Budget 2018 – Speech by Low Thia Khiang

(Delivered in Parliament on 28 Feb 2018)

The Vision of Global-Asia Singapore

This Budget catches my attention for several reasons, but one thing that really jumps up at me was when the Minister for Finance said that, quote, “We must anchor Singapore as a Global-Asia node of technology, innovation and enterprise, welcome investments talent and ideas to Singapore, and be bold in venturing out into new markets.” Unquote. I believe that the Government has accurately identified the major international shifts that will change the world for our children. These are the shifting of global economic weight to Asia and the emergence of new technologies.

I interpret this interesting phrase “Global-Asia” as positioning Singapore to catch the growth in Asia with a global outlook. The convergence of the two shifts, namely the shifting of global economic weight to Asia and the emergence of new technologies in which the Fourth Industrial Revolution is taking place in the region stretching from South Asia to Northeast Asia through Southeast Asia. For the first time in modern history, the Asian economies combined is developing more robustly than Western economies. The Asian engine is driving the global economy and transforming Asia from being a volatile region into a dynamic global centre.

At the heart of Global-Asia is China. The opening up of China to global capitalism by Deng Xiaoping also opened up the minds of the Chinese people to the world. Many Overseas Chinese talents returned from the developed countries of the West to China, bringing with them the knowledge and culture to advance China’s science and technology. The political will to succeed and the hunger of the Chinese people to learn and live better lives fuelled rapid economic development. China is fast becoming an economic and military superpower.

Singapore has thrived in the past 50 years by making ourselves useful to global capitalism, especially by correctly identifying future trends before others do. We made ourselves useful to American-led capitalism in South East Asia and East Asia during the Cold War, and in the process helped to transform ASEAN from a political grouping into an aspiring economic community. In the last three decades, Singapore correctly predicted the rise of China and was one of the first countries to share the knowhow of economic development with China. We had reaped a lot of benefits from this first-mover advantage.

But this advantage is now irrelevant. China is leading the region to become the centre of global capitalism. Global-Asia also means new competitive pressures and realties, especially when the value chain of global production in the region diversifies even as the value chain re-orients to centre on China. China’s One Belt One Road Initiative expresses this, with the many lines of economic flow being re-imagined and re-organised as starting from China and extending in different directions westwards, southwards and northwards.

We have to make ourselves useful again to this new Asian capitalism centred on China by fundamentally transforming our economy. As a small city-state nation, this also means transforming our culture and human capital, as well as our diplomatic relationships with the economic powers and interpersonal friendships between national leaders and citizens.

In the past 50 years, Singaporeans’ ability to speak English well has contributed to fostering our relationships with Western countries at the centre of global capitalism in the region. We have a new challenge today. There is a unique ethnic connection between Chinese Singaporeans and the Chinese in China due to ancestral and linguistic ties. But many people have observed that this kinship advantage is fading fast as China modernises.

I agree with Lee Yi Shyan, Member for East Coast GRC that the learning of Mandarin should be part of the overall strategy of anchoring Singapore as a Global-Asia node, as it will help us to connect to the 1.3 billion Chinese. I would even go further to argue we should also learn our dialects as well. In China, speaking Pu Tong Hua is just the official language in official dealing. If one would like to connect better to the Chinese, not just rationally, but also affectionately, the language to use is the local dialect.

That said, we must bear in mind that Singapore is first and foremost a multiracial and multilingual society. What does the rise of China as an economic and political superpower mean for a small state such as Singapore?

My view is that Singapore is politically at heart a Southeast Asian nation, defined by commercial trade-winds, tropical hospitality, openness of the seas and the diversity of cultures. I believe that the ethnic politics and international frictions in our region will subside in time and ASEAN will soon become a more integrated community to protect our own interests against external dominance.

As a Chinese-educated Singaporean, I am delighted to see Chinese being used in many countries today, especially in places where they see the value of Chinese tourist and investment dollars. The Chinese language is today one of the most popular languages being learned by people all over the world. Chinese culture is fast becoming less a scholarly curiosity but more a tool of soft power today. This has helped some Chinese-educated Singaporeans feel that they are finally freed of the feeling of inferiority. They are excited that the so-called sick man of Asia has now been fully awakened with the full force of five thousand years of rich Chinese culture.

However, many overseas Chinese are also concerned about the intention of China, especially under one-party rule and as a superpower, in her policy and attitude towards weaker states. Will China seek to turn the tables on its experience of European imperialism and become an imperialist power itself?

This is not far-fetched if we consider that Japan did just that in the first half of the Twentieth Century. Will China revive its old tributary empire and use sharp power to compel small states to submit to its will and pay it the equivalent of tribute today? How China behaves will have serious implications on small states in the region like Singapore in the near future.

I am personally wary of the political ambitions of China as a Global-Asia superpower. I am worried that Singapore, if we are not careful and if we fail in our economic strategy to become a Global-Asia node, would become a pawn on the chess board of great power games in Southeast Asia.

Mr. Speaker Sir, I fully agree with the Minister for Finance that we must anchor Singapore as a Global-Asia node of technology, innovation and enterprise. There is a need to transform the Singapore industrial-era mind-set and culture to make us relevant and useful to the future economy and contribute to the economic dynamism of the region. But besides focusing on the economic opportunity, we should also have the new political scenarios in mind while anchoring Singapore as the Global-Asia node. It is important that we see the political economy of the major shifts, instead of just the economic challenges and opportunities.

I appreciate the Government’s vision statements and the articulation of how Singapore should strategically position itself in the new era. This is a forward-looking Budget to anchor Singapore firmly in the future and for the future.

The unfortunate thing about this Budget is that it is looking forward too hastily for future revenue streams by prematurely announcing the GST hike. This has become a unnecessary distraction from the vision articulated in this Budget, and as a real distraction causing the Government to lose its focus in getting buy-in for the vision because it has to explain the future GST hike instead. Do not let this opportunity to lead Singapore with this vision go to waste.