DPM Lawrence Wong at the Nikkei Forum 28th Future Of Asia

Deputy Prime Minister and Minister for Finance Lawrence Wong's speech and Q&A at the Nikkei Forum 28th Future of Asia: "Leveraging Asia's power to confront global challenges" on 25 May 2023. 


Excellencies and distinguished guests
Ladies and gentlemen

It is very good to join you this morning at this Nikkei Forum.


We have all heard about the “Asian Century” for some time now. Indeed, before too long, Asia’s GDP is likely to exceed the rest of the world combined. But Asia is not monolithic. It is a diverse continent, made up of a vast tapestry of nations, each with their own distinct cultures, political systems, development trajectories and challenges.

What is notable about Asia’s growth in more recent times is that it is becoming more broad-based. The whole Asian continent is on the move. The take-off started here in Japan, which is still the most advanced economy in the region. Then in the 70s, we saw the rise of the Newly Industrialised Economies, including, Singapore, Taiwan, South Korea and Hong Kong. In more recent decades, China has become a major growth engine, and an important partner for countries in the region. Concurrently, India is steadily making strides as an economic powerhouse, and playing a bigger role on the global stage. Of course, there are also the Southeast Asian countries of ASEAN –strategically situated between China and India, and emerging as an economic centre in the region in its own right, with a rising middle class and a population of more than 660 million combined.

So Asia’s future is full of promise. Yet, there is nothing inevitable about this so-called “Asian century”, because we cannot extrapolate from recent trends and simply assume that Asia’s rise is unstoppable. The road ahead is fraught with uncertainties, and we must be prepared for disruptions and discontinuities to occur.

In particular, while we have put the worst of the pandemic behind us, there are multiple storms ahead – geopolitical tensions and great power rivalry gathering force, protectionism undermining the multi-lateral trading system, as well as the longer-term threat of global warming.

These multiple storms threaten the stability and prosperity of the region. But as highlighted in the theme of this year’s conference, we can harness Asia’s power to navigate our way through the stormy weather. So today I will share my views, from the perspective of one of the smallest countries in Southeast Asia, on what we can do to confront these global challenges, and to maximise our chances for future success.

Upholding Peace and Stability

The first big challenge is the state of US-China relations, and the implications for peace and stability in Asia. When I visited China last week, this was on the minds of many people I engaged. Likewise, in all my recent meetings with US visitors to Singapore.

Between the US and China, there is deep mutual suspicion and fundamental mistrust. The US sees China as a strategic competitor, and a grave threat to their interests and values. China, in turn, believes that the US is out to contain China’s rise, and deny it from taking its rightful place in the world. Both sides see this as a zero-sum struggle, and they believe the other to be a strategic danger.

The key question, therefore, is whether the two super-powers can co-exist and manage their differences, so that competition doesn’t escalate into outright confrontation with each other. For the past 50 years since the end of the Vietnam war, we have experienced and enjoyed relative peace and stability in the region. We know from painful experience what happens when the region becomes an arena for great power rivalry. The contest during the Cold War led to proxy wars and violence that killed millions. No one wants to see a repeat of this.

Unfortunately, great power rivalry has now returned to Asia, entangling us once again in potential conflict and confrontation. Nowhere are the risks more evident than in the Taiwan Strait, which has become the most dangerous flashpoint in the region. All the relevant parties, America, China and Taiwan, say their policies have not changed. But in reality, they are all reacting to one another. So the situation is not static – any incremental move by one party has its own dynamic, its own domestic political pressure, and it elicits a countermove by another. As a result, the situation is becoming more dangerous, and we are moving closer to the edge. So while all sides do not want a direct conflict, the risks of an accident or miscalculation have increased considerably.

How the situation in Taiwan and the broader US-China rivalry unfold will depend largely on the actions of the two powers. Some of the strategic and ideological differences between the two countries appear insurmountable and may well be irreconcilable. But we hope both sides will be able to manage their differences, focus on the issues where they share common ground, and with time, gradually find a basis to rebuild trust, to co-exist and work together.

