Transcript of Minister George Yeo's Interview with Lianhe Zaobao, 7 Oct 2005, 4pm, Ministry of Foreign Affairs

ON ASEAN

Q: On how ASEAN can remain independent from the influence of the major powers.

We have to position ourselves carefully. It should be in the vested interests of all the big powers to leave us in a neutral position. Take China for example, I remember in December 2000, PM Zhu Rongji said let's have free trade zone between China and ASEAN. It took us a year to respond. In 2002, the framework agreement was signed in Phnom Penh. In Phnom Penh, PM Zhu Rongji made a very important remark. He said China did not seek for itself exclusive position in SEA. And now the US says the same thing that US does not seek for itself an exclusive position in Southeast Asia. I remember when President Bush launched the Enterprise for ASEAN initiative in Los Cabos in 2002. He said that it was good that ASEAN had good relations with China and other countries and now we have improving relations with India. We are now negotiating FTA with India, Australia and NZ. So what we want is to position Southeast Asia such that all the major powers have a vested interest in us being integrated, being prosperous and being neutral to everybody. And since we have no nuclear weapons, no ICBMs, we threaten nobody. Everyone has vested interest in our well-being. If we need help, they will help us. That is what we have been trying to do for the last few years. It is Singapore's position and also ASEAN's position. This is why Singapore is very active on ASEAN's diplomacy, both economic and political.

Q: How will the rise of China impact on ASEAN and on Singapore?

I think everyone has come to the conclusion that the growth of China is good for everybody's economy. So everyone is busily positioning themselves to attract more Chinese tourists, to attract more Chinese investments, to sell more to China and also importing more from China. China has been very active in creating strategic partnerships, having FTA with ASEAN, accelerating early harvest, and so on and so forth. That is a clear plus for everybody. In Thailand, I've been told that PM Thaksin has expressed a wish to see Thailand establish a consulate in every province in China. Because he said look, every province is the size of a European country, and why shouldn't we have a consulate in every province so that we can service Thai nationals and Thai businessmen. That makes a lot of sense to me. We are not as big as Thailand, so we can't have as many consulates but we are also increasing our consular presence in China. Other countries have the same consideration, Malaysia, Indonesia, Philippines. Everyone is very keen to take advantage of the opportunities which the growth of China has brought forth. Now India is appearing and flashing brighter on the radar screen, so everyone is scrambling also to think through how he can get benefits from the growth of India. And Singapore... yesterday morning I went down to Mustafa's--now they open 24 hours, so I went there early in the morning to have a sense of changes that have taken place and the plans they have for the future. Because half of the Mustafa customers are foreigners. And most of the foreigners are either Indians from India or Indians from the Indian diaspora. And I was quite impressed by the improvement in Indian products, food products, clothing and so on. Very much along the lines of what we saw in the products of China, in the early 90s you see the Chinese improving the packaging, updating their styles and conforming more and more to international standards. Same thing is happening in India. So everyone could see that. We could see that here. So there's China, there's India, then we see, what about ourselves? Where do we stand in the face of all this. Will we be left behind? We had better make sure that we upgrade our infrastructure, pay more attention to education. Whatever we do, we are too small by ourselves, so we better combine our efforts. So the rise of China and India has galvanised us both as individual economies and collectively as a region. That unless we buck up and press on, because they are running so we better run too. And we better run together because otherwise we will be swamped. So I think it has been very positive.

I feel the same will happen to India. I think it's very good for us. You look at the map; you have on the one hand China, on the other hand India, both ancient civilizations. Historically they were the biggest and second biggest economies. They boom, we will boom with them. But we must make sure that we are diversified, that we are not just riding on one economy. Singapore is very conscious that we should not just link to the US economy, Japanese economy or European economies. So from the very beginning, we made sure that we have many engines of growth. Now we have two more engines coming along, it's very good for us. Our economic and political strategy is to make sure that we derive power from multiple sources. So our economic strategy should be to have many sources, so we are plugged into many power stations.

Q: On how we navigate among countries who may not be friends with each other?

