Deputy Prime Minister, Minister Fu, Professor Tan, Professor Mahbubani, distinguished guests.
It is a great privilege to be here at the Lee Kuan Yew School of Public Policy.
Particularly this year, when the people of Britain – and indeed the whole world – stand with you in remembering the father of your nation and one of the foremost statesmen of our time. Lee Kuan Yew did not just chart the destiny of modern Singapore – he created it. With his characteristic energy, determination and vision he took Singapore from independence 50 years ago and made this country one of the greatest success stories of the modern world.
And by inspiring economic reform across the wider Asia-Pacific region he helped to write not only Singapore’s history but Asia’s too. Margaret Thatcher used to say that there was no Prime Minister she admired more than Lee Kuan Yew for what she rightly called “the strength of his convictions, the clarity of his views, the directness of his speech and his vision of the way ahead”. I had the privilege to meet him myself, back when I was opposition leader and I was struck then by those same characteristics and by all he had achieved.
So I think it’s absolutely fitting that there should be a school of public policy in his honour and it’s a great honour for me to be invited to speak here today.
Trade and investment
Now I have come to south-east Asia with a very simple message. And it’s this. Britain is back – and Britain means business.
We’ve taken the tough decisions to deal with our deficit and rebalance our economy and it is growing – faster than any other large advanced economy on the planet last year. We’ve seen the largest fall in unemployment in our entire history and more jobs created in Britain than in the rest of the European Union put together. We have met and will continue to keep the vital promises to spend 2% of our GDP on defence and 0.7% of Gross National Income on aid, and so we are playing a leading role in advancing security and prosperity all around the world.
And we are more focused than ever on making our country one of the very best places to do business. It’s in Britain where we have the joint lowest corporation tax in the G20. It’s in Britain where we are stripping away the red tape and where I’ve said to my ministerial team if you want to put a new regulation in, you’ve got to take 2 out first. It’s in Britain where you’ll benefit from a time zone where you can trade with Asia in the morning and America in the afternoon; where you’ll find the easiest access to the European market and where you’ll find some of the best universities in the world.
And I make no apology for talking up what Britain has to offer because I want Britain to play a bigger part in the success of this region too. For too long, we have been too reliant on our European neighbours for trade and investment. Of course we must do more to make the EU more competitive and to cut EU regulations, and those are some of the reforms I want to bring about through my renegotiation of Britain’s membership.
But there is a world beyond Europe where Britain must not miss out. And nowhere more so than here in south-east Asia. It’s a striking statistic that Britain still does more trade with Belgium than with the whole of Indonesia, Malaysia, Singapore and Vietnam combined.
Yet ASEAN is rising rapidly. When I visited 3 years ago, it was the 12th largest economy in the world. Now it’s the 7th – predicted to be the fourth largest single market by 2030. Later this year, the ASEAN Economic Community will bring together over 600 million people.
It’s a consumer market with as many new smartphone users as the whole of Europe combined. It’s an infrastructure market where the roads in Malaysia already stretch further than the circumference of the earth.
It’s a digital market where there are more tweets from the city of Jakarta than from any other city on the planet. And it’s a cultural market where there are more supporters of Liverpool and Manchester United in south-east Asia than in the United Kingdom.
I want to seize the opportunities to trade more with these incredible, vast markets. That’s why I have chosen ASEAN as my first major trade visit since the election. It’s why I am the first British Prime Minister to lead trade delegations to Indonesia and Malaysia twice in three years and the first British Prime Minister ever to visit Vietnam.
It’s why I’ve brought with me a plane-load of business people from every region of the UK, the gateway to the EU, right here to Singapore, the gateway to ASEAN. It’s why I’m not just encouraging British business to look beyond their traditional trading destinations but urging other parts of the world to look beyond where they might normally invest in Britain.
So for the first time, I’m holding a Northern Powerhouse event, right here in Singapore. People might ask: “What’s the north of England got to do with the southernmost tip of continental Asia?”
Well, we are rebalancing our economy – and the opportunities are immense. A new job is being created in the north of England every 6 and a half minutes. It is home to at least 23 universities – all brimming with research and development opportunities. Sunderland in the north-east makes more cars than the whole of Italy. And it’s home to companies like FutureEverything – which just won a contract to bring its festival for digital culture from Manchester right here to Singapore this autumn.
