Speech By George Yeo, Minister For Foreign Affairs, At The HPAIR’s (Harvard Project For Asian And International Relations) 15th Annual Conference On 18 Aug 06 At 9.00 AM

1. With the ceasefire in Lebanon, another round of violence in the Middle East has come to an end at least temporarily. But the underlying tensions persist and no one believes that peace is at hand.

2. There is no clear victor in this last round. Although Israel has succeeded in creating a buffer zone which will be occupied by an international force and the Lebanese Army, Israel's inability to wipe out Hezbollah and stop the rocket attacks on northern Israel has long-term political ramifications. Within Israel, the domestic balance will shift. It is clear now that force alone cannot solve all of Israel's existential problems. In the Islamic world, the division between Sunnis and Shiites has sharpened with repercussions for Iraq and other Arab countries. While Iran's nuclear ambitions cannot be wished away, it cannot be allowed to have its own way on weapons development. The hammer blows which Hezbollah received must lead to a deep reconsideration of what political and religious fervour can achieve in Lebanon, Iran and elsewhere. Perhaps, a new balance of terror can create better conditions for negotiated settlements in the Middle East. But it is not realistic to expect overnight an enduring peace. Better to assume long-term instability and work on that basis.

3. Conflict in the Middle East has at its larger backdrop the history of conflict between Islam and the West. The First World War brought about the collapse and dismantling of the old Ottoman Empire. The new boundaries were principally drawn up by the British taking into account French interest. The Balfour Declaration in 1917, named after the British Foreign Minister who announced it, led to the establishment of the state of Israel. Writing about that period, David Fromkin described how the 'war to end all wars' led to a 'peace to end all peace' ("A Peace to End All Peace: The Fall of the Ottoman Empire and the Creation of the Modern Middle East", 1989). Like many other parts of the Middle East, Lebanon was an artificial creation and the recent conflict reflected the flaws in that design. But we can't reel back to the past. We have to take the world as it is today and try to make it better.

4. While the US and Europe are deeply involved in the conflicts of the Middle East for reasons of history and strategy, Asia is a step removed although what happens in the Middle East affect us directly or indirectly. Terrorism has become a global problem. High energy prices kept up by political uncertainty hurt us all. Looking ahead, however, it is not only developments in the Middle East which will affect Asia, Asia's rapid development in this century will have a major impact on the Middle East and alter its internal balances.

5. Asia's economic importance to the Middle East will grow. Let's look at the numbers. If we define Asia narrowly as East Asia, including all of Southeast Asia, and India, that's half the world's population. It is by far the faster growing half. The combined GDP is roughly US$10 trillion compared to US GDP of US$12.5 trillion and the combined GDP of the European Union of US$13.5 trillion. In the coming decades, the combined GDP of Asia is bound to outstrip that of either the US or the EU because of population size. Today, just China and India alone produce about a million engineers a year. The US and EU produce about 170,000. Even if we assume that only the top 10% of Chinese and Indian engineers are as good as the top half of American and European engineers, they still outnumber those graduating from Western universities. ("The Asian Giants and the Brains Bazaar" by Michael Schrage, Financial Times of 14 May 2006.) While these trends might please Asians who believe that their time has come, they cause discomfort if not alarm among Americans and Europeans.

6. With economic power comes political power. As China and India put on economic weight, their political influence will grow in tandem. Inevitably, there will be new tensions as they become more assertive. Sino-US relations are of particular importance. It is probably the single most important relationship in the world today. If Sino-US relations are properly managed in the coming years, the prospects for peace and development in Asia are good. If not, the future of Asia, indeed the future of the world, will be troubled. Many countries, many families, many of us, will be torn apart. In reality, the interests of China and the US are now so intertwined, any serious rupture will do great harm to both sides.

7. Last year, the US welcomed the participation of China as a 'responsible stakeholder' in the global system which carries with it both rights and responsibilities. China has responded positively to this invitation but the Chinese are realistic and are quite open in saying that while their relations with the US will never be very good, they can't get too bad either. Both powers are rational and will calculate rationally. To that extent, we can be cautiously optimistic about the future. As part of the long-term calculation, major moves are being made. The Americans are not unhappy to see Japan re-arm in a major way and want India to develop as another regional power. For China, having close relations with Europe, Russia and Iran, and developing stronger links with Latin America, Africa and the Middle East, are necessary responses. In an increasingly multipolar world, however, no one wants to be a pawn on someone else's chessboard. Everyone will want some autonomy of action. Europe, Russia, India, Iran, Brazil and South Africa will all act in their own self-interests.

