Welcome Remarks by Wong Kan Seng, Former Deputy Prime Minister, Republic of Singapore, Chairman of Singapore Forum Advisory Board, and Chairman of Ascendas-Singbridge Pte Ltd, at Singapore Forum 2016

Chairman of the Senate of the Parliament, Republic of Kazakhstan,
HE Kassym-Jomart Tokayev,

Your excellencies, distinguished guests, ladies and gentlemen.

 

1. Welcome to Singapore Forum 2016. To our guests who had attended the inaugural Forum last year, welcome back and I hope you will find this year’s Forum as useful and enjoyable as the last.

2. Since we met, the world has become an even more uncertain place. US-China competition in the South China Sea has intensified. Sino-Japanese relations remain tense. The Islamic State has sponsored terrorist attacks in Jakarta and Paris. Sectarian tensions in the Middle East are beginning to echo in South East Asia. North Korea has carried out new nuclear and missile tests. The refugee crisis is placing the European Union under immense stress. In the US, a particularly perplexing presidential campaign is underway. The world economy remains fragile, compounding to these complexities. All the major economies – the US, China, Japan and Europe – are struggling to make structural changes that will put them back on the path of sustainable growth. This will require wrenching internal political and social adjustments at a time when governance is becoming more difficult everywhere. The introduction of negative interest rates by Japan and Europe is a reminder – if any is really needed – that we are moving into uncharted territory. Some economists believe we are going to experience a prolonged period of slow or stagnant growth.

3. Engagement and dialogue are especially important during times of uncertainty. To avoid miscalculation, to prevent tensions from escalating and to manage problems, we need to understand each other’s perspectives and considerations better, even if there are no immediate or obvious solutions to the many issues that confront us.

4. As always, China is a crucial factor. China’s next phase of economic reform is everyone’s central concern as it affects all of us. As China rebalances its economy, growth is bound to moderate and we will all have to adjust to this new reality. The next phase of Chinese reform is far more complex than the first. China must loosen control over crucial sectors of the economy to increase their competitiveness and place increasing stress on domestic consumption to drive growth, while maintaining political stability through the rule of the Chinese Communist Party. Can it be done? We must certainly hope so since all the alternatives are worse and instability in China will have global repercussions. The recent turmoil in Chinese stock markets is a reminder of the country’s challenges and their global impact.

5. Many countries are turning inwards as they grapple with their own difficult domestic challenges. But the external environment cannot be ignored. A globalised and increasingly interdependent world will, whether we like it or not, exert a profound influence on domestic policy. This inescapable reality has made electorates around the world increasingly insecure about their futures, complicating domestic politics everywhere. We see it most clearly in Europe and the US. But East Asian countries and indeed Singapore, are not immune, although as yet we in Asia are experiencing only a relatively mild form of this global syndrome. Singapore believes that globalisation and interdependence are also the solution to the world’s many challenges. That is why we have made the theme of this year’s Forum shared opportunity and shared prosperity. We would like to see the creation of conditions for sustainable development and growth, long-term trade and investment partnerships and prosperity for all.

6. Trade liberalisation must be the foundation of continued growth for East Asia. The Trans-Pacific Partnership (TPP) – which I hope will come into force well within the deadline set - and the Regional Comprehensive Economic Partnership (RCEP) – which I hope will be completed before too long - will contribute significantly to regional and global economic cooperation and integration. The TPP and RCEP should be seen as complementary rather than as competitors. All the East Asian members of the TPP are also in the RCEP and some have bilateral free trade agreements with both the US and China. I hope China will keep an open mind about the TPP and will consider joining it when it is ready. At some point during this stage of China’s reforms, the TPP could be useful instrument to help China make difficult structural changes, just as the World Trade Organisation was useful at an earlier stage of China’s reforms.

7. A key driver of long-term economic growth is technological innovation. And at a time when resources are becoming scarcer, better use of technology to increase productivity is important. One area that has seen rising investment and innovation is Financial Technology (Fintech). It is disrupting the way businesses operate and reshaping the way financial services are structured and consumed. This drive for innovation and search for new ways to create value very much capture the spirit that should prevail as we navigate the complexities and uncertainties in the world today. It is also vital to inculcate the value of sharing that transcends stakeholder groups in a multipolar world, to ensure that opportunities are available to all, and enable inclusive growth.

8. The plenary and breakout sessions today will discuss in greater depth these issues that I have outlined, and focus on the strategies and approaches to deepen cooperation and integration for sustainable growth and development in the region. We have an interesting day ahead of us, with pre-eminent speakers on our panels and very distinguished guests. I hope all of you will participate actively and fully in the discussions.

9. You have not come here to listen to me and I do not want to take up too much time, but I cannot conclude without mentioning the two most significant developments that have occurred since the first Singapore Forum was held. In South East Asia, the establishment of the ASEAN Community at the end of 2015 was an important milestone in ASEAN integration, of which economic integration is the most important pillar. We have done well in this first phrase which saw the reduction of tariffs on goods to zero in the more advanced ASEAN economies. The less developed ASEAN economies have another two years to meet the targets. But the more difficult tasks of reducing non-tariff barriers and dealing with services lie ahead if ASEAN is to achieve its goal of becoming a common market and production platform. Economic integration is never politically easy anywhere and the domestic politics of several key ASEAN members is becoming increasingly complex. We cannot take forward movement for granted but must work hard to muster the political will to do so.

10. Last year also saw the establishment of the Asian Infrastructure Investment Bank (AIIB). The AIIB will complement existing regional and global financial institutions in infrastructure development and financing in Asia. The boost in infrastructure investment will improve lives and economies across the region. The AIIB is one of the key instruments to implement President Xi Jinping’s vision of ‘One Belt, One Road’ (OBOR). This bold and ambitious vision could radically transform global trading patterns and the world economy. OBOR is still in the very early stages of implementation and it will be a work in progress that will take many decades to realise its full potential. The path ahead may not always be smooth. Still, the ‘road’ that runs through South East Asia is already under construction. At present this is largely through bilateral arrangements for various infrastructure projects between China and several ASEAN members, but the needs are so great that we hope that AIIB will serve as a means of mobilising broader sources of finance and that countries like Japan and the US will find means to participate even though they are not yet – and I stress ‘yet’ – in the AIIB. For example, I see no reason why some infrastructure projects in South East Asia and elsewhere cannot be undertaken by consortia of American, Japanese, Chinese, Indian, Australian and other companies underwritten by the AIIB. In uncertain times, it is in everybody’s interest to spread risk.

11. But the most potentially revolutionary part of OBOR is in the north – the ‘belt’ that will link East and Central Asia to Europe, not merely recreating ancient trading routes but, more importantly, substantially expanding them and creating major new economic opportunities beyond just trade all along its route or routes as I think there could be more than a single ‘belt’. Singapore has a stake in the eastern end of one of the ‘belts’ through our western region project in Chongqing that we agreed with President Xi Jinping when he visited Singapore last year. Wherever the ‘belt’ or ‘belts’ run, they must pass through Kazakhstan which will play a major role in the development of OBOR. I am therefore extremely pleased and honoured that His Excellency Kassym Jomart Tokayev, Chairman of the Senate of the Parliament of Kazakhstan is with us today and has agreed to deliver the opening address. Mr Tokayev has had a very long and distinguished career and as his biography is available in the programme booklet, I will not repeat all the important appointments he has held except to say that he spent an early part of his career here in Singapore and even studied here. So welcome back, Your Excellency, and the floor is yours.

12. Your Excellency, please.