Transcript of Trialogue sharing on “Drivers to Transforming Economies” of Minister Iswaran during the 17th Asia-Pacific Conference for German Business (APK)

Moderator Ali Aslan: Minister Iswaran, first of all, thank you for letting us be here in Singapore, great to be here in Singapore, in your wonderful country. It is of course as we know a, small and open city state, and as with all small and open city states, Singapore is always if you will always subject to great [inaudible] from external economies Despite the situation that we are having right now, Singapore has actually thrived as a dynamic economic hub. What insights can you share with us? What examples can you give as a Minister? How can countries come together to address such [inaudible] and what can we learn from your example?

Minister Iswaran: First of all, let me start welcoming by all of you to Singapore. It is our immense pleasure to host the APK here. As an open economy, what do we prioritise? In many ways, what we are doing today here, holding the APK in Singapore, is significant and epitomises the way we should go about our economic strategy which informs our geopolitical [inaudible]. Let me explain what I mean by that.

Firstly, because of all the challenges that we faced in recent times, there is inevitable propensity and political equation which compels some countries to start looking inwards. It is precisely at times like this that we need the political leadership bridge to be able to resist that and to continue in the path of economic integration globally. Because that is the way to really ensure that we have robust supply chains, that we are able to withstand shocks to our economic systems, exogenous shocks, and also to be able to create opportunities for our businesses and our people. When APK told us they are having the conference here in Singapore, the first in-person conference in four years, it has a strategic significance because it demonstrates a clear commitment to engage and stay engaged internationally.

Secondly, it creates an opportunity for us to work on a bilateral basis reaching the EU in Singapore in the EU and ASEAN, working on many areas of cooperation. In Singapore itself, we have the EUSFTA, we are working on completing a EU-Singapore digital partnership. That creates an important platform for us to build on the future.

Finally, I would say that from country to country [inaudible], and so German companies, big and small, the Mittelstand, the MNCs, all coming here, working with our enterprises exploring opportunities around the region, and in particular around the themes of sustainability, around innovation and how we can move forward. I think this is going to be an important development. Our focus is on broadening connectivity and deepening communication.

Moderator Ali Aslan: Minister Iswaran, let us talk about your commitment to the rule based system. Certainly, your country has always found itself in a camp with those who have abided by security and trade matters. How does your country see its commitment to the rules based international system? And more importantly, perhaps the prospects for international cooperation?

Minister Iswaran: I think we have all been beneficiaries of post-second world war era which is made of [inaudible]. As a result, we have created a global architecture which allows countries to engage economically, to trade and [inaudible]. I think it is a value proposition that applies whether you are a big country or a small country [inaudible].

The real question is whether we can sustain that through an area of geopolitical terms. This is the crux of the issue. So blockchains can be disrupted because of political phenomenon or geopolitical issues. The challenge for us is really to be able to maintain robust linkages, diversified across pathways, so that if there is a disruption in one or some of those [inaudible].

For a small country like Singapore, this is self-evident. I was sharing with Vice Chancellor Habeck that we are absolutely delighted to have you here on your first visit to Singapore and Southeast Asia. And indeed, in our discussions I have certainly learnt a lot about solutions with Vice Chancellor. When we look at say, gas supply in Singapore, we are more than 95% reliant on the gas for the generation of electricity. About 12 years back, we were relying purely on piped gas from Indonesia and Malaysia – two pipelines from Indonesia and one from Malaysia. We decided at that point that it is important from our national economic strategy point of view to diversify and so we moved to liquefied natural gas terminals. That has been very helpful to us because it allows us to tap sources from around the world, and it just creates a greater level of resilience in our supply chain for gas. It does not mean we are immune to the rising prices of gas, but it allows us to work across disruptions in order to manage our country. We have similar approaches when it comes to food and various other resources, and really more generally economic productivity. So, I would say that for Singapore, it is not just doctrinal. It is natural, the existential imperative that we uphold the rules-based order and that way, countries large and small, have a clear basis on which to engage and a basis on which to then work together with mutual respect.

