Transcript of Minister for Foreign Affairs Dr Vivian Balakrishnan's Fireside Chat at the Milken Institute Asia Summit, 7 October 2026

Milken Institute CEO Robert Ditizio (Moderator): Minister, thank you so much for joining us. You have described this moment as one of profound disruption. There are wars that show no sign of ending. Barriers for trade are going up when they used to come down. Supply chains that can no longer be taken for granted around the world. All this against the backdrop of AI and other technologies that are unfolding, that are changing how we think about just about everything. So given that, how do you think middle powers and smaller states can navigate this intersection of emerging technologies and geopolitics?

Minister for Foreign Affairs Dr Vivian Balakrishnan: Oh, that’s a tough one.

Ditizio: We’ll start with the complicated ones and go down.

Minister: Well, since [former Canadian Minister of Export Promotion, International Trade, and Economic Development] Mary Ng is here, we’ll refer to the middle power called Canada, and its leader Mark Carney. Singapore’s tiny. You know, we are 1/5 the size of Rhode Island.

Since 1965, the United States underwrote a system of globalisation — supply chains, free markets, bringing down tariff and non-tariff barriers. It opened up its market. It gave access to technology, and generally, although sometimes hypocritically, it underwrote a stable system of rules and international law.

The key change after 80 years of that, if you look at both America and China, is domestic politics. In America, you are driven apart by inequality. You just discussed how the richest 50 Americans have more assets than 150 million other Americans. America is divided, polarised. Congress reflects that polarisation. You can’t agree on facts, much less on paradigms, and politics has become a binary zero-sum game. Flip across the world to China. Everyone knows the economic success of China after reform and opening, but what domestic problems does China have? Number one, demographics — the lack of babies, the ageing of the population. Number two, the domestic economic imbalance between consumption and China’s paradigm of economic development since 1978, which is basically the export-oriented production of goods and services that everyone else, in particular America, would buy. This domestic imbalance, and the twin imbalance between America and China, is not sustainable. But for the last 40 to 50 years, the fact that China was the manufacturer of the world, flooding the world with cheap goods, benefited America. Walmart shelves were full. The average American could buy things very cheaply. The trade surpluses of China, and all that being recycled into Treasury bills, was also another key reason why interest rates have been abnormally low for decades. So, there was a happy tango going on, but that music had to end, and that moment has come to an end.

The point I am trying to make here is: pay attention to domestic politics. Domestic politics in the superpowers have now led to our situation. It is not just about competition. It is not just about contestation or rivalry. Until and unless you get a rebalancing of domestic politics, followed by a new paradigm — a new world order internationally — we are going to be in unsettled times. The point now, for Canada and for Singapore’s prototypes, is this interregnum — the loss of the old-world order, which was great for us because we are outward oriented; trade is three times our GDP; we operate by rules; we are very happy with the WTO and the principle of Most-Favoured Nation (MFN); we believe in competition on the basis of value and you run inventories “just in time”. Now, especially after COVID, you have got to work on a paradigm of “just in case”. You have got to look at near-shoring, friend-shoring, on-shoring. It is a different and a more difficult world to traverse.

The other point is, we can all talk about the necessary changes to make, but let me tell you as a doctor, that there is a limit how quickly the human body can change, or societies can change to cope with these differences. Therefore, the answer to the question of who is going to emerge better or stronger, is going to be dependent on who better masters new technology, because there is a revolution going on in AI, in biotech, and in energy, and who successfully restructures, not just the domestic economy and sources of competitive strength, but also the software side of it, and who can keep our societies together, avoid fractures, polarisation, discrimination. Fear and despair can cause paralysis in all societies at the precise moment that our societies need to restructure as quickly as possible to deal with both the promise and the peril. We’ve got our hands full, absolutely.

Ditizio: You mentioned a number of things. Let’s focus on a few. As you stated, people are disputing facts. We need a new paradigm, and there definitely are cracks to the social order that have unfolded. I am thinking about the lack of a global regulatory framework around a lot of this. Typically, regulation by design tends to be geographically specific. I was a banker for most of my career. There were regulations; if you needed a sanction against a country or a company, there were only so many ways to transfer capital. It was fairly easily accomplished. Today, that paradigm is totally upended because so much is occurring in the dark ether. Can a country like Singapore, which has a very high trust factor, play a role in deciding how we’re going to adopt technologies and regulate them in a way that people can trust?

