Transcript of Minister for Foreign Affairs Dr Vivian Balakrishnan’s Interview with Bloomberg for its 7th Asean Business Summit at the Bloomberg Studio, Tuesday, 15 March 2022

Video credit: Bloomberg

Haslinda Amin (Anchor): Minister Vivian Balakrishnan, thanks so much for joining us today.

Minister: Thanks for having me.

Haslinda: Ukraine has been making headlines just about every day and Singapore made headlines when it decided to impose sanctions on Russia. Quite a rare decision on the part of a small nation like Singapore, what was the key reason behind the decision?

Minister: The egregiousness of it all. The fact that it is such a dangerous precedent. The fact that it abrogates the norms of international law, the Charter of the United Nations (UN). The fact that it is a big neighbour invading a smaller neighbour. The fact that it tramples over the concept of territorial integrity, of sovereignty, of independence. Even the allusion to historical mistakes and crazy decisions also rang alarm bells for us. If you look at what happened at the UN Security Council, except for the fact that Russia vetoed it - clearly in its own self-interest - otherwise, that resolution would have passed with sanctions to follow. When we looked at the situation (and) added it all up, we felt this is a time that we have to take a stand; not because we are taking sides but because these principles are existential for a tiny city-state.

Haslinda: What is different this time around, though? There have been wars before. This has been 40 years and Singapore has decided to impose those sanctions. What is different? Why was it so important for Singapore to make a stand now?

Minister: As I said just now, it is because it was so egregious, and it involved a permanent member of the Security Council. I will give you an example. If you go back to 1978, the invasion of Cambodia – we took a stand. In fact, we had to take a consistent recurrent annual set of resolutions at the United Nations all the way from (19)79 to 1989 – more than a decade. I will give you another example. (In) 1983, the United States’ invasion of Grenada, we voted against (the) United States and I would quote Professor Tommy Koh who was our Permanent Representative to the UN then. He said there are times when our adherence to principles is more important than friendship. This is certainly one of those times.

I think if you zoom the lens out, what we are witnessing now is the end of an era. Post-second World War, the concept of sovereign equality, the United Nations, trying to resolve disagreements peacefully, having the UN Security Council, economic integration, (and) respect for boundaries, was a formula for peace and prosperity for almost eight decades. This is perhaps even a bigger moment than the fall of the Berlin Wall in 1989, because it puts a screeching full stop to that age.

Now, we are facing an uncertain bifurcation. This can escalate horribly. We are all looking at the abyss of stagflation. The big if now, is what decisions and actions China takes. If you get the deepening of the bifurcation of the global economy, of supply chains, of technology, this will be a very, very different world. If you just look at it from an economic perspective, what a global bifurcation means (is) three things. Number one, progress will be slowed down. For the last eight decades – let us take science as an example – we were able to build on each other's advances, research and development, software, (and) build a common stack. That has seen rapid advances in technology. A bifurcated stack will not advance at the same pace. The second (is) economics, (it) is that if we all look for autarky – either in-source or friend-source – you will have inflation because it will cost more, because it will be less efficient. The third economic impact of a real hard bifurcation is reduced interdependence, and therefore a greater propensity to allow quarrels to get out of hand. Sanctions are double-edged swords. This is not something you engage in trivially, and that is another reason why we have been so careful never to do that unless in (the) most egregious circumstances.

Haslinda: I will pick up on bifurcation slightly later. People usually say your economic policy dictates your foreign policy. Would you have thought twice about imposing sanctions if that nation happens to be China, for instance? I mean, if you take a look at Russia, trade accounts for only 1% with Singapore, but if it is a country like China, trade accounts for 13%, so there is a lot more at stake. Would you think twice before making such a decision?