Moderator Ali Aslan: And being in a position of power and responsibility and listening to your German counterparts certainly comes with the burden, but it is also a responsibility to a certain degree. Perhaps it is a privilege, but it is still hard work. It is great responsibility that you have to fulfil on a daily basis. Your country of course, we talked about going green, we have talked about becoming innovative, something that your country has done once again exceptionally well. As you walk through Singapore, if you take a walk, every building you see trees, you have a Botanic Gardens and a Gardens by the Bay. Green is certainly something that is given a lot of thought into the city design. Would you care to share some advice or some learning points from the Singaporean experience for an international audience?

Minister Iswaran: Not so much advice that I think I am quite happy to share our perspective which I think, is quite critical. Sustainability, and more importantly, the whole aspect of climate change really a challenge of the global commons. And like any challenge of the commoners, if each one of us chooses to only optimise for ourselves, then the whole world will suffer. We have seen this in many countries, climate is one very important part. What it means is, we need collective action at the international level, which is where the discussions and agreements that are being struck at COP become very important. There are the NDCs from countries in terms of contributions and so on, but it also has to cascade into tangible actions at the country level, at the enterprise level and individual level. We are firm subscribers to the principle that we have to create the right incentives in the economy, for people to then be able to take appropriate steps.

Carbon is an externality; we should be pricing carbon. Once carbon is priced appropriately, businesses - I know many already using shadow pricing, but we need to make it clear that this is an externality that we have to factor in our investment decision and our consumption decision. We also need to think in terms of not just global architectures [inaudible], bilateral and regional partnerships to address the issue of climate. As Vice-Chancellor Habeck has just said, we are designing a Framework for Sustainability and Innovation with Germany and Singapore. This is important because it allows us to now bring to bear our combined capabilities and resources to address challenges which are not just germane to our two countries, but also to the global equation.

We have just signed the Green Economy Agreement with Australia and again, it is with a view to seeing how we can work in partnership to take the process forward. We worked on for example, with Rotterdam on a green shipping corridor. We are trying to replicate that in partnership with other major ports around the world. In aviation, because we are a major aviation hub, we are firms supporters of the initiatives in ICAO. For example, first year of the carbon offsets reduction scheme and so on.

I think that is a very important part of the effort. For us in Southeast Asia, and I think this is relevant to the context of the meeting here as well. Southeast Asia is a region that will continue to grow and the reason being, risk-fail because it is sustained by fundamentals. It is a growth that if it has the same energy intensity and carbon intensity of the past, then it becomes a growth that is going to be unsustainable. Therefore, we need solutions as well and they will be through technology to commercial partnerships, and perhaps even through G-2-G arrangements. I also think that the intent is clear, the need is clear and present. What we really need to do is work in partnership, so I like to us the analogy of working in Singapore greener trade.

We work in the WTO, its multilateral, but we are also working bilaterally. We have got 22[1] bilateral FTAs. We work in regional partnerships, like in ASEAN, APEC and CPTPP. Our reason is because we think these are mutually reinforcing and we need the same approach when it comes to climate action. There is no one size fits all, but we need to be clear about the challenge to the global commons and the need for global action.

Moderator Ali Aslan: Minister, I think you wanted to chime in?

Minister Iswaran: I wanted to right a reply on the weather. First, I do not have a reference point from 100 years ago, but you will know that the climate is [inaudible] change, but I would make the point that this is precisely why the actions are global, but the impact is local and we need to address it. I am hoping that Vice-Chancellor Habeck and all of you will make regular visits. This is your first and I hope the first of many to come, so you that have better sense of the pulse, the temperature, of what is happening in Singapore, but also of what is happening in our region. I can assure you that it is a region that is vibrant with many opportunities and I suspect that as you immerse yourself in it, you will find that there is great promise. And you can always be assured of a very warm welcome in Singapore.

[1] Minister’s figure of 22 is inaccurate. There are 15 bilateral FTAs that have been signed, the rest are regional FTAs.