Edited Transcript of Minister for Foreign Affairs Dr Vivian Balakrishnan's Remarks at the Nanyang Technological University Ministerial Forum on 27 March

Edited Transcript of Minister for Foreign Affairs Dr Vivian Balakrishnan's Remarks at the Nanyang Technological University Ministerial Forum on 27 March 2018

28-Mar-2018

Ladies and gentlemen,

It’s a special pleasure for me to be back here. In fact, one of my first events when I was President of NUSSU (NUS Students’ Union) a long, long time ago, was precisely such a Ministerial forum. So in a sense, things have come round one full circle. Now, having been on the other side, I also know, I really don’t think you are here to listen to another standard speech, droning on and on. And in any case, the summary that Aaron (Chairperson, NTU Students' Union Ministerial Open Discussion & Events) just gave actually covered all the points of the speech. The main purpose of these events is really to give students a chance to quiz the minister, push the minister a bit and check whether this one is “real or not”. So in order to make this useful, I need you all to be sharp and to be robust. I know I was supposed to talk about ASEAN and globalisation. But actually, I wanted to take a few steps back.

My first point is that foreign policy begins at home. Now what that means is - the first thing that comes to mind - you have to ask yourselves is, “Who are we?” What do we believe in? What are our ideals? Because if you don’t know yourself, you can’t really have a relationship with another person, or another country. So that’s the first question.

Therefore, I want you to think about Singapore - independent, sovereign Singapore. We never had a war for independence.  You know if you travel around to many other countries, they will tell you in the museums and in stories, how they fought to gain their freedom. Singapore did not have a war for independence, because nobody believed that an island which at that point in time, was just 500-plus square kilometres, with less than two million people, with no natural resources, would be viable.

Nobody, including our parents and grandparents, believed that we were viable. So the only way Singapore got its freedom from colonisation was through merger with Malaysia, in 1963. But immediately upon merger, there was a fight, and the fight was because of race, language and religion. It was basically a fight about ideals and values. In Singapore, we said we want to have a fair and just society, where everyone regardless of race, language or religion, is equal, and we will organise ourselves as a meritocracy. In Malaysia of that time, and frankly even to this day, the organising principle was what they term ‘Ketuanan Melayu’. Now the problem is most of you nowadays don’t understand Malay, but ‘Ketuanan Melayu’ is a politically loaded phrase with powerful resonance. For the political scientists here, it is basically affirmative action by a politically dominant group in an attempt to correct what they feel was economic and historical injustices. So because there was a fundamental incompatibility, we got kicked out of Malaysia on 9 August 1965. Now I say this so that you all understand that we became a ‘little red dot’ without a hinterland. Not because we thought it was such a great idea, or such a great economic strategy. We lost our hinterland because we fought and stood for an ideal.

I say this because sometimes people say “you know you Singaporeans, you’re so money-minded, so pragmatic, so practical, no ideals”. But I want to put this thesis to you: that we exist, and we have no hinterland, because we believed in an ideal.

That belief in an ideal immediately placed Singapore and the leadership of Singapore in 1965 in a very, very, difficult situation. I always remember my mother saying, “You know, you can't live on love and fresh air”. As a politician, as a leader, it’s nice to talk about ideals to mobilise and rouse your people. But after having done so, you have a responsibility for your people. How are you going to live, how are you going to make a living, how are you going to feed our people? So that was the foundational challenge for Singapore 52 years ago. If you think about it, fortunately for us, it meant that the leaders of Singapore 52 years ago had to make two politically and economically unconventional decisions at that point in time.

And I say politically and economically unconventional because – you were all too young to remember it, but maybe your professors might – in the immediate post-colonial period after the Second World War, there were two big ideas: One was this concept called “import substitution” - which means instead of importing and depending on foreigners, you start your own industries, make your own clothes, your own food, all your own needs. That is called “import substitution”.

The other strong trend in newly independent countries was, “You’ve just gotten rid of the ‘white man’, don’t let them back in” - xenophobia. Everything must be local and you must be self-sufficient. Well, fortunately for Singapore, because we got kicked out, and because we lost our hinterland, and because we ended up with an impossibly small market, and had no natural resources, our leaders at that time actually had to embark on globalisation, even before the word “globalisation” was coined. So, we embarked on industrialisation - Jurong Industrial Estate - a brainchild of Dr Goh Keng Swee. We welcomed foreign MNCs. Japanese who conquered us during the Second World War, obviously the British, our former colonial masters, the Europeans, and of course the Americans. We could not engage in xenophobia, and welcomed these advanced countries back into Singapore because we wanted access to technology and jobs. We were going to make things which were going to be exported to the rest of the world. So do you see that 52 years ago, this unconventional idea made Singapore a leading example of a globalised city before it was fashionable? But it happened this way because we had no choice. So that’s the fundamental point.

