Thank you ladies and gentlemen, and welcome to NUS. For me, this is a homecoming. I realised to my shock and horror just now that I was actually NUSSU President 37 years ago. A long time ago, certainly way before any one of you in this audience were born. I was also humbled by the fact that when I was President of NUSSU, we didn’t have a global relations unit. To be brutally honest with you, we were far more introspective. We had the luxury of sometimes what some people would describe rather rudely, as “navel gazing”. I say this because I want to commend the current Union for attending this conference. Because you are focused not on local issues – although all politics are ultimately local – rather, you recognise we exist on a single global stage. And the “greenies” or naturalists among us will say this is our one and only world. We are all the citizens of this one precious earth.
2 We live in a tumultuous, volatile, disruptive age. Most of you are going to graduate, in fact I should say all of you, are going to graduate in the next one, two, maximum three years. Your jobs, your future, will depend on how things unfold on the global stage. And this is why as I said earlier, the focus is on the global stage. I want to leave all of you today with a greater sense of urgency. An urgency to make sense of the world as it is unfolding so rapidly and also for you to think about what we need to do to adapt in order to survive and thrive. So if my speech is frank, brutal and discomfiting, let me reassure you from the beginning that it is with the best of intentions.
3 There are several key trends that I want to you all to think about. First, the rapidly shifting, evolving geo-political balance of power. Second, the reactionary rise of nationalism, isolationism, xenophobia, the rejection of free trade, and global economic integration. And the third trend is the impact of the digital revolution on our lives and on our jobs. Three things. Global geo-strategic balance; the reactionary forces to what is happening in the world around us; and the impact of the digital revolution.
4 First, let’s deal with global politics. The United States of America was the clear winner at the end of the Second World War, and if you had any doubts about it, absolutely so with the end of the Cold War. And you can date the end of the Cold War to about 1989 when the Berlin Wall fell. In fact, not far from this auditorium we have a segment of the Berlin Wall as a reminder. For a while, people mistakenly believed that this was the end of history. There were whole books and academic treaties written on that note. However, in fact for your time, what we are witnessing is the end of the unipolar age, and the recession of the one singular hyperpower, that has been in operation since the day that you were born. This is the end of an age.
5 In 1960, the US’ share of global GDP was 40%. Today, it has dropped to 25%. Now this does not mean that the US has crashed or the US is doomed. On the contrary, I am an optimist. I do believe in the vitality, the vibrancy, the ability of the United States to reinvent itself. Nevertheless, even with continued growth in the US, it’s time as the world’s singular superpower, is over. We are moving to a multi-polar world. And one consequence of this, is when the US constituted 40% of the global GDP, the US was willing, if need be, to unilaterally underwrite the world order as we knew it. It was prepared to be the global policeman. Prepared to underwrite risk, or last resort. After all, for each additional dollar made in the world, 40 cents accrued to the US. Today, it is only 25% and dropping. It is a perfectly legitimate question within the electorate of the US to ask “Why should the US unilaterally underwrite the world order as we know it?” Especially, if you look over the last 70 years of the liberal world order with free trade and economic integration. In fact, the chief and biggest beneficiary has been China.
6 For those of us from Southeast Asia, from Asia, you have heard about the Asian Tigers. Even Singapore, our success today is also because we were beneficiary of the liberal world order as we know it. Concurrently, what this means is that you have the rise of China, you have India following up, you’ve got Europe, and even within Southeast Asia, we have significant growth prospects. What that means is that we have the economic and political centre of gravity of the world. China is expected to surpass the United States to become the largest economy by 2032. In fact, those of you who are economists here, you base it on purchasing power parity, some estimates indicate that China has already surpassed the United States as number one.
7 India is another economy and society that you have to take into account. Most people have not yet realised that the population of India will exceed that of China within this decade. And India will become the fifth largest consumer market in the world. Its growth rate has never been as high as China’s over the last 40 years. Nevertheless, it is expected to grow at around five percent a year, and its share of global GDP will increase from 7% to 15% and more in the years and decades to come.
8 I mentioned Southeast Asia just now. The ten member states of ASEAN. We have a population of 630 million. That is not a small number. But the more important statistic there, is that 60% of this 630 million of Southeast Asia, are below the age of 35. In other words, young people like you. This youth of Southeast Asia, or youthfulness of Southeast Asia in fact stands in stark contrast to the situation in Northeast Asia, where there is a big shortage of babies. And fertility rates at around 1.0, 1.1.