Minister: I would say foreign policy actually begins at home. First, what are your circumstances? What are your country's principles? Are your people united? Do you have the means, the capability, and the resolve to advance your interests? So, it begins at home. The economy is certainly very important. As I said, sanctions are a double-edged sword and it leads to greater separation, and ultimately to bifurcation if the two halves are far enough apart and viable separately. I do not want to get into the hypothetical situations on China. To put things in perspective, the GDP (Gross Domestic Product) of Russia is one-tenth that of China. In terms of its trading relationship, certainly with respect to Southeast Asia, it is a tiny fraction of China’s. So, I do not want to get into that kind of hypothetical question or situation. But I would also add, from my experience interacting with China, China is also very aware of this. I think that is why if you look at, or if you listen to what China has said, they have doubled down on the importance of territorial integrity and sovereignty. It is no question about their position on that. I cannot help detecting some discomfort, some awkwardness on their part, with respect to this egregiousness of the invasion of Russia into Ukraine.

Haslinda: Having said that, how do you expect China to respond? There have been reports suggesting that perhaps Russia is looking to China for assistance, perhaps even for weapons?

Minister: I have no information on that, so I am really not in a position to comment. But I am making the point that China does have important principles at stake to affirm and to live up to. I am making the point that China has far more than even Russia in terms of its economic stake in an integrated, multilateral, rules-based world. But China will make its own decisions. We will have to watch. I think the decisions over the next few days, next couple of weeks are going to be absolutely crucial to this new world that is emerging. As some people have said, the most dangerous phase is when a new era is being born. The norms and rules, the expectations are still inchoate. That is why the risk of misunderstandings (and) miscalculations are enormous.

Haslinda: You talk about bifurcation; you talk about a new era. Are there echoes of a new Cold War? I mean, the last thing the region needs right now – Asia, Southeast Asia – the last thing the region needs right now are two blocks. One led by the US, the other by Russia and China. Is there a sense there are echoes?

Minister: I think if you put yourself in Europe, it is clear that (the) Cold War has already stopped. In fact, you have a shooting war in part of Europe already. If your question is what is Asia looking for, and particularly Southeast Asia and Singapore – that is not our interest at all. Singapore and Southeast Asia have been key beneficiaries of this system for the last eight decades – economic integration, free trade, flow of capital, investments, connectivity, mutual interdependence, and open and inclusive political and economic architecture. If you ask any of my neighbours what are you looking for? That is what we are interested in. We are interested in trade, we are interested in investments, we are interested in keeping our region open to all the superpowers. We are not looking for one or the other, or to play games. The worst possible outcome is to be an arena for proxy wars and superpower contestations. We have no intention of taking sides and being a cat’s paw, or being a vassal state for one or the other. So, we are watching. Obviously, what happens in Europe will have an impact on Asia, but I am signalling what Asia's preoccupations are.

Haslinda: Given your concerns, the US has come out to say, or rather there are some suggestions, perhaps, that the US is trying to build an Indo-Pacific NATO (North Atlantic Treaty Organisation). What are your thoughts on that?

Minister: I would dismiss that out of hand.

Haslinda: Why?

Minister: Look at it from a Southeast Asian or an ASEAN (Association of Southeast Asian Nations) perspective. ASEAN is not a military alliance. That is the first point. The second point is that we are not looking for one or the other superpower to be a godfather to Southeast Asia. Not at all. So, the arrangements, the reference to NATO, the reference to Europe, the reference to the post-second World War aftermath – that is all irrelevant to us as far as what we are keen on. ASEAN is meant to be an open, inclusive association, focused on trade, economic integration, inclusive and expanding our bridges to all our partners, including superpowers. We are not interested in military alliances and godfathers. So, no – I would dismiss that out of hand.

Haslinda: There has been no consensus within ASEAN, and in fact, you said in Parliament, that ASEAN leaders stayed up to the wee hours of the morning coming up with a statement which did not even refer to Russia, neither did it refer to its stance. Why was it so difficult for ASEAN to come to consensus?

Minister: I would look first at what we did agree on. We all agreed on the importance of territory integrity. We all agreed on sovereignty, we all agreed that the situation in Ukraine was one of grave concern. In our second statement, we also asked for an immediate ceasefire. For the 10 of us, with such diverse perspectives, to be able to agree on these key points, I think was significant. We can quibble about whether Russia was named explicitly or not. But as far as I was concerned, the bottom line was territorial integrity, sovereignty.

Haslinda: So, you were quite satisfied with the statement that was given out?

