PM Lawrence Wong at GIC Insights 2025

Chairman, and CEO of GIC
Distinguished Guests
Ladies and Gentlemen

I am very delighted to join all of you at this year’s GIC Insights.

This year marks the 10^th anniversary of GIC Insights. You have had good discussions today and, in a world, undergoing profound change, gatherings like this have become even more vital – not just to share views, but to build understanding and trust. Trust that is needed to navigate an increasingly complex global landscape.

GIC’s Beginnings

Many of you would know that GIC itself has been around much longer. It was established in 1981, more than 40 years ago. At that time, Singapore’s economy was growing rapidly. Fiscal discipline had allowed the government to build up a modest pool of reserves, managed then by our central bank, the Monetary Authority of Singapore, or MAS.

These reserves were held largely in liquid assets – like money markets, and sovereign bonds – so that MAS could call on them quickly to manage the exchange rate. But as our reserves grew, it became clear that holding them only in low-yielding liquid assets carried an opportunity cost. We needed a way not just to preserve, but also to enhance our reserves.

And that was how GIC came about. It was a bold move at that time, sovereign wealth funds were hardly discussed then. And no other non-commodity exporting country had created one. But we saw the need for a dedicated institution with the mandate and credibility to invest for the long term.

In its early years, GIC had very little in-house investment expertise. It relied heavily on external fund managers, learning from their experience, and building up its own capabilities along the way. And over time, GIC developed deep investment expertise across both public and private markets. It built a global network of partners, all of you here, enabling it to identify opportunities wherever they arise – across asset classes, sectors and geographies.

And today, GIC operates from 11 offices worldwide, investing in over 40 countries – from real estate and e-commerce to frontier technologies.

GIC has lived up to its mission. Over the decades, it has achieved creditable returns on its portfolio. And as a result, our reserves have grown and become a vital source of strength for us – enabling us to weather major crises like the 1997 Asian Financial Crisis, 2008 Global Financial Crisis and most recently the Covid-19 pandemic. Because of these reserves, we have been able to act decisively in these times of emergencies without burdening future generations with debt.

A Personal Connection

I first encountered GIC back in the late 1990s, when I was working as a government economist. I had a strong interest in finance, and even explored the possibility of joining GIC. I spoke to a few senior people in GIC then, and they were open and encouraging. But circumstances took me in a different direction, and I found my calling in public service instead.

So I did not get to join GIC 25 years ago. But life has its own way of charting out paths. And today, I have the privilege of working with the GIC team in a different role. And that vantage point has deepened my appreciation of the institution. Its clarity of purpose, its professionalism and the foresight behind its founding.

Outlook for the Future

GIC invests with a realistic and clear eye view of the world around us. We do not have a crystal ball, but we think hard about the major forces shaping our external environment. We have discussed many of these forces today but let me share a few of my reflections.

First, we are in the midst of a great transition to a multipolar world.

The multilateral global order – led, guided and underwritten by the US – is steadily unravelling. For decades, investors could work on the assumption of low tariffs, stable supply chains, and predictable trade rules. It was a system optimised for efficiency and it generated broad-based benefits across the world.

But today, many countries, especially the major powers, are re-examining these basic assumptions. They worry that trade specialisation has created dependencies and vulnerabilities. Vulnerabilities which can be weaponised by others. Now, no country can be entirely self-sufficient. But more and more governments are prepared to accept some inefficiency and higher cost in return for greater resilience and security.

The shifts are understandable but if every country pursues resilience unilaterally and without regard for others, the result would be a more fragmented and unstable world. Ideally a stable global order would recognise every country’s right to safeguard its national interest. But then this would have to be balanced with shared rules and mutual restraint. And it should not descend into unilateral action that seek to coerce, harm or punish other countries. The WTO was meant to uphold such global norms but the system is struggling, and in urgent need of reform. So we need a new framework – one that reflects today’s strategic realities, with updated rules of the road to support the global economy built on more resilient and secure foundations. It is hard to imagine how these outcomes can be arrived at. But we cannot give up trying. Realistically it will be a complex and lengthy process requiring sustained political will and cooperation amongst these countries. And in the meantime, we must expect heightened geopolitical risk and uncertainty.

Second, macroeconomic risks are going up.

Many governments had to borrow heavily during the Covid-19 pandemic. And they also face mounting fiscal pressures from defence spending, ageing populations and climate adaptation. Higher debt means higher interest rates and higher debt servicing costs which will eat into funds that are needed for long-term investment and growth.

