Edited Transcript of Opening Address by Minister for Foreign Affairs Dr Vivian Balakrishnan at the 11th ISAS International Conference on South Asia, 3 March 2017

Excellencies

Distinguished Guests

Ladies and Gentlemen

1             First, thank you for your kind introduction. I had forgotten that Gopinath used to be a judge when I was a little school boy participating in debate competitions, petrified by these judges standing judgement over us. But now we have all got grey hair. That means time has flown, but one advantage of grey hair is that I think it gives you a better perspective because you tend to take a longer view of things. For today’s presentation, I just want to make three points – the first being how the past has defined us, the second being that we live in a very uncertain age in the present time, and the third being that the future remains bright. So let me go through these three points. I am still following the three-point limit that­ Professor Tommy Koh has instilled in me over the years.

2             The first point is, how has the past affected the present? In particular, looking at this map (of South Asia on the stage backdrop), you will notice that there is obviously one big, high barrier between India and its immediate ground.  The Himalayas separated India from continental Asia.  The western part of the Himalayas, the Khyber pass, which historically has been the portal between Central Asia and India, was where numerous invasions came through to India from the north.

3             The Himalayas itself, over the millennia, has essentially been an impenetrable barrier. If you look over to the east, where Bangladesh is today, its boundary with Myanmar is not so inhospitable. But nevertheless, the northern part of Southeast Asia, because of its relatively mountainous topography and its impenetrable forest, and also from the point of view of history, acted as a reasonably impermeable barrier. What this means is that if you think about the relationship between South Asia and Southeast Asia, a lot of this, because of geography, had to be transacted through the medium of maritime links. Therefore, it should not surprise you that there have been generations of Indian traders that came to our region. They were in search of spice, gold, Chinese silk, porcelain, and in fact, these traders left an immense cultural legacy which we still enjoy today in Southeast Asia.

4             Even on the religious front, Hinduism and Buddhism came via India to Southeast Asia. Today, when we go to Bali, there are footprints of Hinduism. If you look at the Khmer artefacts, and this is the Buddhist wave, again the impact from India is very clear. Even with Islam in Southeast Asia, the Sufi missionaries and the Arab traders brought Islam to our region by tracing and retracing Indian trade routes.

5             Our languages are influenced by Sanskrit. You just need to go to Thailand and look at the script and realise that that is the case. In Malaysia, Singapore and Indonesia, we refer to language as Bahasa, but even the word Bahasa is rooted in Sanskrit. And “Singa-pur” just like “Raipur”, “Jaipur” and the rest, is again another Sanskrit-derived word. There is no question that there has been, over thousands of years, an intermingling due to trade and a mixture of language, culture and religion. These historical waves have defined, have left heritage, and have left footprints in the sand for all of us.

6             Let me now move to the present. The fact is that the present time is a very uncertain time. The hitherto global consensus on the benefits of free trade and economic integration is broken. If you just listen to the political discourse in many countries, it has become more coarse; it has become more shallow; there are clear tones of xenophobia, hyper-nationalism, and a very resonant call that preys on fears in the bulk of the population. All this has resulted in a push back against globalisation, a pushback against free trade. I do not need to enumerate the incidents just within the last 12 months, which are really symptoms of this underlying wave. That means the world of today has become more difficult to navigate, and we all have to learn to deal with hyper-nationalistic sentiments, and to deal with a world in which free trade will come under increasing pressure. For a small country like Singapore, where our trade volume is three and a half times our GDP, this is a clear and pressing issue of concern.

7             In addition to this political wave, we are also in the midst of another revolution – the digital revolution.  This is going to cause enormous disruptions to jobs and the economy.  It transforms the way we communicate, work, live, play, mobilise and organise our societies. It transforms politics, and from a point view of security, it amplifies the impact of extremism, radicalism and terrorism. We face a challenge both in the economy and in defence and security. We know that on one hand, we have a hyper-connected world. We know that we are facing increased risks or disruptions to our jobs and economies, and we are facing increased risks from terrorism, radicalism and ­­extremism. In Southeast Asia, even in Singapore, we have witnessed regional groups like the Jemaah Islamiyah. We all know about the Abu Sayyaf in the Philippines. Even as ISIS in Syria and Iraq has been pushed back or eliminated, the returning fighters come back to Southeast Asia. They will look for safe havens where they will regroup and they will continue, and in fact, they will present an even greater threat to our local systems. So this is the backdrop of the current challenges that all of us, both in Southeast Asia and South Asia, face.

8             Now, let us move on to the third point, to the future. For the future, I want to make two sub-points. The first sub-point is a point that Mr Lee Kuan Yew used to remind us of and this was more than a decade ago. Extremism, radicalism and terrorism will be with us for quite a long time, perhaps one or two generations, and much blood will be shed and much pain will be brought. But it cannot win. The reason why, at a strategic level they cannot win, is because it is not as if they have new technology or a new civilisation or a new novel way of organising society so that they will be more successful, more productive, fairer, or more stable. So at a strategic level, we will win, but in the short-term, and when I say short-term I mean one or two generations, a lot of pain, a lot of blood will be shed. If you really want to examine the future, then the question in our minds should be: what are the factors for sustainable long-term success in our part of the world, given the current state of economic, political and perhaps even more importantly, technological development? In other words, which society will have the demographic, the economic, the cultural and the technological capital to succeed and thrive in the current world, with all the challenges that we face. Here, I want to make a point that I believe that South Asia and Southeast Asia are actually bright spots, and that we have a bright future.