Now, after that, if you will remember the mid-60s, the big political confrontation then, was between communism and capitalism. And in Southeast Asia, the Vietnam War was heating up. A decade prior to that, the war in Korea. In fact, the war in Korea is technically not over, that’s why you still have a North and South Korea. That fight in Vietnam, in Indo-China, although the Americans and the Vietnamese paid a very heavy price, that confrontation between Western capitalism and communism actually bought us time and space to prove that the free market, liberal economics, economic integration, globalisation, and industrialisation works. So the point that I’m making, is that actually Singapore’s incredible progress was obviously not only due to the wise leadership, our hardworking and disciplined people, but also because the geo-political circumstances were ripe, and we took full advantage of it.

That’s why our per capita GDP grew from $500 at independence. Today it’s more than $50,000 per capita. Now, if you understand that, then you’ll understand why we have had to be such passionate advocates of free trade. You’ll also understand why we have had to be such strong supporters of ASEAN, in order to secure the peace. You’ll also understand why we have always had to engage in a delicate balancing act in our relations with the superpowers; and more recently you’ll also understand why, we are focused on this next “digital revolution”. The key theme in all these four areas is Singapore always has to pre-position ourselves ahead of the curve. We have to anticipate what is going to happen around us, and we have to prepare ourselves for it. So on free trade, you know that right now in the world, actually free trade is not fashionable, politicians have won elections on the basis that free trade is a bad idea, free trade is taking away your jobs, free trade is making people poorer. Fortunately for us in Singapore, even our Opposition does not make that argument. Why do they not make that argument? Because they know in Singapore, our trade volume is more than three times our GDP, and the moment you try to close Singapore, you can’t drink, you can’t eat; your clothes you wear, everything we use on a daily basis depends on free trade, even food.

Would you believe Brazil, which is 17,000 kilometres away, is the source of 70% of our [frozen] chicken, and two-thirds of our [frozen] beef? If you go and get your shabu-shabu or your beef rendang later, chances are it’s from Brazil. So for us, free trade is not the debating point, it’s not the political point - it is our lifeblood. That’s why despite the global political headwinds against free trade, we spent the last two years, still trying to push the agenda as far as possible. You know that just earlier this month we signed the TPP, actually the TPP minus the US. We had twelve partners – until the US pulled out of it. We have to respectfully disagree but anyway it’s their decision. Fortunately, the other eleven of us, and we still constitute an economic bloc with a combined GDP of more than 10 trillion dollars, and we’ve been able to get everyone to come on board.  We’ll still leave the door open, and we say to America “you’re most welcome to come back” - to an agreement, an architecture, a philosophy which in fact America had such a major role in co-creating.

In our part of the world, we are also currently, as Aaron mentioned just now, negotiating the RCEP – the Regional Comprehensive Economic Partnership. You know in Singapore, we love acronyms. The simple way to understand it is this: ten of us in ASEAN and the six major partners of ASEAN – India, China, Korea, Japan, Australia, and New Zealand. If we settle this, and we are trying to settle this by the end of the year, we will end up with a Free Trade Agreement with almost half the world’s population and one-third of the world’s GDP. It will be very, very big. Again, it reflects our belief in the necessity to stand up and say free trade is the way we achieve collective prosperity and peace. Because the alternative of nationalism, protectionism, ‘beggar-your-neighbour’ policies, forming rival blocs – in fact, we’ve been there before. If you look at the last century, it usually ends badly, in conflicts, rivalry, proxy wars or even world wars.

Beyond our own region, we have also started negotiations now with countries in South America. There are two big blocs there. One is called Mercosur, which is Brazil, Argentina, Paraguay, Uruguay; and the Pacific Alliance, which is Mexico, Columbia, Peru and Chile. We have also started negotiations with them. And the point I’m trying to make is that there are many countries in the world who do want access, and who do want to enter into free trade agreements. That, I would say, is still a positive development.

Now, beyond free trade agreements, I also want to talk about ASEAN and why ASEAN is important to us. When ASEAN was formed in 1967, the original five countries - Indonesia, Malaysia, Thailand, Philippines and Singapore - these five countries were not lovey-dovey get-along-well countries. In 1964, Indonesian Marines had set off a bomb on Orchard Road. There were still territorial claims between Philippines and Malaysia. Malaysia had just kicked us out in 1965. Yet, in 1967, these five countries with major fundamental differences got together because our first Foreign Minister, Mr S Rajaratnam said we need to get together, because “if we do not hang together, we will hang separately”.

