Singapore's role in the Asian Century

Your most recent books, from The New Asian Hemisphere to The Great Convergence, point out the need for the West to understand the modernization and the renaissance of Asia. What are the aspects and facets of the Asian Century that the EU and the US still do not get so far?

KM.

Most leading minds in the West find it hard to accept this simple but painful historical fact: the last two centuries of Western domination of world history have been a major historical aberration. From the years 1 to 1820, the two largest economies of the world were those of China and India. It was only in the last 200 years that Europe and North America took off.

If you look at the past 200 years of world history against the backdrop of the past 2,000 years of world history, the past 200 years have been a historical aberration. All historical aberrations come to a natural end. Therefore, the Asian century is irresistible and unstoppable.

Unfortunately, many Western minds continue to believe that the Asian century will not happen. What is the proof of this? If Western minds accepted that the return of Asia is unstoppable, they would restructure global institutions to accommodate the rising Asian powers.

Instead, the UK and France refuse to give up their United Nations Security Council seats in favour of India. And the US Congress continues to block the reform of the IMF to allow larger voting shares for the new Asian powers, including China. This reluctance to restructure the global order is a clear sign that the West refuses to accept the reality of the Asian century.

Is Singapore a model for other Asian countries in terms of foreign policy? Is it poised to play a crucial role in the next decades of convergence? How?

KM.

Singapore is too small a country to be a model for other Asian countries, most of which are much larger than Singapore. Nonetheless, the best practices that have been adopted by Singapore are relevant for other Asian countries, many of which have studied Singapore closely.

In my book, The New Asian Hemisphere, I explained that the Asian countries are succeeding because they have finally understood, observed and implemented the principles of seven pillars of Western wisdom, namely: free market economics, science and technology, meritocracy, pragmatism, a culture of peace, the rule of law, and education. Now that other Asian countries are following Singapore in implementing these pillars of Western wisdom, it is not surprising that more and more Asian countries are succeeding.

In terms of foreign policy, Singapore has been very careful to pursue a realistic, pragmatic and non-ideological foreign policy. While this has not served as a model for other countries, it has enabled Singapore to win friends in all corners of the world. Singapore is also very strong supporter of the United Nations and multi-lateral institutions.

As former Prime Minister Lee Kuan Yew said, “If there were no international law and order, and big fish eat small fish and small fish eat shrimps, we wouldn't exist.” Hence, even though Singapore is a good friend of the US, it has not hesitated to disagree with the US in multilateral fora.

Over time, we hope that the US will see the virtue of supporting multilateral institutions as well. This is why I begin my book, “The Great Convergence: Asia, the West and the Logic of One World”, by quoting from a speech by Bill Clinton in Yale in 2013, where he told his fellow Americans the following: “If you believe that maintaining power and control and absolute freedom of movement and sovereignty is important to your country’s future, there’s nothing inconsistent in that [the US continuing to behaving unilaterally]. [The US is] the biggest, most powerful country in the world now… But if you believe that we should be trying to create a world with rules and partnerships and habits of behaviour that we would like to live in when we’re no longer the military political economic superpower in the world, then you wouldn’t do that. It just depends on what you believe.” Clearly, Bill Clinton was calling on his fellow Americans to support multilateral rules and processes. So far, they have not heeded his advice.

Would you define Singapore as a regional power?

KM.

Singapore is certainly not a regional power. Its land territory is one of the smallest in Southeast Asia. It has only 700 square kilometres, whereas most Southeast Asian states have hundreds of thousands of kilometres of land. Its population is also very small. It has only five million people. Hence, Singapore will never be a regional power.

Nonetheless, Singapore has been able to exercise regional influence by generating good ideas. For example, Singapore noticed that while there were strong Trans-Atlantic institutions like NATO and OSCE and strong Trans-Pacific institutions like APEC and EAS, there were no strong institutions linking Asia to Europe. This was clearly a missing link.