It is the nature of politics that neighbours always have problems. So between Thailand and Malaysia, Bangladesh and India, India and Pakistan, Singapore and Malaysia, Singapore and Indonesia. Neighbours always have problems and problems which have long roots in history and not easily resolved. And very often it is easier to be a friend with your neighbour's neighbour, so this will never change and will continue to be. We are at the heart of Southeast Asia, it is in our interests to maintain friendly relations with everyone and because we are too small to be a threat to anyone, I think it's not all that difficult for us to find a win-win solution to whatever bilateral problems we have. It is at the heart of our ASEAN strategy that Singapore has good relations with all ASEAN neighbours and help those who are in need. So in the case of Indonesia, we were as helpful to them as we could be during the Asian financial crisis, the tsunami, terrorism, SARs etc,

With Malaysia under PM Abdullah Badawi, relations have entered a new phase. During the last one year, relations have improved a lot. I hope some of the bilateral problems we have can be resolved by mutual agreement, put them to third party resolution. On the reclamation issue, Malaysia took us to ITLOS. The process itself turned out to be very productive. By mutual agreement and compromise, we settled our differences. I hope that same spirit will prevail, that same constructive attitude in the way we solve our other bilateral problems. There will always be bilateral problems in politics. But the key is the larger challenges that confront us collectively which give us a new will to set our own bilateral problems in perspective. So even though there are disputes, they are kept within bounds.

Q: On how government respond to domestic sentiments towards foreign policy now that people are more educated and want to have more say?

I think that's natural (to have an opinion). As we become a more sophisticated society we have a greater range of views, more info-driven. It's natural and good for Singaporeans to have views on all these things. But there's also an instinct that on the most important things which are sensitive, we should keep them in the family. There are some things which are good to discuss with foreigners. But the essence of a group, of a family, of friendship is the willingness to be intimate within the group. Creating the intranet among Singaporeans is a very important part of our own identity, which means keeping certain discussions internal to ourselves. An attitude of keeping each other in confidence, explaining why certain things are done but maintaining a common external position.

ON CHINA

Q: Are we comfortable with China seeing us as their relatives?

But we look at them as relatives too. I think that's mutual, at least for the Chinese in Singapore. It's completely natural and an asset. The fact that we are three-quarters Chinese helps us in our relationship with China. It gives us an ability to understand them beneath the skin as it were and I think it's a big plus. It makes for more intimate relations. It enables us to understand each other more deeply. Of course it's two-sided. It gives you advantage but it also generates unrealistic expectations. There is a certain simplicity in the relationship between strangers when we meet, so if you go to a restaurant, you greet each other, you pay your bill and you leave. But once you are related, there are always complications which relatives have. Our relationship with China is a relationship between close relatives. That is a reality and we can't wish it away just like you can't wish your relatives away. And it's important to manage good relations with your relatives. So it's important that we manage good relations with China.

Q: On political and economic relations being intertwined in China. To what extent do you think our businesses can be insulated from the vagaries of unpredictable bilateral relations?

Every country is different. The Anglo-Saxon model of everything being commoditised, everything to be detachable as a factor of production, is peculiar to the Anglo-Saxon economies. The continental economies like the Germans, the Italians, the French, they do not operate like this. For instance, you can't buy land or sell land as easily as you could in the UK or the US. So every country has its own nature and has its own political risk. China has its own nature too and China has its own political risk. You got to factor that in. This tendency of connecting everything together is a very Chinese characteristic and it's something that you've to take into account. It is both a plus and a minus. It enables them to be highly coordinated when they need to be highly coordinated. But it also creates unnecessary rigidity and you do not want the rigidity. But it's a characteristic of the Chinese system and it's not something that they can do away with completely because it's bound up with the political culture of Chinese society. It's something which goes back to dynastic days. They want to separate politics and economics more than what they did in the past but socialism with Chinese characteristics includes the commanding heights of the economy coming under collective ownership. This is doctrine, it's not an interpretation by me. And collective ownership of commanding heights means integration at a certain level. That will not change.

Q: And when bilateral relations were strained last year after the visit to Taiwan, everything was frozen.

I don't think we should overdraw lessons from events of last year. The events of last year are the opposite side of the coin from Suzhou. You can't have the Suzhou phenomenon in the US where the whole country, and a very big country, can concentrate attention on a particular project and associate a country with that project. But the opposite side of it is when there's reason for unhappiness, the entire country can be involved in the unhappiness. And you can't have one side of the coin without the other side of the coin. So I don't think we should be surprised. Just as we should not overdraw lessons from Suzhou, so we should not overdraw lessons from what happened last year.

Q: So what lesson should we draw?

