World Economic Forum

Singapore must keep faith in globalisation, make system work for its people, PM Lee tells dialogue in Davos

Prime Minister Lee Hsien Loong noted that when Singapore does have to make a stand, it is important that people understand that Singapore's choices are on its own behalf.
Prime Minister Lee Hsien Loong noted that when Singapore does have to make a stand, it is important that people understand that Singapore's choices are on its own behalf. PHOTO: MCI

DAVOS - At a time when globalisation is under pressure around the world, Singapore has to continue to bet on countries cooperating closely with one another, Prime Minister Lee Hsien Loong said on Wednesday (Jan 22).

It has to up its game, raise its capabilities and bring in new investments that will connect it to centres of vibrancy and prosperity worldwide, and enable it to make a contribution to this growth, he added.

"We can do things in Singapore, which are not so easy to be done, all together in one place. That means we have to upgrade our companies, our people, education, skills, and have the environment where we can welcome in very high-quality investments, operations, R&D centres, places where high-quality people want to live, work, want to be," he said.

"It's not just costs, it's also the whole environment - the safety, the security, the confidence, the opportunities, the vibrancy."

But the system must also work for Singaporeans, he stressed at a 30-minute dialogue with World Economic Forum president Borge Brende.

"If it doesn't work for them, the system will fail," he added. "And in Singapore, we must not fail because we only have one chance to succeed."

"We have to look after our own people, make sure that all these good things which happen in the world benefit not just Singapore, but benefit Singaporeans - across the board - so that they are able to take advantage of the jobs that we create, so that they are able to fend for themselves against global competition," PM Lee said.

"So that if one industry is declining, which will happen from time to time, the people there are given the help, the support and the time to gain new skills, and transfer their employment to another industry, another job and be able to make a living for themselves and not feel that they are fending for themselves on their own, that the system is not on their side."

PM Lee also spoke about challenges posed by the United States turning inward and a rising China, and how Singapore plans to navigate its way in a more challenging environment.

A changing US, China, and their strained relationship

Strains in the US-China relationship have meant that where it was previously effortless for a country to say it was friends with everybody including the US and China, now, from time to time, one is pushed to be better friends with one side or the other, he noted.

He drew laughter from the packed room of 200 business leaders and officials as he made this observation at the dialogue with Mr Brende, a former Norwegian foreign minister.

 
 
 

Mr Brende quipped: "A lot of Europeans understand that."

PM Lee replied: "Well, the smaller you are, the better you understand it."

He noted that when Singapore does have to make a stand, it is important that people understand that Singapore's choices are on its own behalf.

"Because we are making decisions for Singapore, and not because we are a cat's paw for one side or the other," he added. "That means you must have the courage to stand up and call things as they are and, from time to time, you will incur, well, at least a raised eyebrow and sometimes more than one raised eyebrow from one side or the other, and occasionally both.

"But it is necessary to do that because once people no longer think that you are a serious interlocutor, calculating on your own behalf, you're written off, you're finished."

PM Lee noted that America's benign engagement in Asia as well as China's rise and growth had enabled the region to prosper over the past 50 years.

World trade was also buoyant.

But today, the US is concerned that it is footing too much of the burden, and that other countries are taking advantage of it.

China's influence has also grown, as has its role in the global economy.

How the relationship between the US and China would play out and its impact on the global economy was a key theme of the 30-minute session.

"Singapore hopes that we'll be able to cooperate with them and participate and encourage them to engage in a way which leaves space for other countries to prosper, to set their own path," said Mr Lee.

"And in the long term to welcome a new major player, and not feel that this is an elephant in the room that may not notice who else is there and what else may be underfoot."

Asked whether he felt US-China trade tensions had peaked with the phase one trade deal reached this month, Mr Lee said he did not think they had.

The issue of how an incumbent hyperpower accommodates a rising new power, whose economy is set to grow and eventually become larger than that of the US - although not for years to come - will remain.

Uncertainty has also meant that investments have been affected, and business decisions are being put off. And the prospect of a bifurcation in technology, whether on 5G networks or the entire supply chain, remains, he added. This will have significant negative impact on long term growth, and create mutual suspicion and anxiety.

 
 
 

PM Lee noted that some economists say global supply chains are so integrated that pulling them apart is unthinkable.

He said he did not take such an optimistic view, noting that European countries were integrated before the First World War, but this did not stop miscalculations and tensions breaking out. "We've had 50 years of peace. Can you bet on another 50 years of peace? The odds are not negligible."

The discussion turned to the possibility of a recession or a prolonged slowdown.

PM Lee noted the G20 decided after the 2008 global financial crisis to try and coordinate monetary policy, saying such coordination worldwide was needed. "We cannot all be running trade surpluses. Whom are we going to be having surpluses against? Antarctica?" he added.

Did he see a silver lining?

PM Lee cited the tech sector, saying: "There is tremendous vibrancy and optimism and everybody believes they are going to change the world. They are not all right but some of them will not be wrong."

He added that while new opportunities will be generated, so will new problems.

"When social media came along, everybody said this is marvellous, this is a way to democratise debate, and everybody has a voice and now we shall have an egalitarian participative, basically Nirvana will have arrived," he said.

"Now we see what it is like. It does not look like it is Nirvana."

PM Lee noted that human societies had, over many centuries, developed circuit breakers to deal with the spread of new views and ideas, but these are now short circuited into a fraction of a second.

"When you speed up the operating cycle like that by 100 or 1000 or 10,000 times, the operating system will malfunction. Human beings are not meant to work like that. Your brain does not speed up 10,000 times," he said.

"You need time to hoist things in, to mull it over, to think it, discuss it, to test it and gradually to get some grey hair and then you have some better decisions about it. It will throw all that out of the window."

As for how smaller countries can cope with the platform economy, PM Lee noted the likes of Google and Facebook are in Singapore, with data centres and engineers. "We do not have very many unicorns of our own but we are part of the global economy and part of these major participants," he said.

"If there are proper rules which protect participants, big and small, in this environment, then, I think we can make a living. If there are no rules, and all of a sudden you have a Twitter storm or something befalls you in the middle of the night, next morning you wake up and you find you have been devastated. It can happen."