The growing mood of anxiety and discontent and the ground gained by extreme political parties in many developed countries will impact not just the world economy, but global security and stability, Prime Minister Lee Hsien Loong said yesterday.
There will be major consequences for small, open countries such as Singapore that have relied on open trade and making friends, and sought opportunities to cooperate, he said.
It will also be harder to prosper together in this new climate, where countries are turning inward and becoming more protectionist, seeing others' gains as their loss, he added.
Mr Lee gave this reading of recent trends in a speech to 2,500 People's Action Party (PAP) members at their biennial party conference.
He called on members to understand what the trend means for Singapore and to help ensure the PAP remains a party with strong support from all segments of society.
"The external world is changing... in a very fundamental way not advantageous to us. We have to watch this, we have to know how this is going to impact us over the next few years," he said.
Mr Lee, who is PAP secretary-general, noted that voters around the world are unhappy that the benefits of growth are not reaching them, and feel threatened that immigrants are competing for their jobs.
He cited the recent United States election, the Brexit vote and the rise of extreme parties in Europe as examples of voters' weariness of trade and wariness of immigrants.
"This looks like the trend now. I do not know how far it will go, but I do not like the direction the trend is going," he said. "If more countries turn this way, the world is going to change, and change for the worse."
Singapore prospered in the past 50 years by working hard, but it was fortunate to have a favourable external environment: A peaceful Asia and an international order where countries big and small cooperate and compete under rules that are fair to all, giving small countries "a right to their place in the sun".
Today, countries are flexing their muscles and becoming increasingly assertive.
"Nobody can tell how relations between the big powers will develop," said Mr Lee. "If US-China relations grow tense, Singapore is going to be in a very difficult spot, because we regard both the US and China as our friends and do not want to have to choose between them."
Meanwhile, obstacles to trade are increasing and Singapore's exports - a key pillar of its economy - are not growing by very much either.
But Singapore has to accept the world as it is, not as it wishes it to be, said Mr Lee.
"We ourselves must remain open, because if we close up like other countries, our people will be finished," he said.
Besides understanding the global climate, Mr Lee spelt out two other ways for the ruling party to prepare for the next general election, which must be held by April 2021.
First, the party must strive to improve the lives of Singaporeans.
He cited two ways of doing so: By equipping Singaporeans with the skills to take care of themselves through schools and training programmes, and by strengthening social safety nets.
Second, the PAP must remain a strong, national party that reaches out to all segments of society and represents them. It must also stay focused on serving the people, and provide strong leadership, he said.
"Politics is the same everywhere. It is people, it is trust, it is knowing you care for me," he added.
"Unless we have this deep in our DNA, we will not be able to hold our position in Singapore."