Good morning to all.
1. Thank you for this invitation to speak and share perspectives on the world economy.
2. The world is at a crossroads. Leaders and people in every country have a choice to make. Do we seize the opportunities for greater integration to continue to uplift the livelihoods of millions, or do we adopt protectionist measures and threaten the possible gains brought about by technology and connectivity?
3. We are in a time not too different from the 1920s, where the world had to make hard choices between integration with consequential shifts in global production and value chains; or isolationism to protect the status quo and forego possible net positive gains for everyone. Similar to the 1920s, we will once again have to see if politics will defeat economics.
4. Technological advances in communications, computing power, artificial intelligence, advanced manufacturing, supply chain optimisation, biologics, medical sciences and so on have put the human race on the cusp of a new revolution in production and consumption. The question is if we can seize these new opportunities to usher in a new era of growth?
5. All the technological opportunities mentioned are also threatening the previous and existing models and patterns of production and consumption. While there are net positive benefits for the world and for respective countries, it does not mean that it has or it will translate into net positive benefits for all individuals, especially those in the “middle class” with “middle skills”.
6. In various countries, the middle class is falling backwards. This has grave economic and political implications. The fracturing of the middle economic class will also certainly fracture the political centre. This fracturing of the political centre will also be accentuated by a few sets of forces.
7. First, the advent of narrow-casting of messages to appeal to the primordial fears and aspirations of people. Second, the propulsion of new populist leaders to the fore, on the basis of promises for quick fixes.
8. The shortening and shallowing of the public’s attention span in a world inundated by information and dis-information. All these factors combine to threaten sound governance, which is needed to establish the stable conditions required for global economic growth, success and cooperation.
9. Without steady improvements in the livelihoods of the populace, we cannot expect to have an informed public, who will put long term interests of the society ahead of short-term ones. Neither can we expect them to support a stable leadership and reject short-term populism. Without a strong political centre, countries and leaders will not be able to make difficult and bold trade-offs for the long term.
10. Without countries being strong and internally coherent, we should also not expect strong or coherent international leadership for a rules-based, open and integrated global system.
11. Hence, we are at risk and we can be in for a steep downward spiral just as in the 1920s, if we don’t get both our economics and politics right. These two sets of forces can be positively or negatively reinforcing, depending on our choices of this trajectory. To get both of them right, we need to rethink how we redistribute the benefits of globalisation, how we rejuvenate our industries and how we revitalise our global rules.
12. To redistribute the fruits of globalisation, we must have the political will and means to significantly invest in the training of our people, and reorganise our education and training systems. Many across the world have focused on the redistribution issue on solving inequality alone.
13. While equality is important to fix, immobility is even more important and harder to fix. We must not just try to do better in sharing with everyone the ‘fish’ caught today, we must also teach the rest how to catch their own ‘fish’ for tomorrow. And to give them the confidence that they can do so by themselves. It is one thing to be poor at a moment in time but it is another thing to have no hope to be rich in the future. And that may be a deeper problem, and that may be a deeper reason for the discontent around the world.
14. Too many countries have not paid sufficient attention to the lifelong education and continuous training of its people, to help them keep pace with a fast changing economic environment
15. Without new skills, there can be no hope for a better future. Without hope for a better future, there can be no strong political centre, no strong support for long term coherent leadership at the country level, and certainly no clear leadership on the global stage.
16. To rejuvenate our industries, we must accept that we all need to re-engineer our production and supply chains to better integrate with the shifts in the global production and value chains.
17. Our aim cannot be to protect jobs alone but our aim must be to protect workers. The best protection for our workers is not to defend yesterday’s or today’s jobs. Instead, it is to make sure that our industries are creating tomorrow’s jobs and our people are equipped with the skills to fulfil these roles.
18. Industrial policies are not intended to shelter old industries from change, but are intended to create new opportunities for our people through new technologies, new forms of connectivity and new business models.
19. Finally, we need to revitalise the rules-based global trading system.
20. We need fresh agreements to sustain the existing global trade in goods and services, taking into account the changed realities of the global production system.
We also need a strong and fair arbitration system to upkeep the rules made. But we most urgently need new rules for the new economy – the digital economy. We cannot apply old mind-sets to new technologies and opportunities.
21. For example, I shudder when people see data as a consumable and apply geographical boundaries to control its usage. Data is not a consumable in the old sense where consumption by an individual deprives another of it. On the contrary, consumption and utilisation of data is additive. It brings new value and new opportunities to create new products and services, often at low or zero marginal cost. This fundamentally changes the way we view data. We should not view data as a resource where consumption is subtractive rather than additive.
22. Singapore is encouraged by the efforts at the WTO to define the new rules for the new digital and data-enabled economy. It allows countries like Singapore to transcend our geographical size and location. Countries will increasingly not be separated by distance but united by systems and connectivity.
23. Singapore, together with Australia and Japan, are leading the negotiations and will work with like-minded countries to develop the new rules for the global digital economy.
24. Ladies and Gentlemen, we are once again at a crossroads for the global economy.
25. We have a choice to make individually and collectively. We have a shared responsibility to get this right for our people. We do not want to repeat history 100 years ago, and regress towards isolationism and risk another Great Depression.
26. Instead, the Great Digital frontier can unite us and bring us all to greater heights. But if we apply the wrong concepts, we risk the great balkanisation instead.
27. The European forefathers had the guts and gumption to embark on the European Union or as some would call it the European experiment. It was a statement of integration and collaboration for greater good. it was not premised on the fact that all European countries were the same. it was premised on the fact that even though all the European countries are different and at different stages of development, that each and every one can leverage on their respective strengths to come together to build a better Europe. And this is the theory of comparative advantage in economics. This great experiment has delivered much for Europe and the world.
28. Today, the challenges in Europe, as in America and Asia, are the same. Do we want to reap the benefits of globalisation and greater integration through greater connectivity?
29. Do we have the political will to reorganise our education and training systems; rejuvenate our industries to create the new and not just to protect the old, and revitalise the global trading system by taking into account the changed realities and the new challenges brought about by the digital economy?
30. May we make the right and wise choices for ourselves, our country and our world.