Transcript of Minister for Foreign Affairs Dr Vivian Balakrishnan’s Keynote Dialogue at Singapore Institute of International Affairs’ 17th ASEAN and Asia Forum, 5 August 2025

SIIA Chairman Associate Professor Simon Tay (Moderator): We thank the Foreign Minister for taking time (to join us today). I also want to thank him because I am putting a real challenge to him. In January this year, he gave an excellent speech, which was widely reported in the Straits Times which said: one, the world was changing systematically. The rules that used to govern and favour Singapore – Singapore was predisposed towards globalisation – was changing; two, he predicted that it would matter very much to Singapore. If I had to put a third, he put it in a Singapore, domestic, SG60 context. In the months since then, I cannot say he has been wrong. In fact, the amount of turbulence and change has been dramatic, and those notes that the Foreign Minister mentioned in January were also very strongly picked up by Prime Minister Wong. So having duly acknowledged the insights he shared with us in January, I am not going to let him repeat it. Could I ask you, post-Liberation Day, how you see the same picture?  

Minister Vivian Balakrishnan: Well, January seems so long ago, and I was just trying to recollect what I had said. I think it is the end of an era. We are going to witness globalisation fracture and see bifurcation of both trade and supply chains. (In) January, the tariffs had not been announced yet. We have gone through Liberation Day announcements. We have gone through the flurry of negotiations, and then, of course, the most recent set of announcements two days ago. So, sad to say, this is one of those occasions where, unfortunately, many or all the stuff that I was concerned with in January has come true. So, today, it is the end of an era. Rules-based globalisation, the role of the UN Security Council, WTO, IMF, World Bank – all these pillars that underpinned our global, rules-based system of economic integration have come to an end. We are now at this period which I call an interregnum – that means the gap between the old world order and an emerging world order.

The last 80 years, we have had a kind of an orchestra with a conductor – America – which kept things humming along. Now, the conductor has gone AWOL. In this new order, which is characterised by diffusion, dispersion, (and) fragmentation, the best possible outcome is you get a jazz ensemble – which means you improvise, you react, you respond to one another, but you still get something good, something which entertains and uplifts the spirit. That is the best possible outcome. The worst possible outcome is that it is complete chaos and a cacophony.

It is too early to say where we are at, but fundamentally, the shape of disorder is quite clear, meaning you cannot take the Bretton Woods institutions for granted, to assume that they will have a major impact. You cannot even take the Security Council and the UN (for granted), which is very sad, because we are celebrating the 80^th anniversary of the UN. I will be there next month. And yet, we have witnessed paralysis. We have witnessed cutbacks. It is almost in danger of irrelevance. As an example, on trade, you see evidence of slowdown. I think there is a semi sigh of relief that things were not as bad as they sounded on Liberation Day. But let us not fool ourselves. Whatever the numbers are, and in our case for Singapore, we remain at 10%, it is still, to us, a disappointment. It is still a drag on growth. But beyond the exact numbers, the more fundamental damage to the system of global trade liberalisation, and for those of you who want to be technical – the abrogation of the MFN principle, the Most Favoured Nation principle – which means that every trade agreement now becomes a bilateral arm-wrestling match. And it is not so much just what the Americans will do, but that everyone now, especially the bigger, more muscular countries, are thinking about how to maximise advantage.

Tay: Like mini-Trumps.

Minister: Well, I do not want to be personal.

Tay: I said it, not him (Minister).

Minister: Everyone is going to be inspired by this search for a more narrow definition of interest, a more transactional approach, and leverage on the basis of bilateral asymmetry. All this is bad for Singapore. We have not yet seen the other thing which we are worried about, which is retaliatory tariffs – escalatory, spiral – not yet. But we should not breathe a sigh of relief and say, “Oh that never happened”.

Tay: We have not seen the China deal yet.

Minister: The China deal – well, I think they have until 12^th August, which is next week, and we will see what happens. But whatever it is, we are not going back to status quo ante. That is the point.

