PM Lee Hsien Loong at the inaugural Global Forum on Economic Recovery

Moderator (Myron Brilliant): I want to welcome our global audience today for an informative and really interesting session with Prime Minister Lee of Singapore. I want to thank you, Prime Minister Lee, for participating in today's US Chamber Forum on the Global Economic Recovery. Prime Minister, I want to thank your Ambassador to Washington, Ambassador Mirpuri who helped set up this interview today. The Prime Minister assumed his duties in 2004, but I want to say that he is really one of the great international statesman, and someone who has a great perspective on many of the pressing challenges we face today in the global community. It is truly my pleasure to welcome Prime Minister Lee. We look forward to all your comments on areas where we have shared concerns, challenges and perhaps opportunities.

The world has changed quite a bit, Prime Minister, since you and I got together in Washington DC at the US Chamber in 2017, and I wish we had conditions which would allow you to come visit the US Chamber of Commerce again soon, and be in Washington. But we are going to take full advantage of this virtual forum to conduct an interview today. Let me just say to our global audience, that Singapore very much plays a pivotal role in the global economy. Certainly, 300 billion dollars of direct investment from the United States is just one measurement of the important economic weight of Singapore. But Singapore has commercial, and obviously, important destinations for ports, in terms of trade links to China, India, the rest of Southeast Asia and, of course, to the United States. Prime Minister Lee, you and your government have not only capably managed the COVID-19 crisis in your country, but you have played an important role over time in promoting open trade and investment, and I want to thank you for being with us again, today, for this important forum.

Let us start with a question around COVID. I think it is very clear that you and your government have capably managed the COVID situation, but containing the virus is an ongoing challenge. We look at India and the potential for contagion, the concerns we all have about the spread of the virus, and the threat of variants. Tell us a little bit about your experience, how you have managed it and what you see is the role of the international community to combat this virus in countries all over the world that are suffering and struggling to manage through this period.

PM Lee Hsien Loong: We have had an unforgettable one plus year now. We have had some difficult times - we had quite a big outbreak of COVID-19 in our migrant worker dormitories, but in the general population, with a great effort, we kept cases low. Our fatalities have been very low. So far, we have had 31 fatalities in total for the whole country, and we are in a stable position. Far from out of the woods, because right now we have a fresh super spreading cluster, and we have just tightened up our restrictions and gathering rules again. The conclusion I come to from this is. Firstly, that you cannot afford to slacken. Each time you think you have got the COVID-19 situation under control, and you know how to respond to it, it pops up in a new direction. It can be a mutant, it can be a new avenue which you did not spot, but you cannot afford to slacken, and you must always think beyond what you imagine is likely to happen.

Secondly, for us, prior experience has helped. We were lucky, or unlucky, to have had SARS in 2003, and that primed our system to gear up for a next new disease, and primed our population to understand what was at stake and what kind of collective responses we needed. So, it made it easier for us this time round, both to have the right policies, and to have the population cooperate with us and make the policies work. It is like that with South Korea, Hong Kong, and with quite a number of the other Asian countries too.

Thirdly, it has reminded us of the importance of international cooperation. By and large, that has held up. There was a scramble for PPE at the beginning, there is a scramble for vaccines doses now, but internationally supply chains have not broken down. You can still buy iPhones made in any number of countries, you can still buy cars, which require parts from many continents. We have not taken giant strides towards autarky. Protectionism? Yes. Autarky? No. That is a qualified plus. We are a small open country, we have to deal with it as things go along, and we cannot afford to seal our borders off. Other bigger countries can, to a very great extent. For Singapore, you need food, fuel, people moving in and out, even during COVID-19. You have to do it to the extent that you can, while keeping ourselves safe with all the precautions, (such as) testing, contact tracing apps, protocols to make sure that people come in through proper procedures and are vetted, and so on. Not without risk, but unavoidable.

To open up completely again and have free travel, it is a long way off. Even travel bubbles – countries talk about it, but that needs confidence on both sides and we only want to bubble with countries which are safer than us. That means it is not easy to make a match. But I hope that as societies get vaccinated, and as confidence returns and the disease gets brought under control, that will be possible. India worries us a lot, but it is not just India who are in a very difficult spot now. Latin America has had a very difficult time. In other parts of the world, Africa for example, where cases are still low, at least their reported cases, but the vaccinated population is very low also. We are very anxious that what has happened to the rest of the world will not befall Africa too, which would have consequences not just on that continent.

Moderator: Prime Minister, you briefly touched on this in your opening thoughts and reflections, but I want you to just tell the international community, what is really your approach going to be to reopening travel? We know how important travel and tourism is going to be for recovering our economies worldwide. So, what is your approach? You mentioned travel bubbles, but are you part of an international consortium to try to encourage more travel going forward to reopen as quickly?

