Keeping Singapore relevant in the face of global challenges, fault lines

The world is at an inflexion point and nations will have to adapt nimbly to stay on top, said Minister for Defence Ng Eng Hen yesterday, as he outlined three major fault lines that could drastically change social and political systems. These are globalisation versus nationalism; global rules versus the regional order; and collective good governance versus individual rights. Singapore must face these challenges with the “Singapore spirit” that the nation just celebrated during its Golden Jubilee, he added in a speech at Yale-NUS college yesterday. Below is an excerpt from his prepared speech.

Let me begin with an anecdote taken from a setting not very different to today’s Yale-NUS forum. It is from a parliamentary speech by then-Prime Minister Goh Chok Tong in 2003: “In 1966, I went to Williams College in the US to do a Masters programme in development economics. There were 20 of us in the class.

“We came from 16 Third World countries. Besides Singapore, the Asian students came from Malaysia, the Philippines, India and Pakistan. The African students were from Uganda, Tanzania, Kenya, Liberia, Ethiopia and Egypt. Mexico, Honduras, Bolivia and Colombia represented Central America. And from Europe, we had Yugoslavia.

“We were 20 young, eager beavers, with great dreams for our countries. But unfortunately, 38 years later, those dreams have disappeared for many.

“Looking at the political and social developments in each of the 16 countries represented in my class ... I think only three of the countries have succeeded beyond a doubt. They are Malaysia, Mexico and Singapore. They have brought about development and given their people a better future. Perhaps I should add India to this list, now that it has begun to open up its economy and some results are showing.

“The remaining 12 countries have either made little progress, or worse, gone backwards. Some have really fallen into a valley of gloom.

“... The fate of my classmates and their countries has a sobering effect on me. It could well have been my fate and the fate of Singapore. Fortunately, as of now, among the 16 countries represented in my class, Singapore has come out on top.

“But in 1966, if my professors in Williams College had done a ranking of the 16 countries — which ones were most likely to succeed by the end of the 20th century — I think they would have got the answer wrong, especially with regard to Singapore.

“Indeed, in the 1960s, many pundits wrote off Singapore because we were an artificial country. We were, and still are, only a dot on the map. We had no natural resources, no hinterland. We were a migrant society with no sense of nationhood. There was communal tension and distrust.”

I share this anecdote from then-PM Goh, certainly not from any sense of hubris or Schadenfreude for countries that have not succeeded, but with the acute realisation that history has no favourites, and in fact quite heartless and indifferent to tomorrow’s winners and losers.

Indeed repeatedly, the more likely trajectory for erstwhile empires and successful nations has been a zenith, followed by that inevitable decline or a waxing and waning of lesser fortunes.

Why do some nations succeed while others are less so, or fail altogether? That simple but deeply impactful question has been the root of inquiry for thousands of academics and the subject of many books for centuries. It’s been nearly 20 years since I first read Harvard Prof David Landes’ The Wealth and Poverty of Nations.

To this day, two anecdotes from his book stay in my mind which illustrate so vividly, man’s inherent antediluvian instincts. When the sickle was introduced to South-east Asia, the rice farmers still preferred their finger-knife, which they used one stalk at a time, ostensibly to honour the rice spirit.

When management insisted that labourers in India used the wheelbarrow, labourers who were so used to hauling heavy soil in a basket on their heads, they put the wheelbarrows on their heads too! We are amused at these egregious examples, but are no less guilty in resisting progress, in ways small and large. Nations that want to stay on top are those that can change and adapt nimbly.

The ability to change and adapt seems to be so relevant today because I believe that the world as we know it, is at an inflexion point. We do not know what shape it will take in 2050 but of this, we can be certain. Some fundamental rules will be changed and with it, the fate of nations.

The last acute inflexion point was at the fall of the Berlin Wall in 1989. It marked an end to the Cold War, one of the greatest conflicts of ideas in human history — communism versus capitalism.

That conflict brought the world to the brink of global disaster and destruction during the Cuban Missile Crisis with the threat of nuclear annihilation. In the end, capitalist democracy prevailed and was even hailed as “the end of history” but of course, that was an overly optimistic and exaggerated projection.

Instead Hegel’s dialectic was at work, both socially and politically. Anti-theses to imperfections and perceived injustices with the status quo are resulting in new forms of social and political compacts across the globe.

