PM Lawrence Wong at the Q&A Segment of the 2025 'Summer Davos' WEF Dialogue

Moderator (Børge Brende): Thank you. I think Prime Minister deserves an applause for that. Picking up on your last point, what kind of order or more stable system could we foresee in the future? I think we had one world order after the Cold War. That order is not really there anymore, but we do not know what is coming. The Premier Li this morning said we have to avoid the law of the jungle or the jungle growing back. But how do you see this new system of cooperation? You could see a more multipolar system, but at the same time you see soft power replaced with strong power. You see interests also being developed. So multipolarity is one thing, but are you not seeing more, a system of interests and that for smaller, medium sized countries would be quite a challenge.

Prime Minister Lawrence Wong: It is going to be a challenge. I think, frankly, no one knows what this new order would look like. It is still very early days. We are in a period of transition and a period of evolution. There will be critics of today's system that say it is good that now the system is changing. But I would also say, let us have a care. Let us not be too quick to cheer. Because what is the alternative? So, we have to think through very carefully how we can evolve a better system. And I will give you two examples of global institutions that have come under pressure, but over the years have been able to reform and upgrade themselves.

First, the IMF. I started work as a young economist in the 90s. So, I still remember vividly the 1997 Asian Financial Crisis. People till today call it the “IMF Crisis” because the IMF came in with strict austerity one-size-fits-all measures, and there was a reaction. But look, over the years, the IMF has reformed. It has updated itself. It has customised its approaches, has become more responsive, more transparent, and it has taken into account local circumstances and contexts. It is an improved upgraded IMF. To be clear, there are still reforms to be done. For example, and in particular, where it comes to the shareholding and governance structure which still reflects a world after World War II and needs to be adjusted to better reflect the realities of today's (global) economy. But that is one work that needs to be done and can be done in order for the IMF to maintain its credibility and legitimacy.

Second, the WTO. It has brought about free trade, a rules-based trading system, which has benefited many countries, but there is a feeling that the system is not working as well. And indeed, some of the WTO rules have lagged behind the realities of today's economy, particularly in digital trade. So what do we do? And again, the response is not to jettison the rules but to think about how it can be improved. And a few countries, like-minded countries, Singapore working with Japan and Australia, we have come together to initiate a Joint Statement Initiative on E-Commerce. And after five hard years of negotiation, today, more than 70 countries have agreed on the first set of rules for digital trading - it is the building block for the first set of global rules on digital trade. And I give these illustrations to show that it is possible to update, evolve, improve the multilateral system and global institutions that we have today. It is painstaking work but there is no alternative. A new system does not just appear by magic. You have to work at it and with creative, pragmatic solutions, bringing along like-minded countries. If we are able to start some of these work, do the building blocks one by one, then in time to come, others that are more ready can join it. So this is what we would call a flexible multilateralism. It is not about ad-hoc array of different rules but starting first laying the building blocks, and eventually others can join in and we can steer progress in the right direction.

Moderator: It is very interesting, this notion of flexible multilateralism because, congratulations on getting an agreement around I think what they call plurilaterals on e-commerce, it means that countries that have common interests come together. And now we have more than 70 of them forming like trade rules in e-commerce. And later on it can be more and more people, more and more countries contributing or being part of it, and then it could even turn into something that is multilateral. But with all this kind of more plurilaterals, and also bilateral trade agreement and regional ones and all that, do we not end up with a big spaghetti bowl then?

PM Wong: Yes, there is that concern. But again, I ask, what is the alternative? Do nothing? It cannot be do nothing and hope that someday, along the way, something new emerges out of nowhere. I think we have to start from somewhere, and if we start with like-minded countries, putting in place some basic building blocks but always with a view that whatever we do, it is open, it is inclusive. Others may not be ready to join, but in time to come, they can join and we can multilateralise these efforts.

Moderator: Has Singapore changed its approach? I think traditionally, you were doing more trade agreements under multilateral agreements like WTO. But have you now embarked on bilateral trade agreements, mega-regional ones? Are you - you know some countries are really getting a lot of agreements that I think the number one is Chile, like 100 of them?

