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Singapore must stay open, even if others turn inward: PM Lee

World's condition will worsen if more countries adopt protectionist, nativist approach
Monday, December 5, 2016 - 05:50

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Mr Lee said: "Without the US, there will be no TPP. We have to accept the world as it is . . . We still hope that a regional trade deal including the US will happen one day."

Singapore

THERE is a worrying trend of developed countries around the world turning inward and adopting a more protectionist stance, and this will have significant consequences for small and open countries like Singapore.

Speaking at the People's Action Party's (PAP) biennial conference on Sunday, Prime Minister Lee Hsien Loong noted how people in many developed countries are feeling a profound sense of discontent and angst.

He cited the examples of two major events this year: the UK's decision in June to leave the European Union; and the US presidential election in November.

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Both were "nasty campaigns" with the final results going against the expectations of pollsters and the media as voters voiced their unhappiness over the status quo.

"Voters are fed up, not just with particular parties or leaders, but with all mainstream parties and the whole political class. They feel the elite is out of touch, and that the system is not working for them," said Mr Lee, who is the PAP's secretary-general.

In a nearly hour-long address to some 2,500 PAP members at Singapore Expo, he noted how this mood is growing in many developed economies in Europe, with parties on the far right and left gaining ground.

Election season in Europe is starting soon - the Netherlands will go to the polls next March, France in May, and Germany in September - and Mr Lee said this is "worrying" for the rest of the world.

"Extreme parties on both the left and the right are strengthening, gaining support. They can't govern, they offer no workable alternative, but voters still support them - doesn't matter, bring the house down," he said.

The prime minister noted how many people don't expect France's (National Front president) Marine Le Pen to win the election, or German Chancellor Angela Merkel to lose her re-election bid for a fourth term.

But regardless of who wins, Mr Lee warned that the results of the elections will mean a more divided country. And should either Ms Le Pen win or Dr Merkel lose, then it would mean a "radically different Europe and a profoundly different world".

"These changes impact not just individual countries, but also the wider international order and environment," he added.

Mr Lee spoke of how nationalism has turned on its head. Instead of being open, self-confident and proud of their own countries and seeking win-win opportunities with others, voters have become insecure, inward-looking and anxious about their future.

"They see the success of others as a win-lose proposition, and so try to shut themselves off from the rest of the world," said Mr Lee. "This looks like the trend now. I don't know how far it will go, but I don't like the direction it is going."

The impact will not just be on economics and trade, but security and the international order as well. Singapore, a country that has always depended on open trade, could be affected.

"We have relied on a secure, peaceful Asia, and an international order where countries big and small cooperate and compete according to rules which are fair to all, where small countries have a right to their place in the sun. And that is how we have prospered these last 50 years," said Mr Lee.

He recognised that Singapore was lucky to enjoy an international environment in the past that allowed the country to attract foreign investments, negotiate trade deals and expand its exports.

The situation is different these days, said Mr Lee, as countries start flexing their muscle and become more assertive, and it's difficult to predict how the relations between the big powers will develop.

"If US-China relations grow tense, Singapore will be in a difficult spot, because we regard both as our friends and don't want to choose between them. At the same time, world trade is flat, obstacles to trade are increasing. It's harder for countries to prosper together, to achieve win-win outcomes," he said.

Mr Lee brought up the Trans-Pacific Partnership (TPP) free-trade pact that involves 12 Pacific Rim nations, including Singapore. Donald Trump, the US president-elect, has already declared he will withdraw the US from the agreement once he takes office in January.

"Without the US, there will be no TPP. We have to accept the world as it is, not as we wish it to be. We still hope that a regional trade deal including the US will happen one day," said Mr Lee.

In the meantime, Singapore will continue to pursue trade deals with others in the region, such as through the Regional Comprehensive Economic Partnership (RCEP), which involves all 10 Asean member-states and its six regional partners.

"We will continue to cooperate with the major powers - the US, China, Europe, Asean and others. (Singapore) must stay open, because if we close up like other countries, our people will be finished," said Mr Lee.

READ MORE: PAP elects new central executive committee

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