I want all this to be the beginning of a whole new scale of trade and investment between Britain and south-east Asia. A partnership that can drive our shared prosperity for decades to come.
Singapore and Britain
But Singapore and Britain share more than a commitment to greater trade and investment – as important as that is. We have a special friendship, based on a shared history and a shared outlook on the world. It is what President Tan described on his recent state visit to the UK as a relationship of “old ties, new links and more opportunities”.
Ever since the founding of modern Singapore by Sir Stamford Raffles as a port for free trade almost 200 years ago we have shared a commitment to open markets, free trade, enterprise and innovation.
And from the influence of British common law at the heart of your legal system today to the UK’s role in creating the Corrupt Practices Investigation Bureau we have shared an appreciation of what I call the golden thread of conditions that enables countries to be successful the world over.
This really matters – and it’s key to explaining the success of both our countries.
Democracy, the rule of law, free speech – I would argue that these things are not just good in themselves, they are, in the long-term, key to economic success as well. They underpin innovation, creativity and choice. Because those things require investment and risk-taking and that only happens when people can be truly confident that their property rights will be respected, that their ideas won’t be stolen, that the the legal system won’t suddenly find against them in favour of a corrupt elite.
In short, we believe in a rules-based world order with fair and accountable institutions and open and fair rules to boost enterprise and growth. Now of course there are challenges in delivering that. A truly meritocratic system has to mean equal treatment for all – regardless of race, disability, religion, sex or sexuality. A rules based world order also demands not just freedom of expression but also a free press that can attack the government and that can sometimes be uncomfortable for those in office, as I know myself.
But the better informed the public is about the issues affecting society the easier it is, ultimately, to come to sensible decisions and to develop robust policies that command the confidence of the people.
Of course, there are market economies in closed political systems. But the best way, I believe, to ensure that an economy delivers long term success, and that success is felt by all of its people, is to have it overseen by political institutions in which everyone can share.
One of the most under-stated, but most important elements of a rules based world order, is a commitment to transparency and to tackling corruption.
No-one understood that better than Lee Kuan Yew. It was his commitment to tacking corruption that helped to give people confidence to invest in this incredible country. And it is no coincidence that Singapore’s climb to the top end of the global indices for anti-corruption and for ease of doing business have gone hand-in-hand with its great global economic success.
And that goes right to the heart of the argument I want to make today. I believe world leaders together need to show the same leadership in tackling corruption that Lee Kuan Yew demonstrated here in making Singapore so successful. Let me explain why.
Think of all our efforts to drive global growth. And then consider the fact that corruption adds 10% to business costs globally and that cutting corruption by just 10% could benefit the global economy by $380 billion every year – substantially more than was estimated for the entire Doha Trade Round.
Then think of all our efforts to tackle global poverty. And then consider what happens when corrupt governments syphon off all the benefits and proceeds of growth that rightly belong to their people.
Think of all our efforts on the other side of the world to rescue people drowning in the Mediterranean and then consider why those migrants are there fleeing, in many cases, from corrupt African states where they have no economic prospects because everything is controlled by a corrupt elite.
Think of all our efforts to combat international terrorists like Boko Haram, Al Qaeda and most recently of course ISIL in Iraq and Syria.
And then consider how an oppressive and corrupt government can drive its people into the hands of the extremists in the first place.
Corruption is one of the greatest enemies of progress in our time.
It is the cancer at the heart of so many of the world’s problems. It affects everything – from a family’s ability to send their child to school, to the credibility of the world’s favourite sport, football.
And yet when it comes to tackling corruption, the international community has looked the other way for too long. We simply cannot afford to side-step this issue or make excuses for corruption any more. We need to step up and tackle it. Now I know there are some who won’t agree with me.
There are the sceptics who will question whether we can afford to take the lead on corruption without putting our own economies at a competitive disadvantage.
And then alongside the sceptics there are the defeatists.
They get the problem. And they get the concept of leading the charge to tackle it. But they just don’t think there is anything we can really do that will make a big difference.
Now countering these arguments is absolutely critical to developing the kind of global effort I believe we need to overcome this great enemy of progress. So let me take each of these arguments head on.