PM Wong: Well, we did start with many bilateral FTAs too. And then over time, these FTAs became the building blocks for a more robust multilateral system. Today, when we look at the situation and some of the rising barriers to trade, again our response would be to still work at reforming and updating the WTO. But in parallel, we are engaging with like-minded countries to find ways in which we can strengthen our trade and investment links. And we start with the countries nearest to us. Malaysia and Indonesia, for example, we have a Special Economic Zone now with Johor in Malaysia. We are working with Indonesia, where there is a free trade zone in the Riau Islands just next to us. So we have very close links with our closest neighbours. But even within Southeast Asia, we have a very close link with Vietnam. The Prime Minister of Vietnam is here. We have a connectivity agreement. We are doing something like more than 20 industrial parks in Vietnam. And then for the whole of ASEAN, we are looking at ways to better integrate ASEAN and make us more united, be able to offer a more competitive single market to investors. So that is within ASEAN. But outside of our region, we are also engaging different blocks. We already have very close links with China, Japan, Korea, India in Asia. But we are engaging outside of Asia, for example, with the EU, with the GCC, with Latin America. So we are trying to find ways to strengthen links with like-minded entities everywhere around the world.

Moderator: If you look at global economy, we have seen that the growth is there was expected 3.2% then it was revised to 2.8%. Now to 2.5%. Some revised it down even to 2.3%. And WTO said the other day that on goods, they even expect maybe a contraction of 1.5%. So, trade used to be the driver of growth. I guess we need to find a different driver of growth moving forward. Could that be the new technologies? Could it replace trade? And more fundamental is the changing also of the trading landscape and the economic landscape, how do we avoid sluggish growth for a decade to come like in the in the 70s?

PM Wong: I think trade will still exist. There is a move towards security, resilience, greater self-sufficiency. But frankly, no one can be completely self-sufficient. Trade will still be around. Maybe it will not grow as much as it used to, but I believe there will still be trade but the patterns of trade will change and evolve, different supply chains, different configurations. And for Singapore, we just want to remain competitive and relevant and stay at the center of these evolving trade, trade links. So trade remains relevant but with changing patterns, technology will be a new driver. I am quite sure of that. I think the move towards sustainability will also be another driver. We all want to decarbonise. We want to get to net zero. We will need to harness new sources of clean and renewable power. We need to decarbonise industries; so both technology, new technologies – especially digital technologies, and sustainability, will power the economy of the future.

Moderator: It’s interesting, we heard it this morning too, that digital trade is growing while we are seeing trade in goods – manufactured goods – is almost peaking, we also see services are growing much faster. I guess this is relatively good news for Singapore though. Because you are strong in services and you are strong on the digital and technology side.

PM Wong: We want to be strong in everything. Yes, we have some strengths in financial services, logistics. We have some strengths in digital technologies, and we will continue to harness these strengths to stay competitive and relevant. Life is always difficult for a small country. History has never been kind to small nations, so we have to work extra hard compared to bigger countries, to keep relevant and stay alive.

Moderator: But the 60 last years have not been that bad for Singapore, it is a miracle.

PM Wong: We think it is nothing short of a miracle. And so my mission is to keep this miracle going for as long as I can.

Moderator: And it seems like the workers in Singapore approved your policies. I think you increased your party's result with 6 percentage points.

PM Wong: I am very grateful for their mandate.

Moderator: Yeah, and not all incumbent parties can say that, at least not in Europe.

PM Wong: I cannot speak about politics in Europe, I can only manage the politics in my country, which is enough for me.

Moderator: Managing politics in Singapore means that you also have to deal with the big players, because you are such, such an open economy, as I said at the beginning, through Singapore, you are the largest FDI – Foreign Direct Investor in China. But I guess in many ASEAN countries too, and now you have to manoeuvre between your special friends, the US and China. How do you balance that?

PM Wong: That is the favourite question that gets asked of Singapore in conferences like this. I am surprised it took you a while to get to the question.

Moderator: I wanted to warm you up.

PM Wong: Well, the simple response is we have good relations with both. We have broad and substantial relations with both America and China, and I know everyone monitors and tracks what we say and what we do very closely. Trying to parse every hidden meaning behind every word, behind every action, whether we are moving closer to one or the other. But that is not how we look at things. That is not the way we approach it.

Moderator: Because we are in China.

