Thursday, 2 Feb 2023

Clouds over world economy to get darker in years to come but Singapore is never helpless: Tharman Shanmugaratnam

SINGAPORE – The clouds gathering over the global economy will probably grow darker in the years to come, but the situation for Singapore is not bleak, Deputy Prime Minister Tharman Shanmugaratnam said on Friday (Jan 25).

He said in a Facebook post that Singapore can still do well by educating the young for a new world, developing deeper skills in every job and paying special attention to helping those who lose their jobs, he added.

Another important area is to strengthen the innovative capabilities of Singapore businesses and build on what Mr Tharman considers Singapore’s biggest international asset: “our credibility among countries and businesses from around the world”.

His post on the final day of the four-day World Economic Forum (WEF) in Davos, Switzerland, paints a picture of a very divided world, made worse by fragmented politics in most democracies and that things will probably get worse before a return to a strong centre in the politics of advanced democracies.

At the WEF, which he attended with Finance Minister Heng Swee Keat and Communications and Information Minister S Iswaran, Mr Tharman said he attended about three dozen meetings over three days with political, business and civil society leaders from around the world

He gave his basic take from these meetings.

One, the world’s major powers are more divided than they have been since the end of the Cold War 30 years ago.

He added that the United States-China trade conflict is a symptom of deeper and more enduring problems.

Two, technological rivalry is a reality and the prospect of a world divided into technological blocs will have major consequences for innovation and growth.

Three, the deeply divided people within advanced nations which are the “biggest difficulties” and is the heart of the problem, he said. The exception is Japan.

“Until these domestic divisions and the loss of trust in political leaders are repaired, there is little hope of fixing the divisions in the international order,” said Mr Tharman.

“A spirit of common interests globally, and of wanting to resolve problems in a cooperative way, will not return until there is a sense of shared interests among people at home, in their own societies.”

This lack of cooperation and shared interest is also why the world is failing in its race against climate change “with dire consequences for people and the natural environment everywhere”, he added.

Noting that populist leaders and extreme parties are now part of the mainstream, Mr Tharman sees little hope of repairing the domestic divisions soon.

“Politicians of all stripes, and businesses too, need the humility to understand why ordinary working people have voted this way,” he said, adding that there was more humility at the WEF this year.

“Things will probably have to get a lot worse within the advanced democracies before there is a return of a strong centre in politics, and forward-looking policies to help the majority of people to improve their lives.”

In the meantime, ordinary people will suffer the costs most of all, much more than the elite, he said, noting the unfortunate irony and tragedy of the situation.

For Singapore, the troubled global picture means it has to redouble its effort to develop strengths in the people that the world finds useful, he wrote.

Mr Tharman said Singapore is on a good track, citing its foreign relations and free trade agreements that will open up more growth opportunities, including the soon-to-be concluded trade pact with the European Union.

“We are also working with countries in the Eurasian economic community (Russia and its neighbours), the Middle East and Latin America to free up channels for trade and investment,” he added.

In addition, more global businesses want to create hubs in Singapore for innovation and to serve Asian markets, he wrote.

He also noted that international healthcare foundations, which tackle global infectious diseases, are keen as well to develop a base in Singapore as they are confident in its ability to protect data and its clinical research capabilities.

In highlighting these factors, Mr Tharman pointed out that “Singapore is never helpless”.

He added: “If we keep building on our skills and capabilities, and the trust the world has in us, we will do well even with the clouds hanging over the world.”

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