Distinguished Guests,
Ladies and Gentlemen,
1 A very good morning. Thank you for inviting me to speak to you this morning. To our foreign friends, welcome to Singapore. My heartiest congratulations to the Center for Strategic and International Studies, Nikkei, and the Lee Kuan Yew School of Public Policy for putting together the Asia-Pacific Geo-Economic Strategy Forum.
US and Japan in the Asia-Pacific
2 It is fitting that CSIS and Nikkei are working with the Lee Kuan Yew School of Public Policy on this forum. Singapore has long-standing partnerships with the US and Japan, key players in the Asia-Pacific who are our largest and second-largest foreign investors respectively. Indeed, American and Japanese businesses have been important investors in this part of the world, spurring the growth and industrialisation of many countries in this region. For nearly 70 years, the US-Japan Security Alliance has also been the cornerstone of regional stability. It anchors the US’ presence in the region. This force of stability has allowed the region to focus on pursuing growth, and for emerging economies to rise and share in each other’s prosperity.
Outlook for the Asia-Pacific
3 Today, the Asia-Pacific is brimming with tremendous potential. We are home to the world’s three largest economies, namely the US, China and Japan. We produce close to half of the world’s output, and are projected to grow 5.5% this year, far exceeding the global average of 3.5%. With solid fundamentals, our growth is set to continue. This is good news for countries in the region, for a rising tide lifts all boats.
4 The story of this region is unfolding against the backdrop of the defining geopolitical event of our times. China is growing at a phenomenal pace, and this has offered many opportunities for regional countries. Today, China is the largest trading partner of almost all economies in the Asia-Pacific. Correspondingly, China’s influence has increased both economically and politically. China is a keen player and is keen to play a bigger role in regional and global affairs, and has conceived and promulgated initiatives such as the Belt and Road Initiative and the Asian Infrastructure Investment Bank, which Singapore supports. The Chinese are keenly aware that they have to keep these initiatives open and inclusive, and bring about mutual benefits for the countries concerned. Given China’s growing influence in the region, there is also much expectation for China to play a constructive role in contributing to the region’s development, and managing the region’s challenges.
5 Indeed, there are several challenges that the region will have to navigate moving forward. For one, common threats to regional security are becoming more pervasive, and will require concerted and coordinated trans-national efforts to manage.
DPRK
6 A major concern is continued tensions in the Korean Peninsula. The DPRK is conducting nuclear tests and missile launches with increasing frequency. We are all deeply concerned by these provocations, which undermine the hard-earned peace and stability of the region. Singapore has condemned the DPRK’s actions, and hopes that a peaceful resolution can be reached sooner rather than later. International cooperation and commitment is crucial, and Singapore is doing our part in implementing our obligations under the United Nations Security Council Resolutions fully and faithfully. Our hope is for the early resumption of meaningful dialogue among the main stakeholders, so as to defuse the current tensions on the Korean Peninsula.
Terrorism and Extremism
7 Threats to regional security have come increasingly from non-state actors as well. Terrorism and violent extremism have spilt easily over borders and spread all over the world. We in Southeast Asia are no less susceptible to such threats. On our part, Singapore is working with like-minded countries and stepping up efforts to share information and implement both upstream and downstream measures to prevent terrorism and extremism from taking root. That said, we recognise that this threat is unlikely to go away in the short term. We are thus getting our population psychologically prepared for such attacks, and crucially, ensuring that the multiracial and religious harmony which underpins our society will endure.
Populism and Nationalism
8 We have also seen a wave of populist nationalism developing across the globe. Such sentiments, fuelled in part by deep-seated anger over growing income inequality and the influx of immigrants, have been particularly salient in shaping voting patterns in the West. This is a trend that countries in Asia may also have to manage one day. The rise of economic nationalism, especially during election campaigns, has slowed the momentum of the multilateral free trade agenda. In our view, the problem is not free and open trade. Rather, governments must make sure that the net benefits from trade are distributed in an equitable and inclusive fashion. Nationalism of a territorial nature, which tends to divide rather than unite, has also persisted. This hampers mutually-beneficial cooperation among the countries and partners concerned. Territorial disputes are by nature complex and the countries concerned should expend both diplomatic and legal means to manage and resolve their differences. Amid these strains of nationalist sentiments, a key challenge for governments of today and tomorrow will be to find ways to strengthen collaboration for win-win outcomes, and not widen the gulf between them.
Navigating Uncertainty by Deepening Integration
9 In this broad context, the strategic and economic imperatives for the US and Japan in the region persist. I am heartened that both Japan and the US regard the Asia-Pacific as a priority. US President Donald Trump’s visit to Northeast and Southeast Asia next month further underscores the US’ continued commitment to this part of the world.