Meanwhile, the rest of us in Asia are not just bystanders – we have agency to shape developments in the region too. In particular, the ASEAN countries of Southeast Asia do not want to be forced to choose sides. We want to grow our links with both the US and China. Any attempt either to contain China’s rise or to limit America’s presence in the region will have few takers. Nobody wants to see a new Cold War.

ASEAN has therefore worked to strengthen cooperation among defence and security organisations, both within the region itself, and also with our external partners. ASEAN-centred fora like the East Asia Summit, the ASEAN Regional Forum, and the ASEAN Defence Ministers Meeting Plus — these provide important platforms for leaders and senior officials from ASEAN and the major powers like the US, China, Japan, and India to meet regularly and discuss regional issues. Such exchanges help to promote mutual trust and understanding, thereby fostering stability and a shared sense of community in the region.

Besides the ASEAN-led security architecture, we pursue other institutionalised agreements, like the Five Power Defence Arrangements between Singapore, Malaysia, Australia, New Zealand and the United Kingdom. We also welcome other security arrangements that have emerged, like the AUKUS and the Quad, so long as these support ASEAN centrality, uphold a stable and secure region, and a rules-based order underpinned by international law.

Collectively, these overlapping platforms form an open and inclusive regional architecture, in which countries big and small can participate. And ASEAN will continue to build on this, through the “ASEAN Outlook on the Indo-Pacific”. This is an initiative that explicitly rejects zero-sum regional competition and regional dominance by any single power, and provides a framework for collaboration with all of ASEAN’s partners in areas of mutual interest.

So this is the ASEAN way to uphold peace and stability in our region. We engage with all the major powers, and we avoid exclusive commitments with any single party. During the Cold War, many developing countries maintained their neutrality as part of a non-aligned movement. ASEAN’s approach today is not so much passive non-alignment, but more about active multi-engagement. We work to bring all the key players together, strive to find common ground, and advance cooperation to promote regional peace and stability.

Securing Economic Prosperity

The second big challenge is rising protectionism, that is undermining the multilateral trading system and the global economy.

Because all over the world, countries are prioritising domestic and national security considerations. Where we used to talk about trade as win-win, zero-sum competition is now becoming normalised across multiple domains, from trade and investment to finance and critical technologies like semiconductors. And global businesses are responding accordingly, re-organising themselves to account for geopolitical risks, and on-shoring or near-shoring their supply chains.

We understand why countries and companies would like to de-risk or diversify. No one wants to be overly reliant on a single supplier for raw materials, key components, or technology. But it is hard to see how de-risking, at its current ambition and scale, can be strictly confined to just a few “strategic” areas without affecting broader economic interactions. And if de-risking is taken too far, it would prompt reactions and unintended consequences. Over time, we will end up with a more fragmented and decoupled global economy.

Already, we are seeing global FDI flows becoming more concentrated among countries that are geopolitically aligned. And this marks a significant change from the last three decades of globalisation, where investors allocated capital based on business considerations, and firms established footprints all over the world and linked them up in global supply chains. Asian countries, all of us in Asia, benefited significantly from this integration. We built our economies around such global investments and lifted millions of people in the region out of poverty.

A fragmented global economy will split the world into competing regional blocs. There will be less trade, less investments, less diffusion of ideas – critical ingredients which helped our economies to advance. And all this will make it harder for the developing countries of Asia to converge with the advanced world.

And so in ASEAN, we will work to maintain more open economic cooperation, with broad participation from all countries. And that means actively engaging partners outside of Asia, including the US, the EU and the UK, which have longstanding historical ties and substantial investments across the region. It also means forging ties with new partners, including in Africa, the Middle East, and Latin America.