Minister: You struck on the absolute right word: trust. As George Shultz said, trust is the coin of the realm. At a time of great disruption, trust becomes even more valuable. Whatever happens, we intend to maintain our premium on trust — on not panicking in a crisis, never confiscating wealth properly earned and managed, keeping our heads and maintaining sanctity of contract and consistent application of laws, both domestic and international, and keeping a sufficient level of transparency in our systems. In fact, we think this is an opportunity for us, and certainly for the crowd in this room managing assets and wealth, we’re doing quite well. It is not because we are the smartest or biggest or most powerful people in the room. I would like to believe Singapore has a real trust premium, and we will double down on this.

Ditizio: Once people buy into that ‘trust framework’, do you think that the citizens are equipped to adapt to what’s coming next?

Minister: This refers to the social contract. This is a whole-of-society effort. One key challenge in politics is to be upfront and honest with your people. What’s happening? What are the implications? What are the trade-offs? The latter point, especially, trade-offs are the most difficult thing to navigate. In Singapore, we like to believe that we have been upfront with our population, not just on the upsides and the downsides, but also on the trade-offs that we are going to have to make collectively as a society, and without fracturing. That’s actually the missing ingredient in the political systems of many other places. That’s why you get the corrosive erosion of trust. Then, with diminished political capital, you just cannot make the decisions that need to be made, even though you know what the right thing to do is. You are unable to convince your people, and you end up being a deer in the headlights, and there is a revolution going on, on all fronts. It is something that we are working on.

Ditizio: Let me go back to something else you said. You mentioned the United States and China dynamic. I’ve also heard you say that Singapore shouldn’t choose between Washington and Beijing, and that the day Singapore loses its ability to say no, is the day it loses its relevance.

Minister: It is the day that many of you will leave. Or even if not you, the assets under your management will leave.

Ditizio: But that must be true for many other countries as well.

Minister: But for us, this is a peculiarly sensitive and existential point. What do we have in Singapore? We have got a wonderful location, but everything else depends on trust. Why would people leave assets for us to manage? Why would people invest in Singapore? It is about trust, and at a time when you’ve got two superpowers having a difficult phase in their relationship. I used to tell the President of the United States, “You are more invested in Southeast Asia — in terms of the stock of FDI — than in India, China, Japan, Korea combined”. Of course, I usually do not whisper the next point, which is that more than half of that is in Singapore. So, is America important to Singapore as a source of FDI, a source of technology, and as an ultimate market? Yes, absolutely.

On the other hand, is there any other political entity in the world where 74% of the population have Chinese ancestry? The answer is no. My colleague in China will regularly say to me, “Of all people in the world, you (meaning Singapore) should understand us the best — linguistically, culturally, historically, and so on.” What he actually means is: “you should agree with us.” I will then recite my standard lines: “We are a multiracial, multilingual city-state in the heart of Southeast Asia. We have got great relations with you. Both of you are vital for us, and we will handle our relationships very carefully.” Now, that is easy to say, but what does it mean in practice? It means that as long and as far as we can do so, we will refuse to choose, because the moment you choose, you have lost strategic options and strategic latitude. However, it is not enough to stop there and say, “I will refuse to choose.” You also have to say, “If you force me to choose, either one of you, you may not like the final answer.” Even that is not enough. I then have to go on to say that, in any case, “I am not going to be used by the other guy against you, as a proxy or as a lever.” We have to religiously say, “I will refuse to choose, and whilst I will be useful to you, I will not be made use of.”

The key challenge comes back to trust. The challenge for us is to maintain trust with both the United States and China, not as a vassal state or a tributary state, but as a small but hopefully relevant and useful partner, who is not to be made use of. To the extent that we can maintain this very delicate —

Ditizio: Delicate balance.

Minister: I hate to use the word balance, because when the two poles are jumping all over the place, if you are going to aim for strict balance, you will also be jumping all over the place. My preferred option is to maintain a clear, steady, principled, consistent position, so that whatever they do, if I have to say no, I can say: “Well, we have to say no to you because we have done our own calculations of what is in our enlightened, long-term national interest. But do not worry. I am not acting on behalf of the other guy, and it is not personal.” Maintaining that discipline of thought, and of the conduct of our relationships, is essential to our survival.