8. These are the realities of global politics. The re-emergence of China and India as major powers on the global stage will create stresses which must either be accomodated or resisted. It is not all hard power. It is not necessarily a zero-sum game that whatever one power gains must be at the expense of other powers. For this reason, both the Chinese and Indians are at pains to tell the world they are not imperial powers and will never be. Asked about India helping to contain China, India's PM Manmohan Singh said that each is too big to be contained by the other, and that the world is big enough to accomodate the aspirations of both. On the occasion of the signing of the framework agreement of an ASEAN-China Free Trade Agreement, former Chinese Premier Zhu Rongji assured us that China did not seek for itself an exclusive position in Southeast Asia. Indeed it is ASEAN's objective to make Southeast Asia a region which is open and friendly to all the great powers so that everyone has a vested interest in seeing us united and properous. ASEAN's initiative to establish an East Asian Summit or EAS which includes all the countries of East Asia, India, Australia and New Zealand, with ASEAN at the core, is precisely to achieve such an objective. The EAS itself must be outward-oriented and not seek to exclude the US, the EU or Russia.

9. Because of ASEAN's unique position, we have now become a venue where the other powers can meet each other in a neutral setting. Until last year, for example, it was only on the sidelines of the ASEAN meetings that the leaders of China, Japan and Korea met regularly. Now, because of Yasukuni, they don't meet at all. Recently in Kuala Lumpur, all the protagonists concerned about the North Korean nuclear issue sat around the same table at the ASEAN Regional Forum even though the Six-Party Talks have broken down.

10. If ASEAN can help maintain this architecture of peace, the face of Asia will be completely transformed in one generation and world history with it. That new Asia will have a positive development on the world, and this includes the Middle East. Unlike Islam's relationship with the West over the centuries, Islam's relationship with other civilizations - with China, Southeast Asia and India - has been qualitatively different. In recent years, the countries of the Middle East have increasingly turned towards Asia for economic opportunities. As their citizens encounter growing hostility in the West, more prefer coming to Asia for tourism, business, education and medical treatment. What started as a trickle will become a flow. Gradually, mentalities will change and a more hopeful future becomes possible. To our pleasant surprise, many Arab countries now hold up Asian countries like Singapore as models of development. My old Harvard Business School professor, Richard Vietor, told me once that when he conducts courses in the Gulf states, the host would often insist that the Singapore case be included.

11. In this new age of globalisation, the past is a guide to the future. For centuries, the links between East and West either went overland through Central Asia or via the sea through the waters of Southeast Asia. The main religions of the overland and maritime silk routes were Buddhism and Islam. As Asians rediscover and retrieve their ancient links, the Buddhist and Islamic heritage will become important once again. While religious belief can be a cause of conflict, they can also connect people economically and culturally. Last year, the first Asian-Middle Eastern Dialogue was held in Singapore bringing together the Islamic countries of the Middle East and the countries of South and East Asia. What started as an exercise in discovery became a celebration of rediscovery. We were not meeting for the first time. Our ancestors had travelled back and forth along these routes long before. India is now considering reopening the Holy Land of Buddhism in the states of Bihar and Uttar Pradesh to religious tourism from East Asia. Hundreds of millions of Buddhists of both the Mahayana and Theravada traditions live in China, Korea, Japan and Southeast Asia. As more and more join the middle classes, they will want to visit the sacred sites like those at Bodh Gaya and Nalanda. Nalanda, for example, was for hundreds of years a centre of learning drawing students from all over Asia including famous monks from China and other parts of East Asia. Like Europe rediscovering its past during the Renaissance, this century will see Asians rediscovering the sources of their heritage and deriving from them inspiration for a better future. What we seek is a 21st century Asia which encourages inter-faith dialogue and tolerant of cultural and political diversity.

12. Today's Asia could not have come about without the American involvement. When 19th century Manchu China was being ravaged by the European powers and by Japan, the US held aloof. War indemnities paid by China to the US were donated back to build schools and hospitals. American missionaries dedicated their lives to improving the lot of the Chinese people. After the Second World War, the US was determined to break up the European empires. This opened a new chapter in Asian history of countries big and small becoming independent and experimenting with different political and economic systems. The Korean and Vietnam Wars over which the US expended many lives and much treasure bought time for the Newly Industrialised Economies of South Korea, Taiwan, Hongkong and Singapore to develop and take off. With the end of the Cold War, China, Vietnam and India have eagerly joined the global marketplace.

13. The US was thus an integral part of Asia's recent past and remains an integral part of its future. The way the US engages China, Japan, Korea, ASEAN and India in the coming years will shape the Asian landscape in this century. Indeed, without the American dream becoming the Asian dream, today's Asia would not be possible. Through its openness and generosity, American schools like Harvard educated hundreds of thousands of Asians, many of whom have returned home to help transform their countries, sometimes to compete against the US. Without the US as an active participant in Asia's political and economic development, setting standards, providing the market and the technology, the future of Asia will not be as bright. Worse, if a line is drawn down the middle of the Pacific, there could be new unwelcome conflicts. For this reason, APEC (Asia-Pacific Economic Cooperation) is very important for our common future. Particularly with the breakdown of the Doha talks, the role of the Asia-Pacific in keeping the world open to the free flow of trade, investment and talent is critical. We need the US to continue playing a leadership role. In an earlier era, Harvard was founded by scholars who crossed the Atlantic and made it an institution which expressed the Atlantic relationship. We need to do the same now for the Pacific and it is in that spirit that I welcome all of you to Singapore for this conference.

. . . . .