KEYNOTE ADDRESS BY PROF S JAYAKUMAR, MINISTER FOR LAW AND MINISTER FOR FOREIGN AFFAIRS, AT THE SINGAPORE INTERNATIONAL FOUNDATION'S (SIF) SINGAPORE STUDENT SYMPOSIUM, 18 JULY 2001, RELC AUDITORIUM, 9.00 AM
"SINGAPORE, THE REGION AND BEYOND"
1 First, let me welcome to Singapore all the participants from abroad. Through this annual symposium, SIF has set a good tradition of encouraging and challenging students to discuss contemporary issues. While it may seem that global developments might not have immediate direct impact on your lives as students, there is no doubt that no one is spared from change in our highly globalised world. Southeast Asia has seen tremendous change in the past few years. The world beyond Asia is also seeing significant developments. Therefore, the theme for this year "Singapore, the Region and Beyond" is an apt and timely one.
What is important to Singapore?
2 How does Singapore view the region and beyond? To put in context the issues that are of key concern to us as a country, let me first say that we need to recognise certain conditions crucial to our survival and our future development. These include peace and security, continued economic growth and social stability. This may seem obvious enough, but it is not so obvious as to how a small country like Singapore should go about achieving these goals?
3 Politics, economics, national, regional and international security are all intertwined, particularly so for a small city-state like Singapore. Politically, Singapore needs to be outward looking, continually engaging partners both in our immediate region and beyond to stay current and relevant. Economically we are tied to the global marketplace, and Singapore's fortunes are affected by the ups and downs in many parts of the world. Whatever the state of the global economy, we must continually reinvent ourselves and remain attractive to international investors. Our peace and security are also contingent on larger regional and international environment. Hence we never shy away from playing our part to promote a stable and balanced strategic environment in the Asia-Pacific. With these basic tenets as guiding principles, Singapore must adapt to a global environment over which we have very little influence.
A Look at the Region and Beyond
4 The world at the turn of the millennium has witnessed significant, and in some cases tumultuous, change. In our region, you would have read or heard numerous commentaries on Indonesia and the 1997 financial crisis. The financial crisis brought truly deep-seated impacts, some of which still reverberate in Asian countries today.
5 Post-financial crisis Indonesia is still facing a host of challenges. The economic impact of the crisis brought about upheavals in society and polity. Indonesia's leadership must now deal with fundamental questions about the relationship between the parliament and the presidency, the role of the military, the place of religion and minorities in the polity, separatist tendencies in some provinces, and the relationship of these provinces to the centre. There is an air of expectancy surrounding the leadership transition in Indonesia. The problems are complex and a new government would not be able to solve all of them immediately. If stability is restored, it might take some years for Indonesian politics to reach a new equilibrium.
6 There are also new governments in the Philippines and Thailand, brought into power by constituencies which were looking for change. Both governments will hence be primarily preoccupied with the various domestic challenges that face them, including the restoration of economic confidence.
7 With three of its founding members facing domestic challenges and the region experiencing an economic slowdown, ASEAN is experiencing an interregnum, during which its credibility and cohesiveness are being severely tested. Even without the financial crisis, ASEAN's expansion to 10 was a challenge in itself, calling for consolidation to allow the newer members to catch up economically. With these additional challenges ASEAN currently faces, it needs to double its efforts to regain its lost lustre.
8 In Northeast Asia, Japan's Prime Minister Junichiro Koizumi faces the challenge of implementing reforms to lift the country out of its economic doldrums. Despite its difficulties, Japan made significant efforts to help countries during the financial crisis, and remains an economic power both in the region and globally. We believe that when Japan's economy recovers, it will once again be a prime engine of growth for Asia. Japan also plays a crucial role in Asia by helping anchor the US presence in the region through its security alliance with the US. This has ensured a peaceful environment, conducive to development and growth.
9 South Korea undertook deep reforms after the financial crisis. The reformed South Korean economy is better-off and poised to attract further foreign investment. President Kim Dae-Jung's "Sunshine Policy" has achieved significant breakthrough in inter-Korea relations. Tensions have eased, although the momentum of inter-Korean relations seems to have slowed somewhat after the historic summit between Kim Dae-jung and Kim Jong-il. It is important for the international community to continue to engage North Korea and support dialogue between the two Koreas so as to ensure peace and stability on the Peninsula.
