Global system needs to give everyone room to grow: Heng Swee Keat

DPM stresses importance of free trade and the multilateral trading system

Deputy Prime Minister Heng Swee Keat speaking at the Hindustan Times-MintAsia Leadership Summit moderated by Hindustan Times editor Sukumar Ranganathan at Shangri-La Hotel on Sept 6, 2019.
Deputy Prime Minister Heng Swee Keat speaking at the Hindustan Times-MintAsia Leadership Summit moderated by Hindustan Times editor Sukumar Ranganathan at Shangri-La Hotel on Sept 6, 2019.ST PHOTO: GAVIN FOO

When Deputy Prime Minister Heng Swee Keat was negotiating Singapore's free trade agreement with India years ago, one major sticking point was air services.

An important Indian political leader, who was strongly opposed to the India-Singapore Comprehensive Economic Cooperation Agreement, told Mr Heng he would support the deal only if Singapore set up more hotels in his state, which had beautiful monuments.

Mr Heng, who had travelled a long distance by road to talk to the Indian leader, made the point that there were no direct air services to the state even from New Delhi.

"As a negotiator, I am prepared to trudge miles to see you, but no tourist would do the same just to see these wonderful monuments. If you support the air services agreement, then the hotels will come," he told the Indian leader.

Mr Heng recounted this anecdote to illustrate the importance of connectivity between India and Singapore, at a dialogue yesterday during the HT-Mint Asia Leadership Summit organised by India's Hindustan Times newspaper.

His broader point, made to an audience of about 300 businessmen and policymakers, was that countries should come together and maintain free trade, and support the multilateral trading system.

"We went on to negotiate free trade agreements with the US, Japan... The Regional Comprehensive Economic Partnership will bring tremendous benefits to the region," he said.

Asked about rising protectionism in the face of wage stagnation, he said a key challenge for the global economy is developing a system that gives everyone room to grow.

 

"The advanced economies... must continue to push ahead and in that process, provide room for others to grow," he said.

He urged countries to think about which rules ought to be changed or renegotiated at multilateral institutions such as the World Trade Organisation, and what they could do better within their own countries, and with like-minded partners.

It is hard work, he said, because "once you hit a particular level (of growth), most of the growth is going to come from total factor productivity, which means you have to invest in innovation, research and development, and educating people even better".

He added that there are several things countries can do to tackle growing inequality without "jettisoning the benefits of globalisation".

On its part, Singapore has been rethinking its education system, including training and retraining workers, to meet changing economic structures. "We must not make the mistake of protecting jobs - trying to retain an old job that is no longer value-adding will drag down the economy and eventually the worker. But we must protect the workers," Mr Heng said.

Lifelong learning will be a key part of this, along with having unions that work closely with companies to embrace change and re-train workers so they can access new jobs, he added.

The Government also ensures a fair system of taxation without destroying growth incentives, he said, noting that a large part of the Budget is committed to redistributive social programmes.

Dialogue moderator and Hindustan Times editor Sukumar Ranganathan also asked if universal basic income could be a solution to rising inequality. Mr Heng replied: "I don't think there is a magic panacea. We must try to keep our people meaningfully employed and able to make their own choices about what jobs they are keen to do, interested in and have the talent for.

"It is more important for us to enable our people to acquire the skills, and for us to restructure our economy so that we can create the jobs."

The one-day event at the Shangri-La Hotel centred on the theme Asia In The New Global Context. Speakers included economist Paul Krugman, DBS Bank chief executive Piyush Gupta and Indian Minister of External Affairs S. Jaishankar.

Mr Heng stressed that amid rising geopolitical tensions, India and Singapore, together with other Asean members, could partner in efforts to maintain a stable global order.

"Growth and development are important for us to raise the standard of living of our people. In this regard, India has an important advantage in its youthful and talented population," he said.

A version of this article appeared in the print edition of The Straits Times on September 07, 2019, with the headline 'Global system needs to give everyone room to grow: Heng'. Subscribe