SINGAPORE – Governments have a responsibility to help those adversely impacted by globalisation or they risk social fragmentation, Trade and Industry Minister Chan Chun Sing said on Friday (Nov 13).
“Without coherent government, without domestic confidence, few, if any, governments will have the courage or the political space to stand up on the international stage to continue to support globalisation,” he added.
Delivering the keynote speech at the Caixin summit titled “Rebuilding global trust”, Mr Chan urged countries to confront their long-term challenges as a way to build public trust and to champion globalisation.
He said: “In the tyranny of populist politics against sound economics, we must lay the foundation of trust among our populace, businesses and political leadership.
“This will provide the political space governments need to lay the building blocks for a rules-based global order and connectivity for the long-term well-being of our country, people and the world.”
Mr Chan said that the Covid-19 pandemic has “challenged and at times eroded public trust towards governments”, given that anxiety levels have risen due to employment and economic woes.
On a global level, the anxieties have worsened geopolitical tensions before Covid-19 and, as a result, “trust in multilateral institutions and platforms has diminished”, he added.
Many countries have responded to the anxieties by trying to move supply chains closer to home and boosted domestic production capabilities to avoid being critically affected by sudden shortages in essential goods, Mr Chan pointed out.
“As protectionist and anti-globalisation sentiments grow, many countries have responded by turning inwards,” he noted.
But that cannot be the way, he said. Despite being a small and open economy, Singapore believes that greater economic resilience comes from supply chain diversity and greater interdependence, not from self-isolation, he said.
“Over the years, the rules-based multilateral trading system has brought economic growth, stability and peace to many countries,” said Mr Chan.
“While globalisation may have its shortfalls, there will be a net drop in overall global welfare if every country pursues economic independence single-mindedly without regard for its neighbours. We will be worse off, and we can easily go back to history… to the times before the Great Depression,” he added.
“Covid-19 has been an important reminder of how inextricably interdependent we are, and that economic independence is not a viable option or the most preferred option,” he said.
Mr Chan also said that China, being the world’s second largest economy, has a historic opportunity to win global trust by exemplifying standards of behaviour towards global trade – “from having open markets, sharing technologies on open platforms and being collaborative and connected with the region.”
“How China engages with the rest of the world will impact global trust towards China’s rise. The world is listening and watching intently as China implements its dual circulation strategy,” he added, referring to Beijing’s move away from its focus on export-led development to one where its domestic and international economies are mutually reinforcing.
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