SINGAPORE: Singapore’s top diplomat has touted what he calls “a moment of great potential” for South-East Asia, as economies expand rapidly on surging technology demand even as much of the world faces growing uncertainties.
Speaking during a conference yesterday, Minister for Foreign Affairs Vivian Balakrishnan said semiconductors and artificial intelligence (AI) were major drivers helping the region’s economies outperform expectations.
He noted that the city-state expanded 6.1% in the first half of the year, with Taiwan overtaking China to become its biggest trading partner.
“In the midst of a crazy world, in the midst of the breakdown in world order, the breakdown in trade, the disruption to supply chains, we’re having significant growth,” he said.
“In fact, to the point where you start having to worry – why is it so high?”
Asia’s powerhouse economies have already seized the lion’s share of trade growth in the global AI boom, because they make the chips and other equipment needed for data centres springing up around the globe.
The World Bank cites several Asian economies that have outpaced expectations on high-tech exports, with Vietnam expected to grow 7.4% in 2026, Indonesia 5.2% and Malaysia 5.1%.
Singapore’s electronics exports surged 132% in August from a year earlier, and the island nation has upgraded its 2026 economic growth forecast to between 4.5% to 5.5%.
Vietnam and Malaysia have likewise strengthened their roles in electronics supply chains as firms spread production across more locations.
But the World Bank has also warned that the region’s dependence on AI-related industry could become a weakness if global investment in the technology were to slow.
Balakrishnan acknowledged that the risks posed by the technology itself, saying “loss of control is a real threat”.
He also said rogue states and non-state actors among others could use AI to develop new forms of disruption, including in chemistry, biology and weapons of mass destruction.
Still, with Singapore set to chair the regional bloc known as Asean next year, the diplomat said the region should use the momentum to deepen economic integration.
“This is a moment of great potential and peril,” Balakrishnan said
He later added: “There’s also a lot of money to be made.” — Bloomberg