Markets are increasingly concerned that fiscal policy in many advanced economies is on an unsustainable path, and that is why yields on long-term government bonds have been rising so rapidly in many places. Investors are demanding higher risk premia as protection. At the same time, governments still have several tools to keep interest rates artificially low, so as to reduce the cost of debt and they may be tempted to use them. And these competing pressures will persist for some time, and they will have wider implications for global debt and financial markets.

Third, despite these risks, equity markets remain buoyant.

A big part of this optimism comes from expectations around new technologies, especially Artificial Intelligence. Investors believe AI will unlock major productivity gains and new opportunities.

But the breakthroughs from AI may not come as quickly as hoped. The benefits may take time to reach the broader economy. And there are many ways in which things can go wrong. For example, changes in new chip design could make today’s data centres obsolete. Power generation and transmission capacity may struggle to keep up with demand. We are also seeing circular patterns of funding in the AI ecosystem which can inflate demand signals, blur the underlying economics, and amplify risks as expectations start to unwind.

History shows that every wave of transformative technologies comes with a fair bit of exuberance, especially in the early stages. There is a tendency to overpromise. Because that is how innovators convince others that they are changing the world and that is how they get more investments. The pattern is familiar – we saw it with railroads, with electricity, personal computers and the internet. In every wave, there was over-investment and short-term over-capacity. But eventually, these investments, they paid off.

 And perhaps we might see something similar with AI. The huge capital expenditure which we are witnessing today feels excessive. But as with the railroads and the internet, much of this may eventually become the infrastructure for the next stage of global productivity. But that does not mean that the journey will be smooth or that the returns will be immediate. There will be correction in the near term. And that correction can be painful – not just for tech firms, but for broader markets too.

Navigating the Future

The dynamic shaping the global environment – from geopolitical contestation to fiscal concerns and market exuberance – will not settle quickly. They will continue to shape returns and risks for years to come. And the question is how should investors navigate this new landscape.

There are no easy answers.

One immediate reaction to these uncertainties is a search for safety. We see this in the rising demand for gold, which has long been viewed as a safe store for value. Although if you think hard about it, there is nothing intrinsically safe about a piece of metal.

And investors are not stopping at gold. They are also looking for other safe and trusted assets including places with stability, security, and rule of law. And that is why Singapore works hard to uphold our reputation as a trusted business and financial centre. In periods of turbulence, trust commands a premium. Jurisdictions with consistent and credible track record will be better positioned to attract long-term capital. And we aim to be one of these jurisdictions.

Safety alone is not enough. Fundamentals matter too. And for Singapore, that means continually upgrading our economy and strengthening our capabilities so as to stay competitive in a troubled world.

For GIC, it reinforces the importance of staying true to its mission and core mandate as a long-term, fundamental driven investor. GIC keeps an eye on market momentum, but its focus remains firmly on intrinsic value and durable growth. It has become harder for active manager everywhere to generate alpha consistently. But in a noisy environment – with macroeconomic worries, political shocks and market over-reactions – good companies can still be mis-priced. And that is where opportunities arise. Capturing this value will require a more rigorous, granular and bottom-up approach to investment selection.

We will not get every call right. Nobody can. But with careful deliberation and discipline, GIC aims to get the big calls right most of the time.

And for GIC, this also means having an “owner’s mindset” – treating every investment not just as a financial position, but as a long-term commitment to preserve and enhance Singapore’s national reserves.

It is an ethos that runs deep within the organisation. GIC is not merely a fund manager for the government, but a trusted custodian of the reserves that underpin Singapore’s safety and security. This clarity of purpose will continue to be the north star guiding GIC through the uncertain years ahead.

Conclusion

GIC’s achievement has been possible not only because of sound strategy and discipline execution but also because of strong partnerships. And these partnerships have sustained GIC through strong market cycle, sharpen its thinking and strengthen its ability to fulfil its mission. The world may feel more divided and uncertain than ever but here in Singapore, we strive to be a convenor. Bringing people together, fostering cooperation and helping to build the network of trust that are so essential in these turbulent times. All of you are part of this network of trust, so I thank you for your partnership on this journey and your commitment to Singapore’s future. And I look forward to many more decades of shared success with all of you together. Thank you very much and enjoy the evening.