30 May 2016
Emeritus Senior Minister (ESM) Goh Chok Tong delivered the Keynote Speech at the 22nd International Conference on The Future of Asia, “Rising to Global Challenges and Realising Asia’s Potential” on 30 May 2016. The full text of ESM’s speech as well as edited excerpts from the dialogue session following ESM’s speech are appended.
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MINISTRY OF FOREIGN AFFAIRS
SINGAPORE
30 MAY 2016
KEYNOTE SPEECH FOR THE 22nd INTERNATIONAL CONFERENCE ON THE FUTURE OF ASIA
30 MAY 2016
“RISING TO GLOBAL CHALLENGES AND REALISING ASIA’S POTENTIAL”
Mr Naotoshi Okada
President and CEO, Nikkei
Distinguished Guests
Ladies and Gentlemen
Introduction
1 Thank you for inviting me, to your conference again. I was here last year, and I benefitted from the exchanges with the moderator and with the participants over here, so I am happy to be back today to speak on the same subject of Asia’s future. Last year, I delivered a speech on the opportunities in Asia and what Asia should do in its quest for peace and prosperity. I talked about the importance of political will, trust, vision, and the courage to take the initiative. This year, I would like to share my views on the challenges for the Asia Pacific region from the perspective of a small nation, that is Singapore, and how we can manage these challenges by working together for our common vision to create a better future for our peoples. I see at least five challenges.
Ensuring an Open and Inclusive Regionalism
2 The first challenge for all of us is to ensure an open and inclusive regionalism. As a small country, Singapore is particularly sensitive and vulnerable to the changes that are taking place in the region. Our ability to shape the developments and dynamics in the region and beyond will always be limited. But this does not mean that we do not try. So, what does Singapore hope to see in the region? We want to work towards an open, inclusive and rules-based regional architecture with ASEAN playing an important and central role among its dialogue partners.
3 ASEAN has come a long way since its founding in 1967. Over five decades, ASEAN has engaged and built relationships with the major powers such as the US, China, Japan and the European Union, among others. ASEAN has also afforded Southeast Asian countries more weight with the major powers than we would otherwise have on our own. It has allowed ASEAN to remain at the centre of regional cooperation in its dealings with the major powers.
4 Meanwhile, the strategic landscape in the region – or ASEAN’s external environment – is evolving. The US will remain the most influential global player in the foreseeable future. For decades, the US-Japan Security Alliance has anchored the US’ presence in the region and is the cornerstone for regional peace and prosperity. On the other hand, emerging powers like China and India are developing a greater sense of confidence of how they view themselves and the ways they can influence global events.
5 China’s rise is transforming the regional landscape. As China continues its rise, countries in the region will have to make adjustments taking into account China’s growing strategic weight. Virtually all countries in the region count China as their first or second largest trading partner. Competition between major powers is inevitable, but no country wants to choose sides between the US or China. All countries hope that US-China relations will be an overall positive. Regional stability in Asia will fundamentally depend on the US-China relationship. China has reassured its neighbours of that by emphasising China’s “peaceful development”. The US has also stressed that its renewed emphasis on the Asia Pacific is part of a broader effort to support peace and prosperity in the region.
6 Apart from the US and China, we should also remember that Japan is integral to the peace, prosperity and stability of Asia. On its part, Japan is stepping up its strategic engagement of Southeast Asia and the wider region. Singapore was one of the earliest supporters of Prime Minister Abe’s “Proactive Contribution to Peace” policy. We also support Japan’s Peace and Security Legislation within the framework of the US-Japan Security Alliance which will enable Japan to play a more active role in enhancing regional peace and stability.
7 If the relations are stable among the major powers and with an open and inclusive regional architecture, we believe the region is large enough for all major powers, including Japan, to exist peacefully and resolve their problems constructively without raising tensions.
Managing Territorial Disputes
8 Second, we need to manage territorial disputes in the region peacefully. China’s emergence as a rising power has shifted the strategic balance in the Asia Pacific. The South China Sea has emerged as one proxy for the larger strategic adjustments between the US and China. China has conducted extensive reclamation works, constructed runways and ports, and developed some military facilities and deployed assets in the South China Sea. Other claimant states, too, have also conducted similar activities. However, they have not been on the same scale or pace as that conducted by China. Being such a large country, China’s actions carry a far bigger signature. China is also building up and modernising its armed forces. It already has one aircraft carrier and is reportedly building new carriers. Some countries fear that China may deploy military assets to enforce its Nine-Dash Line claim.
