Lawrence Wong addressing questions on foreign policy at a dialogue after he delivered the 14th S. Rajaratnam Lecture on April 16. - ST
SINGAPORE: Singapore’s foreign policy approach is to have many best friends, including the US, China and Europe, and the city state does not want a world where it can have only one friend, said Prime Minister Lawrence Wong at a dialogue after he delivered the 14th S. Rajaratnam Lecture on Wednesday (April 16).
In a transcript released by the Ministry of Foreign Affairs, Wong answered questions that ranged from managing relations with the US and China, to the role Singaporeans can play in the nation’s foreign policy.
Managing relations with the US and with China
Singapore wants to stay good friends with both the US and China, and wants both countries to be actively engaged in the region, said Wong.
Even as Washington becomes more focused on its “America First” agenda, the US still has many significant interests in the region, and Singapore wants to help the US understand its interests and anchor its presence here.
This is because an American retreat from this region would be dangerous for the neighbourhood and Singapore, he added.
Singapore likewise has close ties with China, including significant government-to-government projects such as those in Suzhou, Tianjin and Chongqing.
All this cooperation is built on a strong foundation of people-to-people ties, and the Republic wants to further develop its relations with China.
But advancing relations with both powers will get harder, not just for Singapore but also for many other countries. It will take agility, vigilance and skilful diplomacy to avoid being squeezed by both sides, said Wong.
This is not just on the part of the Government – the wider society, including the media, businesses and academia, must also be principled and act in Singapore’s interest. This is the best way for the country to maintain its diplomatic space, he added.
Impact of US tariffs on Asean
Singapore takes no comfort from being spared the full brunt of the US’ tariffs, as its exports are linked to supply chains in the region and China.
Many of the Republic’s products are value-added in factories across China and Asean before they are shipped to the US, said Wong.
Asean economic ministers discussed the issue and decided against retaliatory tariffs, which would have hurt the region more, he added. While Asean countries will continue to engage the US individually, the grouping also plans to speak to the US collectively.
If there is a silver lining, it is that Asean now has added motivation to strengthen its regional economic integration. This includes making it easier for companies to operate seamlessly within Asean, which will make the region more competitive, said Wong.
A more unified Asean will have a stronger voice, and increase its influence over how global developments unfold. All Asean countries recognise this, and that is why there are renewed efforts to deepen integration, he added.
US dollar to stay as global reserve currency in the medium term
While countries will try to diversify away from the US dollar, it will remain the world’s reserve currency in the near to medium term as no other alternative exists today.
Countries will hedge and use local currencies for transactions, but there is a limit to how far that is practical, which is why the US dollar will retain this role for business transactions for the foreseeable future, noted Wong.
However, if US banks and the US dollar are increasingly used as instruments of statecraft to advance American policy, then countries around the world will only accelerate their efforts to develop diversification options, he said.
He noted that the US dollar and US markets, traditionally a safe harbour in an uncertain world, have experienced a shift, and that the risk premium on even the US has increased.
No one knows what will happen in the coming years if more uncertainty emerges from the US that may potentially destabilise the financial markets. That is why Singapore’s investment entities continue to diversify globally and never put all their eggs in one basket, said Wong.
Why Singaporeans must unite on foreign policy
It is already very hard for Singapore, as a little red dot, to make an impact in this very dangerous and fragmented world, but it will be even more challenging if people within the country are not united on a national position to engage the world, said Wong.
This calls for more active engagement between the Government and the people, so that Singaporeans understand issues from a national standpoint, and rally together when a foreign policy decision is made, he added.
Interestingly, noted Wong, the new external environment has resulted in greater interest among various segments of the population on issues such as tariffs and foreign policy when the Government holds dialogues, such as in universities.
This is because Singaporeans see what is happening around the world and know instinctively that something different is happening today, said Wong.
Given the interest from the public, the Government will do more to engage different groups and help Singaporeans understand what is at stake, he said. - The Straits Times/ANN