Minister: I mean frankly, I was pleasantly surprised we could even get that far. I say this in all seriousness, because again, you have to understand the diversity in ASEAN. Similarly, the fact that only two ASEAN members abstained at the (UN) General Assembly, frankly, even that exceeded my expectations. Again, this is not a criticism of ASEAN. This is my realistic assessment of the diversity within ASEAN. The fact that we have gotten so far, to me is very encouraging. It shows that we have consensus on what is really important, and we are able to express ourselves and take a stand.

Haslinda: For the outside world, there was no consensus when it comes to ASEAN on its perception to do with Russia's attack on Ukraine. There has been a lack of progress in terms of the situation in Myanmar. Does it pose a challenge to ASEAN centrality? Would it erode ASEAN’s relevance going forward? Especially when it comes to geopolitical challenges?

Minister: My frank assessment is that we have actually done better than expected. There are a couple of dimensions to your question, let us deal with Myanmar. I think that we come back to first, principles. If we agree on political independence, on territorial integrity, and sovereignty, you will understand why we are so, in a sense, reserved, or even constrained with respect to what is happening within Myanmar. Meaning, we have to adhere to the principle that the ultimate outcome of the situation in Myanmar has to depend on the people of Myanmar and external interference will only make things worse. Therefore, ASEAN’s approach to Myanmar has been to work on the Five-Point Consensus, which our leaders agreed to. We are very disappointed that there has been no progress. But nevertheless, we will keep pushing. Ultimately, the key elements of the Five-Point Consensus – stop the violence, especially against unarmed civilians. Number two, there needs to be honest to goodness political dialogue between Daw Aung San Suu Kyi, the leader of the NLD (National League for Democracy), on one hand, and with the military, on the other hand. Everything else is secondary. But you know, you can try our best to bring the two horses to the water, (but) whether they drink from the same water and actually communicate is very different. But we must be patient, and we must not try to take shortcuts, which will unwittingly make things worse.

Haslinda: There is rising geopolitical tensions everywhere in the world. Do you think at some point, this will lead to an arms race? We are already seeing the likes of Europe beefing up its defence spending, we are seeing Australia doing the same. Singapore spends about 3% of its GDP on defence and I think there has been an increase in about 6% since the year before. Could we see an arms race in the region, or the world for that matter?

Minister: I would take a step back and say that what has been remarkable over the past few decades, I would say particularly over the last four decades, is what some commentators have called a peace dividend. Meaning, the prospects of a World War, the prospects of a major conflagration were actually so low (that) countries, and especially in Europe, could afford to spend less on defence. I think it was a mistake to assume that that is the norm. What you are watching now, even if you watch the budget, say of Germany, and I am sure of the other European countries, I think you are getting a reversion to the mean. Which means that every country needs to make sure, as we do in Singapore, that we have invested enough to be able to defend our own interests. What Ukraine illustrates categorically (is) nobody is going to shed blood for you. You have to stand up and be prepared to fight and defend what is yours and your way of life and (do) whatever it takes. Therefore, if you accept that this is a reversion to the mean, I do see increased expenditures on defence, across the board, across the world, because we are going into a more dangerous world.

But the point is to understand that (the) last 40 years have been a unique, and in fact, a wonderful period of peace and prosperity. Our concern is, please do not throw out the baby with the bathwater. Yes, we do know our world needs reform to deal with inequality domestically. You have to deal with polarisation, you have to deal with the challenges of the digital revolution, we have to deal with pandemics – still ongoing – and we have to deal with climate change. What do all these problems of the global commons require? It requires good sense, it requires sufficient consensus, it requires a multilateral, rules-based world, it requires access to peaceful resolution of disputes. That is the position that Singapore takes.

Coming back to your first question, why did we make this such an important stand and even underline it with unilateral sanctions? Because we believe we are at an inflection point. For what it is worth, little Singapore is standing up for principles and expressing a hope for the rules of engagement for this new era.

Haslinda: Russia's attack on Ukraine prompted concerns that China could do the same to Taiwan, and China has come out to say that is a completely different scenario. How are you assessing the risk?

