India-China flare-up could hurt post-Covid recovery efforts across the region: Singapore high commissioner
In his first interview to the India media, Singapore’s new high commissioner Simon Wong Wie Kuen says that the India-China conflict must be resolved amicably, because from the Covid-19 recovery point of view, if two big economic engines suffer, all of Asian economy will tooUpdated: Sep 17, 2020, 21:26 IST
Singapore’s new high commissioner Simon Wong Wie Kuen has said it is imperative for India and China to find an amicable solution to their border standoff as the region is looking at the two countries to drive post-Covid-19 economy recovery efforts.
In his first interview to the Indian media after presenting his credentials last week, Wong spoke on Singapore’s priorities in its economic relations with India, participation in New Delhi’s plans to forge resilient supply and value chains, and collaboration in the Indo-Pacific. Edited excerpts:
As you begin your term in India, what items are at the top of your agenda, and what are your priorities for driving the relationship with India?
We are caught in a very unusual situation. When I was assigned to India, the world was normal, there was no Covid-19, the world was at a stage where the US and China were still on fairly good terms. But all this changed very quickly in the beginning of this year. We have Covid-19, we have a very acrimonious US-China relationship. Coming to India during this time is challenging for us because the world order is probably at the inflection point, and big countries and small countries like us have to figure out where we want to land, how we are going to avoid when two big powers are at loggerheads. Coming to India is refreshing in a way, to see how India grapples with all these changes, plus you now have a border conflict with the Chinese. On the part of Singapore, how do I, in this larger context, navigate this relationship? First of all, the Singapore-India relationship is very frictionless, we don’t have a lot of baggage, we are very close friends and partners although India is a much larger country than Singapore. Indian leadership, people and businesses have seen us a very trusted partner and we too are an all-weather partner with India.
Even during Covid-19, investments are still coming in although not in numbers that we want. In the first eight months of the year, we have committed around $2 billion of new investments into India. CII [Confederation of Indian Industry] led a virtual delegation with six Singapore cabinet ministers on how to move commercial and business relations forward.
In this gloomy situation, I dare say the Singapore-India relationship is in a bright area. I feel that despite all the difficulties, I am going to have a fruitful tenure in India because there are so many things for us to do.
Will Singapore join India’s plans to create new and more resilient supply and value chains?
For sure. Our first real big investments came into India in 1993, when India began to open up. Because we came in early to India, that conversation of plugging India into our part of the world is continuing non-stop. For the past 27 years, the investments across both countries are very big. Cumulatively, Singapore has $85 billion committed to India. On your side, you have close to $60 billion. It is an equal partnership and we have about 650 Singapore companies set up in India and about 8,500 Indian companies are set up in Singapore. That notion of supply chain security and supply chain rework is always in play. In Singapore’s belief, we feel this is perhaps the age of Asia, but we feel that in Asia, we shouldn’t have just one engine of growth, there should be several engines of growth. Singapore, being a small country, wants to partake in the push of all these engines going to the next level. We came in early to India, we want to partake in this exercise of growth in the Indian economy.
What are Singapore’s plans for cooperating with India on Covid-19? What is the current status of Indian workers in Singapore?
The pharmaceuticals sector is a high-value add sector in which India commands a niche, not only in manufacturing of vaccines and generic medicines but in research and development. Covid-19 suddenly pushed at least three or four Indian R&D companies into the limelight. Because of that, Singapore is very interested in collaboration, not just on the Covid-19 vaccine but perhaps on coronavirus vaccines, the more generic ones, and I think that’s a growth area. Both sides are in conversations already.
We feel that—as an immigrant society ourselves—we are very small and need foreign workers to help boost our economy. Foreign workers is a nebulous term, it could be people working in the shipyard, in construction business, in banks and IT industries. We feel we are indebted to foreign workers because they helped grow our economy. It is incumbent on us to take care of them.
In Singapore, we had an outburst of virus infections in our [workers’] dormitories. The first thing that we did was isolation, it was rather harsh, to have everybody medically taken care of. It is free medical facilities and free testing and at the same time, we have given grants to companies so that salaries are paid even though the workers do not go to work. Now that we have flattened the curve two times in a row…workers are allowed to go back to work and then the grants will cease.
We feel it is an obligation on the part of the government to help provide a safety net for our foreign workers. Having said that, the next point we worry about is because of Covid-19, many of the industries, businesses and shops that hire these foreign workers are challenged, they have closed down. Many of our food and beverage businesses and businesses related to hotels and travels, 40% of them will go under. As a result of that, foreign workers may be sent home because they are out of a job. The next step is for us to make sure that they are fairly compensated and if they intend to stay on, we will have to look for jobs for them.
But at the end of the day, we see no difference between citizens and foreign workers. It has caused some unhappiness among the citizens, especially during these challenging times.
As the region looks to post-Covid-19 recovery efforts, how do you view the India-China border standoff? Does Singapore have concerns about the situation?
