Transcript of Minister for Foreign Affairs Dr Vivian Balakrishnan's Interview with The Hindu, 6 June 2024

10 June 2024

The HinduWelcome to this special interview at The Hindu. I am actually in Singapore and the Diplomatic Editor Suhasini Haidar, and I am speaking with Singapore's Foreign Minister Vivian Balakrishnan. Dr Balakrishnan has been the Minister of Foreign Affairs for nearly a decade, a Minister in Singapore for nearly two decades or more. In fact, I first met you when you were the Youth Minister in the 2000s. But thanks so much for doing this interview so soon after the Indian elections.


So my first question really is, we have already seen that Prime Minister [Lawrence] Wong has tweeted congratulations to Prime Minister [Narendra] Modi. What is your response? Not just to the elections, there has been some element of surprise in them. And how do you think they are going to impact India-Singapore ties from this time on?


Minister: Well, the second question is easier to answer. I do not think it is going to affect our relations, which are deep, enduring and I should add, bipartisan. But we can discuss that later.


First of all, I would say India is a democracy. And speaking as a practising politician who has to win votes at every election, you can never be sure until polling is closed, the boxes are sealed, brought to a counting centre, opened and counted. So all the punditry and speculation beforehand is irrelevant the moment the votes are counted. So I would say in a democracy, be prepared for surprise. First point.


Second point is that if you zoom out of this election and look at India's election outcomes, I think Prime Minister Modi is the only Prime Minister since Prime Minister [Jawaharlal] Nehru to have won a third term. In a robust democracy, which India is, that is already an incredible achievement. So we can argue about margins, we can argue about surprise, but nothing takes away from that historic achievement.


The third point I would make, again as a politician, is that unless you are on the ground, you do not really know what is the complex compendium of reasons that people ultimately choose to vote one way or the other. So I think we should all be humbled by this. All politicians should be humble. And that includes the commentariat as well.


And now I wanted to look beyond just the margins and the outcomes. Singapore and India have long, historical, cultural, linguistic and commercial ties. In fact, I have often reminded everyone that because of the Himalayas, because of the dense jungles in Southeast Asia, for most of recorded history, India's engagement with Asia, and in particular Southeast Asia by definition, has been maritime, through the sea. And because of Singapore's location, we are in a sense the southernmost tip of the Eurasian continent. You come down through the Straits of Malacca, or perhaps in the past before the Suez Canal, you could come around the Sundar Straits. That is for ships from Europe coming around the Cape of Good Hope. But for India, it [the trade routes] has always been in the Indian Ocean, Andaman Sea, Straits of Malacca, Straits of Singapore and then to the rest of Asia. So that has been longstanding, even before independence and democracy.


Next point is that if you look in terms of trade and commerce with the world, India really opened up a bit late compared to China, in 1991 under Prime Minister [P.V. Narasimha] Rao. But again, if you take the broad sweep of trade and economic policy since 1991, it has been bipartisan. I can say from Singapore’s perspective, the external-facing elements of Indian diplomacy have been remarkably bipartisan. And that is why I do not expect a change, even if there is a change of government.


From the same perspective, since CECA [the Comprehensive Economic Cooperation Agreement] was signed in 2005, our trade volume has increased maybe two and a half times from something like S$20 billion to now I think more than S$50 billion. If you look in terms of the flow of investments or cumulative stock over the past two and a half decades, I am always surprised that a tiny city state like Singapore can account for more than 20%.


The Hindu: Since 2018, Singapore has been the highest FDI source for India. But over the last year, investment levels actually dropped more than 30%. How do you see the two countries trying to improve that?


Minister: I would make two points about that. First, it should be a point of surprise that a tiny city state should account for such significant flows and cumulative stock. The other point I would make is that as India continues its opening, and as more and more of the other multipolar elements of the world realise the economic growth prospects of India, I would expect in proportionate terms our share to be reduced. Not because we are less interested, but because the rest of the world has cottoned on to the fact that this is a growth frontier. So the point is, we should still remain surprised even today that Singapore represents such a significant stock.


The HinduI did want to quickly ask about that. For five years Singapore has been the highest FDI source for India, but over the last year, investment levels actually dropped more than 30%. How do you see the two countries trying to improve investment?


