Build optimism, solidarity to tackle world’s 3 long challenges, says President Tharman

SINGAPORE - Optimism and a collective belief in the future are critical if countries are to meet the three “long problems” facing the world, said President Tharman Shanmugaratnam on Nov 27.

The three problems – climate change, artificial intelligence (AI) and ageing societies – are the largest governance challenges facing countries both domestically and internationally, he said at the inaugural J.Y. Pillay Lecture Series on Governance.

They are also issues where action or inaction today will decide the well-being not only of the current generation, but also of those to come, he added.

For instance, ways have to be found to win support among populations and address pushback when it comes to the climate transition, while the needs of steadily ageing societies must be met without sending the bill to the next generation, he said.

The annual lecture series organised by the Singapore University of Social Sciences is meant to celebrate the public service contributions of Mr Pillay, who is best known for being Singapore Airlines’ first chairman and who led the Republic’s flag carrier for 24 years.

Speaking before President Tharman, SUSS chairwoman Mildred Tan said it was fitting that the annual lecture, which will feature eminent local and foreign leaders, kicked off by focusing on governance, “the foundation of Mr Pillay’s work and his belief in the power of well-led institutions to create positive, lasting change”.

In his lecture, Mr Tharman noted the decline in confidence in government and trust in multilateralism across many countries in recent years, as captured by various surveys.

He said that it is in the common interest of societies to rebuild a realistic optimism so that the world can tackle these three long-range problems.

“Addressing these challenges requires taking the long view,” he said. “It requires stretching our economic and political horizons so as to provide for well-being today and for future generations, and to do so in ways that build optimism and solidarity.”

At the same time, these challenges are an opportunity for countries to rebuild trust within their societies, provided governments anticipate problems, act proactively, and adopt solutions that are fair and equitable to their people, he added.

This also means moving away from the zero-sum mentality now prevalent in many societies and between the major powers, and reviving a sense of solidarity between people, which he said is key both to preserving unity and to meeting the largest challenges facing the world.

Address climate change urgently

On the “foremost challenge” of climate change, Mr Tharman said the world is now crossing tipping points that will likely result in consequences that are worse than being projected.

Warmer oceans and disappearing forests and ice sheets mean that the earth is losing its ability to absorb carbon dioxide, he noted, as he urged countries to take action.

He called for countries to act now rather than to defer action, so as to create scale and drive down the cost of clean energy and green technologies.

While this means expensive upfront costs, operating costs will be much lower over time. This is also a financing problem that can be solved, he added.

Moving now will also result in “much, much smaller” costs than waiting until global warming becomes intolerable, he stressed.

He also called on governments to shift the political narrative within their societies on climate action, away from costs today for a benefit well into the future.

This is as the transition to a low-carbon world is one of the greatest opportunities for growth and job creation in a long time, said Mr Tharman.

Other benefits include clean water supplies, improved crop yields and eliminating the air pollution that claims millions of lives each year, he said.

On the world stage, reframing the current “dead-end debate” away from aid and towards one of investment in the global public good that benefits all nations will also foster the international coordination needed to support the developing world in the climate transition, he added.

The President also urged governments to have transparent, consistent and credible public policies to spur the transition, including on carbon pricing, and environmental regulations to get specific industries to go green.

“The basic reality is the world is way behind, and we’re entering very dangerous times, which everyone will face the consequences of,” he said. “So we have to move forward.”

For AI, maximise benefits and minimise risks

There is a “fundamental mismatch” between the pace of AI development and government regulation, said Mr Tharman.

Rather than aiming to regulate AI comprehensively, governments should take an approach that maximises benefits while minimising the risk of the worst possible harms, he said.

This means looking for “early wins” such as where AI can improve healthcare and education delivery, while finding ways to mitigate potential harms such as misinformation and an exacerbation of polarisation.

Governments also need to recognise that not every problem created by AI can be solved by regulating AI, and have economic and social strategies ready, added Mr Tharman.

For instance, given the likely impact on jobs, countries need to double down on training and preparing their workforce for an AI era, and use conventional economic and social tools that include wage subsidies and progressive tax-and-transfer systems to mitigate inequalities, he said.

“These are the strategies available to ensure that society remains intact and, as a whole, you can benefit from AI whilst containing its downsides,” he added.

As with climate action, Mr Tharman said effective governance of AI will require international cooperation, in particular between major powers like the US and China.

As AI proliferates, educational institutions everywhere will also need to find ways to develop intrinsically human skills such as empathy and persuasion, and countries need to get their people used to the idea of continuous education.

“(AI) may turn out to be more powerful than most of us expect, but it’s not going to remove certain quintessential human traits, and neither is it going to remove all jobs,” he said.

Reform healthcare and retirement schemes

The triumph of medical science means that people are living longer, but also that healthcare costs will go up.

Preserving optimism as societies age is a challenge that many advanced countries should have seen and prepared for long ago, but which they are now having to deal with belatedly, noted Mr Tharman.

This includes the problems of unsustainable financing of healthcare and pensions, and of looming inequity to be imposed on the next generation, he said.

Governments need to recognise that there is no such thing as free healthcare, and that a mix of co-payment by individuals, government subsidies and insurance is necessary to keep healthcare costs manageable, he said.

Countries must also acknowledge that systems of retirement benefits need reform around the world, he added.

He pointed out how pension schemes – where people are assured of certain benefits not strictly linked to what they contributed – have become unsustainable as societies began to age.

Conversely, countries that adopted defined contribution schemes – where people can withdraw what they had put in themselves – pushed the risk of investment to the individual, and have not worked.

The better solution is to have people pay into their own accounts and take out from their own accounts, but with collective management of investments – a system employed by Denmark and Singapore, said Mr Tharman.

For lower-income earners who are not able to build up enough retirement savings, the government then provides top-ups, he added, citing programmes here such as the Silver Support Scheme.

Keeping healthcare costs down also depends on whether individuals stay active, productive and curious even as they get older.

Mr Tharman cited research that showed that only 10 per cent of avoidable illnesses and death are attributable to healthcare systems, while 60 per cent is attributable to one’s habits and the social environment.

“Are we staying active? Do we have regular friends? Do we have hobbies? Are we learning? Are we countering the ageing brain?” he asked.

“That’s all critical in staying healthy – staying active, staying productive, staying curious about life… and in Singapore, we are very serious about it.”