PM Wong: I know, and maybe tomorrow, when I am in America, then they think differently. But our starting point is, is that we look at things from Singapore's point of view in advancing Singapore's national interest. Our interests are to have close, good relations on substance with both America and China, and we will continue to do whatever we need to do to promote and advance Singapore's interest. It is not about balancing between the two superpowers, but it is about being consistent and principled in advancing and promoting Singapore's interests, and that is what we will continue to do.

And I think if we continue to do so in a consistent and principled manner, our partners, whether it is America or China or other countries, will see us more as a reliable and trusted partner that we can work with. I would say also that Singapore's position is not unique. We want to be friends with both America and China, and to have good relations with them, cooperate on win-win areas. But it is not just us; all of Southeast Asia would like to do the same. And within ASEAN in particular, no single country in ASEAN may have the same size and scale, but when you add ASEAN up altogether, collectively, we are not small. We have considerable heft. We are 700 million people, a sizable economy, and ASEAN has the ability to shape its own destiny, to shape its own future. ASEAN was the arena for proxy wars during the Cold War. We don't want that to happen again. So ASEAN’s approach is very clear. We reject zero-sum competition. We embrace engagement with not just America and China, but with other major powers, and we want all to be engaged in this region, in Southeast Asia. America is the largest investor still in Southeast Asia. China remains the largest trading partner. We want both to be actively engaged. We want other major powers to be actively engaged, and we want the region to be an open and inclusive arena where people have stakes in the region and we can all work together for shared prosperity, and ASEAN will work towards that objective.

Moderator: But ASEAN is quite a diverse group, so hence, the work to integrate and to make ASEAN stronger and more united. How is the single market going?

PM Wong: Becoming better and better each every, each and every day.

Moderator: Baby steps or big steps?

PM Wong: We will keep trying. I would say, if you think about it, there is already a very intricate supply chain connecting us. You can have, for example, cotton from the Philippines being spun in Thailand, dyed and then stitched together into garments in Vietnam or Indonesia and exported to the world.

Moderator: Prime Minister, you said that your role is to advance Singapore's interest and also to be a reliable partner. But is it more complex today because of the fragmented geopolitical landscape we are faced with to advance interest than in the past?

PM Wong: For sure, I readily acknowledge that my job is harder.

Moderator: And sometimes you can end up with between a rock and a hard place, but it does not seem like Singapore has ended up there so far.

PM Wong: So far, no, and we hope we will not end up there as well. If we end up in a hard place, it will not be just us. Many other countries will also end up in a hard place, and I think the consequence of that will be disastrous for the world. So we hope we will never get there.

Moderator: We were very close to almost a full-fledged war in the Middle East. It could have also ended up with spreading to the Gulf countries, and it seems like this is cooling or calming down.

PM Wong: We hope so.

Moderator: Yes. And then we have, for the first time, a major war in Europe happening. How worried are you for the future that we could again see wars happening? And even if you are seeing sluggish economic growth today, just imagine if the war between Israel and Iran had spread and a closure of the Strait of Hormuz would have happened; it would have had devastating consequences. What can we do to mitigate the risks? The NATO meeting is happening now, and they are increasing their aspirations to 5 per cent of GDP to the military. Who would have thought that it was controversial? Last time I was at the NATO meeting, it was controversial to go up to 2 per cent!

PM Wong: Yes, as I said just now, it is a different world, because the accumulation of discontent against globalisation, as well as a combination of recent experiences with COVID and security concerns, have led to a situation where today, security is a paramount concern of many countries, and so it is not just about military spending, it is about more resilient, more secure supply chains, for fear that along the way, if something were to happen, if push comes to shove, ‘I need the supplies but it is not forthcoming’, and no country wants to end up in that position. So it is understandable that countries are concerned, governments are concerned, and responding to this concern, but I think we should have a care about abandoning the concept of economic integration, because integration cannot guarantee peace, but I think it certainly gives us a better chance for peace than a ‘me-first’ approach. The more countries prioritise their own private national interests and allow the common global or shared interest to go down the drain, the more we will all be worse off. That lesson is so clear from history, so let us not repeat the mistakes of history.

Moderator: I think that is a very important reminder. Coming back to the tariffs and trade, what has your dialogue with the US administration been so far? What is Singapore faced with?

PM Wong: Oh, we got 10% tariffs.

Moderator: That is relatively good deal, though, isn’t it? I heard about 140% but I think that is no fifties, right?