10 China's entry to the WTO appears increasingly imminent. This will bring both economic opportunities and challenges to the rest of Asia. As China's great economic potential continues to develop, Northeast Asia has become more attractive to global investors who are still fighting shy of the current uncertainties in Southeast Asia.
11 Developments which affect Asia are also worth noting. One key factor is the new relationship between China and the US under the George W Bush Administration. US policy on Asia, and in particular on China, appears to be still evolving, and the relationship is yet to be fully defined. Whatever the policy, the state of those relations will impact on the triangular relationship between the US, China and Japan which has to date provided balance in the strategic landscape in the Asia-Pacific.
12 Beyond Asia, Europe is preoccupied with domestic and regional developments. European leaders also need to revitalise domestic and regional economies, while tackling the challenges of European integration and monetary union. How then do we interest European investors in Asia if they continually get bad news from the region?
13 Looking further afield, we should not overlook Latin America, where the understanding and awareness of Asia is still low, and vice-versa. We need to bridge the geographic and psychological gaps to bring about greater awareness and cooperation with Southeast Asia.
14 This quick look at our region and beyond is by no means exhaustive. There are many more complex issues which I have not elaborated upon, such as the protracted difficulties in the Middle East, in Africa, and in the Balkans. These are issues which do not always receive great coverage in the Asian media, but can affect us should the situation escalate. Even in our region, potential flashpoints still exist also. These include the territorial claims in the Spratlys islands and the South China Seas, India-Pakistan border tensions, and the Cross-Straits situation. Even though they may not have made headlines in a big way in recent times, these unresolved issues can flare up again if the strategic landscape suddenly changes.
15 In the past months, we have witnessed the slowing of the US economy. Previously, an economic slowdown in one part of the world has been compensated for by growth in another region. This time, the other economic engines in Europe and Japan are also facing slowdowns and there are challenging times ahead for the global economy. Troubled economies are a potential source of instability and conflict, both within and between countries. These difficulties must be managed carefully if we are to avoid conflict and maintain a global peace and stability which would aid economic recovery.
16 Having given you quick snapshots of the situation in the various parts of our world, I come back to the question of how does Singapore work towards sustaining peace and security, economic growth and social stability in the midst of such challenging times?
Strategies to cope
17 Singapore weathered the financial crisis well because of our strong economic fundamentals and prudent regulatory policies. But our economy is intimately tied to that of the region and also to the world beyond. In this respect, ASEAN is of primary importance to Singapore, both politically and economically. We therefore have to do what we can to help our region, and do this simultaneously at various levels.
18 As the ASEAN Foreign Ministers prepare to meet in Hanoi next week, the need to restore the confidence of the international community and investors must remain high among our priorities, along with enhancing the integration of ASEAN members. These regular meetings are useful in facilitating an exchange of views and a better understanding of each others concerns, thereby keeping ASEAN's dialogue partners engaged and involved in Southeast Asia for the long term.
19 One key factor is to keep existing ASEAN projects on track, such as the ASEAN Free Trade Area or AFTA. If ASEAN is able to meet the trade liberalisation targets it has set for itself, it would send a good signal to investors that our region means business.
20 Another factor is closer integration between older and newer ASEAN members. ASEAN leaders endorsed the Initiative for ASEAN Integration (IAI) at the Singapore Summit last year. This project provides the framework for older ASEAN members, as well as ASEAN dialogue partners, to help the newer ASEAN members integrate into the community. Under the IAI, Cambodia, Laos, Myanmar and Vietnam have an active role in identifying the types and areas of assistance each country desires. Singapore's various contributions under the IAI amounts to some S$50 million, including 60 scholarships per year for ASEAN students at Singapore universities. It is our hope that these scholarships will build strong bonds of understanding and friendship among the younger generation which would stand ASEAN in good stead for the future.