It's in the nature of Chinese society that part of the political advantage and political risk of investing in china is that it's more centralised than any country in the world in its political culture. Therefore matters of key importance to them have comprehensive implications. But this also enables problems to be solved in the way which cannot be solved in other countries. So if you need to do something which is very important in China, if zhongyang says yes, it'll be done, it will be done. But in other countries, it may not be done whatever you may say or whatever your wish may be. Because they have a different structure of political and economic power and property rights. China is changing. But at the same time there are certain deep characteristics which cannot change because it's in the nature of Chinese history and the culture. And our strength is our ability to observe the differences among different cultures. Singaporeans are very good at this. If you're operating a shop/restaurant in Orchard road, customers walk in, you would be able to do a quick assessment of whether the customer is Singaporean, non-Singaporean? If he is non-Singaporean, is he Japanese? Korean? Australian? American? Chinese? If Chinese, from where? Hong Kong? Shanghai area. Immediately this enters our databank and then we say ok, what's my best strategy? Then you adjust, your product, your service to the customer. So our ability to understand differences and to respond to differences. And we can do that because we ourselves are internally very diverse and we are used to it from a young age. You learn to be very alert and to expect and respect diversity. And I think that's what we are as Singaporeans. We are small but we're very sensitive to these cultural nuances. And it's precisely this ability to be nuanced in our assessment, in our response, that makes us what we are. So whether it's China, or India or America or Japanese. This is the way we invest, the way we do business, the way we estimate risk and protect ourselves and maximise opportunity. And if we do it well, we arbitrage the differences. So we'll see they're like this, they're like that, and then we'll put ourselves this way so that we can make small margins for ourselves out of the differences. Of course this is nothing new. When Raffles came here, this is how Singapore grew, by arbitraging opportunity in the region. So Singapore was established from India as a trading post for the China trade. That was 19th century. In the 21st century, history has come one big turn...

Q: Has it come to a time that we should learn from the Chinese?

There's no static position. All positions are dynamic. China today is in a very creative phase. they are now doing what we used to do in the 1960s and 1970s. Before you do anything, find out what the rest of the world is doing; find out how the rest of the world attack the problem. Then we'll find the best way, given the best ideas in the world, localise, then attack the whole problem. So they send their study teams all over the world before they sit down, have meetings and discuss how best to attack the problem. This is in complete contrast to the Qianlong period when the Europeans went there and they said "I have nothing to learn from you". They were so self-satisfied. They knew everything. Now it's a 180 degree change. They feel that on any issue, they better scour the world for the best knowledge, best information, best technology, best method. Then they come back, they find their own way forward. so they have become very creative... I think it's crucial that we learn from China

Q: Once we were criticised of not knowing how to deal with the Chinese, now Singaporeans gradually learn their way of getting things done. Will they bring back these practices to Singapore?

As a result of the new connections, we ourselves will be changed. To begin with, we can't make the different connections unless we change. And in the process of adapting to these changes, we ourselves have changed. Our education system, our regulatory system, our whole attitude, our mindset, they are all changing. What will we be as a result? We can't be sure. But we can be sure that we will not be where we are today, and we could not have gotten here if we have not changed from what we were 10 years ago. So this ability to change is part of staying young. If we become tired of change, if we're so stuck in our habits and criticise everything which is new, then we are aging as a society and that's trouble. But if all the time we're prepared to re-examine our assumptions, discard and reconfigure. If we had that kind of attitude towards life, then I think we will be able to adjust and respond, and stay young. Will we import some of their habits? I'm afraid so. Because we can't insulate ourselves completely. It can't be helped. You can't say I want to plug in but I have such a meticulously sealed membrane that I only collect all the good things and keep out all the other things. I don't think that's possible. We have to move with the world and the world is changing, China is changing, we will change also. But whatever we do, we must be different. Because it's in the difference that we make a living. So you said earlier that we are relatives. Yes, we're relatives. Are we Chinese? Yes, three quarters of Singaporeans are Chinese. but it is "有新加坡特色的华人". We're Chinese with Singapore characteristics. We're western educated with Singapore characteristics. We are Indians with Singapore characteristics. We are Southeast Asians with Singapore characteristics. It is our Singapore characteristics which make us unique and enable us to do the things that we do. And one of them must be an unusual ability to deal with a range of cultural and economic systems that must be part of us. Solidarity across all races and religions. A certain open attitude towards foreigners and the world, and of course a political culture that insist on clean government, effective government, fair and impartial across groups. If we have that, I think however strong the winds blow, however high the waves are, we will stay afloat. And we'll move with the winds and the waves.

. . . . . .