Minister: I take the longer view. I think the investments are going to continue to grow simply because the prospects are so good. India is now the fifth largest economy and again, if you believe the trends, could well become the third as soon as 2027. You have got 1.4 billion people. It is now the most populous country in the world. It has got a demographic dividend. If, and this is a big if, you can match jobs with the skills and education of your young people, and then given the geostrategic contest between the United States and China, the next five to ten years are an enormous opportunity for India. So I see investments flowing to India. I would expect Singapore to also look at opportunities there. But because the rest of the world is aware, I think if you just look in terms of proportion of global investments in India, ours will shrink a bit. But in absolute terms, I expect it to increase.


The HinduYou spoke about the opportunities. Where do you see the bottlenecks? Is India a country that is open for investment? Is it easy to invest in?


Minister: Iwould say it has never been the easiest to invest in. But look back ten or twenty years. Clearly, it has opened up. It has become easier and more predictable. Doing business in India has never been easy. Speak to any Indian or Singapore businessman. They will tell you it is not easy.


In the case of Singapore, we have a free trade agreement. We still think it was a missed opportunity for [India on] the Regional Comprehensive Economic Partnership, which was really between ASEAN and its Dialogue Partners. But I understand the political and strategic reasons for that [India’s decision not to join]. It was really India's anxiety about China, rather than India's aversion to Southeast Asia. So be that as it may, I think trade with Southeast Asia will continue to grow. Of course, I think our trading account between India and Singapore will also continue.


Basically, what I am saying is, I remain optimistic. Take a dive into the domestic aspects of what has happened in India. There is no question that on digitalisation, digital IDs and digital finance, India is way ahead. It is no accident that our PayNow system is also linked to UPI [Unified Payments Initiative]. And I think this will set a model for future cross-border digital payments. So that trend of digitalisation in India, I see it progressing. 


The next trend I have noticed is infrastructure. Just ask anyone. Roads, railways, aviation, the infrastructure that forms the arteries of trade and industrialisation, there is no doubt that has improved significantly.


The third dimension is manufacturing. In the past, let us say you go back 20 or 40 years, India was diffident about manufacturing. I mean, you could argue this was due to the impact of the past policies on import substitution, and also the fact that you had China next door, which is rapidly becoming the factory of the world. But now with geopolitical developments, I think you are going to see a resurgence of manufacturing in India. So that is another theme.


And the fourth domestic change I have noticed in India is on governance and policy frameworks. Making the processes more transparent, creating a level playing field, even the tax reform, also facilitates trade and movement of goods and services between states.


The Hindu: You are referring to GST.


Minister: GST is one example. But I am referring to broadly the policy legislative framework, which allows the Indian economy to function as a continental-size whole. Which is what China has been doing for decades. So if you add all these things – digitalisation, infrastructure, manufacturing capability, governance policy frameworks – you can see that the foundations for growth are there. And then I want to come back to my point on bipartisanism. From a business or external diplomatic point of view, I would expect these things to continue, almost regardless of which party or coalition happens to be in power.


The Hindu: You did call RCEP a missed opportunity. With a new mandate or new government in position, would you hope that India revises its decision on RCEP? I ask because we are already seeing countries in India’s neighbourhood like Bangladesh and Sri Lanka applying to join RCEP. Do you see a possibility? Are you exploring a possibility for India to review its decision?


Minister: No, that is a decision for India to make. They know my views on RCEP. Similarly, the Americans know my views on the TPP [Trans-Pacific Partnership]. That is another example of a missed opportunity by an even bigger economy. But to be fair, the story on free trade and economic liberalisation is one in which politicians fail to make the case to the people. I think people do not feel sufficiently secure, because when you open your economy to global currents, there will be winners and losers. There will be some instances in which some people may feel unable or less able to compete. And it is important for domestic social and economic policy to put in place either the compensatory mechanisms or to help people make their transition, so that the activities that they are engaged in domestically are competitive globally. And by that, I mean education, SkillsFuture, and investment in infrastructure. I think not enough attention was paid to that in the last 20 years. The result of which is today, if you just stand up and say I stand for free trade, it will be a political liability.


So my point is, I do not think you are going to get TPP with respect to America or RCEP with respect to India until the domestic political realignments, reassurances, and social safety nets are in place. Frankly, even in Singapore, we need to make sure that our people first feel that everyone is going to gain from being open, that everyone has a fair share of opportunity and that everyone is equipped for the future. If you do not do that domestic homework, you will get political pushback. I guess what I am saying is that I do not expect to see a sudden change in the attitude to trade policies because of domestic politics everywhere.


