DPM Heng Swee Keat at the 54th St. Gallen Symposium

I am delighted to be here in St Gallen, Switzerland for this forum. We have a very special relationship with the St Gallen Symposium. When I was first appointed Deputy Prime Minister, I came to St Gallen, and I think this will be my last official trip as Deputy Prime Minister. 

First, let me thank all of you for coming to this Singapore Night. We are very honoured by your presence. We have here with us both very senior leaders as well as leaders of tomorrow. I would also like to thank the St Gallen Symposium team and EDB for putting this together. And also, to the National Youth Achievement Award Council, which has been one of the driving forces in bringing many of these collaborations together. Thank you all for this.

The theme of this dinner is about the power of a small state. Let me briefly share Singapore's history, and our approach to tackling the challenges we face as a small nation. Now, Singapore was a British colony, which changed the trajectory of Singapore’s development. From being kind of a sleepy fishing village, it became a very important trading centre over the next century, when we were part of the British Empire. 

When we became independent in 1965, there were three big challenges that we had to overcome. One is defence. How does a country defend itself, when we had no army? So, we started the Singapore Armed Forces (SAF), and we started compulsory conscription – where male citizens at the age of 18, will have to serve, at the start, up to two and a half years of National Service. We have now cut it to two years. We have regular soldiers in the SAF, but the number is relatively small. The bigger part of it is really the conscription and National Service, and male citizens have to report for training for a few weeks annually, up to their 40s.

Another related issue was security. So we had a twin approach of deterrence and diplomacy. So in the area of deterrence, the thinking was that, would it be worthwhile targeting Singapore? So, the Defence Minister came up with this thing, that Singapore should be a poisoned shrimp – that if you try to eat a poisoned shrimp you will also suffer. At the same time, diplomacy took a very important role – we entered into agreements at the United Nations (UN) and so on. So that is the twin policy of defence and diplomacy – playing our role globally was a big part of it. 

The second big challenge was economic development. Singapore used to be a very critical base for the British military. When the British decided to pull out east of Suez, we were staring at huge unemployment. So we had to then rethink, how do you develop an economy? And how do you replace the naval bases, shipyards and so on. So the British naval business will turn into ship building, and ship building became one of the industries that was promoted. And the Economic Development Board (EDB) was also created to bring investments into Singapore, which in turn created good jobs for the locals. 

Another example was electronics. In those old days of transistors and so on, it was all manual dexterity by hand. Today, electronics is a very key part of our economy. And one of the things that our founding leaders were very pragmatic about was looking to the future, not to the past. They knew that in order to advance, we must create jobs, and move into the most advanced manufacturing, the most advanced way of doing things. 

So that was how we then attracted a lot of investments from the US, Europe, UK, Japan and so on. Now that was easier said than done, because we were part of a British colony, and we were invaded by the Japanese during the Second World War. But Mr Lee Kuan Yew and his team led our people to look to the future, and look at how we should develop our industry, create jobs for them, bringing the best technologies. So I think this way of looking at the future, instead of looking back at the past has been invaluable. But today, unfortunately, you see so many countries looking at the past and say, “Oh, look, you know you had wronged me in the past, so we are not going to be friends with you anymore.” I think that is a big setback. 

And the third challenge was social cohesion. So, we set about building a multiracial, multicultural, multireligious society, and till today, we have strict laws against making derogatory remarks about race and religion. Because we went through racial riots in our early years of independence, and we know how painful it was. 

And another big part of this economic and social development was about caring for workers. Mr Lee acted as a lawyer for postal workers in the unions, prior to becoming Prime Minister. He acted as a legal adviser because he felt that the People’s Action Party’s principle was to build a fair and just society. And he saw how workers were badly treated. They were exploited. And he said, no, we will represent the workers. 

So till today, tripartism is a very key part of our social fabric. We have industry, we have unions, and we have the government coming together to tackle major challenges - whether it is to set national wage guidelines, to convince workers of the need to change, or to convince employers of the need to pay workers fairly. The government puts in a huge amount of resources to retrain workers, and our unions started Company Training Committees, just about three years back, to help workers retrain and reskill to ensure that their skillsets remain relevant in an ever changing economy, and we continue to attract good investments. 

So I think that has been a big part of Singapore's growth and development over this period. As part of building a multiracial, multireligious society, Mr Lee decided that we must use one common language, a lingua franca that connects everyone. So English was adopted as the lingua franca, a common language for everybody. But he was very concerned that we might become a society without values, without roots, so every group is required to learn a second language, their Mother Tongue, because there is a lot of evidence that a language is not just about communication, it is also a transmission of values. 

Now, let me say a few words about the theme of this dinner, which is about the power of small states. I will share why Singapore has been successful in the last 60 years. The first is our common values, and Singapore believes strongly in the values of common humanity, and that we share a lot with people all over the world, and civilisation has progressed not because of the law of the jungle, where the strong will bully the weak. And it is important for us to recognise that every group of people have the right to exist, to be independent, to be a sovereign state, and not to be colonized, not to be coerced by big powers. 

