Remarks by Deputy Prime Minister and Coordinating Minister for Economic Policies Heng Swee Keat at AmCham Balestier Series on 17 March 2023.
Ambassador Jonathan Kaplan
Ms Monica Whaley
President of the National Centre for APEC
Dr Hsien-Hsien Lei
CEO of AmCham Singapore
Ladies and gentlemen,
Good afternoon to all!
This year, AmCham Singapore celebrates its 50th anniversary. My warmest congratulations!
Over the past 50 years, AmCham members and businesses have made significant contributions to the economic development of Singapore and the region. American businesses have been a major driving force of globalization, which has benefited the region and the US itself. And as we heard from Ambassador earlier, today your role as a business association is more salient than ever. So I look forward to our discussion later, on how we can venture forth and chart an even more successful 50 years ahead.
Let me begin with some brief observations on where we are today.
Where we are today
We may have put COVID-19 behind us, but in 2023 there is no comforting return to normalcy, because normalcy itself has evolved. The post-pandemic world has brought new challenges, uncertainties, and anxieties.
In the near-term, the post-COVID bounce back has been confronted by strong inflationary pressures. The global economic outlook is clouded by the possibility of higher interest rates for longer, and thus the threat of more severe downturns in some countries.
The prolonged period of loose monetary policy and ultra-low interest rates have also allowed risks to build up in some sectors. The recent failures of Silicon Valley Bank, Signature Bank, First Republic Bank, and the concerns about Credit Suisse, is once again drawing attention to financial stability.
Looking into the medium-term, the trajectory of US-China strategic competition has become more worrying, with knock-on effects on supply chains and global trade.
The positive norms and instincts that have underpinned the past three decades of global prosperity and growth are being reshaped.
These new political realities will persist and no doubt influence policy and business decisions. But we must stay focused on our fundamental long-term interests, and the challenges and opportunities.
While there is more reticence about trade and economic cooperation, the reality is that our economies are much more deeply interconnected than ever, and any decoupling will come at high costs to our businesses and people.
While leaders may be using different forms of words and ideas, the need to facilitate broad-based, inclusive growth to uplift economies and populations, is a shared one. Americans in this room will remember well the 1992 Presidential election, where Clinton’s campaign line of ‘it’s the economy, stupid’ was so effective.
Technological advances are also driving structural changes in the global economy, and there will be more to come. Advances in robotics, automation are reshaping manufacturing jobs, and Artificial Intelligence will disrupt many white-collar jobs – the buzz over ChatGPT 4 is the latest example.
In the meantime, we are facing long-term risks, such as climate change. We must come together to address these, while there’s still a small window, before it becomes an existential threat to all of humanity.
So, the key question that all of us – in governments, in businesses, in civil societies must address is: How do we come together, to have a shared understanding of our common challenges, and to work collaboratively, to find viable solutions in this more uncertain and contested world?
Finding new opportunities – Singapore’s experience
Some of our American friends here may find that my remarks so far seem paranoid. Indeed, Singapore, as a small state with an open economy is like a little dinghy in the open ocean. When bigger supertankers sail past, they will make waves that can at best make life uncomfortable, or at worst, threaten our very survival. If Andy Grove, running such a large and successful American company live by the dictum that ‘only the paranoid survive’, we in a little dinghy must be equally, if not more paranoid!
Singapore has a very short history of being an independent nation – we are just eight years older than AmCham! As a small state, we have survived and prospered by being open to the world and being nimble in finding opportunities amid the waves of change.
We are a strong believer in multilateralism, and in trade liberalization. When the Doha Round of trade liberalization was launched in the year 2000, there has been little progress. Within a few years, Singapore embarked on Free Trade Agreements or FTAs – starting with another small, like-minded economy, New Zealand.
The successful conclusion of the USSFTA and the ASEAN Economic Community was followed by many more such FTAs. A small state poses little threat, so we have the latitude to work with all parties, be a pathfinder, and develop solutions that can bring mutual benefit and hopefully be scaled. FTAs is one example of how Singapore contributed to maintain the momentum of trade liberalization and economic cooperation.
In a more digital world, we continue to contribute by finding ways to update trade practices, such as through the Digital Economy Partnership Agreement (DEPA).
Beyond serving as a safe and trusted place to do business, looking into the coming decades, science, technology and innovation will be critical in driving future economic growth, and in our global effort towards achieving the UN Sustainable Development Goals. Singapore, as a trusted and neutral location, with global links can play a role. I would like to see Singapore serving as a Global-Asia node of Technology, Innovation and Enterprise.