Tay: In other discussions – I know you are very practical, Minister, but you also have room for ideas and labels – so I will throw two at you. One is Fareed Zakaria who talked about slowbalisation. Not non-globalisation, but just a slower form. The other idea people talk about is not globalisation, but more regionalisation. And also today, we had Professor Danny Quah talk about globalisation – G – 1 – the world getting on without America. What do you think of those ideas? How do these fit into your geography?      

Minister: I think we are all trying to find appropriate metaphors for what is happening. G – 1 is an obvious metaphor, because, as I said, the key change is that the conductor, the underwriter of the old system, has decided that the system was rigged against its own interests, and, in fact, is now a revisionist or revanchist economic role. But I am saying, actually it goes beyond G – 1. The fact that there are other powers that will now feel that they have been given license – so it becomes G – 1, minus, minus. That is specifically dangerous for a small city state where trade is three times our GDP. So we look not at just first order effects, that “Oh, it is 10% baseline” impact, but we are looking for second and third order impact on Singapore – that every subsequent trade deal is going to be more fraught. And because by definition we are always likely to be the smallest stakeholder in the room, we will be under more pressure. So it is more than just G – 1. 

Tay: In that kind of world, Singapore has always spent a lot of time not just looking at China or America, but multilateral. You spent time in all kinds of corners of the world that we can hardly find on a map. Our former Prime Minister has gone to Commonwealth and other different meetings. We have FTAs with all corners of the world, including in Latin America. In this move going forward, what partners should we be looking at beyond America and China? Is there a merging viewpoint of who could be most favourable to work towards? To avoid using the term ‘mini-Trumps’, acting differently?

Minister: The framework Three Rs; reform, regionalisation and reinforcement. So let me go through the three.

Reform, I have alluded to earlier. It is no point hearkening to the good old days, and the UN, and the Bretton Woods institutions. All these international institutions need reform – reform in representation, reform in decision making, reform in the institutional processes, and we are doing our fair share in New York and in Geneva. Even our recent nomination of Ambassador Rena Lee for the International Court of Justice (ICJ) or the renomination of Daren Tang for World International Property Organisation (WIPO) also represent Singapore's efforts to both reform and participate in global international institutions. That is one.

Regionalisation, you would have noticed our Prime Minister and the former Prime Minister spending time traveling and attending ASEAN summits. You read about conflicts near home, and we will come to that later. But some things to highlight are that we are upgrading the ASEAN Trade in Goods Agreement (ATIGA).  We have done the ASEAN Digital Economy Framework Agreement (DEFA). We are working on the ASEAN Power Grid. We are also expanding our trans-ASEAN payment systems. We have PayNow in Singapore, connecting to Malaysia, Thailand, and India. Now we have got Project Nexus, which is to provide a common platform, which makes it easier for others to come on board, and basically to accelerate digital payments. There is stuff we are doing at a regional level.

The third R is reinforcements, basically on the domestic front. You would have heard the last few days in the formation of the Economic Strategy Review by DPM Gan Kim Yong, which basically takes a longer-term look. Whether you like it or not, the world is changing, and the old arrangements do not necessarily apply.

And there is a technological revolution, especially in AI, digital, energy, and biotech. How do we pre-position our workforce for these changes, rather than wait to be run over or steamrolled, either by bigger players outside or by the fact that we are no longer fit for future purpose? That is on the response side.

Reform international organisations, double down on regionalisation, reinforce our own competitive position in a fast-changing world.

Who do we work with? The first thing is to come back to ASEAN, which is why we are talking here tonight. ASEAN is our immediate neighbourhood. There is a need to hang together or hang separately, both politically, militarily and economically. That is still our innermost core.

We got to very carefully manage our relations with the United States and with China, both bilaterally as well as in the space between them and where we fit in. We do not want to be forced to choose sides, but we want to have a value proposition to both, so that they have a stake in our continued success and prosperity. So far, the first half of this year has been good. We have been able to meet senior leaders, both in Washington and Beijing, (and received) reasonably supportive statements. We know whatever changes they are instituting, both in terms of application, tariffs or even supply chain constraints, are not directed at Singapore. We are being very careful not to be collateral damage in between. So far, so good.