9 Other nations in the region are watching these developments closely. The net result may be a more militarised South China Sea. The line between domestic and foreign policy has blurred; the heightened nationalism in the claimant states, including China, will increase the possibility of conflict. No country can renounce its claims without paying a high political cost.
10 Singapore’s position on the SCS is clear and consistent. As a non-claimant state, we take no position on the merits of the specific territorial claims. However, like every state whose trade passes through the South China Sea, or whose ships and aircraft use it, Singapore has an interest in upholding the right of freedom of navigation and overflight.
11 It is important to settle disputes peacefully and in accordance with international laws, including the 1982 United Nations Convention on the Law of the Sea (UNCLOS). It is also of vital importance to Singapore that the integrity of international law and international agreements, including the UNCLOS, are not in any way undermined. As a small country, Singapore cannot accept that “might is right”. Singapore does not expect the territorial disputes in the South China Sea to be resolved any time soon, but they should be managed and contained in the meantime.
12 In our capacity as ASEAN-China Country Coordinator, Singapore has worked closely with ASEAN Member States and China towards an expeditious conclusion of the Code of Conduct (COC). We are also working on practical measures that could reduce the risk of accidents or miscalculation at sea. We must work together to ensure that territorial disputes in the region are managed well and do not become obstacles to furthering developments in the region.
Advancing Economic Integration
13 The third challenge is sustaining economic growth in the region. Today, China faces the prospect of a “new normal” of lower growth rates of 7% or even lower, compared to double digit growth for many years. More advanced economies such as the Republic of Korea and Singapore are set to experience relatively flat growth. In order to achieve higher growth, Asian economies need to undergo reform and restructuring. Japan’s implementation of “Abenomics 2.0” is one such example. In this vein, regional economic agreements such as the Trans-Pacific Partnership (TPP) and Regional Comprehensive Economic Partnership (RCEP) can help provide the impetus for economic reform. Such agreements will create greater synergies between the regional economies. Greater economic interdependence will also help to foster a common vision and regional outlook which are important ingredients in our pursuit of open and inclusive regionalism.
14 The TPP reinforces the Asia Pacific region’s commitment to a rules-based trading system by updating international rules that apply to cross-border trade and investment. We took more than five years, investing time and political energy, to conclude the TPP negotiations. It is now in the final stretch, and we need to ratify this agreement.
15 The TPP also has an important strategic dimension. It is a major pillar of the US’ rebalancing towards Asia. The US has committed many economic and military assets to the Asia Pacific. This has contributed to the peace and stability of the region over the last few decades. The TPP is a visible manifestation of the US commitment to continue their strong presence in this part of the world. That is why it is crucial that the US ratifies the TPP. If they could do that, it will send a clear and powerful message that the US is a Pacific Power and is here to stay.
16 For Japan, the TPP is the “trump card” of Prime Minister Abe’s growth strategy. It will help domestic reform and restructuring efforts. It is said that the TPP will boost Japan’s GDP by 14 trillion yen, or about US$115.5 billion. Japan is taking steps to ratify the TPP, and is one of the first few countries to do so. At the same time, we should also not forget about the Regional Comprehensive Economic Partnership (RCEP), which is a FTA between ASEAN and six major countries or partners including China, Japan, the Republic of Korea, India, Australia and New Zealand. While the RCEP may not be of as high a standard as the TPP, it is still one of the major pathways to the eventual realisation of the Free Trade Area of the Asia Pacific. If the RCEP and TPP can be concluded and ratified respectively, it would go a long way to realise the eventual goal of regional economic integration which will be a win-win outcome for all countries concerned.
Managing the History Issue
17 The fourth challenge facing the region is the lingering mistrust among some countries in the region in large part resulting from the historical baggage of World War II. More than 70 years have passed since the end of World War II and it is time for countries to look forward rather than backward. We should face up squarely to history and then turn the page and move forward. This is why I am glad to note that Japan and the Republic of Korea had reached an agreement on the comfort women issue last December. Resolving these long-standing and painful historical issues would go a long way to help people in both countries move forward to build trust, collaboration and reconciliation. This will not only benefit Japan and Korea, but will also enhance regional peace, stability and cooperation.
18 The relations between Japan and China are also beset by historical baggage. Relations have thawed since President Xi and Prime Minister Abe met in November 2014, but building personal relations, mutual trust and identifying common interests takes time. In Prime Minister Abe’s statement on the occasion of the 70th anniversary of the end of World War II in August last year, he said that Japan would squarely face the past, take the lessons of history deeply, carve out a better future and make all efforts for peace and prosperity. This is something to be welcomed. In May 2015, President Xi attended the China-Japan Friendship Exchange Meeting and noted that the future of China-Japan relations was in the hands of the two peoples, and he encouraged more people-to-people exchanges between the two countries, especially among the youth.