And secondly, the pushing and shoving going on at the superpower level. And also the bitter lessons that COVID-19 inflicted on our people. You cannot just base your supply chains on just-in-time or just cost. You also need to have assurance, resilience and reliability. So for all these reasons – domestic politics, superpower rivalry and the need for resilience – I think the old days of inexorable, almost subconscious, economic liberalisation, are over.


The HinduYou mentioned infrastructure in India. It has been five years since the project in Amaravati, which was seen as the most ambitious India-Singapore project for a city to be built in Andhra Pradesh, had to be shelved because of the political changes there. It is interesting that in this election, the person who has been re-elected in Andhra Pradesh is the Chief Minister, Chandrababu Naidu, who was responsible for the Amaravati project to begin with. How badly did the shelving of the project affect India-Singapore credibility? And do you see any possibility of a review given the change in government?


Minister: I do not want to get into the specific project, or even get into the specific personalities involved. Although I will confess that Chandrababu Naidu is an old friend whom I know well. The larger point is this. It is important for long-term projects and collaborations to have bipartisan support, demonstrable benefits to locals and to give investors an assurance that the rules are predictable, the playing field is level, and that agreements entered into in good faith are fulfilled. Again, I do not want to get more specific than that. But if your question is, do sudden abrupt reversals, especially reversals due to change of political cast, erode confidence for investors? Yes, it does. The solution is to do more homework domestically and to make sure that the projects that we start stand the test of time. It just means we all have to be careful. And I come back to my point again about doing our domestic homework.


But I remain hopeful that there will be other projects as well. Let us put it this way. Even if there is to be new developments in that area, I think we will look at it with fresh pairs of eyes. And that is the way it should be done.


The HinduSo it would be a whole new project if Amaravati was to become –


Minister: Yes, it should be. Look, we are living in the digital age. Five years is another age.


The Hindu: I want to come back to the India-Singapore bilateral relationship. But first, you had mentioned the great power rivalry. We saw that play out in Singapore just last week with the Shangri-La Dialogue. There were some tough comments being made both by the US and by the Chinese Defense Minister, who was here, particularly with regard to Taiwan. How concerned are you, given what we saw last week about a larger conflagration in the South China Sea affecting you?


Minister: We are concerned,although I would add that I think a United States- China clash is not imminent, and not inevitable. Although I notice that [US Secretary of Defense] Secretary Lloyd Austin used the words “not unavoidable”. You can go and parse the different nuances of that. But we are concerned because even if it is a low-probability event, it is very a high-impact event. For a place like Singapore, literally at the junction between the Indian Ocean and the Pacific Ocean, a city-state whose trade volume is three times our GDP, you do not even need outright hot war in the Pacific to cost us something. Just elevating tensions immediately raises insurance premiums. It is immediately inflationary in its own right. So yes, we are concerned. That is the first point.


Second point - I would rather they exchange tough words than exchange bullets and missiles. We can serve as a convening point for honest-to-goodness conversation, sometimes public, but I hope for even more private communications to occur. If that can promote at least a greater appreciation of each other's respective positions – never mind agreement, which comes about later – just a better appreciation of each other's assessments, anxieties, and hopes, I think that's positive. I would say I was relieved that everyone showed up last week, said what they needed to say publicly, and of course there were a lot of private conversations. I hope that habit of conversing sincerely, candidly, and frankly continues. That is the only way because otherwise you will end up in what I honestly believe is an unnecessary and unwanted conflict.


The HinduBut we certainly did see in the ASEAN region and in the Philippines, some fears of a different kind of conflagration just two months ago. And yet there is a sense that when the Philippines faced the PLA Navy, that the ASEAN countries did not really come to the rescue, that Singapore did not actually push in and press in with support in the way required. Do you think ASEAN has in a sense backed down from –


Minister: I would not characterise it that way.If you look at what ASEAN has been doing internally, we have our own conversations and consensus that we want to maintain ASEAN centrality and unity. We want to maintain peace and stability. We want to ensure that there is peaceful resolution of disputes. We want to maintain the primacy of the United Nations Convention on the Law of the Sea, or UNCLOS. In my view, I think there is rock-solid consensus on those points.


