Singapore will not engage in geopolitical conflicts and will instead take positions that support the rule of law, the country’s Education Minister Chan Chung Sing said at the Morgan Stanley Asia Pacific Summit in Singapore on Wednesday.
He said the world must remain interdependent despite pressure to break up, as any kind of fracture would make individual countries “suboptimal” and suffer economically.
“With interdependence comes risk, but a fragmented world with less interdependence, where people and major countries believe they can improve their own security and indirectly exacerbate another country’s insecurity, cannot be a win-win situation,” Chan said.
“Global companies have a voice and they need to make their voice heard that you prefer an integrated world to a fragmented world,” said Singapore’s Education Minister Chan Chung Sing (pictured here in 2019).
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“It’s important to remember that a more interdependent world is a safer world. But today, because of both domestic and global pressures, the temptation is to think that if the world splits into two different blocs, each of the different blocs is safer.”
Chan said that if fragmentation continues, countries and companies will perform less than optimally “instead of… enjoying the rapid growth of the past 50 years based on a globally integrated system.”
Now, the rules-based international security and trade order is once again “strained” and cannot be “taken for granted”, he added, citing the example of the Cold War.
He cited Russia’s war in Ukraine and the World Trade Organization’s dispute settlement crisis as some of the cracks in the system.
Speaking directly to business leaders and investors at an investment conference, Chan called for global integration.
“Global businesses have a voice and they need to make their voice heard that you prefer an integrated world to a fragmented world,” Chan said.
He said Singapore would also play its part in building bridges and “cooperation” between the fragmented blocs.
“We believe connectivity, stability, progressiveness, cohesion and trust will be higher,” Chan added.
Fragmentation is beginning to undermine the stability of the global economy, Morgan Stanley Investment Management said in a separate note on Wednesday.
For example, deglobalization and the disruption of supply chains are fueling inflation, said Andrew Harmston, the firm’s senior portfolio manager.
“World trade as a percentage of GDP has grown very rapidly in the past, which has contributed to very low inflation. But the trend to shift elsewhere will tend to reduce trade,” he said.
According to the Hinrich Foundation, while terms like “friendship” have been added to the lexicon of US trade policy and that of other countries such as Japan, little has been revealed about what they mean.
“If governments seek to intervene in the supply chain, they need to make sure they are better aware of the risks than companies are. But it is unclear which market failures the friendliness policy will address without fracturing the global trading system,” said Halit Harput, author of the Hinrich report.
The “best guarantee” for the survival of a small country
Singapore will continue to refrain from taking sides, but will take consistent positions, Chan said.
“In the last months, when Russia moved into Ukraine, we opposed it. People ask, is this a pro-US move? Or is it an anti-Russia move or an anti-China move? No. No. When the US moved into Grenada, we When USSR moved into Afghanistan, then we oppose,” said Chan.
“We believe that the rule of law, especially on the international front, is the best guarantee for the survival of a small country.”
“And this is not only true for Singapore, but I will suggest that it is true for all ASEAN countries as well.”
And while US President Joe Biden and Chinese President Xi Jinping exchanged positive words on the sidelines of the Group of 20 meeting on Monday, Chan said it was important to watch for further action.