Let me start with the sceptics. Those who ask whether we can afford to tackle corruption are in my view asking the wrong question. The right question is whether we can afford not to tackle corruption. First there is the moral argument. Taking a stand against corruption is clearly the right thing to do. Corruption runs completely counter to our values. It rewards those who don’t play by the rules. And it creates a system of patronage where the resources are shared out by a small elite while the majority are trapped in poverty, denied the benefits and proceeds of growth that are rightfully theirs.
Now this is fundamentally wrong. And we can’t just look the other way while it happens. It says something important about the kind of country we are that we stand up for our values; that we expose those who try to defraud others; and we don’t stand for corruption at home or abroad.
That’s why, in the last Parliament, we established the Independent Commission for Aid Impact to ensure that our money is spent where it should be and why we’ve taken action to suspend support to a number of countries after corruption scandals.
But tackling corruption isn’t just morally right. It’s economically right too. Companies that become complicit in paying bribes find that they face higher costs, then embark on contracts that may never be honoured, they operate in a false environment that can change suddenly and dramatically, and they incur reputational damage for being complicit in a corrupt system.
Acting to stop that – as we did with in Britain with our Bribery Act in 2010 – shouldn’t have to damage business, jobs and growth. In fact – the effect can be the absolute opposite. As we have seen in Britain – and as we have seen here in Singapore: where tackling corruption hasn’t held back growth, it’s actually boosted it.
Let me explain why. Over the long term it is societies that create and enforce simple, stable rules that will attract the high-value investment. This in turn means that instead of limiting their investment to low-value, low-risk, parts of a supply chain investors are prepared to risk more of their money share more of their projects with partners and innovate more.
Of course commerce depends on many things – It depends on rules, on markets, on products, on customers. But for a large market to flourish – whether in Europe or in Asia – it also needs an element of trust. Trust in the rules. And trust in the implementation of the rules. And all those act to create trust in those you do not know. Now corruption undermines all that.
It makes it riskier to trust strangers and that doesn’t just undermine business, it erodes the bonds of society more broadly too. So we simply cannot afford not to ignore it.
But what about those who think there’s nothing we can do that will really make a difference? What about the defeatists? They throw their hands in the air and say it’s just the way of the world. They say: “Yes, maybe we can tackle corruption in some countries but it’s too deeply engrained to defeat it across the globe.”
Well, of course it’s difficult. The most important things so often are. But I would say: look at Lee Kuan Yew. He didn’t accept that defeatism and neither should we. When Britain first set out to create a partnership of countries that would make commitments on transparency – what we called the Open Government Partnership - many people doubted it would amount to much.
But today 65 countries have made over 2,000 commitments on transparency and openess from pioneering citizens’ budgets in Liberia to letting the public audit major government projects in the Philippines. It’s making a difference.
When I first put good governance at the heart of my co-chairmanship of the UN High Level Panel, when we were looking the replacement for the Millennium Development Goals, some doubted that we would get agreement to put tackling corruption at the heart of our international approach to defeating poverty.
But that’s exactly what we have achieved.
With the new Global Goals that will be launched in New York this September we are set to secure for the first time a concrete commitment to reduce corruption and bribery in all its forms.
And not just that. To promote the rule of law and ensure equal access to justice for all. To reduce illicit financial flows, strengthen the return of stolen assets, and combat organised crime. To build effective, accountable and transparent institutions and representative decision making. And to ensure public access to information and to protect basic freedoms.
This is a fundamental change to the way the international community fights poverty and if the world can live up to these bold commitments over the next 15 years then we really will have a chance to end extreme poverty and build a better life for all. All those things are going to be written into the new global goals.
Now we’ve seen with all such agreements – winning the argument is only half the battle. Action wins the war – and I’m determined to do just that. But again to the defeatists, look at these arguments.
When I put tax, trade and transparency at the top of the G8 agenda for the first time back in Lough Erne in Northern Ireland two years ago many thought it would be a flash in the pan. Another one of those communiques with words that don’t really mean anything.
But today over 90 countries – including Singapore – have agreed to share their tax information automatically by the end of 2018, meaning that more people and companies will pay the tax that is due. At the same time we are also working with the OECD and the G20 to finalise an international plan to stop companies from artificially shifting their profits across borders to avoid taxes.
So I don’t accept the defeatism. In fact we should use the progress that has already been made as a springboard to go even further. And a key area I believe we need to focus on is transparency of business ownership: who owns what.
