Transcript of Minister for Foreign Affairs Dr Vivian Balakrishnan’s Opening Remarks at Fireside Chat at the Hudson Institute, Washington, D.C. on 7 June 2025

Patrick Cronin (Moderator): Hello everyone, I'm Patrick Cronin, Asia-Pacific Security Chair at the Hudson Institute. It is a great honour today for Hudson to host the Foreign Minister of Singapore, Dr Vivian Balakrishnan, who has been the Minister of Foreign Affairs of Singapore for over a decade. His tremendous experience, he’s a real medical doctor, so his experience is tremendous as a humanitarian, as a medical professional, but also the last 20 years in politics, in leading the Foreign Ministry of a critical partner of the United States in the Indo Pacific, in Singapore. So without further ado, I want to welcome Dr Balakrishnan to give some initial comments.

Minister: Thank you, Patrick and thank you, ladies and gentlemen. To be honest, I am bit surprised to see so many of you here on an afternoon where you could be doing many other things in this lovely place.

I come from a tiny city state called Singapore in the heart of Southeast Asia, 700 square kilometers in size. I checked, that makes us slightly smaller than New York City, slightly larger than Chicago, except imagine upstate New York ejecting New York City and saying: “you have to be an independent, sovereign entity”.

In fact, we are younger than the Hudson Institute, which was founded in 1961. Singapore became independent in 1965, and we have had some measure of success in the six decades since. For instance, our per capita GDP at independence was USD500. Today, I think it is somewhere north of USD80,000. Not bad for a six-decade run. Now, of course, first question that arises is what happened? How did that happen? I would say the first factor, is to give credit to hardworking and disciplined people. If you do not believe me, come and visit Singapore and meet my people. A second factor, a competent, honest, pragmatic leadership. I will not get into that, we have just had an election, so I do not need to belabour the point. But there is a third factor that turbocharged the development of Singapore in the last six decades, and that actually begins with Pax Americana and the fact that the real winner of the Second World War was the United States of America. What was so unusual and remarkable was the fact that America was an incredibly magnanimous victor.

Now just think about it. If you were to google the top five countries or economies ranked by GDP today, America is number one; China is number two, but number three and four, Germany and Japan, were countries that America defeated. The point is, at the end of the Second World War, America, which constituted 40% of global GDP, rebuilt countries it vanquished and established a rules-based system of globalisation characterised by economic integration. Its companies – the biggest companies, the most successful companies in America – became multinational corporations, and built global supply chains.

Now think about what that meant for a tiny city state with no hinterland, no resources, no oil, no gas, nothing except people willing to work very hard. What it meant was that we could plug into an emerging globalised economy. In the 60s and 70s, before the word globalisation became popularised, we were forced to plug ourselves in, because we had no hinterland. So the point I am trying to make here is that this very unusual and unique period in history where America and its vision underwrote globalisation – characterised by economic openness, a rules-based system, and also American support for the United Nations, the Bretton Woods institutions, the IMF, the World Bank, the WTO, the WHO – actually set a global stage for many countries, who adopted models compatible with this system to do very well. And you can find books by Herman Kahn, the founder of Hudson Institute, talking about the Asian tigers, like Japan, Taiwan, South Korea, Hong Kong and Singapore.

That is the first point I wanted to leave with you, that Pax Americana was a unique, incredible period of 80 years. Many of us benefitted, but you would notice that I also made the point that when you look at the ranking of GDP, number two is China. And the point here is that, the biggest beneficiary of Pax Americana – now again, I start off by giving full credit to the people in China who worked really, really hard to get to where they are today- but actually, like Singapore except on a much bigger scale, it really turbocharged the development after 1978 when Deng Xiaoping embarked on reform and opening. And so you now end up with today's world.

One other statistic which I want you to bear in mind is that the share of global GDP of America is no longer 40%, it's now about 26%. Now, in absolute terms, America’s GDP has grown. The American economy actually is the envy of many other economies all over the world, but that relative share has shrunk, and the point I wanted to leave you with is that at 26% it is a completely legitimate question for the American voter to say why should Americans underwrite and pay in blood and treasure to keep this multilateral rules based system, which in fact, has been beneficial to almost everyone else in the world. The point is not to be pejorative or to exercise a value judgment, but just say it is a legitimate question.