9 That kind of TFR (Total Fertility Rate) leads to extinction. But Southeast Asia is an area where the demographic dividend has not yet been harvested. So we expect ASEAN to become the fourth largest single market in the world by 2050. That is during your future careers. Alongside these strategic and economic shifts, we also note that there is a digital revolution going on. It’s transforming the way we live, work, play, entertain ourselves, culturalise ourselves, communicate, mobilise, organise our societies. And the pace of change that has been engendered by this digital revolution is accelerating, and accelerating exponentially.
10 Some of you may have heard of Moore’s Law, in computer science, which states that the number of transistors that can fit on an integrated circuit will double every 18 months to two years. However, you may not be so familiar with what has been dubbed the ‘knowledge doubling curve’, which is an estimate of how fast it takes for the amount of human knowledge to double. Until 1900, human knowledge doubled approximately every century. IBM has predicted that by 2020, it will take only 12 hours for the amount of human knowledge to double in the future. If this sounds too abstract for you, just consider the material on YouTube. Every hour, there is more videos being uploaded there than you can probably watch in your entire lifetime. That corpus of human knowledge, media, entertainment, facts, distortions, untruths, are accumulating at exponential rates.
11 Consequently, this accelerating digital revolution has also disrupted many traditional industries and jobs, and many young people. And perhaps more so, the middle-aged and seniors are anxious about the future. Many of you today would have used ride-sharing services, sharing economy. Words like Grab, GoJek, DiDi, you bandy it as if it’s part and parcel of normal life. But these companies, these names, did not exist just a couple of years ago. And yet these companies are disrupting traditional taxi industries, AirBnB is disrupting the traditional hotel and tourist industry. And so people quite naturally and expectedly, are concerned. They are concerned about their livelihood, their prospects, and what the world will shape up to be, in the world that is defined by artificial intelligence and autonomous robots. Basically, where do humans fit into this revolution.
12 Now I want you to shift your mind frame now, back to about 250 years ago, to the start of the Industrial Revolution, in England, and then in Europe. In fact, it is the reason why we are speaking English today, because the Industrial Revolution began in England and in Europe. In the previous Industrial Revolution, the new means of production, factories, capital, machinery, accumulated in cities. This caused a migration of people from villages and agricultural areas, into urban areas. It transformed extended families into nuclear families. It may also even have led to the gender disparity, because once you live in a nuclear family and there was nobody to look after the children, women had to stay at home and children, instead of being viewed as assets and extra hands in the field, now became mouths to feed, and men worked in factories.
13 But there is another social aspect to the Industrial Revolution which I think people have not paid enough attention to – which is that in the early phase of a technological shift, the few people, the few regions that get it, that master these new technologies, gain enormous profit, political advantage and military power. And you have the rise of new oligarchs, new monopolies. The few people who get it, who own the means of production, outsize profits, now get to set the rules and dictate the rules by which society operates. Some people call that the Gilded Age. Gilded because it looked golden on the outside, but inside, was unequal. It was a very asymmetrical society, with asymmetrical power. I say all this because my hypothesis is that today’s anxiety about inequality is not because it is some right wing political conspiracy, but because we are at the dawn of a new technological revolution. And today, you have got digital oligarchs, you hear the famous names – Bill Gates, Mark Zuckerberg, Sergey Brin, Larry Page. You hear multinational digital corporations making enormous profits, and having enormous influence over our lives. You see, what I’m saying is that it is not a political conspiracy, it is a function of a new technological revolution.
14 Consequently, an age where you see increasing inequality, where you see concentration of power, is one that always elicits a counter-reactionary anxiety and sometimes mobilisation. For instance, in the last Industrial Revolution, with unbridled capitalism, that in turn led to the birth of trade unions, and to the development of the welfare state, to balance capitalism in an industrial age. In the same way, we must expect similar transformations to occur in families, societies, economies and regions. And I want you to think about it, because we must avoid simplistic answers to what is in fact a very complicated and complex process. But in the interim, in the short term, what people see are that jobs are at risk, their hopes for the future are at risk, more profoundly, anxiety about their children’s future prospects. And like previous times, every time this happens, people have to look for scapegoats.