Even a resurgence of extreme right ideologies, unthinkable post-WWII — neo-Nazi and alt-right movements, extremist religious groups, xenophobia, authoritarian regimes, potential trade blocs, to name some. Within countries, marginal groups are now part of the political mainstream — Syriza in Greece and the Sweden Democrats, are examples.

Externally, too, alliances are shifting. On his trip to Beijing, Philippines’ President (Rodrigo) Duterte upended 65 years of a treaty with the United States when he declared to an audience of Chinese and Philippine businesspeople: “I’ve realigned myself in your ideological flow and maybe I will also go to Russia to talk to (President Vladimir) Putin and tell him that there are three of us against the world — China, Philippines and Russia. It’s the only way.”

Amid these changes, the tragedy of the global commons which the world averted post-WWII, may yet occur for climate change laws, even trade due to more protectionist measures but already impacting humanitarian relief for immigrants and refugees. Your generation will have ringside seats to not only interesting times, but dramatic interludes where the world is being reshaped.

Let me cast some competing themes that will affect your generation in the decades ahead. The tension at these fault lines is under severe pressure.

If the plates buckle, social and political tsunamis will be created. I will list three fault lines for your consideration — globalisation versus nationalism; global rules versus the regional order; and collective good governance versus individual rights.

Globalisation vs Nationalism

At the heart of the argument, whether for countries or for each individual, is this simple belief: If globalisation does not benefit me, why should I support it?

At the macro level, the advantages of globalisation are enormous and without doubt. Global trade has expanded and that is always good but more importantly, more countries are trading and sharing in that wealth creation.

As a result, average real incomes per capita globally rose by 460 per cent between 1950 and 2015. The proportion of the world’s population in extreme poverty has fallen from 72 per cent in 1950 to 10 per cent in 2015. It has made people on earth live longer — life expectancy at birth has risen from 48 years in 1950 to 71 in 2015, quite an astonishing jump.

But one of the more maligned features of globalisation has been income inequality. French economist Thomas Piketty wrote a book Capital in the Twenty-First Century, which sparked considerable debate — on the distribution of that wealth created. So even if everyone’s lot has gotten better, Piketty gave evidence that the top share of overall income going to the top 1 per cent in the US (and other Anglo-Saxon countries) has risen sharply since the 1970s, to levels not seen since the 1920s.

This, coupled with the global financial crisis in 2008, where it was felt that those responsible were not held accountable, let alone punished, tainted the widespread benefits of globalisation. It eroded the trust of the people in the system. But it is at the individual level, in the community, where stresses of globalisation really show up in two facets — immigration and jobs.

For the US, the de-facto champion of globalisation, entire manufacturing towns and cities like those in the Rust Belt, along the northern parts of the US have gone into decline and with it, median real wage in the US stagnant for decades.

From an economic view, migration facilitates the benefits of globalisation. Skills go where they are best used and the entire system benefits. Many studies objectively show that migration provides net benefits to recipient countries but it is very hard to convince a worker who has lost his job of these benefits.

These developments in part explain Brexit, the Trump victory, and the rise of the anti-European Union and anti-immigration parties in Europe.

An African-American Trump supporter told protesters at a Black Lives Matter rally: “I’m voting for Trump because I want jobs, not welfare ... I want a job. I want a future that’s mine.” A British mother in favour of Leave (European Union) told the Guardian newspaper: “I’m just fighting for my little girl to get a place in primary school. It’s all the foreigners, there are too many.”

The backlash against globalisation is emotional and will take time to resolve.

Global Rules vS Regional Order

The second fault line begins with another simple question. Who sets global rules? Of all the historical hegemonies, the US was the odd one out, for a few reasons. For about two to three decades, the US was the sole global power, indeed a “hyper-power”. Never in history did any one nation possess that commercial heft and military reach of the US — not the Mongol, Roman, Chinese and British empires, etc before it.

At the end of WWII, the US accounted for an estimated 40 to 50 per cent of world GDP. The US was the top trading economy in the world until three years ago. Even today, the US defence spending is more than the next seven countries after it combined.

But the US was also unique as a hyper-power in its ideology. The expansion of its global reach after WWII was preceded almost half a century before that imbued by President Woodrow Wilson predicated on American exceptionalism. Wilson’s use of phrases like the “idea of America is to serve humanity”, “for the elevation of the spirit of the human race” and “to make the world safe for democracy” to underpin its foreign policy, were a significant departure from previous empires that sought territory or influence for more mundane mercantilist motivations.