This is why the former Singapore Prime Minister, Goh Chok Tong, proposed the idea of an Asia-Europe Meeting (ASEM). I was then the Permanent Secretary of the Foreign Ministry of Singapore, and I made several trips to Europe to try and persuade Europe to adopt this idea. Fortunately, France was the first country to support this idea. Since then, ASEM has taken off. ASEM has also established the Asia-Europe Foundation (ASEF) in Singapore.

Singapore has also produced some of the most thoughtful Prime Ministers and Foreign Ministers, whose speeches have been carefully studied in leading capitals. As long as Singapore keeps up this tradition of speaking frankly and candidly on regional and global issues, it could continue to have some regional influence.

Singapore won what former British Prime Minister Gordon Brown famously described as the “global skills race”. What does it mean for the country in the so called Asian Century?

KM.

PM Gordon Brown is dead right. We are globally engaged in a “global skills race”.

Fortunately, Singapore has done very well in this area. Its education system is universally admired. Its maths textbooks are used in places as distant as California, South Africa, and the Netherlands. Singapore students have done well in PISA tests and the National University of Singapore (NUS) is now ranked as the top university in all of Asia.

Yet, despite all these successes, Singapore cannot afford to rest on its laurels. New challenges are appearing. For example, technology is eliminating jobs. In a 2013 report, McKinsey points out that “the force of automation has already swept through manufacturing and transaction work, with profound impact. To put this in perspective, in 40 years of automating transaction work, in some US transaction occupations, more than half of the jobs were eliminated. ATMs took on the work of bank tellers, self-serve airline reservation systems replaced travel agents, and typists all but disappeared.”

The report estimated that by 2025, “knowledge work automaton tools and systems could take on tasks that would be equal to the output of 110 million to 140 million full-time equivalents (FTEs)… increased automation could drive additional productivity equivalent to the output of 75 million to 90 million full-time workers in advanced economies and 35 million to 50 million full-time workers in developing countries.” In short, many jobs will be lost. Singapore will need to ensure that Singaporean workers remain flexible and relevant to handle these profound shifts in labour needs.

Apart from Australia, Singapore is the only Asian country to be ranked among the top ten on the UN Human Development Index. Is the Asian Century more a matter of economic growth, rather than economic development?

KM.

Singapore is truly blessed that its founding fathers, especially Lee Kuan Yew, Goh Keng Swee, and S. Rajaratnam, did not focus only on economic development but also on human development. From day one, Singapore paid attention to the social needs of its people: from housing to health care, from education to the environment. As a result, not only did Singaporeans enjoy rapid economic development, they also enjoyed living in one of the world’s most liveable cities.

There is no doubt that many other Asian cities are studying the Singapore model of development. China has welcomed the establishment of the Suzhou Industry Park and the Tianjin Eco City, both of which are Singapore-led projects.

Since China will be producing the largest new urban population in the world, any lessons that the Chinese cities learn from Singapore will lead to better urban development for Chinese citizens. Hence, while Asian countries focused more on economic development in the early years, it is clear that more and more of them are now paying more attention to sustainable development and to protecting their environments.

Recently an agreement has been signed to set up the Asian Infrastructure Investment Bank and Singapore is among the signatory states. What do you think about the new bank from a Singaporean perspective? What do you expect from this new institution in terms of U.S.-China relations?

KM.

Asia badly needs new infrastructure. The ADB has estimated that Asia will need to invest “about $8 trillion in national infrastructure and $290 billion in regional infrastructure between 2010 and 2020 to sustain its growth trajectory”. Given this need for more infrastructure, the region as a whole welcomes China’s initiative to set up the Asian Infrastructure Investment Bank (AIIB). This is why most Asian countries attended the launch in Beijing.

Unfortunately, the US misunderstood the goal of this AIIB initiative and saw it as an effort to diminish the role of US- and Japan-led regional and global banks like the World Bank and the ADB. This led to the US Treasury launching a major initiative to persuade its friends to stay away from the AIIB launch. This is why South Korea and Australia did not participate, even though it was in their national interest to do so.