9             Now, since this is an academic conference, let me try to provide some factoids for this hypothesis. The World Bank reports that South Asia is the fastest growing region in the world right now, and their economic growth for 2017 is projected at 7.3 per cent. 7.3 per cent is a very significant number. India is projected to overtake China’s population by 2022, according to the UN. Southeast Asia is also in a good position, fuelled by a large and growing middle class. The ASEAN Economic Community, by helping to integrate ASEAN economies, boosts intraregional trade. By presenting ASEAN as a single production and investment zone, it will present great opportunities for us. ASEAN already has a population of about 628 million and a combined GDP of US$2.5 trillion. That already makes ASEAN as a whole the 7^th largest economy in the world, and in fact, if we do things right and we do not have any major mishaps, by 2030, we could be the 4^th largest economy in the world with a combined GDP of US$10 trillion. Both South Asia and Southeast Asia have youth on our side. There is a median age of 29.1 in South Asia, and 26.4 in Southeast Asia, and by 2030, more than a quarter of the world’s working-age population will reside in South Asia and Southeast Asia. So the point is that we represent regions that have not yet harvested the demographic dividend. If we get our act together, if we invest in ourselves, in our infrastructure and in our people, then we have a realistic chance of harvesting this dividend.

10           But, it is not enough to just offer some facts to say the potential is here. There are things, programmes, projects and initiatives that we need to address. Let me give you an example. I started off my talk by talking about impenetrable barriers like the Himalayas. The key difference today as opposed to the past 2,000 years is that today, with air, land, sea and digital connectivity, these barriers are less and less of an effective barrier. What do I mean by that? Currently, 90 per cent of trade between South Asia and Southeast Asia is by sea, and I must say, that is not surprising. That, in fact, is an old historical fact. But have we fully maximised the opportunities of maritime connectivity? The answer is no, there is still much more room for investment in port infrastructure. It will take time, but there is no reason for us to not invest in ports and to make sure that we fully exploit the sea between us. In the case of land, India has made the effort to address this with the Trilateral Highway project that connects India to Myanmar and Thailand. This is a 3,200 km stretch. It will take time, but even as we think about this, we think about that network of high speed railways that China is linking up, not only within China itself, but with Central Asia and Southeast Asia. Surely, railways are another modality that could also connect South Asia and Southeast Asia.

11           Then, we think about the air, which is a more recent phenomenon, recent meaning in the last century. Much more can be done to connect us through the aviation circuit. There are so many existing airports that can and should be upgraded, and airlines that are available for air connectivity. In fact, the key problem for air connectivity is not the airlines and not the technology. It is policy. It is getting all the states that constitute South Asia and Southeast Asia to understand that the interests of the airport and the country outweigh the interests of the national airlines. So protectionism and protecting national airlines actually occur at the expense of the welfare and the economic interests of the state. This is something which, perhaps in these days of protectionism, is not an easy sell­­­ to make, but we will continue to make this point – that liberalising air space and air connectivity within and between our regions makes long-term economic sense.

12           Then, the next point I want to make is that there are strong economic complementarities between both regions. I mentioned just now that the ASEAN Community comprises a market of 628 million people and a combined GDP of US$2.5 trillion, but the point about ASEAN is that our middle-class is expanding steadily, and the same process of middle-class expansion is occurring in South Asia as well. Middle-class expansion means increase in demand for more sophisticated goods and services. Also, think about it, we are actually moving past the age of mass production, where everything looks the same, to the age of mass customisation where people want something that is different, something that is unique, something that has cultural resonance, and yet sufficiently different to be novel.  We think about the cultures, the historical difference and similarities. The point is that for both South Asia and Southeast Asia, we are sufficiently similar to be able to recognise familiar echoes, but we are sufficiently different to make ourselves novel in our own ways. Even as the fourth industrial revolution takes place, we can capitalise on cultural similarities and differences. We can, by arbitrating and understanding our differences, create more relevant goods and services.

13           That is also why Singapore is a strong supporter of regional Free Trade Agreements. You know our position on the TPP and you know our current problems with the TPP because the US has withdrawn from it. But you would also have heard the Prime Minister mention that we are prepared to proceed with the TPP minus one, if all the other 11 agree, although quite frankly, the economic dynamics will be completely different without the United States. But we are also strong supporters and proponents of the RCEP – the Regional Comprehensive Economic Partnership - and the key difference is that the RCEP includes India and China. In fact, what we are really looking for is a Free Trade Area of the Asia Pacific. Now that completely transforms the economic dynamics. The point is, we will continue to support, to include and to encourage all the states in the map that you can see to participate in this because we still believe that an integrated world with low or non-existent barriers, with a flow of ideas, products and services, and an interconnected world where we are interdependent and therefore have a stake in each other’s success, have a greater investment in collaboration and win-win outcomes, as opposed to a world of independent rival blocs characterised by competition and zero sum gains.

14           I still believe, and I hope I have given you sufficient food for thought, that the future is bright for both South Asia and Southeast Asia. But there is some homework that we need to do, and so long as good sense and good will prevails, we will get there.

15           Thank you all very much for this opportunity to join you here today.

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