Maritime hubs like Singapore critical amid worldwide disruptions: DPM Gan

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SINGAPORE – Maritime hubs like Singapore are critical in ensuring trade carries on at a time when disruptions in the Strait of Hormuz cascade across the global economy, said Deputy Prime Minister Gan Kim Yong on April 21.

Delivering the Singapore Maritime Lecture at Suntec Singapore Convention and Exhibition Centre, he noted that the crisis in the narrow waterway is not just regional but also a “systemic shock” that has had an impact on energy prices, transport costs and production chains.

DPM Gan, who is also Trade and Industry Minister, told attendees at the opening of the annual Singapore Maritime Week that maritime hubs, therefore, play a stabilising role by maintaining connectivity in a volatile environment.

The ongoing bottleneck in the Middle East, he added, has underscored the importance of maritime hubs that can provide flexibility, which allows trade to be redirected quickly and efficiently.

Singapore’s port is one such example, he said, noting that it is the world’s busiest trans-shipment port and connected to more than 600 others across the globe.

When Tuas Port is completed in the 2040s, it will allow Singapore to handle greater volumes of containers and deepen its port connectivity, while enabling it to respond more effectively to disruptions, he added.

“In a more volatile world, such connectivity is not just an economic asset. It is a crucial part of resilience, not only for ourselves, but for the rest of the world,” said DPM Gan.

Beyond physical connectivity, maritime hubs will also shape the standards for the future of seaborne trade, particularly in the realms of digitalisation and decarbonisation.

In doing so, they will ensure that “the next generation of maritime systems remains open, interoperable and connected”.

This, in turn, provides “clarity for investment decisions, enables coordination across borders and prevents fragmentation from leading to disconnection”, he added.

On top of that, maritime hubs build trust, which carries a premium, especially in an increasingly fragmented world, said DPM Gan.

They are also a source of influence, which will become even more important when artificial intelligence is scaled up.

AI systems depend on trusted data, from shipping movements to port operations to logistics chains, that can be shared across the sector, he said.

While shipping relies on infrastructure, he said the industry also depends on confidence in certain foundations, such as abiding by international frameworks and ensuring that rules are applied consistently.

Singapore’s maritime ecosystem is built on foundations such as a strong rule of law, as well as transparent governance, he said.

DPM Gan stressed that the country continues to be a “steadfast steward” of the United Nations Convention on the Law of the Sea (UNCLOS), which sets out the right of transit passage through straits used for international navigation.

It remains committed to upholding UNCLOS as the legal framework for navigational rights and freedoms in the maritime realm.

These are existential for Singapore as a maritime hub and also important to other nations that depend on maritime connectivity and trade, he added.

But the rules-based maritime order is now increasingly fragile.

In recent days, the US and Iran have sent mixed messages about the status of the Strait of Hormuz, underscoring how volatile and fluid the situation remains, he added.

At present, the waterway – through which about 20 per cent of the world’s oil and gas normally flows – remains in limbo, as the shaky ceasefire between the two nations looks set to expire on April 22.

The constant back-and-forth, including Iran lifting and reimposing its blockade on the strait, and the US imposing its own blockade on Iranian ports, has meant that commercial traffic remains at a virtual standstill.

The events in the strait, DPM Gan said, are a stark reminder of the global economy’s dependence on a few critical chokepoints, and the role of international frameworks and norms in sustaining the rules-based maritime order.

The disruption is also a reminder that connectivity is not guaranteed and must be sustained, strengthened and, when necessary, rebuilt, he added.

“In the years ahead, the question is not whether shocks will occur. It is whether our system can absorb the shocks and continue to function well,” said DPM Gan.

“That is the task before us – and we must approach it with resolve, with cooperation and with a shared commitment to keep the world connected.”

After delivering the lecture, DPM Gan took part in a question-and-answer session moderated by Ms Yong Hsin Yue, managing director of Kuok Group Singapore. He also fielded several questions from the audience, which included senior leaders from the maritime industry.

Captain Hari Subramaniam, deputy chairman of the National Maritime Safety at Sea Council, asked DPM Gan how Singapore is prioritising the safety of seafarers in the Strait of Hormuz.

DPM Gan replied that the Maritime and Port Authority of Singapore is in contact with shipowners and operators of affected vessels, and that the Republic is working closely with ports along the coast of the waterway to provide support where necessary.

Another audience member asked if Singapore would intervene diplomatically for ships stuck in the waterway.

DPM Gan reiterated Foreign Minister Vivian Balakrishnan’s point, made in Parliament earlier in April, that Singapore cannot enter into a negotiation with Iran, and it will continue to uphold the principle of safe passage under UNCLOS.

“You can imagine if we negotiate and there’s some agreement that we arrive at, there’s some condition that Singapore must comply with in order to have that safe passage... that means we agree that the right of safe passage, or transit passage, has now become conditional,” he explained.

“And it is not conditional.”

When asked how governments worldwide can keep the maritime industry at the forefront of policy discussions, DPM Gan said that realistically, countries would prioritise different needs, such as national interests or security, which may run counter to free passage or the maritime sector’s growth.

“When that happens, it is incumbent on all of us who are like-minded, who believe strongly in the rules-based system, to stand up and to speak up,” he said.