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Singapore will keep thinking big, being bold and won’t be bullied — K. Shanmugam

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by August 29, 2017 General

Singapore will keep thinking big, being bold and won’t be bullied — K. Shanmugam

AUGUST 29 — China’s One Belt One Road initiative (OBOR) is a bold vision that can reshape global trade, but for it to succeed, Beijing will have to work harmoniously with other countries, said Minister for Home Affairs K Shanmugam yesterday at the 2017 Asia Economic Forum. Below is an excerpt from his speech, in which he also spoke about what the implications of OBOR are for Singapore.

The One Belt One Road (OBOR) is not a substitute for the current international order.

The current order is built on free trade. If the world turns protectionist — that will affect OBOR.

If there is a trade war between the United States and China — that will affect OBOR.

The US has become energy independent. With a lowered cost of energy, it is trying to onshore industries. That could also have an impact on current patterns of trade.

Let me explain this: Infrastructure facilitates trade. But infrastructure does not by itself often create trade. Trade flows ultimately depend on supply and demand.

In a globalised world, countries trade with many partners. And for many Asian countries, while China is the biggest trading partner, the ultimate consumer of most of the traded products is still the US.

The products go as intermediate products to China, and the finished products go from China to the US. This will likely remain so for some time.

Thus, for OBOR to succeed, you need the globalised economy to function. (That) means: There must be no trade wars between China and the US. There must be continued growth, peace and stability — all of this and more will be necessary.

But if China plays this right and successfully conveys that it has benign intentions, it has a tremendous opportunity — through OBOR and other regional initiatives, such as the RCEP (Regional Comprehensive Economic Partnership) — to build a new economic architecture that can uplift economic growth in this hemisphere.

OBOR is a bold vision. China can overcome the challenges and turn the vision into reality. It will be easier for China to achieve that if China is able to work harmoniously with countries that have weight, influence in the world economy, and it receives the cooperation of countries with weight and influence along the Silk Route.

China will be aware of this. Singapore is too small to influence or be involved in these sorts of combinations and counter-combinations. We are an observer, and often a price-taker.

So we observe, say things clearly when our own interests are affected, and hope that there will be wisdom, peace and stability.

China is likely to find South-east Asia easier in the context of OBOR. The connectivity — road, rail, ports, airports — will be of great benefit. But again: It is in China’s interests to work with the existing international order — there will be much more stability.

China has been very active in engaging Asean (the Association of South-east Asian Nations), driving robust infrastructure growth in this region (and) actively engaging Asean countries along the Mekong River on water resource cooperation issues.

OBOR will therefore improve infrastructure, physical connectivity greatly, across the region. (It) has the potential to be a game-changer.

Now let me set out what I see as the impact, implications of OBOR on world economy, security architecture and geopolitics.

Economics: OBOR, if successfully executed, will reshape global trade. Already, China, India and Japan are in the top 10 economies in the world in terms of GDP.

Asean, as a single economic unit, is also in the top 10. OBOR will anchor the world’s centre of economic gravity in Asia. And China will be the centre of that centre. Not all roads will lead to Beijing. But many roads will.

This is on the assumption that the major economies of Asia work together, there is no trade war and no alliances that face off against each other.

Security architecture: Security usually follows economics. As its trade routes expand, China will probably seek to protect those routes. So you may well see more Chinese military bases, security arrangements, along the Silk Routes.

Geopolitical impact: We are likely to see a more multi-polar world. The US, Europe, India, Japan, Australia, other countries are not going to disappear from the geopolitical equation — in Asia or elsewhere.

As I said earlier, it is likely that the US’ ability to decide unilaterally will be reduced from what it has been in the past 25 years. At the same time, (it is) difficult to see any one country — including China — taking over the US’ role of global leadership.

And in several parts of the world, the US is likely to remain the predominant power. How stable a more multi-polar world will be — difficult to predict — but it will be in the US’, China’s and other countries’ interests to maintain stability.

What does all this mean for us?

Singapore recognised very early, from the early 1980s, the potential for China’s growth and was an active proponent of that growth.

(Singapore) supported OBOR since its early years of inception and recognised that it would benefit Asia and Asean, leading to greater regional economic integration.

(There are) lots of opportunities in Asia from OBOR, China’s growth and India’s growth. And Asean’s own growth is high. As a small country, well governed, (with) rule of law and a highly educated population, we should be able to benefit from all of this economic growth.

And OBOR in itself offers tremendous economic opportunities. If connectivity improves, people travel, investment flows increase, and we can then benefit, if we are ready and smart.

A Financial Times article in May noted that “among BRI (Belt and Road Initiative) countries, the leading investment destination in 2016 was Singapore, a high-income country with well-developed infrastructure”.

Figures show that we are already benefiting from the opportunities offered by the OBOR: China’s investments in Singapore alone are about one-third of its total investments in “Belt and Road” countries.

Singapore’s investments in China accounted for 85 per cent of total inbound investments from “Belt and Road” countries.

With the new opportunities, we can and should be able to find ways of being economically relevant. In this unfolding multi-polar world, (it is) even more important for us to have as many good relationships as possible.

Small states must continually earn their relevance on the international stage. China, the US and India will be there a hundred years from now. For us, nothing is guaranteed. The world can pass us by in an instant. The forgotten cities of the Silk Route are a salutary warning to us. (We) need to keep improving, reinventing the way we operate and finding new ways to be of value to others.

We will continue to support initiatives like OBOR, because it benefits us, and the region. We will also continue to maintain good relationships with our neighbours, with China and with our Western counterparts in Europe and the US. This is how we have prioritised our nation’s needs over the years, and we will continue to do so.

Let me end by saying this: We achieved what we have by thinking bold, thinking big. (We) did not allow anyone to bully us, or subject ourselves to the demands of other countries. Many have tried; we resisted. International relations, it is not unlike a jungle. The small states are at risk.

Small states that are intimidated or cajoled by bigger states into allowing their identity and interests to be defined by bigger states are not going to remain sovereign states for very long.

They may retain a flag, a national anthem and a vote in the United Nations, but that is all. They will lose the autonomy to be themselves.

The issue is existential.

If we allow ourselves to be bullied or seduced by big powers, that can break or severely stress our own domestic social-political compact on which modern Singapore rests. Once broken, it will be difficult, if not impossible, to put together this compact again.

If our founding fathers had conceded Singapore should behave like a small state — “adeks” (younger siblings) — (we) would not be having this conversation today. But thankfully, our founding fathers thought boldly, so we have a vibrant, confident modern state. — TODAY

* This is the personal opinion of the writer or publication and does not necessarily represent the views of Malay Mail Online.

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