinner, and to the presentation of the Award later this evening.
But I wanted, nevertheless, to take this opportunity to put tonight’s event into context; to talk a little about what is happening in Asia; what this means for Britain; and why the Asian Business Leaders Award is so important.
The shift East
It is not news to any of us here tonight that the world is changing, and changing fast. That today’s major challenges - climate change, migration, organised crime - require global solutions. That even taking into account the recent global slowdown, the engine room of economic growth is moving from West to East.
Asia is at the forefront of this shift in economic power, with countries across the continent continuing to develop rapidly.
Economic growth has been spurred by huge demographic changes. According to UN estimates, the world’s population will grow by one billion between now and 2025. As you know, the majority of this growth will be in Asia.
Some argue that this shift is a threat to Europe and to the United States. But this Government does not see it that way. We see the emergence of Asia - or, rather, the re-emergence of Asia - as a huge opportunity; one which the UK is well-placed to take advantage of.
An opportunity for Britain
For one thing, the increasingly wealthy and mobile populations of Asia are our potential customers - so it’s not surprising that British businesses and companies are doing more and more business there.
There is a significant appetite for British luxury goods. Consider Aston Martin, for example - a topical choice given that the new James Bond film is released later this week, part of which was, incidentally, filmed in China and Japan. Despite 007’s tendency to crash them, Aston Martin’s sales to Asia reportedly increased by 48.5% in 2011, to £66 million. There is a similar story to be told for other familiar British brands, from Jaguar Land Rover to Burberry.
The rapid development of the Asian economies also continues to present countless opportunities in areas such as infrastructure, science and technology.
Britain’s commercial relationship with Asia is not a one-way street; not by any means.
Foreign companies are choosing to invest here in ever increasing numbers. Companies like Indian-owned Tata Group - now the largest corporate employer in the UK, and whose Chairman was honoured by Asia House last year. A Malaysian consortium bought the Battersea Power Station site in July and intends to start an £8 billion revamp in mid-2013. In April, Nissan announced that it will build the next generation hatchback at its Sunderland plant, securing 3,500 jobs.
Last year Chinese Foreign Direct Investment into Britain reached £1.1 billion. India invests more in the UK than the rest of the EU combined, and the 700 Indian businesses that operate here account for 90,000 jobs.
We attract some of the Gulf’s biggest sovereign wealth funds, which are being ploughed into construction projects from the iconic Shard at London Bridge to the redevelopment of the Olympic Village. And there is even more scope to attract inward investment. There are some £250 billion worth of infrastructure projects planned in Britain in the coming years.
The UK, and London in particular, is already a world leader in international bank lending, bond trading, and also currency exchange. We account for almost a third of all lending to India, China, and Malaysia. But I believe that Britain can play an even stronger role - and I’m not just saying that because many of you here tonight work in financial services! For example, London is perfectly placed to be the ‘Western Hub’ for the international Renminbi market. There are also many opportunities in the legal services sector.
The Government’s role
So we are already doing a lot, and there is potential to do even more. But how do we make the most of the opportunities, and retain our place in the ‘premiership’ of global economies in today’s rapidly-changing world?
First and foremost, we need to get things right here at home. With this in mind, the Government is seeking to increase Britain’s competitiveness, so that more companies from Asia and elsewhere decide to invest here.
We are cutting corporation tax to 22% and reviewing unnecessary regulations . At the same time, we are investing in infrastructure, and working to ensure that the UK remains a world leader in education, science and innovation.
And at this time of great change, the Foreign & Commonwealth Office is changing too.
A refocusing of our diplomatic network is absolutely critical. We have already opened a new Embassy in Bishkek in Kyrgyzstan. In India, we have opened a new Deputy High Commission in Hyderabad, with one in Chandigarh to follow soon, and further openings to come. Why? Because we recognise that, in a country of over 1.2 billion people, we need to engage at a regional as well as a national level. And because, as companies like yours seek out these new opportunities in these markets, we want to be there, on the ground, to support you.
The Foreign Secretary will reopen our Embassy in Vientiane in Laos next month after a 27-year hiatus, meaning the UK will be represented in all members of ASEAN - which is something I discussed with ASEAN Ambassadors and High Commissioners over lunch earlier today. We hope to open a new Post in China and are creating sixty new jobs in our China network, fifty or so in the ASEAN region, and we have renewed our focus on language skills. In short, we want more staff at more posts speaking more languages.
And under this Government, Ministers from the Prime Minister down are on the road building relationships across the world. I was in South Korea last week - as Ambassador Park, here this evening, will testify. Incidentally, I should take this opportunity to congratulate South Korea on securing a non-permanent seat on the UN Security Council, and also on its success in becoming the home of the Green Climate Fund. I am thoroughly looking forward to visiting Asia again in December; this time to Brunei, the Philippines and Burma.
So we in the Foreign & Commonwealth Office are working closely with UK Trade & Investment to improve the commercial support we provide to businesses. My colleague, Lord Green, has demonstrated real leadership on this. We are now training our diplomats in commercial as well as foreign affairs. And our Ambassadors increasingly undertake secondments to companies before taking up their postings, to gain first-hand commercial experience. I hope this shift in focus is something many of you here this evening will have picked up on in your contacts with my Department.
And our efforts are starting to bear fruit: exports of UK goods to Indonesia, for example, were up by 44% last year. Exports of goods to Mongolia were up by 75%, and are rising by 15% year-on-year in South Korea, partly a result of the EU-South Korea Free Trade Agreement that we helped to conclude.
The Asian Business Leaders Award
It is clear, then, that Asia matters hugely to Britain’s future prosperity.
This is one of the reasons why the Asian Business Leaders Award is so important. And it is particularly special because it is given to individuals who exemplify what Asia House have termed “servant leaders”. Winning the award is not just about success in business. It is as much about the way that person has built their business into a success, and how they have translated their personal success to benefit society as a whole.
It has therefore been a real privilege to meet Lubna Olayan this evening. I am sure that Stephen Green, who knows Lubna well, will have plenty to say about her later on when he presents the Award.
But I just wanted to underline my great respect for what she has achieved. Not only has Lubna steered the Olayan Financing Company towards continued global success, she has also taken an active and positive role outside the business world - whether through her engagement with universities or her positions on the boards of organisations supporting people with cancer and Down’s Syndrome.
Nor should we underestimate her importance in her native Saudi Arabia. Lubna has over the course of her career achieved several firsts. The first female board member of a Saudi public company. The first Saudi woman to deliver the opening address at the Jeddah Economic Forum. The first Saudi woman, I understand, to be awarded Sweden’s Royal Order of the Polar Star.
I know that Lubna Olayan’s story will inspire countless others in Saudi Arabia and right across the world.
So, Your Excellencies, Ladies and Gentlemen, Distinguished Guests,
Let us all congratulate Lubna Olayan, and look forward to a productive and mutually-beneficial future of co-operation between the United Kingdom and Asia.