We are also looking at the EU because even if it is G – 1, there are still a lot of other players out there who are still willing to subscribe to a reformed global system of economic liberalisation. One key candidate is the EU. You would have read of us proposing that the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which we are member of, can do more in partnership or in collaboration with the EU, because, after all, they are also quite natural partners for multilateralism, for rules-based systems and for trade liberalisation.

You will also notice we are also doing more with Africa, with South America, and we are trying to stitch up a coalition of the willing, who continue to believe that there is good sense from organising our economies on the basis of competitive advantage of efficiency. And whilst you do need to pay attention to national security and resilience, you must get the balance right, and do not throw the baby out with the bath water. So that is who we are working with.

Tay: That is a good answer. This idea comes back to how we have a multilateral DNA, but there are partners that make more sense and adapting to this changing world.

Minister: The term we are bantering with now is called flexible multilateralism.

Tay: In January you said omni-directional.

Minister: Those are two different concepts. Omni-directional – we have to do. We have to engage with everyone possible. Flexible multilateralism meaning, for instance at ASEAN, we operate on consensus, which is sometimes a straitjacket and sometimes slows it down. You do not want to abandon consensus, but clearly at the WTO, trying to get consensus there, it is well-nigh impossible, especially when some countries decide rightly or wrongly to act as spoilers.

We need to have a system where as long as there are enough of us who want to move forward, and it is in a constructive and positive way, we will move forward. We are not abandoning consensus or the need to find compromises, but at the same time, we are not going to be held back at infinitum. So, there are some habits that are evolving.

Tay: Now, if I could shift us on to perhaps some of the difficult issues. Granted what you said about the effort, bringing most people together, meeting the great powers and trying to move ahead. But recently, there have been a number of issues. The most recent in ASEAN, of course, is the border skirmish between Cambodia and Thailand. Longer standing is Myanmar. On Myanmar, you all will know that Singapore has taken quite a principled point of view. The ASEAN Secretary General himself said, that is how it has been with the whole group. How do you see these problems being processed with consensus, but not a strait jacket?

Minister: Myanmar, and the recent border skirmishes between Thailand and Cambodia are setbacks for ASEAN. There is no way to put lipstick on this. These are major setbacks, not just for peace and stability, but for credibility of ASEAN. So, let us call it for what it is. Next point is that if you took a step back and asked yourself, what is happening – Myanmar, or even in Thailand and Cambodia. Yes, you could say to some extent, this is a hangover of the past colonial history, colonial maps. That is almost a trite way to deflect, to blame it on the colonial hangover.

Another way to look at it is to what extent are domestic factors and the way it hamstrings leadership actually contributing to our difficulty in resolving this. In the case of Myanmar, the truth is, since the end of colonisation, Myanmar has struggled to create a unitary national identity. But military force alone is not sufficient. Because you have never had that national reconciliation – that national unity and cohesion – Myanmar continues to struggle. It is not a matter of just writing constitutions and conducting elections – those are almost epiphenomena – the root conditions for national unity, identity, cohesion still remain missing. The key ingredient is, until and unless you have leadership that has the moral authority and political capital and imagination to put things together, you will struggle. 

Similarly, if you were to maybe just check for a list of all the borders which are still undelimited or in contention amongst ASEAN countries, it is not a short list. In fact, it will be longer than you anticipate. But the point is, just because you have got areas which have not yet been delimited or which are in contention, does not mean it has to lead to violence, and the fact that violence occurs is a failure of diplomacy, and arguably complicated when leadership is hamstrung.

The point I am trying to make is look inwards first, your domestic situation. This is an echo of what is happening globally. Even the pushback against globalisation, against trade and the weaponisation of tariffs, supply chains and technology, actually emanate from domestic insecurity and a lack of confidence and faith that the system is delivering the goods fairly to all the different constituents of your domestic political entity.

So again, I fall back on my usual line that foreign policy and economic policy begins at home. If your home front is not settled, it is very difficult to conduct economics or diplomacy.

Tay: Well, I hate to sound like your echo chamber, but if you look at Myanmar and the intra-Burma conflict between the NLD Government and Aung San Suu Kyi with the military, that describes it very well. There is almost a personal element to this. Similarly, in Thailand, the Shinawatras and the establishment have had this long-running feud for longer. I am not saying they caused the skirmish at the border, but as you said, gives you the ingredients.

