Uncertain External Environment
Mr Chairman, in July last year, Dr Henry Kissinger—probably the most senior Secretary of State and Foreign Secretary in the world—declared, “We are in a very, very grave period.”
2. We are, in fact, witnessing the rapid unravelling of the post-World War Two global order. And this unravelling is being accompanied by profound shifts in the balance of geopolitical power and also by unprecedented leaps in technology. And these changes are not a passing, transient phenomenon. No one knows how long it will take for the world to set onto a new, stable trajectory again. For Singapore, our external environment therefore will be increasingly volatile, ambiguous, complex, and uncertain. And we cannot afford the luxury of navel-gazing. Let me therefore address the key foreign policy concerns, which in fact have been brought up by all the Members who have spoken before me.
3. First, Mr Vikram Nair and Mr Charles Chong asked about Sino-US tensions.
4. I agree with both of you this is the most important bilateral relationship in the global system. And the ability—or lack thereof—of the US and China to find a new modus vivendi will shape our era. The US actually envisioned and underwrote the post-World War Two global order, now 70-years old: Pax Americana. In 1960, the American share of global GDP was 40%. At that level, it was worth its while for the US to be a unilateral benefactor, umpire—global policeman, indeed—for the world. But its share has now declined to 24% of global GDP. Therefore, it is a completely legitimate political question for American voters to question whether it is worth their while to continue to sacrifice American “blood and treasure” for international interests. And there is an increasing bipartisan consensus that America has been taken advantage of by China, and must now play hardball. On the other hand, China is pursuing the ‘China dream’, and is determined that the ‘century of humiliation’ will not be repeated. It will not allow the US or any other power to stop it from taking what it believes is its rightful place in the world. This dynamic between the two powers is therefore shifting from one of engagement to one of strategic rivalry and competition. And consequently, new strategic architectures will arise. And countries, including we, will come under intense pressure to choose sides. Even if the current Sino-US trade tensions are resolved, the strategic contest will continue to be waged, but it would include areas: defence, energy, cyber security—even outer space. And we can expect this major power rivalry to sharpen, especially in the technological arena. The ongoing arguments about 5G technology are a case in point. Both the US and China know that the first country to master the Fourth Industrial Revolution will have a huge advantage.
5. Second, the digital revolution has already triggered disruptions in many other parts of the world. A rise in computing power, an explosion in big data, as well as progress in automation, robotics, new computational techniques, and smart technology have transformed societies and economies, and disrupted phenomena all over the world, including in Singapore. The digital revolution, which is still in its early phases, has ushered in a new Gilded Age, where the fruits of economic growth are unevenly distributed. The winners in this era are the giant technology companies and the digital oligarchs who control all the data flows. The losers are entire industries and less-skilled workers who are at risk of being displaced by these smart technologies. Workers everywhere in the world are anxious. They feel squeezed, and especially in the West, there has been a stagnation in middle-class wages for several decades. Consequently, with the erosion of the middle-class in developed countries, you will see that they are channelling their frustration towards easy scapegoats—the obvious ones: immigration; free trade—and increasingly, you will see that voters in the middle have become disenchanted with mainstream political parties. Populist politicians, who promise to impose protectionist and nationalistic policies and appeal to primordial loyalties of race, language, and religion, are on the rise, everywhere. We in Singapore must not allow these disruptive forces to fracture our own society. We can, and we must master the technologies of the future so that our people—our citizens—can remain successful and united. Then, and only then, can we preserve our independence and make decisions based on our own sovereign interests. The advances in information technology have made Singaporeans far more media-savvy, and has exposed us to the crowded marketplace of competing viewpoints and disinformation. But we must also be aware that this also raises the risk of us being influenced by foreign entities who are using these new tools, including using them in the political arena.
6. Third, another worrying consequence of this uneven distribution of growth—both within countries and across countries—is the inevitable rise of protectionism and nationalism across the world. Around the globe, the right and left political wings have drifted further apart, hollowing out the political centre. The far right has responded to popular disenchantment by focussing on immigration and free trade. The liberals have tacked even further left and demanded radical redistribution. We are not so bad in this House. But you can hear faint echoes of those same political siren calls. This tumult of domestic politics and political polarisation has created a geopolitical order dominated by increasingly short-term transactional ethos and a zero-sum mind-set.