ASEAN also continues to link up partners across Asia and beyond through various economic arrangements. We initiated the Regional Comprehensive Economic Partnership (RCEP), which is the world’s largest FTA. And we welcome other economic cooperation mechanisms, such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the Belt and Road Initiative (BRI), the Indo-Pacific Economic Framework (IPEF), and the Digital Economy Partnership Agreement (DEPA) amongst others.

There are different members in each of these frameworks and groupings. Not every country is in every group, nor is it necessary for this to be so. But collectively, these diverse arrangements form a dense mesh of cooperation and interdependence, as well as interlocking circles of partnerships between the region and our external partners. And this gives all of our partners concrete stakes in Asia’s peace and prosperity, and we believe this makes for a more stable and balanced region.

At the same time, we must continue to strengthen multilateral institutions and fortify the rules-based order for economic development and cooperation.

One key institution is the World Trade Organisation (WTO). Because while bilateral and regional agreements reached outside the WTO can be helpful “second-best” solutions, they are poor substitutes for a well-functioning rules-based global trading system, which can deal effectively with issues like tariffs, protectionist industrial policies, intellectual property and dispute settlement. In particular, to restore the WTO’s effectiveness and the upholding of its rules, we must find a way for the Appellate Body of the WTO to function properly. Otherwise, if every country takes the view that it will be its own judge of when national security considerations over-ride multi-lateral rules, then we will end up with a system where “might is right” and the law of the jungle prevails.

We also need to revitalise the international financial architecture, including the World Bank, the IMF, and others. The Bretton Woods Institutions were formed to rebuild countries after the Second World War; they were not designed to deal with the multiple new global challenges we confront today. They will therefore need to be strengthened, with the expanded mandate to make better use of their balance sheets to finance global public goods.

From time to time, there have been suggestions for Asia to develop its own regional mechanisms rather than to rely on global institutions. And indeed over the years, we have established regional development banks like the ADB and the AIIB, as well as a regional currency swap arrangement with the Chiang Mai Initiative. Even as we review and update these mechanisms, we must recognise that they cannot substitute for resilient global institutions, which remain key to fostering cooperation in the global commons, and diversifying risks. So our efforts in Asia must complement the wider reforms that are needed to strengthen the global economic order.

Tackling Climate Change

And this brings me to the third major challenge, which is climate change. It is a brewing global crisis, with grave long-term consequences for humanity. We have already seen rising occurrences of extreme floods and droughts, threatening the lives and livelihoods of millions around the world. And all this will only intensify with time.

Asia is the key battleground in this fight against global warming. We account for about half of the world’s greenhouse gas emissions. A large part of these emissions comes from power generation, which is currently reliant on fossil fuels, especially coal. So whether the world can succeed in its climate goals will depend to a large extent on Asia’s ability to transition to cleaner sources of power.

Addressing this will not be easy, because millions of people in Asia still do not have access to electricity and clean water. And we must invest substantially in both green and transition projects, and ensure an orderly and just energy transition in Asia.

The scale of investments that is needed is huge – you are talking not billions but trillions every year, and over the next 30 years. Governments alone will not be able to afford these investments. Instead, they must find ways for the public sector to catalyse and crowd in private sector funding. And there are many examples of how this can be done, including ways to achieve a fair sharing of risks on such investments through blended finance.

ASEAN has started to take some concrete steps in this direction. We have established an ASEAN Taxonomy for Sustainable Finance, which recognises energy transition activities, including the early retirement of coal-fired power plants. The ADB is working with several Southeast Asian countries to pilot an Energy Transition Mechanism. And as a financial centre, Singapore is doing our part to scale up financing for such transition projects. We are exploring how we can work with other Governments, with Multilateral Development Banks, and philanthropic organisations to provide catalytic and concessionary capital that will crowd in private financing to accelerate the green transition across Asia.

