HT-MintAsia Leadership Summit 2019: ‘One stroke of genius..,’ Singapore’s FM lauds China
According to Heng, India had a dynamic and youthful population which could give it a significant advantage, as it could propel its digital economy.
Amidst the retreat from globalization and increasing geopolitical tensions, India has an important role to play in maintaining a stable global order, and Singapore is keen to partner it here, its deputy prime minister Heng Swee Keat said today.
Speaking at the HT-MintAsia Leadership Summit in Singapore on Friday, Heng, who is also the finance minister, highlighted that Indian prime minister Narendra Modi has been to the city-state twice last year. “When Prime Minister Modi was here, he had said Singapore was the largest investor into India. Trade (between both countries) has grown significantly in last the last 20 years. These numbers not just represent our partnership, but also the strong growth potential between both countries. There is a lot we can do together on the economic front. On the security front, India and Singapore and Thailand are going to have joint exercise in policing the Andamans seas in the months ahead,” he added.
According to Heng, India had a dynamic and youthful population which could give it a significant advantage, as it could propel its digital economy. At the same time, he said India had to invest considerably in its education sector, and added that Singapore could collaborate in this space.
Further, he said that increased connectivity between both countries could help their respective economies further.
On the global economy, Heng said it was unprecedented that the IMF and World Bank had downgraded global growth several times this year, and noted that heads of countries were all seeking economic development, and undertaking measures to achieve the same, leading to pressure on other nations.
“How do we develop a system that allows everyone to grow? My own view is that, the advanced economies need to move even faster. In the process, they will provide room for others to grow,” the deputy PM said. Growth in advanced economies will have to be fuelled by the rise in productivity, which means a lot of hard work and investing in R&D, education, he added.
“This is also hard work for companies. If companies take the view that they can’t compete and need to be protected, we are going to be in a far tougher position. But many businesses, instead of going out and competing, and increasing their capabilities, are lobbying the government to keep the door shut….We have to think of new patterns of specializations across the world, we all have to develop new areas of expertise, and if we can distinguish ourselves, it will allow others to grow. Then all of us will benefit,” he added.
Mr Heng said the retreat from globalization was a ‘very serious problem’, as the global division of labour had been the driving force for global economic growth since the end of second World War.
On the way forward, he said countries needed to restructure their economies at the national level, while companies rethink on what is required to be more competitive, even as individuals learn new skills and jobs, and parents consider ways to educate the children better to cope with the changes.
Cautioning against protectionism, Heng said that there is still a very strong case for multilateral trading system to tackle global challenges, and called upon like-minded companies to come together to ‘maintain support for free trade’.
“Countries that have embraced free trade and specialization, those who have opened up their economies have been able to do a lot better others, with China being a very good example of this - they’ve just celebrated 40 years of reforms. That one stroke of genius lifted hundreds of millions of people from property,” he added.
On multilateral trade structures, Singapore’s deputy prime minister said ‘good progress had been made on made on CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership).
“I believe that if we can get the RCEP (Regional Comprehensive Economic Partnership) done – it will bring tremendous benefit to the region. I am not suggesting that countries in such trade deals become a closed block – we should use it as a building block to catalase bigger discussions and multilateral deals at WTO,” he added.
The Regional Comprehensive Economic Partnership is a proposed free trade agreement between the ten member states of ASEAN and its six trading partners – China, India, Japan, South Korea, Australia and New Zealand. When concluded, RCEP is set to form the largest trading bloc in the world, accounting for a third of global GDP.
Highlighting the advantages of having a global set of rules, Heng said that in a digital economy, the reason why there are so many unicorns, or even decacorns, or companies that are highly valued, were because of the scale of their operations.
“The economies of scale of being able to develop a product and scaling it across the world makes a huge difference”, he added.
Unicorns are companies which have a value of over a $1 billion, while decacorns are firms valued at more than $10 billion.
Heng said it was the responsibility of leaders to prepare their people for a future, where jobs would be very different from that of today, and said Singapore had taken steps towards it by investing in healthcare and education.