So we are strong believers in the global multilateral system. We are strong believers in multilateral institutions like the World Trade Organization, International Monetary Fund and World Bank, and of course, the UN. 

So I think the first aspect is valuing this common humanity. And part of this common humanity is that we seek to partner and collaborate with like-minded countries and people, so that together, our nations and our societies can progress.  In 1991, Singapore founded the Forum of Small States, and these are states with less than 10 million population, together with 14 other countries. 

And today, the Forum of Small States has grown to 108 countries, including Switzerland, New Zealand and many other countries. The United Nations has 193 member nations, and two observers, the Vatican and Palestine. So, the small states are a majority of the UN membership. So small states are not without agency, that if we come together, we can do something. 

Because trade is three times our GDP, trade is critically important to Singapore. So our former trade minister, George Yeo, played a key role in the launch of the Doha Round.  But after it was launched, we realised that things were not moving. It was hugely difficult to negotiate with 193 members with very, very divergent interests to another set of global rules, but we need to uphold multilateralism. 

So the way that Singapore tried to play a role was to make use of a provision under the WTO rules about Free Trade Agreements (FTAs), to work with like-minded partners. Our first partner was another small state, New Zealand, then with the ASEAN nations. After that, we negotiated FTAs with bigger countries – Japan, China, US and more recently, the European Union. Singapore and Switzerland are also signatories to the Anti-Counterfeiting Trade Agreement (ACTA). So, I think we have done well. 

And today, Singapore has 28 Free Trade Agreements, including with the Pacific Alliance – Singapore FTA with Chile, Colombia, Mexico and Peru, which just entered into force this week. So I believe that free trade is important, because I think trade benefits everyone. 

Mr Lee Kuan Yew believed very firmly that Singapore needs to be useful and relevant to the world. And the simple question is this, “if Singapore is wiped off the global map, would anybody even bother? Would anybody care?” If the answer is, “No”, then we will be in trouble. So, Singapore must remain useful and relevant to the world, and I hope in many ways.

And the third thing is that being a small state, you suffer huge disadvantages because you have a small market, with a small talent pool. But the question then is, you know, EDB has been very useful in attracting multinational companies to Singapore. Today, we have 1,300 Swiss companies that have operations in Singapore. I am very confident that not one of the 1,300 Swiss companies in Singapore invests with us to sell to a market of 6 million people. You will not globalise by selling only to a tiny place like Singapore. 

Instead, I think many companies and many MNCs use Singapore as a base to expand into the region, and Singapore is a trusted, reliable base for them to do that. Because I think what Singapore and other regional economies were able to achieve, by being open to trade and investment, has allowed us to grow the economy, to create good jobs. I think it is the same story across economies – it is about embracing globalisation and free trade. So I hope that we can continue to do that and do that well, and that many more countries will recognise the value of free trade. 

And what Singapore has done is also that to make sure that the rule of law prevails. The value of legal agreements and the FTAs that we have. So today we have 28 free trade agreements. But the effect of the US Tariffs on Singapore will be deep, because all our neighbours have been so bad hit. The trade war and the tech war are going to be with us for a while. So, all of us have to rethink and find like-minded partners, such as Switzerland and Singapore, to progress together. 

And finally, you know, I am also Chairman of Singapore’s National Research Foundation. I need to make a pitch for this. I personally believe that science, technology and innovation will reshape the global economy in very significant ways going into the future. I was in Beijing recently and saw the technology on display there. The Chinese are investing hugely in science and technology, and I think it is important for us not to further bifurcate the technology chain. 

So I think how being small is actually beautiful as we can coordinate better. And the work that you see among Singapore agencies, including EDB, is a whole-of-government effort, because many of these difficult business problems have to be solved not by one or two agencies, but by the whole-of-government, and in fact, the whole-of-society, because many of the difficult changes that we need to make require social support, and that is why our relationship with the union, our relationship with people, matters. 

So I think it is important for us to build that the social compact. In fact, Prime Minister Lawrence Wong’s recent election campaign was about “Forward Singapore” – how we can move Singapore forward together, given the challenges of globalisation, trade war and so on. So I hope that this gives you a little sort of glimpse about how Singapore became what it is. 

Let me conclude by saying that we share great kinship with Switzerland. We share the belief in multilateralism. The Swiss neutrality has been such a valuable part of the whole world, which has in turn allowed you to develop private banking, asset management and other major industries. There are a lot of commonalities in our values, in the way that we approach many of these issues. 

So I thank you all very much for attending this, and I look forward to St Gallen coming to Singapore in November this year for the formal celebration of our 25th anniversary of participating in this symposium. 

Thank you very much. 

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