New model of constructive cooperation needed to find global solutions amid Covid-19 pandemic: Heng Swee Keat

Deputy Prime Minister Heng Swee Keat speaks via video link at the Lujiazui Forum in Shanghai on June 18, 2020. PHOTO: BLOOMBERG

SINGAPORE - Amid the uncertainty of the Covid-19 pandemic, countries must work closely together to find global solutions to common challenges, work out a new model of constructive cooperation and strengthen the global governance system, said Deputy Prime Minister Heng Swee Keat.

Speaking at the 12th Lujiazui Forum on Thursday (June 18), he said that the coronavirus respects no borders, adding that countries must safeguard the global commons, as "no one is safe unless all of us are safe".

"In the same way, we need global solutions to many longer-term global challenges, such as climate change, food security and terrorism."

The annual forum, held in Shanghai, brings together government officials, regulators and experts from across the world to discuss economic issues and foster international financial cooperation.

It was held virtually for the first time due to Covid-19. Singapore is the partner city this year.

Noting that Singapore, like China, Japan and Europe, is facing a rapidly ageing population, he said: "Nations must work closely with one another on these common challenges, learn from each other, and strengthen the global governance system."

Mr Heng cited examples of global cooperation in the areas of public health and travel, such as the ongoing race to develop a Covid-19 vaccine, and the opening of a "fast lane" between China and Singapore to facilitate essential business and official travel.

Announced in May, the arrangement is being first applied between Singapore and the six Chinese provinces or municipalities directly under the central government - Shanghai, Tianjin, Chongqing, Guangdong, Jiangsu and Zhejiang.

He said that all countries, especially the major powers, must work out a new model of constructive cooperation to share global opportunities and global responsibilities.

"This should be done within the framework of an open and rules-based multilateral order where trade, capital and ideas can flow freely, where commitments and agreements are honoured, and where the interests of all countries, big and small, are taken into account."

It is also important to nurture financial cooperation, he said, as global finance is crucial in rebooting the global economy.

Key to this is making sure that the money flows to productive uses, supports the sustainable growth of the real economy, and improves living standards.

He described three major areas of need in the real economy: the infrastructure needs of developing Asia, which is estimated at US$1.7 trillion ($2.4 trillion) annually; green financing to tackle environment and climate risks; and fintech and digital finance.

He said that China's Belt and Road Initiative can contribute to the development of sustainable infrastructure, based on an inclusive, transparent and market-driven approach.

The digital revolution will also reshape finance, by lowering transaction costs and improving access, he said. "Through digital finance, we must also aim for greater financial inclusion, which helps to reduce poverty."

On the bilateral front, Mr Heng pointed out that Singapore is one of the largest renminbi (Rmb) centres outside Greater China.

He said that both Singapore and Shanghai can deepen collaboration on cross-border Rmb initiatives, to better support trade and investment flows between South-east Asia and China.

"We can also strengthen capital market linkages, and expand digital and green finance cooperation between our two cities," he said, noting that the Monetary Authority of Singapore will set up its second China representative office in Shanghai this year, after Beijing.

Calling on the international community to pool its efforts to tackle the unprecedented crisis, he said Covid-19's impact on societies, economies and the global system will be long-lasting.

"What the world would look like after the pandemic, depends on each and every one of us," he said. "Singapore stands ready to work with all like-minded countries to recover from the pandemic.

"Let's use this crisis as a new starting point, to embark on a new mission, and to forge a new vision for our collective future."

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