PM Lee: There is no international consortium yet, because the countries are not yet ready to do so. In fact, some of them are still tightening up their rules because of the recent outbreak of more transmissible mutants. But in our case, what we are trying to do is to establish travel bubbles with other countries where we have mutual understanding of each other’s situations, and mutual confidence that we will be open with one another and will keep things under control, or if not, we will fly a red flag straightaway. We have a travel bubble agreed with Hong Kong, but it has not been implemented yet. As things are, it may be a while before it comes into effect. We have various ways of enabling safe travel between us and other countries. Limited numbers, but at least it keeps the channels open. Beyond that, we would like to have a wider inkblot and join all these travel bubbles together, but it will take a while.

Moderator: Prime Minister, let's talk about trade. As a country, Singapore is obviously very trade dependent. I know you worry about bottlenecks, vulnerabilities and supply chains. A number of countries in Southeast Asia are looking to re-shore or near-shore supply chains, perhaps from China. There are a lot of policy ramifications to that. A lot of major economies around the world, the United States and Europe, and other countries are contemplating changes in policy around supply chains, partly in response to the COVID-19 crisis and national security considerations. What do you propose we do, as a global community, to ensure that trade flows are kept open and that we fortify against supply chain disruptions?

PM Lee: It would be very harmful if every country tried to make everything onshore. It is also impossible. You can have the final assembly of your devices in your own country, but to make all the components yourself is a stretch. And to get all the raw materials yourself, in most cases, it is going to be impossible. We have to cooperate with one another. There will be greater desire to have more resilience and less ‘just in time’, more ‘just in case’. But if that goes too far, the price is going to be very high. You cannot even make vaccines all by yourself. You do need not just the raw materials, but also the bottles, the bottle stoppers, all sorts of things which come from all around the world.

To solve these problems one by one is impossible. Bilaterally, which I think the previous administration tried to do, one-on-one, is very hard. You do have to work multilaterally with more partners, in order that we come together and establish rules which apply to all of us, and we can cooperate together and establish trust amongst all of us. I am very happy that this US administration is re-engaging with the WTO. It has weaknesses, but we should work together to remedy and strengthen the WTO, not to marginalise and cast it aside. That is at the top level, but there will be many other areas of cooperation regionally.

Singapore, we ourselves have joined in the CPTPP, and we are participating in the RCEP, which is an Asian trading group. We would like to pursue this further, not just traditional trade, but also new areas, for example, Digital Economy Partnership Agreements, or Green Economy Partnership Agreements, which may be perhaps politically more acceptable, and more doable in America.

Ideally, we would like America to be part of this, and to be negotiating trade arrangements with other countries. I think realistically that you are busy now, and given the political climate in Congress and in the country, you probably would not push for this, to put it very mildly. But I hope that the mood will change and you will find your way forward to have a positive trade agenda before too long, and possibly one day find a way to work your way back into the CPTPP. After all, America was a major architect of that, and the house is basically what America had a part in designing and crafting, even now.

Moderator: Well, Prime Minister, we could not agree with you more at the US Chamber. I mean, after all, 95 per cent of the customers we want to sell to live outside the United States. So clearly, we want to see a strong WTO system, there is a need for reform as you have suggested, and we also agree with your idea around a Digital Arrangement. And we will be talking to our government about that, be assured.

Let me talk about US-China relations next, because you have a critical relationship with both the United States and China, you have watched the trajectory of this relationship over many years, you have seen the increasing tensions in the relationship over trade, human rights issues, over technology, the regulation and national security aspects of technology, over South China Seas and over many other areas. We all know that having a stable, constructive and pragmatic relationship between China and the United States is critical, not just for the bilateral relationship, but for the world economy, and certainly from your lens. Tell us what needs to happen in both Washington and Beijing to put this relationship on a more stable path? And what is the stake in your view for the rest of the world?

PM Lee: For the rest of the world, everything is at stake because if the US-China relationship goes sour, you are going to have a state of tension – anxiety at the very least and conflict possibly – all over the world. Certainly, all over the Asia-Pacific, or as now America prefers to call it, the Indo-Pacific. And that is going to be bad, not just for other countries big and small, but for both America and China too. Because both America and China are countries with enormous economic and technological power, with high tech capabilities, weaponry, nuclear capabilities; and modernised armed forces in the case of the PLA, and the most powerful armed forces in the world, in the case of the US Armed Forces, but not so powerful that when you [i.e. the US] go to war, that you do not take casualties, and expect to absorb a lot of damage. So, if the two countries clash, everything is to be lost.