If I look at the situation at this moment in time, you have a stalemate and a stare-down situation...It may be a long winter, it will not have an easy solution but I think the messages coming out from both sides are very calm and the operating principle is still trying to figure out something of a resolution through diplomatic means. As a diplomat, my first instinct is that even if you disagree 100% between each other, you still need to sit down and talk because the talking process will calm things. We are good friends of both India and China. The last thing we want is to have skirmishes grow bigger and bigger because now both sides are in a stare-down position and the troop levels of both sides are very high. We don’t want any untoward incidents happening because from the Covid-19 recovery point of view, if we have two big economic engines suffer as a result, the whole Asian economy will suffer for a prolonged period of time. We don’t want to see that happen, we have been urging both sides to stay calm and find an amicable solution to it.
But we are concerned about what’s happening in Ladakh in particular, in Pangong Tso. We hope calmer heads prevail.
China’s border issues with other countries have sometimes taken decades to settle. In India, there are memories of the 1962 war. Even if the current tensions dissipate, do you think the border issue will linger on?
I think it is always problematic [in] relations between neighbours, especially two humongous neighbours, to resolve [things] and from time to time, it will spike. Whether or not it will have long-term effects, it depends on how both sides resolve this problematic issue. If you were to have harsh negotiations and you cross with words, I think it’s easier because it’s common practice, even in FTA negotiations—harsh, tough negotiation postures, but thereafter, when the deal is done, you shake hands and that’s it.
But the memory of 1962 is very, very strong because it was a military conflict. That will fundamentally, I think, change the perception of the relationship and the scars will be so much deeper. My humble advice is that both sides should think very carefully how they want to move forward and to be sure, both sides understand this very clearly...in the operating principle, both sides should sit down and talk and resolve this diplomatically. I think the Chinese side also wants this, the key now is what is going to happen in winter. I hope the lowering of the temperature will have cool heads prevail.
How does Singapore perceive the increased activity with relation to the Indo-Pacific such as the trilateral meeting of India-France-Australia?
If you read the story of the day, it is always with China in mind. You have had many papers and discussion points on the Indo-Pacific. You have the US version, the Indian version, the Asean version, which is largely an Indonesian suggestion, you have the Japanese version and, to some extent, the Australian version. All of these proposals on the table have different shades of colouring. Singapore, because we are part of Asean, we endorse the Asean version of it, which is to say we keep the waters around our region peaceful, the organisation should be inclusive and not exclusive, it should not be targeted at one or two particular countries, and the focus should be on economics, and less military.
I think there’s going to be a competition of ideas. How the Indian version comes in—we take the 2018 speech [by Prime Minister Nrendra Modi] at the Shangrila Dialogue, because he set up the parameters of how India envisaged itself in the Indo-Pacific and I think a majority of elements of it are very similar to the Asian version. But in the actualisation of this idea, the Indian preference is to have Quad, Quad-plus or trilaterals. India is free to have conversations with like-minded parties which share same interests...I feel that down the road, India should also have a conversation with Asean on the configuration of your ideas and the Asean ideas. The more you talk to different interested parties, the more you understand where they’re coming from. It really depends on the shading.
Now you have a border issue with China, so the shading tends to be more towards the anti-China side of the house but in politics, never say never.
In the case of India, you are good friends with the US and Russia...I don’t think India will be so hot-tempered to say ‘I am going to cut off this relationship’...because the relationship is larger than that. I think we should also watch how Russia is positioning itself as a kind of informal mediator and informal channel for India and China to come to some kind of resolution.
Do you think the India-China tensions will make it even more difficult for the Indian government to sell a concept such as the Regional Comprehensive Economic Partnership (RCEP) to the people?
I feel my Indian friends share their emotions very publicly, they are very binary. And they’re very vocal about it. In the situation with China, you can look at social media, newspapers, TV talk shows and the youth—they’re very vocal in opposition. You need this to pass and hopefully by winter, I pray it’s a very cold winter so you have fix or six months of freezing, then the rational mind comes back.
RCEP is a hard sell, you have a minority of reformists in India who see the benefit of it. I see industrialists who are exporters, who are very pro-RCEP but in general the idea of a community of FTAs does not penetrate that deeply into Indian consciousness because India is so big…It’s going to be an emotional issue. Coming from a country like Singapore that survives on trade and sealing deals in FTAs, we kind of don’t understand why some other countries do not embrace FTAs but we understand where India is coming from.
I can say with 100% assurance that the CECA between India and Singapore is mutually beneficial. Since the signing in 2005 and till now, India has had a [trade] surplus and never once did Singapore complain...the reason is because we see in a long-term relationship there will be times [when] I may have a surplus with you, you may have a surplus with me. I don’t even mind prolonged surpluses…It’s just that Indian products are so well made, we buy them. It’s the question of your ability to sell, if you have good products, people will buy them and the importing country will suffer a deficit.
But we look long-term not only at trade imbalances, we look at mutual investments. Because we have such good trade relations, it enables businesspeople from both sides to look at our market and therefore, have more investments coming in...this is not an asymmetric relationship, we are thankful that India sees us as an equal from the eyes of trade and commerce.
I think RCEP members are all in sync on welcoming India when India is ready to come back in. I think that’s key.