And so that brings us to today, and from a Singapore or Southeast Asian perspective, this is the end of an era. There is no point crying over spilt milk or hearkening for a rose-tinted past. Recognise that this is the end of an era. We do not quite know what the new world order will look like, but what we do know from history is that the interaction between an old world order and a new world order is when things get hairy, when things get dangerous, and that transition can be chaotic, unpredictable, and can be very awkward. That is the stage we are in right now.

After that stage, assuming we survive and thrive, we then get to an emerging new world order, which, as I said, you cannot predict exactly how it will turn out, but what is fair to say is that we are transiting from a unipolar world into a multipolar world. Where are the poles of the new world order? As far as Singapore is concerned, we expect America to still be one major pole. We do not count America out. China will obviously be another pole. But it is not going to just be a bipolar world, because if you add up what is going on in other parts of the world, the EU-27, even minus the United Kingdom, if you add up their combined GDP, it is in the same ballpark between the US and China.

Then if you look at India, which is now the world's most populous country, it is already number five. But I am also here to make the point that if you add up the combined GDPs of the 10 countries in the Association of Southeast Asian Nations (ASEAN), it actually gets into the Indian league. The key point here is that we have a demographic dividend for both India and Southeast Asia so long as we get our act together, so long as there is no war in Asia, in the Asia Pacific, or even in South Asia, these are two regions where you can expect significant growth, and I have not even included extended discussions into the Gulf and Latin America, which we believe to also have significant growth potential. So that is for the longer-term future.

Coming back to today, what is Southeast Asia concerned with? First, trade and tariffs. I cannot underestimate the impact of the Liberation Day announcements for many, if not for all of us in Southeast Asia. It is not just the headline or the number. The disruption goes far deeper than that because what it actually means is that once you have reciprocal tariffs ‒ country by country ‒ it represents a complete rejection of the Most Favoured Nation principle, which is a key organising principle under the World Trade Organization. In fact, this concept predates even the Generalised Agreement on Trade and Tariffs. If this becomes the norm, every economic agreement becomes a bilateral arm-wrestling match. Not only does this mean a rapid expansion in the number of economic agreements, but it also means a world where might means right and small countries ‒ small states like Singapore would obviously be at a disadvantage. Second, because trade is three times our GDP, any friction in global trade would have significant secondary impacts on a place like Singapore. Third, we are all watching what happens between China and America. If you think about what complete decoupling means ‒ we hope we do not get there ‒ but nevertheless, there are three immediate implications of decoupling.

First, it will be inflationary. Why? Because for 80 years, we have organised global supply chains on the basis of efficiency and competitive advantage. Managing inventories was the organising principle, or “just in time”. If you now prioritise resilience and national security, and if you overdo that dial, by definition, you are no longer working on the basis of cost effectiveness and efficiency. You will not be organising your inventories on the basis of “just in time”; it will be “just in case”. It must mean higher prices, and that is quite apart from the impact of tariffs on prices. So that is the first impact ‒ inflation. Second, if you have significant decoupling, you really set the stage for a more disrupted, dangerous world, because interdependence is reduced and the downsides of embarking on disruption are apparently reduced, so you will get a more bumpy, spiky and awkward world. The third point is ‒ I think, a point which Herman Kahn would have appreciated because he was a techno-optimist ‒ is that for at least a century or two, the world has operated basically on a shared and single technological stack. You make a discovery; you file a patent; you publish how you did it; you have a temporary monopoly. Others get to work on your discovery. You stand on the shoulders of giants. Science and technology accelerate, and accelerate increasingly quickly. In fact, we are now on the cusp of a revolution because of digital technologies, especially AI, the energy transition and biotechnology. But if in the name of national security and geostrategic contests, you break that apart, instead of all of us working on a single stack, we are now in two different and maybe isolated stacks. It must mean a reduction in the speed of progress. So yes, we do have fundamental concerns, and I thought I should stop here to take questions, and hopefully I will be able to end on a more optimistic note at the end of the session. Thank you.