7. Fourth, the global, multilateral rules-based trading system embodied by the World Trade Organisation (WTO) is now under serious threat. Ms Tin Pei Ling, Prof Walter Theseira asked about how we will try to uphold the multilateral trading system. The free, open, rules-based multilateral system actually has underpinned the success of Singapore and ASEAN, and has been the formula for peace and prosperity for many decades. Unfortunately, countries under domestic political pressure increasingly view multilateral agreements on issues such as trade, climate change, security, arms control, cyber security. They view multilateral agreements as shackles on sovereignty and a burden on economic growth. Therefore, leaders in these countries are resorting to unilateral actions and prefer bilateral deals instead of multilateral deals. They repudiate multilateral approaches and the multilateral institutions that have kept the peace and facilitated prosperity. So, over time, trade connectivity may shrink, tit-for-tat action on disputes will increase, and our ability respond to global challenges like radicalism, cybersecurity, and climate change will be impaired. Left unchecked, this will be a negative-sum game for everyone.
8. Closer to home, we must remain vigilant about threats to our regional stability and security. We are witnessing a surge in identity politics and exclusive extremism that raises the risk for radicalism and terrorism in our region. The return of ISIS fighters to Southeast Asia and the episodes of violence, which we’ve seen in the southern Philippines last year, are stark reminders that this is a clear and present danger. Mr Louis Ng also asked about the refugee situation at the Myanmar-Bangladesh border. Both of us have been there. I can tell you this remains an issue of concern. Dr Maliki will elaborate on our response later. In just the last few days, we’ve witnessed recent escalation of tension between India and Pakistan—again, another reminder that the old fault-lines remain, are volatile, and are susceptible to political exploitation.
Singapore’s Approach to the Challenges
9. Therefore, the question which all of you have posed is how should we in Singapore respond to these challenges in this current state of the world. I would submit that our foreign policy principles remain as salient today as they were at our independence and constructed by Mr Lee Kuan Yew and Mr S Rajaratnam.
10. First, we must continue to promote a rules-based international order. A system that upholds the rights and sovereignty of all states and the rule of law is important, especially to a small city state like us. Without it, small countries will have very little chance of survival. Under a rules-based system, bigger powers do not get a free pass to act as they will. But in exchange for that, what they would benefit from is an orderly, stable, global environment. We all know that in Singapore, our trade volume is three times our GDP. I think all members agree with me that we must stand up for the multilateral, rules-based, global trading system. This is not a debating point; this is our lifeblood for us in Singapore. So we continue to play an active role at the WTO, and in constantly trying to negotiate a web of free trade agreements at both the bilateral and multilateral level. Last year, we ratified the Comprehensive and Progressive Agreement on the Trans-Pacific Partnership (CPTPP). Yes, in fact, this deal started off with four small states, Singapore, New Zealand, Brunei and Chile. Then the Americans, Japanese, everyone else came in, and it became the TPP. And then, America pulled out. Fortunately, with Japanese leadership and active support from the other 11, we got the CPTPP signed, and then to my pleasant surprise, enough of us ratified it so that it came into force on the 30th of December. This is important. This leaves the door open. Hopefully, the United States, at some point, will find a way, a political way, to come back and to engage in trade at a strategic level with the Asia-Pacific.
11. The CPTPP represents a market of approximately 500 million people and 22% of global trade, and will provide our companies with increased market access in the Asia-Pacific, and these figures exclude the US. I am also happy to note there has been substantial progress on the negotiations for the Regional Comprehensive Economic Partnership (RCEP), and leaders of all the RCEP participating countries have committed to conclude the RCEP later this year.
12. If we get this done, it would encompass 45% of the world’s population, and amount to 30% of global GDP. This would be big. We have also launched, and by this I mean Singapore, FTA negotiations with MERCOSUR, the Pacific Alliance, and the Eurasian Economic Union. The European Parliament just, two weeks ago, voted in favour of ratifying the EU-Singapore Free Trade Agreement. This is the first bilateral trade agreement signed between the EU and an ASEAN country. It signals the EU’s commitment to step up engagement with Southeast Asia, and will be a, we hope, pathfinder for future agreements between EU and other ASEAN member states, and ultimately of course, we hope that there will be an EU-ASEAN Free Trade Agreement. We should also remember that as a port at the edge of the narrow straits that ultimately connects the Pacific Ocean to the Indian Ocean, freedom of navigation under the United Nations Convention on the Law Of the Sea is absolutely critical for Singapore. And this is why we have always participated actively at the United Nations, and in the formulation of international regimes and norms. We were a key player in the negotiation for the Law of the Sea Treaty, that is UNCLOS, and also for the Paris Agreement on Climate Change, on which I spent four and a half years of my life on. We continue to contribute actively to shaping new norms to govern the global commons, including emerging areas such as cyberspace and outer space.