Minister: As a practicing diplomat, I make a lot of effort to develop good interpersonal relations with all my counterparts. You can be friends, and you should try to be friends, but it is important for you to understand that in diplomacy, the purpose of friendship is to enhance communication and to avoid misunderstanding.

But you must never conflate national interests and personal friendships. In fact, when you mix up the two, that is when you get danger. So, I compartmentalise very strictly in my mind – what is personal, bilateral, and what is national. You must strive to have the best possible personal relationships, so that you can advance the national interests of your country. Sometimes, diplomats fall into the trap of believing that you can seduce the other side, simply because you get along so well, or there is so much history behind.

I say this because an inability to separate in your mind and in your heart between personal relationships and national interests can lead to danger. Do not ever assume a good personal friendship somehow gives you immunity to getting into problems.

Tay: One more question and then I want to switch a bit to Singapore. One more question on ASEAN is Timor Leste. It is on the cards to become the 11^th member. We have had a process of trying to figure out whether they are ready. There is expectation they will need on-going help. How much can Singapore and ASEAN do to fully bring on-board Timor Leste and what is the prognosis if we cannot?

Minister: No, let us put it this way – that ship has sailed. Timor Leste is going to become a member of ASEAN. Your next question is, do they need help? The answer is yes. Why do they need help? Because if they are going to take full advantage of membership in ASEAN, there are hundreds of agreements. Just core agreements in the economic field itself, I think it is something like 66. You add up all the agreements, it numbers in the hundreds. Just to read past those documents and decide what legislation or policies need to be effected is a major exercise.

So, on the part of Singapore, we are committed to working very closely with their leaders, with their civil servants and bureaucrats to help them make this transition as quickly as possible. But again, in a typical Singaporean practical, no nonsense way, we will be helpful and we will be constructive, and we will bring them along.

Tay: I wanted to ask that question because our Prime Minister has spoken about ASEAN integration. To this business audience, where I talk about this term integration, we think about trading goods and services, the major economies. But integration, I do not know whether you agree with this must mean being on board Timor Leste, helping the questions of inequality across ASEAN more generally.

Minister: No, you may recall it was Singapore, I think, that mooted IAI – Initiative for ASEAN Integration. This has nothing to do with Timor Leste. It goes back 20 years. No other organisation in the world has this level of economic disparity or diversity in governments and ways in which business is conducted as ASEAN. 

But even way back then, we understood, instinctively, that helping to level up and close that gap is good for all of us. Those of us who are somewhat ahead need to lean in and help the others. So it is the same attitude that underpins IAI we will bring to Timor Leste. If you have been to Timor Leste, I do not know how many of you have been, it is a place that deserves support, and it is in our interest to support them and to level them up as quickly as possible.

Tay: As I mentioned, I wanted to ask about Singapore for three reasons. First, you have mentioned also that a lot of foreign policy starts from home. Second, between January and now we had this thing called General Elections.

Minister: And even that seemed like a long time ago.

Tay: Yes, it does. Third, a little bit ahead of us is our 60^th anniversary. Given this change, given the vote, given the need for continuing reform in the Singapore economy, what is your prognosis and how do we avoid hubris? How do we keep reinventing, innovating and moving forward?

