Remarks by Minister S Iswaran at the Milken Institute Asia Summit 2019

First, let me begin by thanking the Milken Institute for having me.

I hope you had an invigorating sense of the sessions in terms of the various issues that were discussed. I thought I would just highlight a few key themes, which I hope would be useful parting thoughts for you and various participants to take away from this.

The theme, Asia at a Crossroad, aptly captures the circumstances, context and policies that Asia finds itself in currently. I think what defines our circumstances is, firstly, the global economic environment. We have talked a lot about it in terms of the US-China trade relations, but also the general rise of anti-globalisation type of sentiments and rhetoric. These tend to cast a pall over the future of economic integration, regionally and globally.

At the same time, I think we are also dealing with another major factor shaping our backdrop - technology and the changes. Again, we are very familiar with this, and the impact it is having on industries, businesses, individuals and jobs. When we pull this together, I think Asia and Asian nations are going to make, or are already making important choices in that context. When we think about crossroads, we are thinking in particular about two or three key areas.

The first is, how does Asia respond to globalisation and economic integration? The second, what is Asia's response to technological advancements? Third, how do we manage the consequences of some of these changes that are taking place and the implications, not just for the economy, but for society too. And finally, the way we go about doing this.

Economic integration - whether it is in the form of a rules-based multilateral trading system or a system of regional relations and bilateral relations - all of these continue to be a very important part of the effort to bring economies of nations closer together.

This is an area that Singapore subscribes to. We have regional and multilateral initiatives, But the crux of it is Asia’s development - we know that Asia has seen growth, I think you see all the numbers in terms of GDP growth, population demographics, and so on.

But what I want to emphasise is, the opportunities in Asia is not just in the aggregate, but actually it is in the details, in the nuance. And by that I mean, the region to region, province to province, state to state variations, and the first, second, third city variations. This is why in Singapore, we have emphasised that we need to understand this better, and work in that context, understanding the granularity of Asia. And this is also why the economic integration efforts that we undertake with the rest of the world - because many of the needs in Asia are complementary to the capabilities that you have seen from around the world, whether it is in Europe, the US, and other parts, and also within Asia. So we do want that free flow of goods and services, on the conventional ideas of free trade, in order to be able to realise this larger benefit.

The multilateral trading system and a rules-based one is particularly important, because it has been the bedrock of rising prosperity globally, lifting hundreds of millions out of poverty, especially in Asia. And so a commitment to the multilateral trading system, and to economic integration and further collaborations across nations is something that Asia will continue to pursue. The evidence of that is in what you see in the efforts done in ASEAN, within APEC, between ASEAN and our partner countries, and the Regional Comprehensive Economic Partnership.

If I can segue to the second point around technology - we talk a lot about AI, data analytics, robotics and so on. All of these are global trends, and every country is trying to deal with them. Asia is no exception. This is changing industries, business models are getting disrupted, and jobs and skills are being redefined. We therefore are dealing with a lot of uncertainty.

The question is, what is our response? I think one can take a very prosaic approach and say, ‘Well, this is a global trend, it's unavoidable, and we all have to go along with it’. But I think beyond that, there is a more fundamental reason why Asia will embrace technology. It is because this is going to help unlock tremendous potential. Digitalisation, for example, unlocks the potential of SMEs all over Asia, It gives individuals tremendous new opportunities. So creating that kind of digital platform and capabilities that individuals and SMEs, for example, can participate in is going to be a very important part of Asia's next effort in taking not just economic growth forward, but enabling a much more inclusive participation in the economic growth. So, that, is the second thing I would emphasise.

The third, is that as a result of economic integration globally, regionally, and technological advancements, we will see that the spoils or the benefits being distributed unevenly. And that is why we must have efforts that deal with these kinds of adjustment challenges, whether it is an adjustment challenge for companies in order to help them acquire new capacities, or adjustment challenges for individuals for them to acquire the relevant skills, and to enable all of them to participate in these new opportunities.

If I can share with you, in the Singapore context – where we work on for the individuals across the nation - we have the SkillsFuture initiative, which is really aimed at ensuring that every individual continuously picks up skills in order to be adapting, and we have curated courses for specific sectors so that people know not just that they need to upgrade but the pathway and what courses they can tap on. Similarly, for companies, especially SMEs, developing their capacity - we have a programme called SMEs Go Digital. That is aimed at precisely enabling SMEs to acquire digital capabilities in order to move forward. But this is the effort of the government that we are doing.

And I think every government, if we want to create the space for technology to be adopted, and for globalisation and economic integration to take place, as we do in Asia, we must make sure the space for that is preserved by addressing these very important domestic adjustment issues. And this is the third set of issues that I think Asia will have to deal with going forward.

The final point I want to make is, having described what I think are the key choices Asia has to make, is the manner in which we go forward in addressing them. In particular, addressing the impact on the economy, the society and the social compact, as we understand. And this is where I think the partnership between government, the private sector and the people sector is critical.

This is because we cannot continue in a manner where the private sector says, “Well, I'm going to use the technology and I'm going to make the adjustments, but the people adjustment part is a responsibility of the government”. Neither can the workers say that is the responsibility of the business to entirely look after me without any kind of effort or initiative on his or her path. And the government obviously has a role to play in this as well. So bringing the tripartite partners together in a concerted effort, be it to enable businesses to adapt, be it in addressing the impact on individual workers, and preserving at the societal level - the social compact - I think this is the challenge all countries face, including in Asia.

And we are having very fast adoption rates of technology, in particular, because of our youthful population. This is even more important. So if I bring it together, I think that Asia at this stage in its evolution will continue with economic integration. This is, I think, an important point of emphasis, because it serves the growth and long term benefits of Asia. Secondly, in terms of technology, I think the global tide is irresistible. But there are compelling arguments, in terms of inclusiveness, economic inclusiveness and unlocking potential, especially for economies where you can leap frog.

I think this is where Asia will be an early and quick adopter. We see that around the region. Then, we do need measures to respond to the implications of these challenges, which is where the adaptation of companies and adaptation of individuals has to be assisted by governments but also the private sector.

The last point I was making is that we have to do this in a new kind of partnership between the people sector, the private sector, and the government and the public sector. So, I hope that these thoughts which I am sure would have incurred throughout the sessions we have had in the last few days, will stay with you because it shapes the approach that Singapore has adopted.

If you look at many of our policy responses, and so on, this is the way we have approached it, and we will continue to approach it. We welcome partnerships, innovative partnerships, at the government-to-government level, and also with our private sector partners, like you, in order to make some of these newer possibilities, realities.

Thank you very much, and I wish you a pleasant stay in Singapore.