SINGAPORE - When he was at the helm of the Ministry of Education, Deputy Prime Minister Heng Swee Keat was informed by his staff that the budget for students to travel to Asia for education programmes was underutilised.

Unlike the funds allocated for trips to America and Europe - the two more popular destinations - the Asia account was not used much, and his staff asked if they could reallocate the funds to the more popular programmes.

"I said 'no', I disagreed. In fact, we should help our people understand Asia better. Young people should not assume that just because we are in Asia, we know Asia. So please, I'm not going to make a change, in fact on the contrary, I may reallocate more to Asia," Mr Heng, who is also Minister for Finance, said on Friday (Nov 22).

He was speaking during a dialogue at the annual The Straits Times Global Outlook Forum which was moderated by The Straits Times editor Warren Fernandez. This year's forum focuses on the political and economic situation in Asia.

Mr Heng cited the example from his stint as education minister between 2011 and 2015 to emphasise the importance of knowing Singapore's immediate neighbours, a point he reiterated multiple times during the 45-minute session.

"Today, with global travel, budget airlines and social media and the Internet, our people, especially our young people, are exposed to all parts of the world," he said. "We sometimes assume that we know our closest neighbour, but we don't."

He said that "Asean as a group is not a small entity" and can work together to engage major powers, especially with tensions high between the US and China.

Emphasising the need to uphold the concept of Asean centrality, Mr Heng said Singapore must maintain its links to all parties.

With the regional bloc projected to become the world's fourth-largest economy by 2030, Mr Heng said it is still "a work in progress" and its success will be determined by how well member states work together.

"Of course, the projection is a projection. Whether or not we can reach it, depends very much on how hard we work at it in the coming years. And in terms of the ideal of a common market, a common production base, it is always a work in progress."

Mr Heng identified areas that Asean needed to cooperate further, including the service sector and the removal of non-tariff barriers, such as regulatory ones.

He said Asean should create a common standard, particularly for protecting the integrity of data and ensuring cyber security in the digital economy.

Key areas like food, drugs and medicine were also areas for greater cooperation, said Mr Heng.

"I don't think we are ready for an Asean common currency, but step by step there are many things that we can work towards," he said.

"If you look at Asean year by year, it looks like a snail's progress. But if you look at it over a decade, you wonder, wow, there's so much progress made. I think we need to take the same attitude, and just keep making progress with like-minded countries. We start with whatever can be done, and be practical about it and address each other's concerns."

Mr Heng said that the US-China relationship would affect not just Singapore, but all the Asean members.

In response to a question from Mr Fernandez, who is also editor-in-chief of Singapore Press Holdings' English/Malay/Tamil Media Group, Mr Heng said that beyond the trade war, the US-China tension is "a contest of government systems", with differences on a range of issues such as the environment, human rights, free speech and the economy.

Calling the relationship "worrying", Mr Heng said it is "a difficult adjustment for both sides" with one being an emerging global power and the other the incumbent power.

During the dialogue, Mr Heng also shared his thoughts about the protests in Hong Kong since June.

"I think it is very worrying, in particular, the violence. I used to be a police officer. So when I look at the videos and what is happening, I must say the police officers in Hong Kong have been facing a very tough time. They are doing their best to maintain law and order. It's not easy when you have that level of violence. It is of concern to everyone."

Mr Heng said that "a very deep fault line" has opened up in Hong Kong society, and the protest has moved beyond the immediate cause of the extradition bill, to other socio-economic issues.

He also said that Singapore's history, celebrated in this year's Bicentennial celebrations, has always been one of adaptability and planning ahead for the future.

"If you look at Singapore's developments over the years, our fortunes float with the world. Whatever happens, we are always a part of the world, and regional powers and regional rivalries cause us to go up or go down. But the fact that we survived and prospered over the years, is because we have very adaptable people," said Mr Heng.

"It is not realistic for us to expect the world to adapt to us. And whatever changes in the world, whether it's geopolitics, whether it's new economic relationships, whether it's new technology or new social trends, we have to adapt to the world and make the best of it."

Mr Heng said that, as a small country, Singapore is not in a position to threaten or dominate anyone in the world.

However, the Republic has its own way to remain useful and relevant to the world, and can operate nimbly.

"Because we are small, hopefully we can be far better coordinated in Singapore, and in that way we can be a pathfinder for many things."

He said that as Singapore only has one layer of government, it makes experimentation a lot easier for things like digital technology and financial technology.

"Let us think not in short term, what is going to happen in the next three months or six months or the next one year. Let us think far ahead," said Mr Heng.

For example, since we know that the climate change battle is going to cost $100 billion over a hundred years, we can start saving up for that.