Skip to main content

Advertisement

Advertisement

Help blunt stresses of globalisation, employers told

SINGAPORE — This year may well go down as the start of the great backlash against globalisation, with the world falling apart into fragmented trading blocs, if countries fail to manage the stresses that come with it, said National Development Minister Lawrence Wong yesterday.

People walk past office buildings in Singapore’s business district. Reuters file photo

People walk past office buildings in Singapore’s business district. Reuters file photo

Follow TODAY on WhatsApp

SINGAPORE — This year may well go down as the start of the great backlash against globalisation, with the world falling apart into fragmented trading blocs, if countries fail to manage the stresses that come with it, said National Development Minister Lawrence Wong yesterday.

And while governments will have to address anxieties over livelihoods, businesses also must do their part in exercising their moral obligation by going beyond “tokenism”, and do more than just “donating millions to charity or installing solar panels on the rooftop of buildings”.

Businesses, he said, have to ask themselves basic questions such as whether they treat employees fairly, whether they exploit the vulnerable and less fortunate, whether they harm the environment and whether they compromised on consumer welfare and safety when selling their products and services.

With the consequence of higher geopolitical risks “everywhere” should countries fail to manage the fallout from globalisation, businesses must do more to address the erosion of public trust in institutions, stressed Mr Wong, who was speaking at the Responsible Business Forum held at Marina Bay Sands. “Individuals in businesses have the moral obligation to ensure that our society and economy continue to grow in a responsible way,” he said.

Addressing an audience of over 750 sustainability and business delegates, Mr Wong said several factors are fuelling deep discontent with globalisation and provoking nationalistic and protectionist sentiments worldwide.

Since the 2008 global financial crisis, growth around the world has been sluggish, as central banks have tried easing monetary policies but have not been able to stimulate demand. In some ways, the “flush of global liquidity” has made things worse by distorting asset valuations and contributing to asset bubbles and unsustainable capital flows, he said.

Rapid technological change has also impacted some industries and threatened livelihoods.

Countries are facing job losses and high unemployment, with the “broad middle” class of society not feeling that their lives have improved. Their incomes are stagnating while “top incomes are zooming ahead”, said Mr Wong, who is also Second Minister for Finance.

Noting the surprises and upheavals this year, Mr Wong said few predicted at the start of the year that the United Kingdom would be leaving the European Union, or that Mr Donald Trump would be President of the United States. The rise of anti-globalisation politics could also play out in elections coming up in Europe, he added.

Yet, an “open globalised” system has facilitated free movement of goods and capital, as well as economic interdependence, in the decades since World War II, and has brought benefits to many developing countries including Singapore. Globalisation is not irreversible, he said, noting that before World War I, there was a global movement of people and goods, but sentiments shifted and America imposed trade tariffs on imports, sparking retaliation from other countries and plunging the world into depression.

The current system is far from perfect and the question now is whether countries can work to improve it. “If we fail to do so, then 2016 may well mark the start of a generational shift,” said Mr Wong.

“It could be the beginning of the unwinding of globalisation, with the world falling apart into fragmented trading blocs, with more protectionist barriers, and higher geopolitical risks everywhere... This will be the big question of our time and the major uncertainty we will have to confront in the coming years.”

Governments have to address anxieties of workers but also be honest about what practical state intervention can or cannot achieve. It is easy to sell populist measures that sound good but they may cause more harm or stir up xenophobic sentiments in societies, he said.

Turning to businesses, Mr Wong said a candid assessment is that they can do much better. Scandals such as automotive maker Volkswagen’s emissions cheating and Toshiba and Lotte’s financial and accounting woes play a role in eroding confidence in institutions, he said.

Noting that some have called for tighter rules for businesses, Mr Wong said that governments will need to have regulations that are effective and mitigate market failures, but do not stifle innovation. “It’s not just about more regulation or more complex regulation — that may simply lead to the rules being gamed in more complex and unpredictable ways,” he said.

At the event, United Nations Environment Programme executive director Erik Solheim said he aims to reach out more to businesses during his tenure.

The private, public and government sectors need to sit down together to figure out joint programmes to work on, said Mr Solheim, a Norwegian who took on the role this year. Cruise and shipping firms could be part of the discussion on ocean pollution, while wildlife protection is relevant to the tourism industry, for instance.

Some businesses are also ahead of governments in environmental commitments, said Mr Solheim. Wilmar, the world’s largest palm oil trader, for example, has made an “enormously important pledge” of zero-deforestation.

Companies on the stock exchange should disclose their environmental risk alongside their financial risk, he said. Sustainable development needs to be conveyed in understandable language, focusing on issues people can “feel and breathe”, he added.

Read more of the latest in

Advertisement

Advertisement

Stay in the know. Anytime. Anywhere.

Subscribe to get daily news updates, insights and must reads delivered straight to your inbox.

By clicking subscribe, I agree for my personal data to be used to send me TODAY newsletters, promotional offers and for research and analysis.