Ditizio: So, let’s stay on the international stage for a moment. I watched your speech at the United Nations. It was filled with very insightful thoughts on a lot of different issues. You did mention that the closure of the Strait of Hormuz violates the UN Convention on the Law of the Sea (UNCLOS) and must collectively be rejected. My question is, what does collective rejection actually mean? How would it play out in practice, and does it change the way you are thinking about regional energy security?

Minister: There are many strands to that question. First, our strategic location is the key advantage that Singapore has. The Straits of Malacca and Singapore, at its narrowest point, is about two nautical miles. In comparison, the Strait of Hormuz is 21 nautical miles. The next point you need to be aware of is that about 40% of global trade traverses the Straits of Malacca and Singapore. Singapore derives a lot of our value not by collecting tolls and imposing blocks on traffic, but by providing value-added services. For us, UNCLOS — which sets out maritime entitlements and limits to the entitlements of littoral states, and which sets out transit passage as a right rather than something which you have to pay fees for and beg for, by the grace of whoever happens to be a bordering littoral state — is absolutely crucial. When we look at the Strait of Hormuz, even without taking sides, any full-frontal assault on this regime of the right of transit passage for ships in and aircraft over straits used for international navigation is a full-frontal threat to our business model. That is why we have to take the position that we take. That is international law and our diplomatic position.

We can also unpack another strand. I have been in the Gulf several times since — in fact, I was just there a couple of weeks ago, and met my counterparts in the Gulf in New York as well. I am not going to name names, but there is at least one Gulf country who has confidently told me, “Guess what? We are making more money now than before the war.” I said, “Oh, how do you do that?” He said, “Well, we are running what we call the ‘Hormuz shuttle’. You have about 20 Very Large Crude Carriers (VLCCs), and your job is just to bring the 2 million barrels of oil past the gauntlet.” I said, “What about the risk of it being shot?” He said, “You basically self-insure. Sometimes you get hits, but it is still worthwhile to run the Hormuz shuttle. Since the price of oil is higher than it was before the war, we are making money.” I think there is a recent Reuters report that says even the volume of oil is now back to pre-war levels — that needs to be verified.

Even the attempt to interdict the Strait of Hormuz is leaky. That is not to belittle the point, because it is not only the Strait of Hormuz, but now also the Bab Al Mandeb Strait, which is at risk. In fact, there is an even bigger risk if the latter is completely shut down, because the Suez Canal in the Red Sea is essential for trade between Europe and Asia. Put aside the economics of it, the real strategic point is this: if Iran, at the end of all this, is allowed to charge tolls and fees, it means having a veto on who gets stuff through. It means strategic dominance and coercion. I doubt America or the Gulf countries are going to accept such a situation, because if that happens, that completely reorders the balance of strategic power in the Gulf. This is something which will bear watching. It goes beyond tolls and fees. The strategic question is who gets to decide transit through these critical straits in the world, and that is why it is so vital.

Ditizio: You mentioned that such a large percentage of trade flows through the Straits of Malacca and Singapore, and so it is critical that people are following the same set of rules. Do you think we can still build rules today that every country actually follows?

Minister: The short answer is yes. The longer answer is yes, but with greater difficulty. I’ll give you an example – the Biodiversity Beyond National Jurisdiction (BBNJ) Treaty. Ambassador Rena Lee was able to land this treaty by global consensus about two-and-a-half years ago. It is still possible, and that is why I am not giving up hope that we can do this in other arenas of the global commons. Today, for the global commons, such as in climate change, there is a UN convention. If you talk about the ocean, there is a UN Convention on the Law of the Sea. For pandemics, you have the World Health Organisation and its guidelines. We will also need something for [outer] space. There are other global commons that are now emerging, such as AI and biotechnologies.

For those of you who have not paid enough attention to the biology side of the house, on synthetic biology, there is a good article on Mirror Life in The Economist. I do not have time here to explain the biology of it, but there are emerging threats and great potential in AI and synthetic biology. And as I said just now, if you want to move fast, you also need to have good brakes and you need to have international standards. My basic point is that it is possible, and in fact, it is essential. And if we do that, there is a huge amount of money to be made. We are at the beginning of another gilded age, and if you recall the last industrial revolution, the gilded age meant greater inequality. It also meant, particularly in the case of the railroads, great investments and great volatility, because some of these investments also came to grief. In the long run, whatever happens with the short-term volatility, you know that these are technologies that are transforming economics and societies. In the long run, it is still great. But I am also reminded that in the long run, we are all dead.

Ditizio: Let us zoom in a little bit closer to home. Singapore takes the ASEAN Chair next year.

