PM Lee Hsien Loong at the Asia Future Summit 2023

I am very happy to be speaking at the closing dialogue of the Asia Future Summit. It has brought together diverse perspectives on the themes of geopolitics, the economy, societal shifts, and technological breakthroughs. And I commend SPH Media and the participants for the wide-ranging and lively discussions.

Asia’s Tremendous Potential

Asia remains a vibrant region with great promise. It is home to more than half the world’s people, including a growing, increasingly well-educated, and affluent middle class. And Asia’s GDP is likely to exceed that of the rest of the world combined in the near future.

The two Asian giants, China and India, continue to make steady economic progress. China’s growth has slowed lately, and its population is gradually ageing. But it is still expected to expand at 4.5-5.5% annually, and will continue to be a major growth engine, with its large and growing consumer market, its increasingly skilled workforce, and rapid technological development.

India, is now the most populous nation in the world, and one of the fastest-growing economies – recording 6-7% annual growth. If it can keep this up, its young and energetic workforce, and its strengths in the digital economy and technological innovation will continue to push it forward. India has just delivered a successful G20 Presidency, and it is aspiring to play a more active role beyond the sub-continent.

Southeast Asia is emerging as an economic centre in its own right. It is a region that is young, fast-growing, urbanising, and digitalising. It is also home to many high-growth companies and even unicorns. And the combined GDP of Southeast Asian countries of over US$3 trillion makes it collectively the 5th largest economy in the world. And it is projected to become the fourth largest economy by the end of the decade.

What Asia Must Do

But to realise Asia’s promise, we need the right conditions in the world. For the last few decades, Asia has been fortunate to enjoy a peaceful, stable, and increasingly globalised environment. And this global and regional stability has been critical to the region’s dynamism and prosperity. We hope that the decades ahead will see peace prevailing and economic progress continuing in Asia. But this is far from guaranteed. The future depends on the choices that we make.

For a start, we need to uphold and reinforce the open and inclusive regional architecture. Many Asian countries recognise the importance of all the major powers having stakes in and contributing to the region’s stability and development. Hence, ASEAN, the Southeast Asian countries has long sought to build a dense web of cooperation, interdependence, and having overlapping circles of friends. For example, we have enunciated an ASEAN Outlook on the Indo-Pacific (AOIP) that provides a framework for omni-directional, inclusive cooperation with ASEAN’s partners.

Next, we need to deepen regional economic integration. For example, we have created the Regional Comprehensive Economic Partnership (RCEP) in Asia. It is the world’s largest FTA – 30% of the population, 30% of the GDP of the world. But despite the trend against globalisation, the RCEP was ratified by enough countries to enter into force last year.

We also have other economic cooperation mechanisms, like the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The Belt and Road Initiative, the Indo-Pacific Economic Framework for Prosperity (IPEF), and many others. So the mechanisms for cooperation are being built, people are joining it and there are also new sectors which hold promise, for example, the digital and green economies. So that is the second precondition that countries need to work on to integrate the region.

The third precondition is that individual countries need to manage our own internal social and political developments, to create stable societies and states that can contribute to the prosperity of Asia, and have governments with the mandate to pursue regional cooperation. Myanmar is an example of how domestic troubles can hold back regional cooperation, and export difficulties to a country’s neighbours. But for every country, domestic stability is a precondition for effective external collaboration, and domestic political function, not disfunction, is equally necessary. International relations are vital to the security and prosperity of a country, but a country’s foreign policy always depends on supportive domestic politics.

A Turbulent World

It is in every country’s interest to cooperate for win-win outcomes. But we also need to be realistic about the difficulties of achieving this in a turbulent world. In my view, Asia faces three broad challenges.

The first is increasing geopolitical contestation, particularly between the US and China. We have talked about that a lot about that in these last two days. This rivalry affects every country and region in the world. I believe neither the US nor China seeks conflict. But the issues that divide them are deep. Increasingly each sees the other as an adversary. And the risk of accidents and miscalculation is ever present, especially in dangerous hotspots like the Taiwan Strait. This worries Asian countries a lot. We are close to ground zero. We will be impacted economically too. “De-risking” is understandable, but “de-risking” is risky and costly. It may result in bifurcation, and it will likely have more than just economic consequences. But the picture is not all gloomy. Because while different countries will align more closely with one side or the other, nearly all still want to be friends with both. Third countries will pursue policies that maximise their freedom of action, and hence they will work hard to keep regional cooperation going, and also to keep the region open to prevent it from becoming a closed bloc, in rivalry with blocs in other parts of the world. It will be a more complex region no doubt, but it is not likely to be a region split between two camps.

Secondly, regionally within Asia, we have our fair share of difficult issues to deal with. We all wish to cooperate, win-win, mutually accommodating peacefully, with the greater good and greater number at heart. But doing it is not so simple. Sometimes between two countries there will be difficult issues, like the dispute over the Diaoyu/Senkaku Islands between China and Japan. Sometimes, it will involve more parties, like the South China Sea, where maritime claims of several ASEAN countries and China overlap. Even between ASEAN members, while relations are generally good, there exist some difficult bilateral issues. For example, border issues, or maritime disputes, which will be politically and practically difficult to resolve.

So Asian countries need to insulate their overall relations from these specific difficulties, build mutual trust, and continue to cooperate pragmatically for mutual benefit. It is happening to some extent, for example, Japan and Korea are working hard to put their historical differences behind them. Or China and Australia, who do not see eye-to-eye on strategic issues, but they also have a deep economic relationship. And I am happy to see that their ties are currently improving – China has lifted tariffs on Australian barley exports, and I am told have just recently removed barriers to Australian hay exports. So even countries that are not like-minded allies need to learn to cooperate and co-exist with one another.

The third challenge is the growing mood of nationalism and protectionism. Globalisation is in retreat. Trade and investment flows are increasingly being organised not just by economic logic, but by geopolitical orientation and national security imperatives. Countries are increasingly intervening in their economies to protect or subsidise industries, and disregarding rules of international trade in the name of resilience and self-reliance. Inevitably, others respond in kind, which distorts markets, leads to escalating rounds of state support and protection, and leaves everyone worse off. It is a global trend and it affects our region too. It happens to listing products when you are under pressure – food exports for example, or mineral exports, because countries say, the rules no longer strictly apply. I hog what I have, I develop my downstream industries, whether or not it makes economic sense. Or green energy, where the rules have not yet been developed. But if we do not develop rules, I think we will be missing out on a great opportunity to cooperate, to deal with climate change. So, governments need to push against this, to seek greater security and well-being collectively and not just individually.

Conclusion

For Asia to realise its promise despite these difficulties, we all need to demonstrate a high standard of statesmanship, and strong resolve to focus on shared interests. There are still many opportunities for win-win cooperation amongst Asian countries. And there are also global problems which cannot be tackled by countries at odds with one another. Climate change, pandemic preparedness, and not least, shared peace and prosperity.

Asian countries have agency. If we can make the right choices – prioritising cooperation, strengthening multilateralism, and taking advantage of new opportunities. Then we can create the conditions for peace, security, and continued prosperity, even in this turbulent world.

Speaking for Singapore, amidst this environment internationally, it is all the more important for us to look to the future. We are preparing for leadership transition – preparing a new team to take Singapore forward into the next bound. And the younger leaders are developing a substantive national agenda in an extensive consultation exercise with the population, under what we call Forward SG, to build a more resilient and united Singapore. We are looking outward, working with our ASEAN and international partners, supporting deeper regional integration and multilateralism. We are doing all these, so that we can set the right conditions and create opportunities for our next generation.

Thank you very much.