Minister: Again, you always pack multiple questions. We will reach 60 years on Saturday and what is very clear is that the next 60 years are not going to be like the previous 60 years – despite being cut off from our hinterland, despite being cut off from a common market, despite the British naval base pulling out, which would have created a potential hole of minus 30% to our economy. In a way, because we had our backs to the wall and were able to avoid the siren songs of import substitution, we were forced to globalise before globalisation became popular. We had to welcome Multinational Corporations (MNCs), even ex-colonial or ex-occupiers of Singapore. And because we had a hard-working and disciplined population, we had trade unions who took a long-term view of workers’ welfare and we had an honest, competent government, we were primed for the last 60 years. The question now is if you accept my thesis that the next 60 years will be different. That is why we are trying to reposition and prime ourselves to take and catch the new winds from the technological revolution, avoid getting crushed between the two superpowers, chase down opportunities with the middle powers like Australia, India, the Middle East, Africa and South America for the Artificial Intelligence (AI) revolution. It means going back to basics, taking the world as it is, understanding that there is both danger and opportunities and working on doing our domestic homework. Recently, I was asked about free trade and many people have become far more critical or sceptical of free trade. My current belief is that free trade needs to be complemented by industrial policy and social security. You need all three elements. If you just focus on free trade and do not pay attention to the impact of free trade on your economic structure and economic strategy and you have no sense of priority, of adjustments, of compensations, of what I call industrial policy, you are in danger. In fact, the preparation for a free trade negotiator is to understand your own domestic economy. Free trade must be complemented by industrial policy. The Americans and Europeans used to criticise us for it. Now they have all stopped because they are all doing it. I try not to be too gleeful about it. Yes, I completely agree with you that free trade must be complemented by industrial policy and social security. So again, if you look back particularly over the last 20 years, the refinements that we have made to our social security, welfare, SkillsFuture and family support. It is not just because we have gone politically soft-headed and are heading left. When you know that people are going to be on a roller coaster that is going to be rough at times, you must give people the assurance that seat belts are in place. Can you see this combination? We still believe in free trade, in competition, in being competitive but we will also, in an intelligent and smart way, restructure our economy and we will also give our people the necessary assurance so that they are willing to stay on board this train. Because what we cannot tell our people is “Do not worry. Everything is the same. Everything is safe and anything you do not like, we will just build a wall and insulate ourselves”. Those strategies do not work.

Tay: I have packed those questions in multiples so that you can get full answers and leave us about 12 minutes for any questions, if that is okay. Would anyone like to ask a question we have not already touched on or come back to something?

Phil Heijmans (Bloomberg News): Hi, thank you very much. I am Phil Heijmans from Bloomberg News. I think it is very timely that you have touched on the Cambodia-Thai border issue. A lot of conversation, a lot of the stories is about maps, about the colonial era and I think you have just nailed it on the head. In your experience, given what we have seen now, I would love to hear your perspective on what is really driving things at the border there. How has this really blown up? Is it about this personal interaction between Thaksin and Hun Sen, or is there more to it? Thank you.

Minister: I think it is still too fresh, and I do not think we have got all the facts and that is why I just wanted to take a step back and say that “If you organise the world on the basis of ‘might is right’, then we can draw borders that way”. What has happened in the last 80 years with the UN charter is to say, “Let us accept borders as they are. In fact, even give them sacrosanct status”. What we have done is to prioritise peace above all historical arguments. It is the same thing you see even in the Middle East, if you resort to trying to decide political arrangements and borders on the basis of religion or history, there is no end to that because very often, you will come up with one version, I will come up with another version and you will resort to force. What we are trying to encourage is a world in which you can have peaceful resolution of disputes, true recourse to legal principles, whilst knowing full well actually international law has an enforceability problem. Nevertheless, a world in which we can have recourse to legal principles, and you need leaders to be able to bring that outcome back home and say, “This is the better outcome”. I am not saying it is 100% right or 100% wrong because in fact, the moment you make things a morality play in foreign affairs, there is nowhere, no trouble. I guess what I am trying to hint at is that you need leaders and you need systems to give you political accountability to settle disputes peacefully. This is still an experiment in only the last 80 years. It is still work in progress. But can it be done? I believe it can be done. Should it be done? Yes, it should. Even in the case of Singapore, do we have our own? Fortunately, at least in our interactions with Malaysia, I think one thing which we should give full credit to the leaders of Malaysia and Singapore is that we have always played by the rules. Whenever there have been differences, we have gone to the International Court or we have resorted to arbitration and then both sides have said, “I accept the verdict. I look forward. I carry on”, and I hope this will be a model within ASEAN and beyond.

Tay: Is there one more final question for the foreign minister?

Shu Ting (Moody’s Ratings): Hi Dr Balakrishnan, I am Shu Ting from Moody's ratings. Thank you for the thoughtful discussion so far. I particularly enjoyed what you mentioned about the imperative of us catching new technology revolution and the AI revolution. With all the buzz around agentic AI today, I am curious to understand how ASEAN and Singapore are prepared for such opportunities and risks with such advanced technologies? Thank you.