Transparency of business ownership
As the economist Professor Paul Collier has noted, lack of transparency over who owns companies “not only assists tax avoidance, it is the key vehicle for corruption.”
Why? Because when you have companies whose ownership isn’t known you allow a shroud of secrecy behind which people can do bad things, sometimes terrible things, with no accountability. The corrupt, the criminals, the money-launderers – they need anonymous company structures to hide, to move and to access their money. So by lifting off this shroud of secrecy we can expose wrongdoing and dissuade others from going down the same path.
Now this is a challenge for everyone – including ASEAN, including Britain. We too must get our house in order – and we are. And that is why the UK government has legislated to ensure that from next year, Britain will become the first major country to establish a publicly accessible central registry showing who really owns and controls all British companies.
This will open up a new era of corporate transparency in Britain. But, of course, it will only apply in Britain and for British companies. So the aim should surely be for others to follow. To really tackle corruption effectively, we need to be able to trace data from one country to another. We don’t want criminals to be able to go unnoticed, just because they move money across borders or have assets in different countries. The torchlight should be able to follow them. If we are to win, we must make sure that there is nowhere to hide.
So I’ll continue to make the case for transparency with international partners – including the British Overseas Territories and Crown Dependencies. And I am willing to go further, and take concrete steps to force the pace.
And that includes looking at whether we can get foreign companies investing in the UK to step up to the same level of transparency.
Now with £122 billion of property in England and Wales owned by offshore companies we know that some high-value properties – particularly in London – are being bought by people overseas through anonymous shell companies, some of them with plundered or laundered cash. Just last week, there were allegations of links between a former Kazakh secret police chief and a London property portfolio worth nearly £150 million.
I’m determined that the UK must not become a safe haven for corrupt money from around the world. We need to stop corrupt officials or organised criminals using anonymous shell companies to invest their ill-gotten gains in London property, without being tracked down.
People like convicted Nigerian fraudster James Ibori, who owned property in St John’s Wood, Hampstead, Regent’s Park, Dorset all paid for with money stolen from some of the world’s poorest people. So we have got to find ways to make property ownership by foreign companies much more transparent.
There may be a number of ways we can do this, for example extending what we currently ask of UK companies to foreign companies too. And we will consult on the best way forward.
But as a first step, I have asked the Land Registry to publish this autumn data on which foreign companies own which land and property titles in England and Wales. This will apply to around 100,000 titles held on the Land Register and will show for the first time the full set of titles owned by foreign companies.
And we will also look carefully at the case for insisting that any non-UK company wishing to bid on a contract with the UK government should also publically state who really owns it using the government’s buying power as a if you like, battering ram for greater corporate transparency around the world.
So let me be clear. The vast majority of foreign-owned businesses that invest in property in the UK are entirely legitimate and proper, and have nothing at all to hide. They are welcome in Britain. Indeed I want more of them. We want one of the most open country in the world for investment. And I want Britain to be that country.
But I want to ensure that all this money is clean money. There is no place for dirty money in Britain. Indeed, there should be no place for dirty money anywhere. That is my message to foreign fraudsters: London is not a place to stash your dodgy cash.
The challenge I am laying down for every country today is to root out the rot of corruption – to ensure transparency over what your own companies are doing; require transparency for foreign companies in your country too and work with us to spread this approach to transparency around the world.
This will be a vital part of the Anti-Corruption Summit we will host in London next year. A Summit where I hope the whole world can work together to strengthen all the tools that we have to take on corruption. To put fighting corruption at the heart of our international institutions. To support the investigators and prosecutors who can help bring the perpetrators to justice. To maximise the way we use international aid to drive better governance and to fight against corruption. To make the rules and practices which govern global commerce even more resilient to threats from corruption. And to give more support to those in business, in civil society and the media who are working to fight corruption like the ASEAN Corporate Social Responsibility Network which Britain is supporting to promote best practice among local businesses right across the region, including in Burma.
Together I believe we can defeat the cancer of corruption in all its forms and with it, strike the biggest blow for our generation in the struggle to ensure greater prosperity and greater security in every part of the world.
To see it all through will take the leadership that Lee Kwan Yew embodied. But there could be no greater prize and frankly no more fitting a tribute to his memory.
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