19 It takes real leadership to acknowledge a country’s past actions which have caused pain to others. It also takes real leadership to turn the page on history and move on. As I mentioned in my speech last year, it takes two hands to clap. The history of the war should not be used to put Japan on the defensive, or to perpetuate enmities to future generations. At the same time, it is important that Japanese leaders must bear in mind what Prime Minister Abe said last year on history and reaffirm Japan’s commitment to build a brighter tomorrow for future generations.
Countering the Terrorism Threat
20 Finally, how do we maintain an open and inclusive regional architecture, while dealing with transnational terrorism and its root causes in closed and extreme ideologies? Terrorism fuelled by violent religious extremism is a threat that does not respect national boundaries. Terrorist acts can be planned, coordinated and carried out in different countries.
21 Singapore has been fortunate, but we cannot rule out that an attack on Singapore will eventually happen. We must be prepared and remain vigilant. In late 2015, we arrested and subsequently deported 27 Bangladeshi workers who had become radicalised and had been studying jihadi-related material among themselves. The group was actively growing their membership and would have become an even greater threat if not for the vigilance of our authorities. In May this year, we again arrested 8 radicalised Bangladeshi workers. They were not against Singapore, but they were planning attacks on their own country, Bangladesh.
22 Japan is not the typical target of violent religious extremists. However, Japanese nationals have been the victims of such terrorist attacks. Just last February, the Islamic State murdered two Japanese nationals, shortly after the Charlie Hebdo shootings in Paris. That was the first time ISIS singled out Japan – a chilling reminder that even Japan is not safe from terrorism.
23 The problem of terrorism has been with us even before the attacks on September 11, 2001. The Islamic State is the latest incarnation of the problem. A collective approach to security, including intelligence sharing across national boundaries, is absolutely necessary. The threat of terrorism is here to stay and it is crucial that all countries must work together to make sure that the evil forces do not succeed.
Conclusion
24 Ladies and Gentlemen, I have identified some of the major challenges facing our region. While the challenges may impact differently on individual countries, it is important they resist the temptation to pull back and look inwards. As a small and open country, Singapore clearly cannot afford to do so. Our prosperity and security will always be inextricably linked to the outside world. We cannot wish away the reality of where we live, but we can try to make the reality a little better for our peoples.
25 Governments need to deal effectively with both internal and external challenges as these would have implications for the well-being of their own people and indeed for the region at large. The governments in the Asia Pacific region need to resist the temptation to be consumed by populist politics. Instead we need to keep our focus on the longer-term shared interests.
26 The challenges facing the region as I have spelled out today – ensuring open and inclusive regionalism, managing territorial disputes, advancing economic integration, managing the history issue and countering the terrorism threat – are the challenges that will be with us for some time to come. How successful we are in managing these existential challenges will determine what kind of future we will be building for our people. Ultimately, the primary responsibility of leaders is to build a better life for their people. This is our common responsibility. We have to succeed to open up a new peaceful and prosperous era.
27 Thank you.
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EDITED EXCERPTS FROM THE DIALOGUE SESSION FOLLOWING EMERITUS SENIOR MINISTER GOH CHOK TONG’S SPEECH
AT THE 22nd INTERNATIONAL CONFERENCE ON THE FUTURE OF ASIA
30 MAY 2016
On historical legacies affecting China-Japan-US relations and the region
ESM Goh: “I see the visit by President Obama to Hiroshima and I must here add that I happened to be there some years ago, I can understand the reason. It is important because symbolically, it shows the two countries are further down the road to close another chapter on the past. This symbolic gesture is important because Hiroshima was a huge tragedy for the Japanese as a result of Japan’s war in the Pacific. And if the same kind of symbolism or gesture can be made between Japan and China, that would go a long way to creating peace for the whole region. The comfort women issue between Japan and Korea has more or less been resolved, so now the difficult part is Japan and China. And the complication is because China is a rising power. And when China rises, it’s not just a matter of adjustment for countries in the region but the world’s biggest global power must (also) accept and adjust to a rising power. So therein lays the complication because the US takes a long view - 20 years, 30 years down the road. Would the US remain the world’s sole superpower or work together (with China) to make this better world for all of us? Japan, being a neighbour of China, and an alliance partner with the US, would have to play a very clever and constructive role. If Japan comes across as distrusting China and taking steps with others to contain China, then we are going to have ill relations for a long time. I am not saying that Japan is doing that but Japan must not risk a perception of being seen as working to keep China from rising.”
