Intervention by PM Lee Hsien Loong at the Global Summit on Supply Chain Resilience on 31 October 2021

Source: PMO

President Biden

Colleagues

I thank President Biden for convening this important conversation.

COVID-19 disruptions have laid bare the complexity and weakness of global supply chains. But besides COVID-19, some important and legitimate security reasons also need addressing. Therefore Singapore supports the Chair’s Statement on Principles for Supply Chain Resilience.

This necessary emphasis on resilience and self-sufficiency needs to be carefully judged. If it goes too far, it could prompt reactions and unintended consequences, e.g. deep bifurcation of global trade and technology and this could leave us all poorer off and less secure. May I offer three elements to consider in striking this balance.

First, domestic production. All countries wish to maintain some domestic production for certain essential and strategic items E.g. food supplies. But domestic production, or stockpiling, is not a silver bullet, especially for more complex supply chains. Like semiconductors: Too costly and challenging to replicate full ecosystem to design and manufacture chips within any one country. Ditto with biomedical research and vaccine production.

Second, source diversity. The pandemic has prompted a rethink of extremely lean production networks. It has hastened the shift away from “just-in-time” to “just-in-case”. It’s crucial to broaden the range of sources and trusted partners. To ensure supply chains can adjust flexibly when any source is disrupted. But there are considerations of economic cost and fair competition. Diversification will involve Governments intervening in commercial decisions, and it should be carried out in a transparent and even-handed manner. Guidelines and rules will have to be developed, preferably within a multilateral framework like the WTO.

Third, network reliability. Transportation nodes like Singapore play an important role. Singapore takes our responsibility as a trusted logistics, transportation, and energy hub very seriously. During this pandemic: We never restricted export of any goods produced in or transhipped through Singapore, not even goods which we ourselves needed urgently, like N-95 respirators and vaccines. Singapore’s air and sea ports stayed open throughout to ensure uninterrupted flow of critical supplies. We increased port capacity to help shippers expedite urgent cargoes and connect with ports up- and down-stream. We made full use of digital platforms for shippers and cargo owners to track shipments more efficiently. We even vaccinated port workers and ship crew to keep them safe, and working. This is how Singapore strives to be a reliable node. I am sure many others are doing the same. Hopefully, in time, countries and industries will assess the nodes in the network, the reliable ones will establish their reputations, and a secure and resilient global network will emerge.

Singapore looks forward to working with US and stakeholders to take this discussion forward to realise such a positive outcome for the world. Thank you.