Singapore’s openness and ideal geography enables us to serve as a gateway for the world into Asia and ASEAN, and for businesses in the region to build global linkages. Many companies, including many of you here, use Singapore as a base for the region, and even the world.
Our laws and institutions are strong – the protection of intellectual property, the resolution of disputes – including through mediation, arbitration and the courts provide a range of platforms for businesses to operate by agreed rules and norms, and to resolve disputes. In fact, we established the Singapore International Commercial Court to allow for transnational commercial matters to be heard before the court.
With this stability and trust, Singapore can facilitate new collaborations and opportunities.
Venturing Forth Together
What relevance does Singapore’s experience offer in today’s more uncertain world? I will offer three suggestions.
First, by reframing constraints into opportunities, we open the door to new possibilities.
In Singapore, the constraints posed by an ageing population and climate change, as well as our own resource constraints, also bring opportunities to overcome them.
For instance, we are focus on identifying new opportunities in green finance and sustainability. We direct our research investments towards areas like health and human potential, and urban sustainability, to develop solutions for ourselves, and beyond.
BEPS 2.0 will shrink the space for tax competition, but this strengthens our commitment to building capabilities in our people, enterprises, and infrastructure. Through the Future Economy Council, which I chair, we mobilise stakeholders to grow and transform our sectors, so that Singapore and Singaporeans remain innovative and competitive. We also bring in the most innovative companies and people from around the world to try new things in Singapore.
This brings me to my second point, which is that partners and networks are invaluable for navigating a more uncertain world.
In Singapore, tripartism has enabled our workers and companies to work alongside the government to overcome challenges and find new opportunities. Our labour movement is quite unusual, as the unions are not just bargaining for wage increases, but in fact partnering companies to retrain their workers and to meet the new structural changes which are happening all over the world, in different workplaces.
I am myself a strong believer that we should be building bridges, not walls. The more interconnected we are, the more resilient and productive we can be. Nobody, and no country, has a monopoly of wisdom. By building partnerships across our areas of interest, we can tap on each other’s strengths, and go faster and further.
AmCham is one such steadfast partner for Singapore. Over the past 50 years, you have played an important role not only in building understanding and fostering cooperation between our two countries and our businesses, but beyond that, to the region.
You have operated across different US Administrations and economic circumstances, but your purpose has not changed.
Through your regular engagements with our government agencies, AmCham provides constructive feedback and suggestions to our policy process.
And you continually pull in new partners, such as the National Centre for APEC, to grow your impact, and facilitate dialogue across the private and public sectors.
My final point is that we must direct attention towards areas of mutual interest and benefit, in order to deepen trust and foster collaboration.
Notwithstanding the dominant narrative of competition, there are in fact numerous areas where there are shared interests, such as innovation and sustainability. Indeed, many global challenges like the pandemic and climate change, require global solutions.
There is goodwill for the US in Singapore and within the region because our partnerships have been mutually beneficial. The US is the largest investor in Singapore and Southeast Asia, and your companies are well-regarded for their good practices and their commitment to growing talent. Our businesses and entrepreneurs who venture to the US also benefit from their experience there.
We must continue to nurture these collaborations and facilitate win-win outcomes. Ambassador Kaplan and I spoke about the importance of working quietly to find opportunities and address issues when he first arrived in Singapore. This is even more pertinent today.
We therefore count on you – Ambassador Kaplan, AmCham, companies and corporate leaders – to share your experience and insights with your American counterparts and policymakers wherever you can, and to continue finding new opportunities in Singapore and the region. This is how we can surmount the rhetoric and continue to thrive and grow, for the benefit of our economy, businesses, and people.
In closing, I am reminded of Joseph Balestier where the Series is named after, the first American consul to colonial Singapore nearly two centuries ago.
Balestier, a planter and merchant, ventured to Southeast Asia at the ripe age of 46. He saw the promise that the region held, and subsequently set up a 1,000-acre sugarcane plantation at what is today’s Balestier Road. Balestier and his wife Maria, worked hard and were well-loved by the local community for their many contributions.
In his honour, a road in Singapore, Balestier Road, is named after him. This is the story of many American businesses over the years – venturing forth within the region, finding new opportunities, building strong ties with the local communities, and creating value.
So let us continue to deepen our partnership and cooperation, to reach new frontiers, and create value for ourselves and the world, and I look forward to our chat afterwards.
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