Letting geopolitics shape trade takes world down ‘dangerous’ path: DPM Wong
WHEN geopolitics-driven economic decisions become normalised, the world could be going down a more “dangerous and fractured” path, said Deputy Prime Minister Lawrence Wong.
“Previously, the logic was countries do not have to be friends to do business with one another – in fact, the hope was that the more we trade and invest in each other, we will tamp down geopolitical rivalry,” said Wong.
But that now is history, he said during an evening dialogue at the Forbes Global CEO Conference on Monday (Sep 26) moderated by Rich Karlgaard, futurist and editor-at-large at Forbes Media.
“Now, a different logic is at play, where geopolitics is shaping trade and investments, so the global age of globalisation that we experienced in the last 30 years since the end of the Cold War has ended clearly, and we are entering a new era,” said Wong, who is also finance minister.
Still, he said, it is “a little too early” to say that the world is entering an era of “deglobalisation in the sense that the whole global system unravels” with everyone becoming more self-sufficient.
What is clear is that a fundamental change has taken place, and it is not a temporary one.
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The world, he said, is moving from a “unipolar world” to a “multipolar world” – but it is not yet at an equilibrium.
“We are still in transition, and that’s why we are all feeling our way forward in this flux and transition,” he said.
In the multipolar world, there is the United States and China, as well as other major powers such as the European Union, Japan and India.
Although US-China relations are worsening, Wong said, the fortunate thing is that both sides of the leadership do not want direct confrontation at all “because they know so much is at stake, and there is everything to lose”.
“That restrains them somewhat, but we do worry that there may be accidents and miscalculations which can cause things to worsen very quickly,” he noted.
While today’s generation of leaders do understand the stakes on both sides, Wong said the concern is what the next generation – growing up in a very different environment – thinks.
“If there is no ability for that people-to-people connection and communication to happen, it’s very easy to portray the other side as the bad guy,” he said.
“When you have a whole generation of people growing up thinking that, then what happens 20 years from now, 30 years from now – I think that’s something we should be concerned about,” he said.
As for how Singapore navigates US-China tensions, Wong said while the Republic is in no position to prescribe actions for either party, it has been encouraging both sides to keep the lines of communication open.
He added that Singapore sees this not as an exercise to choose sides but one where it continues to uphold its interests, including its interest to maintain a rules-based multilateral system.
This could mean Singapore’s position may coincide with the US position sometimes or with the Chinese position other times.
“But it is not about taking sides. It is simply about securing what is good and right for Singapore,” he said.
During this window of uncertainty in the world, Wong said, Asean has an opportunity to strengthen its integration – whether in trade, customs or other areas.
He added that given how the world is evolving in this new era of greater geopolitical contestation, it is “all the more important” that Asean strengthens cooperation within itself.
Singapore, as part of Asean, wants all the major powers to engage in and have stakes in the region.
“That’s why we tell our friends in both America and China – engage the region more constructively and comprehensively, and engage the region on its own merits,” he said.
“Not through the prism of a US-China relationship or US-China competition,” he said, adding that all Asean countries do not want to choose sides.
“We do not want Asean to be divided into 2 camps with a line – or worse, a wall – separating the two,” he said.
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