Beyond financing, we are also working within ASEAN to make our energy system more inter-connected and resilient. Singapore has initiated some projects like the Lao PDR-Thailand-Malaysia-Singapore Power Integration Project. We have signed MOUs with various regional countries on cross-border energy trade. These are building blocks towards the eventual vision of an ASEAN Power Grid. And such interconnections will help to fully unlock the energy potential in Southeast Asia, by linking the regions with high production capacity to the areas of demand, and increasing the overall energy resilience of our region.

Japan’s Role in the Region

So far, I have spoken about what ASEAN is doing to tackle the three big challenges of our time. We are working not just amongst ourselves, but also with other partners which have a stake in our region, to foster peace and stability, economic prosperity and realise a greener future.

Across all of these areas, we welcome the collaboration and ties with Japan. These ties are deep and longstanding. In fact, this year marks the golden jubilee or 50 years of cooperation between ASEAN and Japan, and we will be celebrating this important milestone at the ASEAN-Japan Commemorative Summit in December.

Over the past five decades, Japan has contributed to Southeast Asia’s development, as a key source of economic aid as well as a major trade and investment partner. Abiding by the 1977 Fukuda Doctrine, Japan has built close relations with ASEAN based on a “heart-to-heart” understanding of each other’s concerns. And partly for this reason, a recent survey by the ISEAS-Yusof Ishak Institute, which is a think-tank based in Singapore, that survey indicated that Japan is the most trusted major power in Southeast Asia.

So all this provides a strong foundation for Japan to continue to engage ASEAN on its own merits, and we look forward to upgrading ASEAN-Japan relations to a Comprehensive Strategic Partnership, and doing more together. I shared just now about the opportunities in sustainability financing and green projects in Southeast Asia. This is an area which Japan, as a leader in green technologies, can play a key role in facilitating. Through its Asia Zero Emissions Community initiative, Japan can bring together interested parties in the region to explore more green energy projects. There is also scope for Japan to strengthen its economic and infrastructure cooperation with Southeast Asia. And as a business hub, Singapore will do our part to facilitate Japan’s efforts in these areas. We can be a springboard for Japanese companies, big and small, to serve the wider region. Both our countries enjoy close longstanding ties, and we are stepping up collaboration substantially across many areas, including on digital technologies, innovation and R&D. We are also working on sustainable energy solutions like green hydrogen, which we will both need to achieve our net zero goals.

For its part, I am glad that Japan is keen to play a more active role in the region, under its new Free and Open Indo-Pacific Plan launched by Prime Minister Kishida earlier this year.

Japan has also announced its intention to play a larger role in regional security cooperation, with the release of its revised National Security Strategy. Japan has historically adopted a low-key posture in security. But with the passage of time, there is scope for Japan to make a greater contribution in this area. We hope that Japan will continue to build on the momentum of its recent engagements with regional countries, and further contribute to Asia’s stability, security and growth.


To conclude, I met several Nikkei executives yesterday and one of them asked me about my thoughts on Asia’s outlook in 2030. It is not so far away, but unfortunately, I don’t have a crystal ball to predict the future. But what I can say is that it is quite clear we are entering a more dangerous and troubled world. Confronting the challenges ahead will be the major task of our time. There are no easy solutions. Yet there are reasons for optimism. Asia’s dynamism, shaped by its diverse cultures, resilience and adaptability, offer hope. And we can also take heart that the countries in the region share a deep commitment to collaboration and a common interest to work together. Through our collective efforts, I am confident that we can realise the promise of Asia, and create a more successful future for our region. Thank you very much.



Q: In your speech, you established per se the century of Asia, and then concluded with optimism. So Asian century is with us; we want to remain positive. However, I was impressed by your presentation — by the US-China rivalry, and ASEAN does not want to take any side, and no one would like to see a new Cold War. You mentioned all these and that was really impressive. Regarding that, I would like to widen my first question. Nikkei had an interview with Deputy Prime Minister Wong; in that interview, you said that our policy is neither pro-US nor pro-China, so could you elaborate this further please?