15 For instance, free trade has become a scapegoat of this anxiety and for rising inequality. Right now there is an ongoing trade war between number one and number two. The negative impacts of this trade war will ripple through our entire global interconnected economic supply chain. It’ll affect all countries and especially Singapore, where our trade is three times our GDP. We will be affected disproportionately.
16 Another scapegoat that you hear very much nowadays is “blame the foreigner” - and in particular, immigration. Right-wing nationalists, have seized on this anti-foreign, xenophobic, nationalistic agenda in order to gain political mileage. Polls suggest that one of the biggest motivations behind those who voted for Brexit was not all the economic details, but a desire to regain control over the United Kingdom’s immigration policies. This anxiety about immigration followed a marked increase in migration to the UK from EU countries over the preceding decade. Which means that whilst change is inevitable, if change happens too quickly, people will get anxious and people will react – sometimes overreact. There will always be populists who are happy to ride on that fear and wind up that overreaction in order to score political points. So we should not be surprised that this is also the age of increasing xenophobia and religious intolerance.
17 In other countries, you get the onset of what they call - the culture wars. Identity politics. You see white supremacists, Neo-Nazi groups, even in a place like Charlottesville in the US. These are warning signs that you have an unsettled society. Anyone who tells you we’re in a post-racial age, even in advanced countries, just needs to look at these examples in advanced societies to realise that those old fault lines are still there.
18 We’ve seen a weakening of countries’ commitments to multilateral solutions to global challenges. In fact, there is no greater global challenge of our time than climate change. This is an example of the tragedy of the commons – if something belongs to everyone, no one is responsible. In fact, everyone tries to extract advantage out of that commons. Then it becomes unviable whether you talk about fish stock or you talk about natural agriculture. Whatever the repository of natural heritage that we’ve inherited will all be lost because we can’t manage the global commons. We had the Paris Agreement for climate change and I spent four, five years negotiating that. It represented a careful balance - not perfect - but a careful balance between the interests and responsibilities of all parties. Unfortunately, we know that the United States has pulled out of the Paris Agreement. The United States is either the number one or number two emitter in the world.
19 On the cusp of your graduation, many of you here worry about what lies ahead. These global trends and developments I have outlined will have serious implications on your future. I think it is entirely legitimate for each and every one of you to ask the following questions:
20 Another question I hope you all will ask yourselves - can we work together, collectively, effectively in the midst of our great diversity, to solve the monumental threats to human welfare? Threats such as climate change; pandemics; nuclear, biological and chemical warfare; extremism and terrorism? These are not just catchphrases I’m throwing at you. You can think of an example for every one of them in your immediate neighbourhood within the last one or two years. These existential threats threaten the confidence and cohesion of our societies.
21 Nevertheless, the point I want to make to all of you is that in the midst of all this disruption and anxiety, do not give in to the siren call to close ourselves off, to shield ourselves from competition, to build walls instead of bridges. This option, fortunately or unfortunately, is not available to a tiny city state like Singapore. But some of you might be from much larger countries where you may believe that it is a viable option, to build walls, keep foreigners out, insulate yourselves from competition, preserve your way of life.
22 My point is that the contrary is needed. Our response to these trends must be to remain open, double down on openness. Openness of our minds, openness in how we think about policies, openness in how we need to transform our economy, society and external relations. Our economy has to remain open. By deepening and diversifying our international connections, I believe we can find new opportunitiesand new technological aid in both new and existing markets.
23 That’s why in Singapore and in ASEAN we have decided to double down on efforts to further liberalise free trade and to boost global economic integration. Let me give you some real examples of what we’re doing.
24 We have signed the Comprehensive and Progressive Agreement for the Trans-Pacific Partnership which has given Singaporean companies access to economies across the Pacific including new markets in Canada and Mexico. In particular, for Singapore as a regional hub, we can also benefit from increased regional integration through initiatives such as the RCEP – the Regional Comprehensive Economic Partnership – you know in Singapore we love acronyms – and of course, the ASEAN Economic Community. The RCEP consists of the ten ASEAN countries plus the six that we already have existing free trade arrangements with. These six external countries are China, Korea, Japan, India, Australia, and New Zealand – I think all the people who are represented here too. If we succeed, and we are trying to by the end of the year, we would have a free trade agreement that covers about 40% of the world’s population and well over 30% of the world’s GDP.