PM Wong: Well, I mean, if you look at the facts, we have an FTA (Free Trade Agreement) with America. America has a (trade) surplus with us, so on the basis of the FTA and the fact of the trade balance, we should have a zero tariff, not a 10% tariff. But I think America has decided that 10% is their baseline tariff, and they are probably not going to go below 10%, so we have been engaging the officials, but that, I think, is their sort of mindset at this stage, but I know that other ASEAN countries have higher tariffs than us, and they have been also engaging their American counterparts. And we hope, in time to come, when America decides, makes a decision on the reciprocal tariffs, that you will be able to bring them down at least closer to 10%, if not 10%, if indeed, 10% is going to be the baseline applied to all countries.

Moderator: I think it is also important to remind ourselves that, you know, we are getting used to 10%.

PM Wong: It is still very high.

Moderator: It is three times higher than it used to be, on average, from the US. So it is already quite substantial.

PM Wong: That is why I have said that we are in a new era where there will be more barriers to trade. And we have to accept these realities, not that we think it is a good idea, but these are the realities that we have to work with. And in the meanwhile, countries that would like to promote and advance the agenda for free trade should come together and work in different formats, different platforms, whether regional or plurilateral platforms to advance the agenda for free trade, and Singapore will be the first to lead the charge on this.

Moderator: You know, Singapore has always been at the forefront, also when it comes to technology. Just go to the Port of Singapore and it is just mindboggling what you are faced with. With Gen AI, with the robotics, with the synthetic biology, with also now satellites, but also space, there is so much happening. Some people say it is the second Industrial Revolution. This is as big as the Industrial Revolution. You can see increase in productivity with 10% in the coming decade, if you apply Gen AI in the right way. Could you, when we are getting now, at the end of this dialogue, say something about how do you assess the magnitude and the paradigm shift we are faced with in these technologies, and how do you position your own country to be at the forefront?

PM Wong: We think it is a major game changer. AI will be a major game changer. We, like all countries, would like to harness the benefits of technologies and AI to push the frontiers of our economy, raise productivity and improve the lives of our people, but I would say that our focus is not just on what happens at the leading edge. There is a lot of media attention on, where are the breakthroughs, which are the next unicorns, when will we get AGI, you know, to materialise? All these are important conversations, no doubt.

Moderator: For a DeepSeek of Singapore.

PM Wong: Maybe, but we would like to harness AI in a different way, which is to make sure that the benefits are broad-based. Get every Singaporean, every company, to really make full use of technology to improve and uplift themselves, and I will give a simple example. When we embarked on our computerisation drive in the 1980s, we had very few computers. My family, we were not rich enough to have a computer, but the government made computers easily accessible to every Singaporean in Community Centres so we could learn, get used to it. In school, we had a computer club. It was very popular. Many of us would go there to play computer games, no doubt. But along the way, we learned, and we got familiar. And it is not just at the top end. Everyone became familiar with computers very quickly, and we could harness computers and new technologies to improve our lives, to be more productive and to transform society. In the same way with AI, let's not get too obsessed with what is happening at the cutting edge. But how can I as a government harness AI effectively to transform my processes in government? How can businesses, big and small, even the small medium enterprises, make full use of AI to improve their processes, to become more productive and importantly, how can I get every worker to master AI tools and be familiar with AI tools to be more productive. That is what we are obsessed about.

Moderator: I think that is a great aspiration. It is also about wealth trickling down.

PM Wong: Yes.

Moderator: Everyone benefiting from it. And I think that when I followed the election also in Singapore, I think at least my interpretation is one of the reasons why you did so well. We were addressing also practical challenges for the people in Singapore.

PM Wong: It has to be. It has to be.

Moderator: The housing prices and all that.

PM Wong: A nation's progress has to be shared, felt and experienced and translated into improvements in the lives of people day by day. If it does not, there will be a disconnect, and the compact gets undermined and societies do not hold together, and we do not want that to happen in Singapore.

Moderator: You saw the primaries in New York, maybe this morning.

PM Wong: I have not, I have not been keeping track.

Moderator: I think we should look it up at that shows also that if things are not addressed, it can lead to also frustrations. But Prime Minister, so good to have you here.

PM Wong: Thank you.

Moderator: I really enjoyed the discussion, and also learning from your talks. So thank you very much.

PM Wong: Thank you. Very good to talk to you, thank you very much.