In relation to this, US is asking ASEAN to choose either democracy or autocracy. Unfortunately, Singapore has not been invited to the US-hosted Democracy Summit two years in a row. I was wondering if you have any opinion about that as well, please.

DPM: Thank you. Singapore does not choose countries. We chose principles and one key principle is that of territorial integrity and sovereignty, as well as the freedom for countries not to be attacked by others as enshrined in the United Nations Charter. Over the years, Singapore has consistently chosen and adhered to this fundamental principle. Whenever conflicts or issues arise, you can look at our track record, we have consistently adopted this stance and most recently, of course, when Russia invaded Ukraine. We hope that through our consistent actions, everyone knows what Singapore stands for. You may disagree with us and that is fine because there will always be differences in views between countries. But through our consistent, predictable and principled actions, we hope that we can be a more reliable and trusted partner for countries everywhere around the world.

The other question that was asked was on the Democracy Summit, let me share my perspective on this. We know who we are – the facts about our democracy speak for themselves. We are comfortable with who we are, and we really do not need external parties or external events to validate our status. If you ask: does Singapore have the characteristics of other Western liberal democracies? The answer is not all (the characteristics). And in fact, we do not blindly copy what others do. We adapt and learn, and we apply and develop a model that is suitable for our needs, our own circumstances, and that model has worked so far and has delivered good outcomes.

In fact, surveys will indicate – and these are surveys done by external parties – that there is a high level of trust in the elected government in Singapore; there is a high level of trust for public agencies and for institutions like the police, the media, and the judiciary. So this is a system that works well for us. We will continue to develop it; the system is not static. It will continue to evolve, but how it evolves will ultimately depend on Singaporeans, not external parties. We will have to determine our own fate. And I have no doubt that if my party, the ruling party – me and my team – if we do not deliver, if we fall short of the standards and expectations that Singaporeans have of us, they may well choose alternative candidates to form the next government.

So that is Singapore. But the point raised has a broader issue because it is not just about Singapore. If you look around the world, there are diverse nation states, very complex nation states, all with their own deep cultures and long histories. Many have developed their own governance and political systems over time. Not every country has universal suffrage like Singapore. But if you were to do a survey of these countries, I think in quite a number of them, they will tell you the majority of the people will be quite happy with their systems, rather than to have external parties impose their values, their systems on them. And I think they need to respect that.

So, the reality is that we live in a more complex world, far more complex world that cannot be easily distilled into binary labels. And I think rather than have such frameworks that split the world or divide the world into opposing hands, it is far more important for us to find ways for countries to build common cause with one another, to coexist and work together despite our differences. And I know that that is something that Japan has been focusing on as part of its G7 presidency and Singapore fully supports such efforts to strengthen multilateralism and build a rules-based global order.

Moderator: Thank you very much, time is very short. So, I would like to have one short question. From online, we do receive the questions – there are two questions. Prime Minister Lee Hsien Loong has designated his successor and 13 months have passed. So the transition of power – do you think it will happen this year or next year, or the year after the next – I would like to check on the timeframe. Second question on casinos, the country will introduce casino facilities: as a country which already did it, can you give advice to Japan about the introduction of casinos?

DPM: Thank you. The first question is probably the favourite question that everyone likes to ask, in events and by the media. We have already stated clearly, the key milestone is the election. The election in Singapore has to be held by 2025. So that is one milestone that we keep in mind. When the leadership succession occurs can be before the election or it can be after the election. These are the options and we haven't decided (between them). But it will happen, it is just a matter of time. If it happens before the elections, then I will lead the team into the elections and I will ask for a mandate from Singaporeans for me and my team. If it happens after the elections, then it is quite clear the Prime Minister remains as the leader, but I will still play a key role in the campaign. And we will make very clear to voters what the succession plan is after the elections, assuming of course that the PAP wins the confidence of Singaporeans to govern. So that is where we are. We haven't decided what the options are, but we will eventually make a decision.

