An open global trading system key for small countries like Singapore: PM Lee at World Economic Forum panel

DAVOS, Jan 23, 2020, ST. An open global trading system where every country plays by the rules of the game is of great help to a small nation like Singapore, Prime Minister Lee Hsien Loong said on Wednesday (Jan 22), The Straits Times reported.

“Without that, if I am arm wrestling one on one, Singapore versus whoever the other side is, chances are the other party is bigger than us,” he told a panel discussion on sustaining multilateralism at the World Economic Forum.

To strengthen this system, Singapore is working to maintain domestic support for openness, doing its part to support the World Trade Organisation, and working with regional groupings to deepen economic integration, he said.

The session, Leading A New Multilateralism, was moderated by Financial Times editor Roula Khalaf, who asked Mr Lee how Singapore navigated conflicting pressures in free trade and globalisation.

PM Lee said it was important to maintain support for an open policy within Singapore, “because if you do not have support within the Singapore population, then you may have principles and ideas but it cannot work”.

On the WTO, he said Singapore tries to nudge progress in areas like electronic commerce, where a good number of willing parties have signed on to a Joint Statement Initiative to negotiate rules for this growing sector.

He added that the Republic is also working intensively on closer integration within Asean, where modest progress is being made, as well as with wider groups. These include the Trans-Pacific Partnership (TPP), which became the Comprehensive and Progressive Agreement for TPP (CPTPP) after America withdrew near the finish line, and the Regional Comprehensive Economic Partnership (RCEP), which India has said it will not be able to join – although Singapore and others are hopeful it will one day.

Asked about the impact of the United States-China trade war on Singapore, Mr Lee noted that exports are down, confidence in the region is down, and growth last year was less than 1 per cent.

“It is partly because of this Sturm und Drang (storm and stress, in German) and atmospherics in the world economy and the uncertainty and doubt on which way we are going,” he said. “Are we heading in the right direction? Will there be further big bumps in the night? That is holding back business confidence and investments, it’s bound to.”

PM Lee also elaborated on two things Singapore was doing to strengthen support for openness in an uncertain environment.

One, promoting growing sectors like technology, and get established companies to do more in Singapore. He cited how the FANGs – Facebook, Amazon, Netflix and Google – are setting up engineering teams and data centres in the Republic.

Two, helping sections of the economy which are not doing so well with globalisation to cope. This includes companies and people who are uncertain about their jobs and future.

“You may say, on average, your chances of being retrenched are not very high, but they only have to read one story of 100 people retrenched, and a few hundred thousand (people) can be very agitated by this,” said Mr Lee.

“We have to develop the support scheme so that we will give you the training, we will help you have the employability skills, and if you do lose a job, help you transition into a new job, possibly in a different career altogether,” he added, in reference to SkillsFuture, a national programme to encourage lifelong learning.

This entails not just reskilling, but also upgrading existing skills, Mr Lee said.

“Even if you are in the same job, let us say you are a coder, what you learnt five years ago is already five years out of date. The young person graduating from school today knows certain things which you do not,” he added.

“Unless you learn it pretty soon, he or she may take your job. That becomes not just a problem for you but on a scale, it is a social and political problem.”

Also on the panel were South African minister for international relations and cooperation Grace Naledi Mandisa Pandor, India’s Bharti Enterprises chairman Sunil Mittal and Western Union president and CEO Hikmet Ersek.

Ms Pandor noted that African nations have launched a continent-wide free trade agreement which seeks to increase intra-African trade, while Mr Ersek added that groups like the European Union were a model of regional integration.

But Mr Mittal noted that given the role the US continues to play in the global economy, change will be hard to come about if it is not going to be an active and willing partner.