So, ASEAN is important for us to overcome our fundamental differences so that we will not have a war within Southeast Asia. And ASEAN is also important because it is the way for us to overcome our lack of hinterland. And ASEAN today consists of ten countries, 630 million citizens, of which 60% are below the age of 35. Basically, ASEAN is young, like the people in this room.

Today, ASEAN’s combined GDP is US$2.5 trillion. If you look over the recent past, we’ve been able, at an ASEAN-wide level, to have growth rates of 5% or more. If we can keep the peace and if we can sustain reasonable economic growth, and it should be possible because of the fact that we still have a young population, and we still are investing in our infrastructure. It is possible. In fact, we actually expect ASEAN’s combined GDP to reach US$10 trillion sometime between 2035 and 2050. When that is achieved, ASEAN becomes the world’s 4th largest economic bloc - after China, US and Europe. So the point is, ASEAN actually has great potential, and is of crucial importance for the next two or three decades. And those of you who are graduating soon, don’t just look at the US and China. You must look at the superpowers, but also look at your immediate neighbourhood. That’s where the opportunities are.

The next point I want to make is about connectivity. You know when I was the President of the Students’ Union, we used to have, I think we called it the “Student Travel Service”. Basically, to buy tickets so that students can travel during holidays. You know, at that time if I told you that you could buy a ticket for $100 or less, and fly to Bangkok - it would not have been possible. Amazingly today, despite inflation, you can get low-cost tickets, and you can travel at a frequency that was not possible during my time, when we were actually much poorer.

So the point is, what you can look forward to, with air connectivity, with high speed railways, is that, if you’re living in Bedok, your neighbourhood is not Tampines. But you could get to the airport, fly to Bangkok, have a meeting, have lunch, pop by on the way back to Malaysia, have another meeting, have dinner, take the high-speed rail back in time to sleep in your own bed. That kind of interconnectivity, which is already happening, means your world view, and your opportunities must be vastly different. And again it’s another illustration for why our immediate neighbourhood is, once again, our hinterland.  Not because there is political union, but because there is greater and closer economic integration.

Now, the next challenge we have is that there is a new revolution.  You know, the reason why we’re sitting here - a multi-racial, multi-religious immigrant society, a city state in the hub of Southeast Asia, and why I’m standing here speaking English to you - the key reason that has happened is because the Industrial Revolution began in England.  You know about the steam engines, Thomas Newcomen and then James Watt.  And then after the steam engines, steel-making, electricity, oil.  All this Revolution, all these technological waves, began in the West.  Because of that, from the 18th century onwards, wealth and power was accumulated by the West.

If you ask what happened in the last two to three hundred years in China, in fact, it is a sad story, because if you go back a thousand years, AD 1000, in China, at that time, they had what they called “四大发明” (si da fa ming), the four major or four big inventions. What were the four big inventions? Gunpowder, the compass, paper, printing. In AD 1000, Europe was in the Dark Ages. The Middle East was having the Golden Age of Islam.  But unfortunately for China, after they had the technology and their ocean-going fleets, because of political intrigue within the courts, by 1525 they destroyed their ocean-going fleets.  China turned inwards, China felt “we have already reached the pinnacle of civilisation, there is nothing that the foreign barbarians can teach us”. And China missed the Industrial Revolution.

Now, fast-forward to today.  If you believe that the Digital Revolution is as big a deal as the Industrial Revolution, then you understand the reason why today, jobs are being disrupted and the middle class is worried about job security and wages. It’s not because of trade, it’s not because there’s a political conspiracy. You know, the old campaign slogan, “It’s the economy, stupid”? Just change it – “It’s technology, stupid”.

Now, do you understand why we have embarked on this Smart Nation initiative? We need to make sure, Singapore, in terms of infrastructure, in terms of training and education, in terms of skills, that all of you have relevant skills to master tomorrow’stechnology. Because the countries and the regions that get it, and get it first, make enormous profits and with that comes power and influence. And Singapore will always be small, we will always be a ‘little red dot’. But if we can master the technologies and be plugged into a global network of research, development and entrepreneurship, then we are in the game again. And we get to ride this new wave into the future.

So anyway, I’m going to stop there. I’ll summarise my speech as the following. For the sake of an ideal, of equality, of a fair and just society, we ended up as a ‘little red dot’ with no hinterland. But because we ended up in that very difficult situation, we fortunately embarked on globalisation, early, and we got a head start. Now, there is a new revolution, we need to get ahead again. We cannot just repeat the formula of the last 52 years. We need to take a realistic assessment of what is going on in the world. Both geopolitically, we need to reaffirm the importance of free trade, the exchange of ideas and information, and we need to master the technologies of tomorrow. And if we do that, our ‘little red dot’ continues to be a shining ‘red dot’. And I am confident that all of you will continue with a bright and exciting future ahead. Thank you all very much for your attention.

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