Therefore, it is necessary for both countries to decide to work together and accept each other as they are, but work together and find common ground where they can cooperate. And there are many [opportunities]. Climate change is one, where [US and China] are talking, and John Kerry has been to China already. But it cannot just be climate change. You have nuclear non-proliferation, public health, and pandemics to come. You have the global trading system needing to be on a stable basis in order that countries can import, export, trade and develop their business and prosperity. The two countries have to work together, but it means that both countries have to reconcile their international stances with their domestic political opinions. And both have domestic political opinions, even the Chinese. And [both countries will have to] overcome the nationalist instinct to say “we will look after our country’s interests, but we will do so by cooperating with other countries. Whether or not we fully trust them, and whether or not they are our bosom friends, they have to be our partners on this planet.”

And for China, that is a big deal. Because the Chinese have reached a point where they feel that they have not only stood up and become wealthy, but they want to become strong and be acknowledged as such. But when you are strong, you are not the only strong guy in the world. You have to know how to have that strength accepted by others over the long term, as the US has been able to do since the Second World War. You [the US] have the most powerful fleets and aircraft and army, but you have a lot of friends around the world, and people work with you not just because they are afraid of you, but because they think that there is room for them, you leave room for them, and you are doing good for the world, generally. For the Chinese to adopt such an attitude, it takes time.

For the US, to accept that China is a fact, that it is not going to disappear, and you have to work with it. You can try to influence it, but you cannot convert it. And it is not going to become like a European country, much less like the United States of America. It is a big psychological thing for America to accept, and it takes great statesmanship to make it work and to make Americans go along with such a policy, but that is what you need. If you do not do that, and the two countries clash, neither is going to curl up and die. It is not like with the Soviet Union. There is no Potemkin village in China, it is real! The vitality, the innovation, the drive, the prosperity, the determination to get ahead. And neither is America a declining and fading society. So somehow, [both countries] have to come together, and that is the responsibility of statesmen on both sides.

Moderator: Is there a wish on the part of Singapore or nations in Southeast Asia that the United States evolve its policy towards Asia, outside of the US-China context to perhaps re-join the TPP, or take other initiatives that you think would be important? Just briefly, because I want to also get to climate in this conversation.

PM Lee: Yes, of course. We would very much like you to re-join the CPTPP, but we do not think it is on the cards. I mentioned about Digital Economy cooperation, to establish norms and standards for data transfer, for data transparency, for accountability, for where data has to be hosted. These are things which are not so contentious, but would be important in the new economy. Or cooperation on the Green Economy, green financing, or sustainability standards, these are things which we hope the US will have the bandwidth to put on the agenda.

Moderator: Mr. Prime Minister, you spoke at the White House Climate Change Summit last month. I just want you to quickly summarise some of your reflections. You have got countries in Southeast Asia (who are) very dependent on coal and other natural resources, but we have to take on the battle of climate change as a global community. What do you think is needed here now? And what can happen if we all work together?

PM Lee: First of all, we should carry out what has been agreed in Paris. The fact that the US has come back and will do its part is a big plus. Because if the US is not part of this, everybody else will say, “Why should I do my part? The US is free-riding”. But if the US is back, there is a possibility of doing what is in the Paris Agreement. But honestly speaking, all the scientists believe that even if we did everything that is in the Paris Agreement, it will not be enough. And you have to go further, in a fair way, with the big emitters making big adjustments, and the other countries big and small, each doing their part. Including Singapore, which is not just small, but what we describe as having an alternative energy disadvantage, because we do not have hydro, we do not have geothermal, we cannot have nuclear because there is no place to put the power plant. But we do have some sunshine and we will make the best of that, although the sunshine alone will not be enough. But to go beyond Paris, the next occasion will be the COP26 meeting in Britain at the end of this year, and we hope that the countries will come with proposals to take things forward. We will be there, we hope to help advance the negotiations, and to help Britain as President of the meeting, and make it a success. Everything is at stake, because it is not just one or two degrees Celsius, but what that means for sea levels, for storms and droughts, for coastal cities and low lying areas. And for war and peace, because climate change means large social, and economic disruptions, migrations, and human conflict. You can adjust to them over centuries, but if it happens within a few decades, you are putting humanity under stress.

Moderator: Prime Minister, you have been very generous with your thoughts and reflections today, and I just want to say on behalf of everyone listening today, the important role that Singapore plays in the global economy, the important role that you have played personally, in issues like the US-China relationship, trade, and many others, I want to just thank you, on behalf of the US Chamber for participating today and sharing some of your thoughts. Stay safe, and thank you for participating today.

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