13. Second principle, we must always be a credible, consistent and reliable partner. We will continue to be honest brokers. We will deal fairly and openly with all parties. The key point is this and many of you have asked, how are you going to deal with people who force you, who are trying to force you to choose sides. The key point is our neutrality. And that Singapore cannot be bought, nor can we be bullied. We are not “for” or “against” anyone – we are “pro-Singapore”. We are Singaporeans. We are pro-Singaporeans. We will be nobody’s stooge. We will not act on behalf of any other power. We act consistently and purely in the long term interests of Singaporeans. And in fact, it is this sense of strategic predictability that has enabled Singapore to build up trust and goodwill and relevance, with all the major powers. And because we are credible, Singapore has been able to play a constructive role in international affairs. And we have kept up good relations with all the major powers. The US remains a key partner for us. We have continued our close cooperation in both defence and security spheres. We have strengthened our economic ties. Last year, both US President Donald Trump and Vice President Mike Pence visited Singapore. While the current US Administration has adopted an unconventional approach towards issues such as trade, actually the fundamentals that underpin the strong bilateral relationship with us remain.
14. Mr Charles Chong asked about the US’ engagement of the region. The US has significant investments in Southeast Asia and broad-based links with many Asian countries. In fact the US has more invested in Southeast Asia than it has invested in India, China and Japan combined! Amazing statistic. I only discovered this when I read Vice President Pence’s speech two years ago, and every time I meet both the President and senior members of the administration, I remind them that the US has real skin in the game in Southeast Asia. The US has rolled out several initiatives to demonstrate its continued commitment to the region, including the US$113 million in new economic initiatives, and another US$300 million in funding for regional security cooperation. Mr Henry Kwek focussed on our longstanding relations with China. In fact, several of you brought that up. Well, last year, we enjoyed a very good series of exchange of visits at the highest level. We also maintain regular exchanges through institutionalised platforms such as the Joint Council for Bilateral Cooperation (JCBC) chaired by DPM Teo, Singapore-China Forum on Leadership, also chaired by DPM Teo, and Singapore-China Social Governance Forum, again chaired by DPM Teo. On the economic front, Singapore remains, surprisingly, China’s top foreign investor. We have skin in the game. While China has been our largest trading partner since 2013. Both sides, China and Singapore, concluded the upgrade of the China-Singapore Free Trade Agreement in 2018, and this will bring our economic cooperation to new heights. My colleagues will elaborate on these accounts in greater detail, but the point I want to make is this: that even at a time of increasing tensions and polarisation, we have maintained relations with both these key powers in a way that is robust, constructive and sets us up well for the future.
15. Mr Low Thia Khiang delivered an excellent speech, and I really could not find anything to disagree with you. Your key point was whether we should shift our strategic focus to ASEAN. Actually it is not about shifting strategic focus but recognising that ASEAN has always been a cornerstone of Singapore’s foreign policy and for our engagement with the region and the rest of the world. And I completely agree with you that we must strengthen the open and inclusive ASEAN-centric regional architecture. When we were ASEAN Chair last year, we launched several initiatives to boost regional integration and to increase our key partners’ stake in the development of our region, including the establishment of the ASEAN Smart Cities Network and the Model ASEAN Extradition Treaty. We also achieved key milestones for the ASEAN-China relations during the three years we were the coordinator for that relationship from 2015 to 2018. We upgraded the ASEAN-China Free Trade Area , a big step towards our goal of achieving two-way trade in excess of US$1 trillion and investment of US$500 billion between ASEAN and China by 2020. We are well on the way to achieving these targets. Both sides agreed on a single draft negotiating text for the Code of Conduct in the South China Sea. It will not solve all the problems there, but it is an important confidence building step.
16. Mr Vikram Nair asked about the progress of these negotiations. We are working towards completing the first reading by this year. We are encouraged by the momentum, but we should realistically recognise that there is still a lot of work to be done. Both sides have also charted the future direction of the ASEAN-China relationship with the ASEAN-China Strategic Partnership Vision 2030, which was adopted at the 21st ASEAN-China Summit in November last year. My colleagues will again further elaborate on this later on. Our credibility has also consistently won us a seat at the G20 table over several years. I do not need to remind you that we are not among the 20 largest economies in the world. We are not there, but yet we have been invited. And more recently, we have been invited by Japan, the current G20 President, to participate in the G20 Meetings and the Osaka Summit later this year. We look forward to working closely with Japan to support Japan’s G20 Presidency and its ambitious vision.