25 Another initiative is the ASEAN Smart Cities Network that we launched last week. This is again another attempt to work together, collaboratively, in order to enhance our region’s economic potential, particularly in the digital space. Beyond economic benefits, we believe these agreements also send a strong signal that we remain open and that we remain ready for business, and that we intend to make sure our economies and our societies interoperate despite the diversity and uniqueness of each of our national circumstances. Now, beyond economic integration, we need a commitment to take a multilateral approach to solving global commons problems.
26 We need multilateral approach because only by working together can we resolve climate change, oceans, pandemics, cyber security, extremism. These challenges by definition are transnational. No single country can resolve it on its own. And so we must strive for an open global architecture where all states can cooperate, collaborate, and have mutual respect in order to achieve win-win outcomes. This is why we take into account both the positive and negative externalities generated by our individual actions.
27 Again, let me translate this into “green speak”. If you privatise the gain and socialise the pain, you get issues that we face today like deforestation, haze, overfishing and poisoning of the oceans that we depend on. Because we can privatise the gain, you’re not accountable for the externalities, and you expect Mother Nature to take care of it.
28 The real question is not whether the earth survives, the real question is whether human beings can continue to survive on the earth after we’ve messed it up, and perhaps messed it up irrevocably. The point is, we need to have a proper accounting of economics, ecology, and social impact of our actions. And then work together with enlightened self-interests to create a better world for the future.
29 I mentioned the digital revolution earlier on. This adds another layer of complexity to our discussions and our debate and our anxiety. Because in the early phase, some people and some countries and some companies will get an outsized advantage. The real solution to dealing with the digital technological revolution is to commoditise, to democratise the new means of production. And that means training, retooling, reskilling everyone. Because it is only when these new tools are in the hands of everyone that the new middle class will rise, inequality will come down and we will create the new norms of behaviour, the new rules of business, and the new perimeters for social engagement and for political development.
30 It also means we need to invest in infrastructure, training and education. It also means that unlike the past Industrial Revolution where if someone’s job gradually became obsolete, that person could afford to retire because the change occurred over decades, if not centuries. In your time, when change occurs within years, it means each of you is likely to have two or three jobs in your own working career. And if you think about two or three jobs, it means you’ve got to start preparing for your second job or your third job while you’re still engaged in your first job. And you will know your current employer actually has very little interest in preparing you for your next job. The responsibility for preparing you for your next job has to start with yourself.
31 One good scheme that I want to commend NUS for starting, is they now have, a program for obsolete alumni like myself to come back and attend courses of our choice. I think you give us some discounts, so membership has its privileges. But apart from quibbling about discounts and subsidies, the more important point is this - that we have to keep retooling and reskilling ourselves, and that’s why you see in Singapore, we’re making this big boost on SkillsFuture.
32 Similarly, whilst we prepare for the next revolution and the next job, it’s equally important to bear in mind the issue of social cohesion. Because although I told you that inequality is increasing because of technological revolution, it doesn't mean you can just say ‘well it’s due to computers, it’s not my problem that someone else is left behind”. You can’t afford to allow society to fracture. And that's why, even more so, in this time of great disruption, governments need to work on social safety nets, need to enhance it, need to make sure children and especially those with less advantaged circumstances have a chance to be levelled up, even while you encourage those at the top to keep exploring the universe. Because if you don't level up and you allow society to diverge, eventually you get a revolution.
33 I think it was Einstein who said, his worry is not the Third World War, but that the Fourth World War would be fought with sticks and stones. Think about that.
34 So let me conclude, hopefully on an optimistic note. The world as we know it is undergoing rapid dizzying change. And all of you, because you are young and just starting out, have a wonderful opportunity to have a ringside seat, if not to actually participate and perhaps even shape this revolution that is occurring in your lifetime. It is an exciting time to be alive. Do not be afraid of the disruption, the anxieties, the anger, the loudness of the debate out there.
35 Keep your heads and wits about you, take a longer term view, understand that ultimately we have to work together and we have to join the dots between the economy, society and the environment. That in fact, the new tools that the new digital revolution provides us, gives us opportunities to do more good and better and faster than it ever was.
36 So please, whilst I try to inject a sense of urgency and reality into all of you, please do not lose hope. It’s really a wonderful time to be alive. Thank you very much.
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