If you look in terms of activity, the ongoing negotiations for the Code of Conduct are very difficult, almost tortuous, but very necessary. That is still going on. Our Senior Officials have been meeting. ASEAN meetings will be reconvened later this year as well. So there is diplomatic activity that is going on.


However, you are asking whether there has been public pronouncements. The flip side of that question is: would public pronouncements be helpful? My own view is that it would not be helpful. Far better that internally we have a consensus, and externally we are engaged in negotiations with China. Nothing we say or do should aggravate the situation or escalate tensions.


This is not the ideal circumstance. Certainly, for ships to be heaving in the seas of the South China Sea in close proximity, and collisions, or based on the reports, water cannons and lasers, all that is in my view unnecessary and dangerous. So I hope they will find a way because it is really unnecessary. And it is provocative.


The HinduAnd you mentioned UNCLOS. China has certainly rejected a lot of the judgments under UNCLOS, as well as the cartography as countries in this region see it. I want to ask specifically about India and Singapore here.


Minister: Well, hold on. I am not sure that China has rejected UNCLOS. I think what they have said is they do not accept the Arbitral Tribunal ruling of 2016. I do not want to mischaracterise that position.


The Hindu: Point taken. But this is now becoming a region-wide phenomenon. We have already seen Indonesia protest. We have seen other countries in the region like Vietnam protest against Chinese military movements in the sea. You mentioned Singapore being at the edge of the Indian Ocean. India sent three ships last month for exercises. I think India and Singapore have more military exercises than anyone else in the region. Do you see them being able to safeguard this area of the Malacca Straits? Are there plans to strengthen that cooperation?


Minister: There are several questions in there. First, on the naval collaboration. If you check, India and Singapore have been doing the Singapore-India Maritime Bilateral Exercise, or SIMBEX, uninterrupted since 1994. That is 30 years. So I just want to put it in context. It is not new. The anxieties of 30 years ago are also very, very different. I would situate SIMBEX as an illustration of the close, long-term, bipartisan, strategic relationship between India and Singapore. Even if you probe our defence relations with India, it is not just the Navy. So basically, we have long-term relations. The main thing it has built is confidence and trust on a mutual basis between our two countries. So let us put it in its proper context. I do not think it is directed at any other power, and I would not want to characterise it that way. First point.


Second, come back to my Southeast Asian neighbours and their accounts with China. The reality is that for every single Southeast Asian nation, the South China Sea is important, and certainly for the claimant states of sovereign importance. But it is only one item in a much longer checklist of items, which overall define the relationship with China. In fact, even if you ask the Philippines, I do not think that even they want their relationship with China to be defined by one issue, by the South China Sea. So again, you know, I am asking everyone to look at it in context.


And the third point, therefore, is that yes, issues will come up from time to time.  Because the centre of gravity and strategic weight has changed over the last 40 years. 40 years ago, China's share of global GDP was maybe 2%. When they joined the WTO [World Trade Organization] 23 years ago, it was 4%. Today, it must be 16% to 18%. India's economic heft is increasing. You only need 7% growth a year consistently, and every decade India will double its GDP. Now, as India's economic heft increases, and its supply chains and trading routes expand, India will have strategic interests in the waterways to protect. Remember, I started off by saying that most of India's interaction with Asia has always been maritime. So for the Indian Navy to grow and be visible in more parts of the world than just Singapore, I take that as a given.


My point is that all these trends should not be viewed as escalatory or threatening. They reflect the reality of a growing China over the last 40 years, a growing India over the last 30 years, and in fact for the next two to three decades, some very promising times for India. With a big “if”. Again, I come back to people. The number that I look at most closely when assessing the health of [the Indian economy] is unemployment. We know that India has a potential demographic dividend. But if you do not have education, infrastructure, opportunities, and jobs to match with young people, then you set up the potential for political problems, which will show up in elections.


The Hindu: Sure. And the issue of jobless growth has been there even in this election. On this point, you were talking about India's growth in the region. How do you see India's export of the BrahMos missile to the Philippines? And would you support India exporting such defence hardware to other parts of ASEAN?


Minister: I am not in a position to tell India who it can export to or when. But again, take a step back. Does India have any military-industrial capacity? Clearly the answer is yes. Will India's industrial military capacity expand in the future, given both the geostrategic competition between the superpowers and India's own enhanced manufacturing ability? The answer clearly is yes. So you asked: will India possibly be selling more armaments to other countries? I would expect that to be the case.