10 Looking forward, Singapore believes that deepening integration and interdependence in the region is key to navigating the challenges ahead. We will continue to be supportive of efforts to create an open and rules-based regional architecture. We see three key issues which, if handled well, will bring about continued growth and prosperity for our region and peoples.
Stable Relations Amongst Major Players
11 First, developing strong and stable relations amongst the major regional players. This is a prerequisite for a peaceful and prosperous Asia-Pacific region. I have already spoken of the positive externalities a strong US-Japan alliance has generated in the region. How the US and Japan handle their respective and collective relationships with China is also imperative for the region as a whole.
12 US-China relations is one of the most important bilateral relationships in the world. The relationship is complex, and has significant spillover effects on the global community. It is good that both sides recognise the fundamental importance of pursuing mutually beneficial cooperation with each other, and have worked hard to ensure that competition does not lead to conflict. As for Japan-China relations, it is complicated by issues of territorial sovereignty and history, but has seen a recent uptick. As neighbours, it is in the long-term interest of Japan and China for good relations to prevail. Collectively, these three major regional players share a high level of interdependency, which engenders strong incentives for stability and cooperation. I am hopeful that such linkages will continue to deepen, bringing about greater growth and opportunities, and not conflict and confrontation.
ASEAN Centrality
13 Second, it is in the region’s long-term interest to have an integrated and cohesive ASEAN, which can act as a neutral space for external powers to engage each other. ASEAN-led mechanisms such as the East Asia Summit and the ASEAN Regional Forum have fostered substantive discussions on key challenges and the way forward. There is value for our external partners to continue upholding ASEAN Centrality and unity, which will make ASEAN a more credible and effective grouping.
14 The economic case for deepening engagement with ASEAN is also strong. ASEAN is a bright spot, with 6% average annual growth. We have over 630 million people, good fundamentals, and are forecasted to be the fourth largest economy in the world by 2030. Amid the rising protectionist sentiments across the world, ASEAN remains committed to strengthening regional economic integration through the ASEAN Economic Community, or the AEC. The AEC aims to create a single ASEAN market and production base, which includes the free flow of trade and investment and freer flow of capital and goods. Intra-regional trade in goods is now largely tariff-free, non-tariff barriers have been reduced and ASEAN states’ regulatory environments have been harmonised and streamlined. As ASEAN becomes a more attractive investment destination, there will be even more opportunities for external partners.
15 Next year, Singapore will take over the ASEAN Chairmanship and focus our efforts on the inter-related themes of resilience and innovation. Our goal is a forward-looking ASEAN, well-placed to harness opportunities and manage challenges from disruptive digital technologies. This includes advancing e-commerce and creating a network of ASEAN Smart Cities. As important Dialogue Partners of ASEAN, the support of the US and Japan, along with key partners, will be invaluable in these endeavours.
Economic Integration
16 Third is the issue of economic integration. Singapore, as a small open economy, has been a long-standing supporter of free trade. There are a number of free trade agreements on the table that the region can leverage to further this agenda. First, we have the Trans-Pacific Partnership, or TPP. Notwithstanding the US’ withdrawal, the agreement remains important. A high-standard TPP agreement, with its new and improved trade rules, will benefit our businesses and workers, and increase trade between our countries. Japan has taken the initiative, and all the remaining 11 countries are keen to push ahead with the TPP-11. We hope to welcome the US back when it is ready, as well as other countries that are keen to join the TPP in the future.
17 We also have the Regional Comprehensive Economic Partnership, or RCEP, which brings together ASEAN and its six FTA partners – Australia, China, India, Japan, New Zealand and South Korea. All parties are working to make meaningful progress in the RCEP, which complements the TPP as pathways towards the ultimate goal of a Free Trade Area of the Asia-Pacific, or FTAAP. Japan and China have further launched initiatives to provide the physical connectivity for these FTAs, such as Japan’s Partnership for Quality Infrastructure and China’s Belt and Road Initiative. These initiatives also complement the Master Plan on ASEAN Connectivity, and play a key role in ASEAN’s Community-building and integration efforts. We look forward to a proliferation of good projects which will further enhance regional integration and support mutually beneficial collaboration.
Ladies and Gentlemen,
18 The Asia-Pacific is in transition. The challenges we face are far from simple, and their underlying causes are intertwined. Given this, we need to look beyond our own borders and deepen our integration. I believe our region can realise our full potential if we encourage constructive engagement and stable relations amongst major players, strengthen ASEAN as a credible and united organisation, and continue to commit to economic integration towards win-win cooperation for all concerned.
19 With that, I wish you a rigorous debate, and a robust and fruitful discussion in the day ahead.
Thank you.
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MINISTRY OF FOREIGN AFFAIRS
SINGAPORE
25 OCTOBER 2017