This mix of global might and evangelistic fervour to spread an ideology to perpetuate a set of universal ideals, even to entrench a common global system, gained much impetus after the ravages of WWII. But it was also simply because the US could, with no single country to challenge that dominance.

As Joseph Nye observed, the Bretton Woods institutions, loans to the UK, Marshall Plan to rebuild Europe, Nato (North Atlantic Treaty Organisation), the events in South Korea and the security treaty with Japan, all occurred on the back of US power. Not that these democratic ideals and efforts by the US always achieved good or desired outcomes or that the US itself lived up to the high standards of this “exceptionalism”. Whatever the shortcomings, by the 1970s, economic globalisation had recovered to levels it had reached before being disrupted by WWI in 1914.

I do not think anyone doubts the benefits of a closer world based on clear rules adhered to by everyone. But historically, it has been regional politics that exerted a dominant force.

I attended the Manama Dialogue in Bahrain recently. In that part of the world, their regional order since historical times and today has been the result of a power balance between Iran (Persia), Iraq (Babylon and Assyria), Egypt, Turkey (Ottoman Empire) and relatively recently, Saudi Arabia. From time to time, external powers — British, Russian, American, French — have redrawn the canvas. But look deeper at the palimpsest, and the old traces remain.

In this interplay between global and regional powers, how will our region change as bigger countries like China, India and Indonesia rise? Will regional rules change? For example, can a global system that governs trade, commerce and security interests be maintained, within a multi-polar world?

Collective Good Governance vs Individual Rights

The third fault line is best depicted through leaders like (Vladimir) Putin, (Donald) Trump, (Rodrigo) Duterte and Xi (Jinping) — who are strong and some even polarising leaders. Xi is now a core leader, on par with Mao and Deng. Trump won the US elections despite running a highly contentious, even divisive campaign. Polls put Putin’s approval at 86 per cent and Duterte’s at 83 per cent.

The Nordic countries were held up as examples of good governance that achieved the balance between social progress, inclusiveness and equity, with the right emphasis on universal rights.

Yet, they also have seen political upsets recently. In Sweden, the far right, anti-immigrant Sweden Democrats have made great strides in electoral votes to become the third largest political movement of that country. In nearby Denmark, the anti-immigrant and anti-EU Danish People’s Party is now the second largest in Parliament.

How does one explain these trends against the call for more inclusive policies and a global outlook? Many of you here will debate the various challenges before us based on the need to be more accepting of different affiliations — regardless of nation, race, religion, political affiliation, social classes, migrants, sexuality, etc.

One explanation has been that populism is on the rise, meaning that individual interests — rather than the collective good — must now be given greater attention. This of course poses the classical dilemma that beyond a point, the two cannot be reconciled. If all individual interests are taken into account, the shared interests must necessarily shrink.

That kind of domestic politics will polarise communities as we are witnessing today. It may force political parties to campaign on the varied interests of different groups, hoping to win the popular vote by slim margins or through coalitions, but at the expense of an inclusive ideology and at the price of an ever-reducing common space.

Establishing Singapore’s Place in the 21st Century

Amid these changes for the coming decades, Singaporeans here have to ask ourselves more prosaic but equally impactful questions, as our founding leaders did: How do we keep Singapore relevant and ensure good jobs here for Singaporeans? What roots us even as more opportunities increase for our younger generation overseas? How does a small state like us help shape the world we live in? What role can we play? How do we avoid, the divisiveness that populism brings in its aftermath?

For Singapore, we must face these challenges with the “Singapore spirit” that we just celebrated during our Golden Jubilee. We are certainly in a much stronger position than our founding generation. Our schools, hospitals, housing, public transport and security agencies are among the best in class.

We have developed a core Singaporean identity based on values of integrity and meritocracy with racial and religious harmony on this island home. Over the years, we have built up reserves that will carry us over difficult periods, if we need them. We have developed strong partnerships with other countries and our international standing is high.

I end with a quote from Mr Lee Kuan Yew: “A nation is great not by its size alone. It is the will, the cohesion, the stamina, the discipline of its people and the quality of their leaders which ensure it an honourable place in history.”

I wish your generation these qualities to ensure Singapore’s place in the 21st century. Make Singapore a top city in 2050 to realise your aspirations.