21 Even as we work towards our goal of an integrated ASEAN, we have to be realistic. Not all members can progress at the same rate. While ASEAN rebuilds its lost shine as an Asian economic dynamo, those members which are able, should continue to keep the international investor community engaged and to sustain global interest in ASEAN.
22 It is with this approach that Singapore embarked on bilateral negotiations for Free Trade Agreements, or FTAs, with various key economies in our region and beyond. As ASEAN goes through a period of difficulty, the need to keep the key economic players in our region and the world becomes even more pronounced. If they lose interest and seek trade and investment elsewhere, it would be difficult to persuade them to return once our region falls off their radar screens.
23 Singapore concluded an FTA with New Zealand in December 2000, and is currently in negotiations with Mexico, Japan, the United States, and Australia. Recently, Thailand also embarked on explorations for FTAs with New Zealand, Australia and Chile . You might have seen in the media some comments questioning such bilateral FTAs. But others have recognised the value of keeping up the momentum of bilateral and inter-regional trade liberalisation, as a means of catalysing the larger multilateral liberalisation framework under the WTO.
24 Because Singapore is in a position to do so, we are playing our part in facilitating the integration of ASEAN, while simultaneously keeping key global economies engaged in our region through FTAs. These parallel processes are WTO consistent and have a complementary effect to restoring a good economic climate in our region.
25 Aside from the economic arena, Singapore also has to stay engaged with regional and global players in political and security issues. But the rationale for economic engagement is closely related to the strategic security environment. If our economic linkages with key regional and global players are strong, they would take a greater interest in contributing to the peace and security of our region. Again, one of the most important forums through which to achieve this objective in our region is ASEAN.
26 Over the years, ASEAN has played an instrumental role in establishing useful forums like the ASEAN Regional Forum (ARF), the Asia-Europe Meeting (ASEM), the ASEAN+3 process, and the Forum for East Asia-Latin America Cooperation (FEALAC). Each forum serves a unique and distinct purpose in facilitating inter-regional understanding and cooperation. In the case of the ARF, ASEAN provides the unique middle-ground for confidence-building dialogue between interlocutors which would otherwise not have a chance to discuss sensitive security and strategic issues in a neutral setting. This has facilitated greater understanding between key strategic players and kept them engaged in the region.
27 Both the Asia-Europe Meeting and the Forum for East Asia-Latin America Cooperation were ASEAN initiatives to create more substantive linkages with Europe and Latin America respectively. Their establishment demonstrated the political will and support of the two regions for greater cooperation with Asia. Ongoing projects help contacts and interactions flourish between the peoples of Europe, Latin America and Asia. Singapore played a key role in seeding these initiatives.
28 Within Asia, ASEAN has also strengthened ties with its Northeast Asian neighbours through the ASEAN+3 process. This framework has provided for economic, cultural, social and other forms of cooperation through which linkages are strengthened between the two sub-regions. Northeast Asia has emerged stronger and more resilient from the economic crisis, and can be a source of investment and expertise for the ASEAN countries.
29 In the immediate future, Singapore has to continue working with fellow ASEAN countries to ensure that the momentum is kept up in these existing mechanisms for cooperation. This would contribute towards restoring ASEAN a partner of choice in Asia both for governments and international investors.
Conclusion
30 In concluding, let me say that I have been able to only give you a wide snapshot of the strategic landscape in our region and beyond, to which Singapore and other countries must constantly adapt and react. One of the values of this symposium is the significant number of participants from foreign universities. I hope you will have a candid exchange of views with each other about some of these issues and events.
31 Whatever challenges develop in our region and in the world, one of the best ways for governments to deal with them has been to keep our channels of communications open, and to meet and exchange views with other leaders. By deepening our understanding of each others' situation, domestic constraints and regional context, we are better able to work together towards resolving any problems. In the same way, I would encourage you to share your views of regional developments and help your friends understand your own national perspectives.
32 The task of strengthening relations between nations cannot be just confined to governments or diplomats. In fact, the bonds of friendship and understanding can often be stronger when they are built at the people-to-people level. This symposium presents a good opportunity for this. I wish you fruitful and enjoyable discussions over the next two days and I would be happy to discuss any of these points further with you during the question and answer session. Thank you.