This US-China rivalry is not surprising. Indeed, it would be perfectly natural to see great power competition between the US and China in the coming decades, because we are now approaching one of history’s most significant moments. In 1980, in purchasing power parity (PPP) terms, according to IMF statistics, the US share of the global GNP was 25% while that of China was 2.2% (less than 10% that of America).

But by the end of 2014, the US share will slide to 16.2%, while that of China will rise to 16.4%. For the first time in 200 years, the largest economy in the world will be non-Western. So far, the US has reacted wisely to China’s rise and we hope it will continue to do so.

What is your view on the planned railway between Singapore and Kunming?

KM.

The Kunming–Singapore Railway will connect China, Singapore and all the countries of mainland Southeast Asia. It is expected to increase regional economic integration and increase China's economic ties with Southeast Asia.

Singapore would benefit enormously from the establishment of this railway. Firstly, the railway will provide a cheap and efficient way for Singapore to acquire resources. Meanwhile, other countries can use it to take better advantage of Singapore’s technical expertise and entrepôt status to earn more gains from trade.

Secondly, the railway would enhance Singapore’s status as a logistics hub. Each year, the Port of Singapore has a throughput of more than 550 million tonnes of cargo. Much of it will continue to travel around the region on ships, but Singapore’s hub status will be further enhanced if some of the cargo can be distributed to Malaysia, Thailand, Vietnam, Laos and Cambodia by rail as well. This is why Singapore strongly supports this Singapore-Kunming link.

What are the most significant political, economic and cultural challenges that Singapore will face in the coming decades which in all probability will be informed by the shift of power from the West to the East?

KM.

Singapore will face extraordinary new challenges and opportunities as power shifts from the West to the East. The main geopolitical challenge it will face could arise from the rising rivalry between the US and China. We are already facing pressures from both China and the US because of our close relations with both countries.

When I spoke to a group of retired Chinese generals in Beijing last year, it was clear that they were concerned about Singapore’s close defence relationship with the US. In fact, our defence relationship is so close that American leaders and commentators have referred to us as an “ally” even though, strictly speaking, we are not treaty allies with the US.

This is dangerous, because in a crisis, American leaders may expect us to behave like an ally. However, we will not be able to take a strong pro-American stance if US-China relations sour, as 75% of the Singapore population is Chinese.

Similarly, some Americans are upset by Singapore’s close economic relationship with China. For instance, we supported the creation of the AIIB, even though the US had lobbied against it. The New York Times reported this: “One American ally has already signed up despite Washington opposition: Singapore.” If even the well-informed NYT reporter Jane Perlez is not aware that Singapore is not a US treaty ally, we will find it very difficult to navigate the expectations of both the US and China if their relationship ever sours.

However, Singapore will also have extraordinary opportunities. Just as London serviced the rest of Europe in the 19th century and New York City serviced the rest of America in the 20th century, Singapore could become the city of choice for the 21st century. Singapore is culturally comfortable with the Chinese, Indian, Islamic, and Western civilisational streams, all of which are well-represented in Singapore society.

It is the most westernised city in Asia, even compared to Tokyo, Seoul, or Shanghai. It is also the most Asian global city in the world – it is far more Asian than New York, London or Paris. It is also geographically located within 6 hours of the major cities in China and India, the biggest powers in Asia. These features make Singapore the ideal crossroads between East and West, and the best choice for an Asian “capital” in the coming Asian century.

On balance, I am very optimistic for Singapore’s future because in the first fifty years, we have put together strong physical and human infrastructure that has enabled Singapore to become a key global city on our planet. As the Asian century unfolds, no other city can benefit as much from Asia’s growth as Singapore can. Hence, great times lie ahead for Singapore.

Acknowledgements

Part of this interview was published in Longitude: the Italian monthly on world affairs, February 2015.