A stronger middle class needed to create more stability in societies: Panellists

SINGAPORE - Having a stronger middle class will help create more stability in societies, especially in a world characterised by the growing US-China rivalry, economic uncertainties and supply chain disruptions, panellists have said.

They were participating in the 15th Asean and Asia Forum held at The Fullerton Hotel Singapore on Friday. Organised by the Singapore Institute of International Affairs, the event saw more than 270 participants – comprising key regional corporate leaders, industry experts, policymakers and decision-makers – coming together to discuss how Asean can move forward in an era of prolonged polycrisis, or the coming together of multiple crises.

At a panel discussion on charting growth amid geopolitical challenges, Mr Liew Chin Tong, Malaysia’s Deputy Minister of Investment, Trade and Industry, said: “If each of our societies has a much stronger middle class and more prosperous society, you will have a lot more stability. Politics will eventually come and go... if you have a strong society, you will be able to sustain changes of political affiliations.”

Fellow panellist and DBS chief executive Piyush Gupta concurred, bringing up the example of Thailand, which has been facing political instability with multiple changes in governments.

Mr Gupta said: “Thailand, despite the rapid changes of government, has done really well in economic terms. As long as the countries in the region build the capacity of people to be able to put their minds and the economics to work, they can actually make it happen.”

In his panel keynote address, Mr Liew also outlined the shifts in supply chain models post-pandemic and their implications for Asean societies.

He pointed out that corporations are moving from a just-in-time strategy where goods are received from suppliers only when they are needed, to a just-in-case model where a larger inventory of goods is carried to ensure resilience to disruptions.

Giving an example of a corporation that sets up its global headquarters in Singapore, Mr Liew said: “Those days, they will source from anywhere – like China or Mexico. But today, corporations are looking for shorter and more secure supply chains. They will want to invest in the factory in Johor, or in Batam. And I think this is the opportunity for all of us to reshape our economic relationship.”

Asean countries must also have a long-term strategy for the climate crisis that takes into account development, Dr Mari Pangestu, former managing director of development policy and partnerships at the World Bank, said during a second panel discussion on paths to recovery and rebuilding socio-economic resilience.

“If you address energy transition, you address the food and land use. You are going to achieve the climate agenda as well as higher productivity for your population and the inclusiveness of people, and also more income,” said Dr Pangestu.

In his keynote dialogue rounding off the conference, Health Minister Ong Ye Kung said that in order to tackle growing inequality between the rich and the poor in a globalised world with rapid technology advancement, a new compact is needed between the government and people.

“We need to grow sectors to bring in new activities, activities that can create value because they create jobs. At the same time, invest in training, education and public health. Keep those pieces right, make them universally available to everyone rich and poor,” said Mr Ong.

“This means the state will need to do more, intervene more and spend more in order to upgrade all segments of society.”