17. Third, Singapore must continuously create relevance for ourselves so that we can be a successful and vibrant country. And here I want to quote Mr Lee Kuan Yew, and he said: “We must make ourselves relevant so that other countries have an interest in our continued survival and prosperity as a sovereign and independent nation. Singapore cannot take its relevance for granted. Singapore has to continually reconstruct itself to keep its relevance to the world and to create political and economic space.” If we are not successful, if we are not united, if we are not stable, we would be completely irrelevant. Mr Lee has also reminded us that there is no irreplaceable function that a small country performs. Singapore was asked to host the 1st US-DPRK Summit last June. I think I have shared with members before that we did not put up our hands to ask to host, but when we were asked, we had to say yes. But we are proud to have played a small part in easing tensions on the Korean Peninsula. I think this reaffirmed Singapore’s reputation as an impartial, reliable, neutral and safe country, and a trusted and consistent partner. And I want to thank all Singaporeans again for their forbearance and for showing the world what we can do at short notice, and putting on, again, a safe event which put us on the map, which made Singapore one of the most searched google terms, and hopefully people know where we are now. We know that Vietnam hosted the 2nd US-DPRK Summit in Hanoi. You know that things didn’t go exactly according to plan, but both sides will continue their dialogue, and we hope that their efforts will ultimately lead to lasting peace and stability in the Korean Peninsula.
18. Finally, we must always aim to be a friend to all but an enemy of none. And this is especially so for our immediate neighbourhood, where peace and stability are absolutely essential. Our closest neighbours will always be Malaysia and Indonesia. This is a geographical fact, and therefore they will always be of special importance to us. Mr Vikram Nair and Prof Faishal Ibrahim asked about our relations with Malaysia. Mr Nair and Dr Chia Shi-Lu also asked about our relations with Indonesia.
19. For Malaysia, although several bilateral issues have come to the fore in recent months, in fact in just the last three months, we remain committed to resolving these issues in an amicable and constructive manner, and in strict accordance with bilateral agreements and international law. On the port limits issue, officials have been meeting to discuss measures to de-escalate the situation. And both sides are aware of the urgent need to prevent accidents and untoward incidents, like the recent collision between the Greece-registered bulk carrier Pireas and the Malaysian Government vessel Polaris, which was illegally anchored in Singapore Territorial Waters. This working group of senior officials is due to submit its recommendations to the two Foreign Ministers in early March, which is now. The Transport Ministers and the senior officials from both sides have been meeting to discuss the arrangements for Seletar Airport and the airspace over Southern Johor, including the instrumented approaches into Seletar Airport, and Malaysia’s Restricted Area over Pasir Gudang. And again we look forward to finding a solution that is mutually agreeable, and – fortunately or unfortunately – as my capacity as acting Transport Minister, this is also my problem at this point in time.
20. For Indonesia, our bilateral cooperation remains deep, multi-faceted and reinforced by frequent high-level exchanges. Our two economies are inextricably linked, with economic cooperation robust and expanding. Singapore remains Indonesia’s top foreign investor in 2018 (US$9.2 billion worth of realised investments). We have committed investments in Indonesia such as the Kendal Industrial Park in Semarang and the Nongsa Digital Park in Batam. The US$10 billion bilateral financial arrangement, which was announced at the 2018 Leaders’ Retreat, and signed on 5 November 2018, reflects the confidence in the economic fundamentals of both countries. Singapore and Indonesia also share common defence and security challenges. And our agencies collaborate closely through frequent defence exercises, and in intelligence sharing for counter-terrorism purposes.
21. Mr Alex Yam asked about our relations with Brunei. You know that we have a longstanding special relationship with Brunei and we will continue to strengthen these bilateral ties. Our strong defence cooperation - many of us have trained in the jungles of Brunei - and Currency Interchangeability Agreement remain important pillars of our bilateral relationship.
22. We will leverage on other platforms to expand Singapore’s networks and soft power. Ms Joan Pereira asked about the Singapore Cooperation Programme (SCP). The SCP is a key example of our commitment to share our experience with other developing countries through human resource development. Since 1992, over 124,000 foreign officials have participated in our programmes and they represent an invaluable reservoir of goodwill for Singapore. My colleagues will provide further details.
23. Mr Low Thia Khiang and Mr Terence Ho asked about Singapore’s soft power. The intangibles of foreign policy – the attitudes, the perspectives, the mindsets – are very important. And in fact, they are the ultimate currency of our foreign policy – because if people like us, trust us, depend on us, I think we will continue to do well. To cite an example, many of our overseas missions use cultural diplomacy to showcase the diverse heritage of Singapore, a heritage which embeds us firmly in the ancient and rich cultures of Asia. When we are able to showcase our arts practitioners’ stories and innovative techniques, it allows friends in other countries to understand Singapore a little better, and to get to know our people at a more intimate level.