Minister: I agree with China that it is a completely different set of circumstances. I do not think we should get into that kind of speculation, and try to draw parallels from it. The more important point is this – that once you allow these principles to be abrogated, you make unilateral resort to violence more likely, and you create a more dangerous world. Coming back to sanctions again, I completely agree with the fact that sanctions are double-edged and that is why it is not something we engage in lightly. But for what it is worth, it is a symbol of how important this is, and you have to make, hopefully, others in future who (may be) thinking of unilateral resort to violence, think twice. The rules of engagement for a new era. Taiwan is a far more complicated question – we will need a far longer discussion on this.

Haslinda: I want to quickly touch on the Indo-Pacific Economic Framework, which some say - perhaps you included - say that it has been politicised, as something that can be used against China.

Minister: Singapore is a tiny city-state. Our trade is more than three times our GDP. When we say we believe in free trade, it is not a debating point, it is lifeblood. When we say we actually look forward ultimately to a Free Trade Area of the Asia-Pacific, it may sound grandiose and may sound impossible, but we actually do believe in it. What have we done so far?

Haslinda: But is trade being politicised?

Minister: No,but let me come to that, because we have to start with the end in mind, if you know that that is what we are after. What have we done so far? ASEAN succeeded in getting the RCEP, the Regional Comprehensive Economic Partnership; ten of us plus five. Unfortunately, India opted out. That, frankly, primarily because of their concern with China. The other building block is the CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership). That, again, it is, frankly, a strategic error on the part of the United States who have walked out of a skyscraper that it was a major architect for. Frankly, every time I go to Washington, I continue to make this point that actually, the best thing you could do would be to return to the TPP (Trans-Pacific Partnership).

The real reason America cannot do this, you are right, it is political. But it is domestic politics. Until America can get its own house in order, and can assure people, its own voters, that free trade and economic integration and globalisation is good for ordinary people; until it can assure its workers that the appropriate social security, safety nets, education, training, investment in infrastructure; until they can get that, I understand why they cannot sign on to the TPP. In the meantime, there are all these alternative architectures being proposed – a variety of Indo Pacific-isms. Insofar as they are baby steps in the right direction, and particularly where they focus on important areas like climate change, digital technologies, intellectual property, I think these are good things, and we should work on them. My attitude is to be as facilitative as possible on these measures. But I am realistic enough, and the people whom I speak to on the other side of the Pacific know my bottom line, which is if you are serious about this, come back to the TPP. It is no accident that now you have got China and the UK, and Taiwan knocking on the doors of the CPTPP. That is the real question

Haslinda: Earlier you talked about how China will decide in the next few days and the next few weeks about what to do with Russia and the position it will adopt. What are you looking out for from China to prevent that bifurcation which you are concerned about?

Minister: Well, I think the first thing is that China has enormous influence on Russia, both politically, economically and diplomatically. I hope they will assert their influence in the usual (way), with Chinese characteristics, which means quietly, discreetly, but effectively. That is a hope. Whether this is wishful thinking on my part, we will see over the next few days and weeks.

Haslinda: Just one final question before I let you go, Minister, how long do you think this war will last? Will it be a protracted war?

Minister: Well, here you are asking me to speculate. There are probably about at least three scenarios.

Haslinda: What is the likely scenario?

Minister: The likely scenario is a protracted quagmire for the Russians. Clearly, what has surprised the world is the fighting spirit, the independence, and the guts and courage of the Ukrainians. You can effect a military defeat, but I do not think you are going to extinguish their spirit. The most likely scenario is some form of frozen conflict with lines of control and a rump state, but probably decades of instability. It will be a lose-lose proposition – most likely, but it is a sad outcome. The most dangerous outcome, which can occur in days, is an escalation leading to the deployment of weapons of mass destruction, and that will be an absolute disaster for the whole world. The best possible outcome is that cool heads prevail and China and the US, and everyone else can facilitate dialogue and negotiations and save lives. But right now, even that seems like a remote prospect. I am not an optimist at this point in time.

Haslinda: Minister Vivian Balakrishnan, we thank you so much for your time today.

.   .   .   .   .