Minister: That is worthy of a whole session on its own. I am a technophile, so obviously my views may be a bit biased, but I think AI is a big deal. It is a transformational technology, not for its own sake, but because of its potential to transform or to enhance productivity of some workers. Its potential to make some work redundant, and the fact that it will feed on itself and accelerate. This is a bullet train that is accelerating. There are both dangers and opportunities. On the danger side, the complication is going to be that because of the stark contest between the US and China, both sides will prioritise getting ahead over paying attention to safety. There is a real risk, more direct risk to humanity. But putting that aside, the other level of risk is that for 80 years, we have generally had peace between superpowers, especially the nuclear powers, on the basis of Mutually Assured Destruction. But if you think about it, the concept of Mutually Assured Destruction is very much a human emotional concept that (when) push comes to shove, you will repel, from a final solution. That means extermination of human beings. We are now in a day and age when warfare (is) about hypersonic missiles, ballistic missiles, swarms, drones. Actually, it is impossible, especially on the defence side, to have a human finger on every trigger. That is not the only complication. The other complication is in executing Mutually Assured Destruction. I must have a theory of mind of who I am dealing with on the other side, and what you are afraid of and what you are hopeful of and certain shared norms. The more our military systems become outsourced to AIs, I can quite confidently assure you, it is impossible to codify all human values and human reactions. Some people say, yes, everything can be good. I do not believe so. In fact, there is going to be significant danger on the military side of the house, but it is going to be very hard to have arms restriction or an arms trade treaty because both sides are trying to get ahead. For the rest of us, we have to deal with the economic impact. The way we are approaching it in Singapore is that, look, I do not believe the cutting-edge frontiers of AI, those developments are going to occur here. They are going to occur in Silicon Valley, they are going to occur in Beijing, Shenzhen, parts of Europe. But if you think about its economic and social impact, it is the rate of AI diffusion that counts, and that is why, as far as I am concerned, the key thing for us is to be early adopters, early diffusers, early enablers of AI tools, and it must pervade through all industries and all the activities that we perform. That is at one level. The other level is what is called agentic AI, which is the latest buzzword, which basically means AIs are not just a Google search or not even a text drafter like ChatGPT, but can take instructions, decompose your task, go out and search for additional information, reprioritise its goals, and then transact on your behalf. That is a big deal. Again, we have got to come to terms with it. Take the example of a self-driving vehicle, you now have human drivers interacting with artificial, autonomous agents, and those interactions, because they are iterative, can also become quite unpredictable, with both good and bad results. That is another big deal, which is happening.

Our attitude is, let us in Singapore be early adopters. Within the government, we are doing our best to infuse AI. It is like using a calculator or a word processor or a spell check. We do not even ask our staff to attribute whether or not they used AI. In fact, I expect you to use it the way you use a spell check. But I hold you personally, absolutely liable for any mistakes made. You cannot say I made a mistake because I used whichever AI tool. I expect you to know how to use it. I expect you to know the limitations. I expect you to ask the right prompts, and I expect you to double check and verify and come back with your answers. This is a practical example of how we work with AI. You will see that more and more in government interactions, where it becomes seamless it is taken for granted. Again, to give you an MFA example, for those of you who travel and lost your passports, it used to be a major laborious exercise. You had to go to the embassy, you had to make a police report, and then we had to print a special document of identity on a specific piece of paper. Nowadays with live video feeds, verifications, with SingPass and digital, it should be so much simpler, and we have. But it is not just Singapore – we also have to negotiate with our other partners to recognise these digital certificates of identity. It is another example of how you must use it as an opportunity to re-engineer your processes show real value to real people and collaborate and inter operate. If we can do that and play a role in the development of standards, we can also help in that process of AI diffusion, so that is what my focus is on.

Tay: Thank you very much, Foreign Minister. From the foreign policy school, right policies, right down to the patience for domestic society, industrial policy and a pet area of his technology and AI. It has really been a wide ranging and deep discussion with a lot of insights. I want to ask you to join me in thanking him very much for the speech.

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