24. More broadly, by being successful, by being honest, by building a society which is open, pragmatic, hardworking and rooted in our multicultural heritage, we build warmer people-to-people relations and a store of global goodwill to Singapore. So here again I want to agree with Mr Low Thia Khiang. I think you made a very important point about humility in success, and we will pursue his suggestions on deeper engagement with ASEAN through economic projects, people-to-people ties, and digital diplomacy.
Looking Forward and Key Priorities
25. Looking forward, we must continue to strengthen our bilateral and multilateral partnerships with our neighbours and the major powers. And it is important to manage our key accounts adroitly in order to preserve our strategic space and options. We will continue to maintain constructive and open engagement with Malaysia to manage and to resolve the differences and to advance the bilateral cooperation for mutual benefit. Indonesia is on track to hold legislative and presidential elections on the 17th of April 2019. I want to emphasise that Singapore does not take sides in the elections of any country, including our neighbours. We are committed to working with the government of the day. We hope for a smooth and peaceful elections that will contribute towards Indonesia’s long-term stability and success. We look forward to continuing the strong and constructive partnership with Indonesia. We also look forward to working with Brunei to explore new areas of cooperation, such as aquaculture and agriculture. We will continue to engage the younger generation of Bruneian leaders through the annual Young Leaders’ Programme, which will be held in Brunei later this year. We will also continue to deepen and broaden our links and our cooperation with other neighbours in the region.
26. The Sino-US relations will continue to be the defining major power relationship in the 21st century. It is in everyone’s interest to keep the US and China engaged in the region. Singapore has a big stake in good Sino-US relations; and we will continue in a humble but constructive way to position ourselves as a helpful, reliable partner to both, and where relevant, to be a valuable interlocutor. On the bilateral front, we will continue to enhance economic, defence, security including cybersecurity cooperation with the US. We are also working very closely together with China, including on its Belt & Road Initiative (BRI) and the Asian Infrastructure Investment Bank (AIIB).
27. We should also continue to engage other key partners, Australia, Japan, India, New Zealand to keep them engaged in our region, and to establish Singapore as a partner of choice. Australia remains a very close friend of Singapore. We continue to build on the positive momentum created by the Comprehensive Strategic Partnership which we signed in 2015. We are exploring new areas of cooperation such as the digital economy and cybersecurity. Japan continues to be a close and like-minded partner. We are expanding cooperation in areas such as the Smart Cities, infrastructure cooperation, as well as the provision of technical assistance to third countries through the renewed Japan-Singapore Partnership Programme for the 21st Century. Our relationship with India remains robust and forward-looking. India has made great strides in digitalisation, and we are enhancing our FinTech collaborations, including linking up our electronic payment systems, banks, and our businesses. With India’s large population, which by the way will shortly overtake China to be the largest population in the world, Singapore’s position as a regional hub gives us tremendous potential for us to work together. We continue to deepen relations with New Zealand, another like-minded and longstanding partner. In fact, we have just concluded negotiations to upgrade our bilateral Free Trade Agreement last year, and we are working to upgrade our relations to an Enhanced Partnership later this year. We reaffirm our commitment to free trade and to an open, rules-based international order and multilateral trading system.
28. And as we develop our national capacity to innovate, we have also stepped up efforts to profile Singapore’s thought leadership in today’s innovation-led economy, and our contributions, through technical assistance under the Singapore Cooperation Programme. This has helped to expand our mindshare and, as Mr Loh reminded us, to increase our soft power in various parts of the world. But as I have said repeatedly in this House, diplomacy begins at home. Division at home, within the shores of Singapore, will paralyse our foreign policy. We need to continue to strengthen the resilience and the unity of our citizens, and to build a deeper appreciation of the fundamental principles of Singapore’s foreign policy and of our vulnerabilities as a small country. We must continue to invest a fair share of our resources in diplomacy so that we can stand our ground, protect our sovereignty, keep Singapore safe. But, we will never ask for more than we need. In fact, I would remind the House if you look at all the Ministry budgets, MFA is the lowest and MFA has not asked for an increase this year. What we are asking for is more domestic support. And I am very grateful for the hard work and the ingenuity of our diplomats; and the sacrifices of their families.
Conclusion
29. All that we do in Singapore, including the larger Budget debate, must take into account the profound changes taking place in the region and world around us. We have to accept the geo-political realities and vulnerabilities of being a small island city state. We take the world as it is.
30. But this does not mean that we are powerless. We must stay nimble, we must continue to seize opportunities whilst maintaining our balance in midst of rapidly evolving world, and we can do this with your support.
31. We will secure Singapore’s continued independence, well-being and prosperity. Thank you.
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