On resolving the past and changing the mind-set for the future
ESM Goh: “The first requirement will be that leaders on both sides, in this case, China and Japan, see the future and the benefits of cooperation over using the past as an issue for their own internal purposes because within each country, they have very strong feelings over (the past) and sometimes it’s convenient for political leaders to keep certain things on a boil so that they can turn up nationalism for domestic politics. (So) You require strong leaders to say the future of the people is more important and how you get into that position for the future, which means you do require initiatives by leaders in the region, to say, “war never again”, because war is going to destroy lives of many people. And today is not like the old days. Should there be war, it’s going to be much more destructive than before, even without the use of nuclear weapons. And I do not see the scenario where China is being hammered and close to defeat, and not use the ultimate weapon. So there is this debate whether (atomic) bombs should have been used (in WWII). But the Americans weigh the lives of Americans versus lives of Japanese, which is more important for them? So the bomb was dropped. So if you have war, the scenario is horrendous.”
“I have been Prime Minister for 14 years, looking after a small country and for us, it is a question of survival. It’s an essential question because we have many challenges and sensitivities. If we don’t handle our situation well, Singapore will cease to exist as a sovereign country. So at the age of 75, I don’t look backward, I don’t write memoirs. I am more interested in the future of the next 50 years. I won’t be around but I am interested in doing what I can try and get the Presidents and future leaders, to understand that we must work together for our common future.”
On the South China Sea issue and how countries should respond to the impending arbitration ruling
ESM Goh: “First, put yourself in the position of the other party in order to get a better understanding, so that we can then try and find common ground. If we merely look at issues from our position and neglect or refuse to look at it from the other person’s perspective, then we are not going to come to any agreement. So, big as China is – and I am not being an apologist for China because I will speak on the South China Sea issue after this - China fears for its own security. In the last century, China has been humiliated and occupied by many foreign powers. (So) Chinese leaders say never again would they allow China to be humiliated. And from China’s point of view, they can see bases being built around China all over - Korea, Japan, Philippines, Australia and maybe even Vietnam, maybe India. So you might be very big as China, yet you ask yourself 30,50 years from now, will you be strong or will you be contained? So it is not (so much) Japan but it comes back to China reaching an understanding with the US, or put it the other way, US accepting China’s rise and making positive steps to ensure that China’s rise will be beneficial to the world and not a threat. It’s not so easy but the US and China now have more areas where they are having discussions to build up their relationship in those areas, rather than areas of disputes.
“What is Singapore’s position on (the disputes)? If I may use public housing in Singapore as an example – where we have occasional disputes between neighbours over small issues which become big issues if not handled well – how do we resolve them? I think there’s a parallel there for international disputes. First, we encourage the two neighbours to try and solve it bilaterally, that’s called bilateral resolution. If you can’t solve this bilaterally, then what happens? Well, we use community leaders to informally get the two (sides) together. So the community leaders are like ASEAN - you would try and get them to see each other’s point of view and come to a solution peacefully and with no violence, no fights. If that doesn’t work, in recent years, we have set up a mediation centre, to counsel and mediate disputes. Mediation is not by law and it is not enforceable but it’s a proper mediation centre. And when we find there are some neighbours who are quite troublesome and do not abide by the mediators’ ruling, we have recently set up arbitration as the final platform for them to resolve disputes. When both parties go for arbitration, the findings of the arbitrator, the judgement, the verdict are binding. They enforce it.”
“So when it comes to the South China Sea – I make it clear here that Singapore is not a claimant but we have interests in freedom of navigation and overflight – how will this be resolved? There are certain principles. One, we say resolve it peacefully. As a small country, if we can’t resolve an issue, we would take the rule-based route. We had a dispute with Malaysia. We referred our dispute to the International Court of Justice which gave a judgement and both sides accepted the ruling. That’s what we meant by rule-based regime.”
“The complication is that China has refused to join the Philippines’ arbitration submission. We cannot drag China to the court. Unlike the case in Singapore where the arbitration verdict is enforceable, this case is not enforceable. But there’s a certain moral angle to the judgement, and so the Chinese are hoping for many countries to be on their side, not to issue any statement on this. If you talk about ASEAN, Singapore is now the ASEAN-China relations coordinator. I think the matter is being discussed whether ASEAN will issue a statement. It’s too early for me to predict but the matter will have to be discussed among the ASEAN members first.”
