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A 'much safer world' if China integrates with the US economy: Tharman

Jovi Ho
Jovi Ho9/22/2022 09:53 PM GMT+08  • 7 min read
A 'much safer world' if China integrates with the US economy: Tharman
Speaking at the Singapore Management University (SMU) on Sept 22, Tharman highlighted four key insecurities. Photo: Albert Chua/The Edge Singapore
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The world is entering a period of profound global fragility and pessimism, brought on by a culmination of insecurity across geopolitics, energy, food, society and climate change, says Senior Minister Tharman Shanmugaratnam, who is also coordinating minister for social policies.

These are not due to temporary shocks, events or even bad actors, and the world will have to live with this structural fragility “for many years to come”, he warns.

Speaking at the Singapore Management University (SMU) on Sept 22, Tharman highlighted four key insecurities.

Firstly, the period of extraordinarily low inflation and interest rates is over, says Tharman. “Inflation, especially among energy and food prices, pre-dates [Russia’s invasion of] Ukraine. It was accentuated by the war.”

Tharman also warned of a rapid deterioration of global commons, especially on the climate front. “This is a race of our lives and we are losing that race… The tipping points are, themselves, tipping over other tipping points like dominoes. Southeast Asia will be one of the most vulnerable regions this century to climate change.”

The third insecurity “doesn’t touch the headlines so much”, says Tharman, but he is “seriously concerned” about a rollback of progress in the developing world. “Sub-saharan Africa, Latin America and parts of Asia were already in debt distress before Covid-19 and the Russia-Ukraine war, and the situation is now worse.”

See also: World faces 'perfect long storm': Tharman

With education disrupted by the pandemic, Tharman warns of a “permanent scarring of a whole generation” in the developing world.

Finally, the Ukraine crisis is a watershed event for global geopolitical insecurity. “After 30 years, we are back to a world of conflict,” says Tharman.

Back in March, Tharman warned of a “perfect long storm” across the world, one brought on by a laundry list of uncertainties; namely, the pandemic, the threat of stagflation, the climate crisis, Russia’s invasion of Ukraine and food insecurity.

See also: 'The sky has not fallen' following Pelosi's Taiwan visit: George Yeo

“They’re not cyclical; they’re not random shocks. They’re structural shifts, they’re going to be with us and they are interacting. They make for a new era of fragility,” said Tharman at the IMAS-Bloomberg Investment Conference 2022 on March 9.

Now, Tharman exhorts the world to create “bases for optimism”. He evokes the scientific breakthroughs of Covid-19 vaccines and “green steel” made with hydrogen furnaces while emphasising global collaboration.

“We need a new strategic relationship between the US and China,” says Tharman. “A world where China is integrated with the US economy is a much safer world. It does not assure us of peace but it makes conflict far less likely.”

US-China relations

Tharman’s lecture is the 11th in the Ho Rih Hwa Leadership Lecture Series. Established in memory of the late Singaporean businessman and ambassador, previous speakers include former prime ministers Lee Kuan Yew and Mahathir Mohamad.

His son, Ho Kwon Ping, moderated the session. Ho is the chairman of SMU and executive chairman of the Singapore Exchange-listed leisure business group Banyan Tree Holdings.

See also: Digital does not mean different: Can Singapore’s digital banks bring the fight to the three incumbents?

The US and other leading nations must give China a role and responsibility in the multilateral system, says Tharman in response to Ho’s questions. “The multilateral system serves US interests because it was made by the US, but it also serves global interests — never perfectly — but by and large, it has led to a remarkable wave of prosperity and global peace over the past 70 years.”

Political division in the US may be bitter, but there is bipartisan consensus about containing China, “to hold it down”, says Tharman. “What’s happening now within the US and within China has self-reinforcing features — more and more self-sufficiency, more and more separation.”

That will lead to a more dangerous world, not just for the US and China, he adds. “It’s a very simple thought experiment. Just imagine a world where China is not part of the global market system, in investments, technology, payments [and] data. It takes you back to the Cold War.”

Is it Southeast Asia’s century, really?

There is optimism, however, in Southeast Asia and India, says Tharman. “These are growing societies, people still feel that they will have much better jobs than their parents [did], the digital economy is taking off and I believe that this decade will be Southeast Asia and India’s decade… if they keep investing in human capital and integrating with the rest of the world.”

But Tharman adds a caveat that nothing is set in stone. “I always hold my breath when people say it is Asia’s century. Expect the unexpected, and never underestimate the innovative power of the US.”

He adds of the States: “It is beset with domestic difficulties; social divisions are hardening. But never underestimate the US’s innovative capability.”

Paper chase ‘inherited’ from East Asia, Britain

Singaporeans must innovate and collaborate with others amid what will be “a very difficult era”, says Tharman. “We do not do as well in innovation as several small European countries. There’s no formula for it but we must start young… We must do everything we can to encourage people to think deeply for themselves.”

Singapore is moving away from a culture obsessed with academic grades, says Tharman. “We are halfway along this journey where everyone is judged, not just when we leave school, but through life, based on their aptitude rather than their grades earlier in life.”

Singapore inherited “two very academic cultures” from East Asia and Britain, says Tharman. “If you look at China, Japan, Hong Kong, Taiwan, Korea — cultures that have a lot of similarities in education — they haven’t moved as far as we have in terms of loosening the system [and] broadening the range of aptitudes that people are encouraged to develop.”

Britain, too, had a very academically-focused culture that differed from the northern Europeans, says Tharman. “It was a culture in Britain that didn’t look up to trade skills [and] vocational skills.”

Singapore has been working its way out of that, says Tharman. “I think we’re doing so at a reasonable pace. If we go too quickly, it unsettles people, it unsettles parents. You have to do things at the right measure.”

A third space

Tharman also hopes Singaporeans can broaden their cultural lens and assume an identity beyond their own and that of others, but together as a country. “We now can go further, having achieved what we’ve built up: a system of peaceful multiculturalism. We need a third space in our identity, besides our own identity, besides our common spaces, we can build a third space… where each of us feels that part of our identity in Singapore is based on all our cultures.”

By taking a deep interest in other cultures and forming deep friendships, Tharman believes this Singaporean identity will aid the nation amid rising division globally. “It is not a melting pot; we don’t lose our own identities but it enriches us… It will hold us in good stead in the years to come.”

Developing these sensibilities starts early in life, says Tharman. “Things like Racial Harmony Day are thought of as too formulaic. To my mind, it can even be negative because it gives you the impression that you’re doing something multicultural, but you’re not.”

Are our children socialising well with others, wonders Tharman. “Who are your friends? Whom do you sit with during recess time? How often do you have CCA [co-curricular activities] with people of different backgrounds and do you meet up after CCAs?”

Tharman points to the Erasmus Programme, an EU student exchange programme established in 1987, and says Asia could explore something similar for its tertiary students, teachers and lecturers.

These will help shape a generation of more empathetic Singaporeans. “Engagement and interaction is how you develop the sensibility and cultural breadth that I think we need. We can make Singapore more resilient and make life more enriching.”

Photos: Albert Chua/The Edge Singapore

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