With China and India propelling it, Asia won't be 'unduly disadvantaged' by a recession in the US
ASIA - propelled by the twin engines of China and India - will not be 'unduly disadvantaged' if a recession hits the United States, said Minister Mentor Lee Kuan Yew last night.
AIRING HIS VIEWS: MM Lee Kuan Yew is confident that the aviation industry in Asia will continue to soar. -- PHOTO: LIANHE ZAOBAO'I believe this may be the first time where the US economy catches a cold and we are not going to catch influenza - I hope,' he said at the Singapore Airshow Aviation Leadership Summit dinner dialogue attended by about 200 aviation pundits.
The Chinese and Indian economies are unlikely to dip below 8, 9, or 10 per cent, he added, and while about 40 per cent of intra-Asian trade today is bound for the US, even if the US cuts its imports by half, Asia will not be too badly hit.
Zeroing in on the aviation industry, he was confident Asia will continue to soar high, as new airports are built and more people take to the skies.
He said: 'I see enormous growth in Asia in the next 10, 20 years, more in Asia than in any other part of the world.'
China alone is looking at about 240 airports by 2020 and more than 500 by 2050 - and 'that is just the beginning' he said.
But on whether Asia, with its booming air travel sector, is well-placed to lead the aviation industry in all areas, including liberalisation going forward - an agenda that the International Air Transport Association (Iata) led by its head Giovanni Bisignani is trying to push - Mr Lee was a bit more sceptical, adding that 'it will be very difficult'.
Countries with airlines that are not doing so well will want their flag carriers to grow stronger first before they open up. And while in his view, this is the 'wrong approach', it is nonetheless the reality.
Citing Singapore Airlines' example, Mr Lee said its success shows how you become competitive when you are forced to compete internationally.
He remembers telling management and unions when Singapore Airlines (SIA) was set up as a separate entity from Malaysia's national carrier that 'if you can fly the flag and make a profit, I will be proud. If you cannot, let us forget it and somebody else can fly this flag'.
Everybody in SIA - from management, to pilots, to cabin crew and catering - understood that unless SIA was better than the rest, there was no reason for people to fly the airline.
Mr Lee said: 'So I believe many of the problems that our neighbours are facing will go if they get international competition going and get international management to bring them up to speed. Then the whole region will prosper.'
Some progress has been made, he said, noting that by December, Asean will lift all restrictions on flights between capital cities of the 10 member states and by 2015, Asean national carriers will be able to criss-cross the skies over the region with no restrictions.
Turning to the other hot potato of global warming, Mr Lee was also asked during the 45-minute session for his reactions to attacks on the aviation industry by governments and organisations, primarily in Europe. Proposals have included taxes and penalties on airlines.
He replied that the industry contributes to about 2 per cent of man-made carbon emissions, but global warming has to be attacked in every way.
Still, if the problem is to be dealt with in a more cost-effective way, 'then you must come to the conclusion that surely you can save more by rationalising air routes and have less of this prohibited flights and no-fly zones.'
Other things like more fuel-efficient jets, maybe the use of solar cells and many other options will also have to come.
According to industry average, one minute less of flight time saves 62 litres of fuel and 160kg of carbon emissions.
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