Again, like my answer to the earlier question, it does not necessarily need to be viewed as escalatory or pointed at any party. To be fair, since independence, India has been nobody's lackey. Nobody's proxy. It has always exercised independence. It is no accident it was the founder of the Non-Aligned Movement. Actually, I am not particularly a fan of the term “Non-Aligned”. I much prefer [Indian External Minister] Jaishankar’s characterisation that India would not take anybody’s side; it takes its own side.


The Hindu: Well, he used “strategic autonomy” much more.


Minister: But you have every right to [take your own side] because you are the world's most populous country. You are a rapidly growing economy. You have got tailwinds for at least the next two or three decades. India will do what it needs to do. And sometimes it will push, sometimes it will pull, but I think it will do so not on behalf of any one superpower. It will do so for its own sake. But the difference is, by the time the Indian economy is the third largest economy, where India pulls or pushes may make a strategic difference to the balance of power militarily and the economic centre of gravity of the world.


The Hindu: India is a member of the Quad. As the US seeks more coalitions in the Indo-Pacific region, some of them being security architecture like AUKUS, would Singapore consider being part of Quad-Plus?


Minister: No, we are not into those sorts of groupings. Now having said that, we do have excellent ties with the Quad members. We are not a treaty ally of the United States, but we are a Major Security Cooperation Partner. This is a sui generis category with only one member: Singapore. There is no doubt that we have a significant relationship with the United States. With Japan, we do not have a military relationship, but we have got an excellent economic relationship. With Australia, it is very, very close strategic and economic alignment. It is not really a secret that we train in Australia. In fact, I suspect we may be one of the largest foreign, or alien, armed forces on Australian soil. They welcome us. We love them. We get along, our soldiers are well-behaved in Australia. With India, as I said, for decades we have had strategic, economic and military ties.


So separately, we have excellent relations. I see no need to package it when we can have a bespoke and great relationship with all the individual members.


The HinduTo come to a close, I do want to ask about the next line of India- Singapore bilateral meetings. How soon do you expect high-level meetings? Like the ISMR [India-Singapore Ministerial Roundtable]?


Minister: Yes, it is overdue, so I hope it will happen in the next couple of months. We will have to wait for the Cabinet in India to be announced. But this is very high up on my agenda.


The HinduWithin the five broad cooperation areas [in the ISMR], Singapore has looked at digitalisation, pharma, clean energy and others. Where do you see the big growth areas, the big announcements expected between the two countries?


Minister: I think we have deliberately chosen these areas. Each of them is important, each of them fit for the times and the opportunities that are emerging. Wait and see.


I want to also make the point that we should focus less on government pronouncements and more on business decisions, where the investments are flowing. Where the trade flows are. What kind of new businesses are emerging, both within India and within Singapore, and where it makes sense for us to do things together.


Look at the broad themes like digital. You know India is a digital giant. In manufacturing, especially on the healthcare side of it, there are great opportunities. India is a manufacturing base for pharmaceuticals. India is a source of very talented people involved in the delivery of healthcare. Even in this digital age and with AI, you are still not going to remove the need for human touch, human communication and human care. That is another big growth area.


If you look in terms of manufacturing and the electrification of transport, there are also big growth prospects. I expect to see a lot of that production occurring in India as well. Look at the way the aviation industry grew in China in the last two decades, and transpose that to India in the next two decades. Well, I think it is no accident that even Singapore Airlines is now one of the major stakeholders in Indian aviation. Look at the opportunities for our companies, industrial parks, real estate, cross-border services, even on the financial and FinTech space, as well as what our banks and financial institutions are doing.


It is not just India and Singapore. We can connect South Asia to Southeast Asia. If you look at demographic trends, it is South Asia and Southeast Asia where the demographic dividend is going to be available for harvest in the next two decades. This is in stark contrast to Northeast Asia. So whyever in the world should we not fully exploit the opportunities that are emerging in front of us and between South Asia and Southeast Asia?


I want to end on a note of optimism. In politics, there will be choppy waves from time to time, but the current and tailwinds are in our favour. So let us be confident and navigate this even if the waters are choppy. Let us get our fleets through these exciting times.


The HinduDr Balakrishan, thanks so much for speaking with us at The Hindu in Singapore. I am Suhasini Haidar.

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