For now, I have many other preoccupations. I have lots of things to do on domestic issues, where many Singaporeans are concerned about areas of economy, jobs, cost of living, housing. We are reviewing social policies comprehensively within Singapore, so these occupy a lot of my time. I am also stepping up my engagements overseas with our partners around the world. In fact, this is my second trip in a month to Japan. I am not complaining (at having to come back to Japan), I hope to come back many more times, as well as to visit all our partners around the world. So, a lot of focus and efforts are needed there. Finally, I am also spending more time thinking about organising our team both within the party and in government. So there are many preoccupations, there are many priorities. Of course, we have to think about leadership succession at some point in time, but I think we should also focus on these other broader issues.

On the Integrated Resorts, we call the casinos in Singapore Integrated Resorts because it was never just about casinos. It was really about building something special, something different, an integrated resort with a whole range of offerings that we could not have done without the casino, and which ultimately would create many more jobs for Singaporeans. And we have since reaped the dividends. We have built two Integrated Resorts, we have seen the positive outcomes arising from these two resorts in terms of the economic benefits, the jobs created, and how it has really put Singapore on the map when it comes to world class entertainment, lifestyle offerings. So that has been positive.

We will always be mindful that there could be issues with problem gambling, so we put in place safeguards. We set up a regulatory authority, we put in place measures to make sure that having a casino will not result in more addiction and problem gambling, and so far we have been able to manage that quite well. We know that something new is happening in Japan soon, in Osaka, and we will be very happy to exchange notes and continue learning from each other's experience.

Q: When I visited Singapore with my son, he said that Singapore is like a futuristic country because of the design of the buildings and plants. They are so well-mixed in the landscape. I think Singapore as a country is going to be the showcase for city-based sustainability in the future. You talked about trade and energy in your speech. In ASEAN countries or in Asia, you are investing in logistics infrastructure. Can you share with us some ideas about your types of investment in transportation infrastructure? I just wonder if you have any opportunity to expand the ways of transportation because that can be more sustainable going forward.

DPM: Thank you for your kind words about Singapore. Our perspective is very unique, because in many ways Singapore is an improbable nation. We are a nation that was not meant to be. You look at Singapore – it is just a little red dot, we have no natural resources at all, only our people. We need to count on our own wits and ingenuity to survive, and to navigate a very challenging external environment. We have done that for more than 50 years and we hope that we can continue to do that for as long as possible.

So my primary responsibility, for me and my colleagues and my team, is to work with fellow Singaporeans to sustain this miracle, and to make sure that this little red dot continues to shine brightly for as long as possible. So we will continue to do everything we can to make Singapore an attractive, reliable and trusted node for the region and for the world. That means building up our infrastructure. For example, our airport and our seaport, we are expanding capacity there. We are trying to find ways to link that up by land in Singapore, so that we can continue to be a very competitive and reliable logistics hub for regional and global supply chains right here in Singapore.

And I think our handling of logistics and supply chains during the pandemic has also helped, because even when there were critical shortages of supplies around the world, Singapore never introduced export restrictions. We kept our airports and seaports open, and we showed the world that we could be a reliable transport hub. And that is what we want to do — to always be able to offer something special for the world and to show that we are able to deliver as a reliable and trusted partner.

So we will do that within Singapore itself, but of course, as you highlighted, these logistics links are not just about Singapore. It is also more broadly around ASEAN. So we are also working to strengthen integration in ASEAN to link up ASEAN economies a lot more than before. Connectivity will be through flight, will be through land, possibly through rail, but it also will include digital connectivity, because increasingly with the new environment, trade and investments are not just in goods and services but in digital trade. So we are also looking at how we can enhance our links on the digital front.

So Singapore, as part of a connected ASEAN, we hope will be able to continue providing value to the world and we can differentiate ourselves and we can contribute to the region's stability and prosperity.

Moderator: Thank you very much.