Minister: Yes.

Ditizio: If you were to look back at Singapore’s chairmanship at the end of 2027, what would make you call it a success?

Minister: If our economy within ASEAN continues to grow and be more integrated; if our respective strengths, say in energy or in technology, could really become complementary such that the whole is more than the sum of its parts; we would have succeeded. In other words, we are looking for deeper integration within ASEAN, and for wider partnerships across ASEAN, and beyond ASEAN. By that, I do not just mean our traditional Dialogue Partners. We want to do stuff with the European Union. We want do stuff with Africa, South America, the Pacific Islands, and across Canada as well, a Trans-Pacific strategy. Basically, if you think about it, we are going through turbulent weather. By definition, we are small, except for Indonesia. The more we can raft our economies, the better we can cope with high waves and strong winds.

Let us put some numbers on this. If you add up the cumulative nominal GDP of ASEAN, we will be, or may already be, the fourth largest composite economy in the world. And guess what? We still have great growth potential in the next 20 years. We want to be assessed on our own merit, not as an arena for contestation between the superpowers, and not as another arena for proxy wars. That is the first point. We stand collectively on our own.

The next point, if you look at the growth figures just for the first half of this year, you would be surprised. Vietnam is galloping at 8-plus per cent growth. Singapore is at 6.1 per cent GDP growth for the first half of this year. And our neighbours, Malaysia and Indonesia, must be running at around 5-plus per cent. The point is, in the midst of a crazy world, a breakdown in the world order and trade, and disruption in supply chains, we are having significant growth to the point you start to worry, why is it so high? For most of you, if I asked who the biggest trading partner of Singapore is, the traditional answer is China. The biggest trading partner last year for Singapore was Taiwan. So, what is going on? Clearly, AI, semiconductors, and technology are a big part of it. Can you see how this illustrates that this is a moment of great potential and peril? This is a moment of great change and volatility. If we can thread the needle, and not just for Singapore but for ASEAN as a whole, I think we have got quite a compelling narrative and great potential. So, I am still an advocate, and I am a believer in ASEAN.

Ditizio: I want to close on a personal reflection. You have been serving as Minister for Foreign Affairs for some 11 years now. What do you know for certain today that you did not know when you assumed the position?

Minister: In retrospect, what we are seeing today — the writing was on the wall. As I said, the internal contradictions within America, and within China; the accelerated and accentuated rivalry; and the breakdown of a very comfortable world order for middle powers and small states — in retrospect, it is very clear. But if you go back to 2015, the promise of AI was not so obvious. The potential for synthetic biology in healthcare was not so obvious. The fact is that there is a role and there are rich pickings for middle and small powers in the midst of all this, so long as we can keep our heads, we do not panic, we do not break apart, and we continue to build bridges and be constructive solution makers. I am not bored even after this long period of time. It is an intellectually fascinating time to be alive, and even what I do with my own [AI] agents, it is incredible.

To end on the point of [AI] agents, I have now spent enough time building, interacting, and using agents to tell you that we have a real problem. Anyone who tells you, “I’ve got absolute control over my autonomous agent, and I know exactly everything it is going to do or not do”, obviously does not know what he is talking about. Loss of control is a real threat.

Second, the fact that even I can do this, shows that the risk of rogue actors — state and non-state actors — using this technology to build new weapons of disruption, whether it is in chemistry or biology, or weapons of mass destruction, is very real. It is a time of heightened risk. The third area is its impact on society — on belief, on cooperation, on mobilisation, and on the practice of politics. We are in a whole new arena. The final point is, we train our [AI] agents on the entire corpus of stuff which has been published on the internet — and most stuff on the Internet is violent, misogynistic, unfair, crazy — and then you are surprised that your AI agents are a reflection of humanity. We are neither saints nor devils. Sometimes it is circumstantial, but we should not be surprised that AI agents brought up on a diet of human thought and writings will also behave like human beings. Now that can either be very scary, or it should be moment of great contemplation.

My message to all of you, is that it is a wonderful time to be alive. A lot of things are happening. There is also a lot of money to be made. There is also a lot of good that you can do. I think that refers to the Milken Institute and hopefully the people and the organisations that all of you represent here. This is a great time to be alive.

Ditizio: Well, thank you for such a thoughtful conversation.

.    .    .    .    .

MINISTRY OF FOREIGN AFFAIRS

SINGAPORE

7 OCTOBER 2026