Continued global cooperation key to recovery: Heng Swee Keat

Singapore

THE Covid-19 pandemic has given the world common cause to work together, and building on this momentum is key for rebuilding in its wake, said Deputy Prime Minister Heng Swee Keat at the Straits Times Global Outlook Forum on Monday.

"Through global cooperation, the world has an opportunity to rebuild and emerge stronger from this crisis," he said, highlighting three areas in particular - public health, climate change, and digital governance.

This year began with some hope in the form of vaccines, though the fight is far from over, Mr Heng said.

"If the vaccine rollout is successful, and with continued policy stimulus, we may see the beginning of global economic recovery in the second half of this year."

Beyond Covid-19, the relationship between the United States and China is a key factor that will shape global cooperation, he added.

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While there will be continued friction - and the incoming Biden administration may not reverse some of the previous government's moves - there are early signs that both could be willing to seek common ground.

US-China relations have significant implications for Asia's prospects, with divisive competition likely to hurt growth. For their part, Asia's leaders must work together, said Mr Heng, noting moves such as the Regional Comprehensive Economic Partnership and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.

These are not exclusive blocs, but building blocks that can improve confidence for greater global integration, he noted, reiterating that they continue to welcome the participation of India, and the US and other like-minded partners, respectively.

In Asean, while member states cannot determine how US-China relations will go, they can stand together to advance Asean's collective interests - not choosing sides, but remaining able "to make choices for ourselves", Mr Heng said.

"To safeguard our independence and agency, our region must remain anchored on Asean centrality. Asean must play a proactive and central role in engaging external partners, always working inclusively and pragmatically, and transcending disagreements between external powers."

As for Singapore, openness is what underpins its economic success. While being small means feeling external pressures more keenly, it also means that Singapore "can be more adaptable, flexible, and innovative in tapping opportunities brought about by global cooperation", said Mr Heng, citing efforts in areas such as climate change and digital technology.

But this ability to explore opportunities and stay relevant depends on strengths at home, he added, for example, ensuring the benefits of growth are spread equitably, and nurturing national solidarity rather than division and polarisation.

For 2021, the government's central scenario is for a slow global recovery in the second half of the year as vaccination proceeds, picking up from a rough first half, said Mr Heng in a question-and-answer segment following his speech.

But he cautioned that even if that scenario pans out, global gross domestic product is still likely to stay below 2019 levels.

There are of course upside risks, chiefly in the form of effective vaccination roll-outs worldwide, and downside ones such as US-China tensions and the possibility that "vaccination does not work out as hoped".

Nonetheless, the baseline scenario is still one of a better year ahead. After 2020's slew of Budgets and ministerial statements on Covid-19 measures, Mr Heng quipped: "My wish for this year is one Budget."