On the power of diplomacy and Singapore’s role in the Xi-Ma meeting in Singapore
ESM Goh: “We are friends of both Taiwan and PRC and they know our position (on One China). We recognise that Taiwan is part of China and that is very important. We recognise that and we understand both sides’ positions. We did not and will not act as intermediary – it’s too complicated – but we provided a neutral venue for them to have the discussion. We did not invite them to meet in Singapore. As I said, we are not intermediaries. If they feel they want to meet one another and they can’t meet in each other’s place, which neutral country would they go to? Japan, I think not. America, no. Korea, no. So where? I think Singapore is a natural choice for them. We provide facilities and security arrangements, and they feel comfortable. What they discuss is between themselves. That is the strength of Singapore. We are quite clear (that) we don’t take sides, and our position is very clear that Taiwan is part of China.”
On the impact on the world if Republican nominee Donald Trump wins the Presidency
ESM Goh: “If (Trump) wins, we can certainly say he’s no President Obama. He’s a very different character. Are we seeing the real Trump character now, the real policies? I don’t know because he is in a campaign mood. To campaign and win, he must know the pulse of the people. He’s able to tap into the disaffection in America at this stage, in particular, white working class Americans. Clever with his language, with his rhetoric, with his bluntness, he’s able to tap into that anxiety and even anger in the population to become the candidate for the Republicans. What would his policies be? Will he listen to advice later on? I don’t know, but I think he would listen and become more presidential. You cannot comment on what the world would be like under President Trump because he has (thus far) come across as a politician. At the moment he’s in a very different mood, in a campaign mood. I think, for our sake, he has to change his policies. What he has articulated now may not be his policies in future.”
On rising populism and inward protectionism around the world.
ESM Goh: “This is a consequence of trying to win elections in a democracy. In the past, leaders would tell their people what the problems are and how do they resolve the challenges. Most people who became leaders in those times understood the problems. But in many democracies now, it is to win at all costs. To win, you must tap into the pulse of the people which could be disaffection with the economy. Sometimes it could be tapping into the populism streak, (in which case) you offer solutions which you know you cannot deliver. But at that moment, you tap into it, you win and then try and see what you can do about that (later). We see this as nationalism, which in a sense is populism at this stage, in many democracies in Europe. In a way, it’s in America too, tapping into the angst of the people and it is a form of populism in trying to win elections. Democracy is passing through this fragile phase; how would it emerge? If as a consequence of this, the economies and societies of these countries don’t do well, and instead of being harmonious, they fracture, then I think democracy will see very sad consequences.
“How to prevent it? I’ll give the example of Singapore. We have been accumulating reserves over the years because we believe in a balanced budget. We never spend beyond our budget and we always commit our reserves for a rainy day and this rainy day would include an aging population. Very early on, we anticipated that whilst my party, the People’s Action Party, could be conservative and constructive in its approach to policies, in a democracy, another party may emerge that promised populism – that we have got so much money, why don’t we give free medical care for people beyond a certain age, why can’t we subsidise things more heavily and win elections? Of course, in this case they will spend the money, then the country would be weakened once the reserves are gone. So we introduced the concept of an elected President with power limited to two areas: one is on the use of reserves and the other one is the appointment of senior people in the civil service. In other words, a second key: the government can propose but the President must unlock it. As a result of this introduction of elected Presidency, you find that political parties cannot promise (populist policies). If they do, then we would ask: how do you intend to pay for this. You can’t use the reserves to pay for your policies. So we have taken populism out of our democratic contest but other countries find that they are owing big sums of money, (because they) just spend and spend. It’s not my problem, my problem is just to spend and make (promises).”
On the economic challenge to other countries from China’s slow down
ESM Goh: “China is indeed slowing down. There are structural problems which they got to fix. There’s an over-capacity in manufacturing, its population is also aging and the wages have gone up. China is therefore in a phase where it’s got to restructure its economy. Will there be a hard landing for China? I don’t believe so and I think the IMF doesn’t believe China will just crash into the ground. (There are) huge problems but they are finding ways to move forward. And it’s not just China but many economies will have to restructure themselves. Japan too is also facing the same problem. But China’s growth rate affects all of us now. If China grows slower, I think our whole growth will slow down. What is the solution? We depend on China but we can on our own try to restructure our economy, find new areas of economic activity. Again we know what we should do, but how to do it is not that easy. In the Republic of Korea, they use the term creative economy. In other words, you can’t just use conventional ways to grow the Korean economy, you got to create. In Singapore, we use the term knowledge economy and we got to increase our productivity, we got to restructure. In Japan, they use Abenomics to restructure. While China has a big influence on us, we must not depend on China alone. We got to restructure our own economy in order to grow. India, I think, is a hope for us. India is at the stage where China was 20 years ago, with tremendous slack in the economy. While China slows down, India should take the advantage and grow its economy by 8, 9 percent and be the new engine for the world economy. In other words, don’t just depend on China alone. I think all of us can play our part.”
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