21st Morgan Stanley Asia Pacific Summit Keynote Luncheon Address by Minister for Education Singapore, Mr Chan Chun Sing

THRIVING IN A FRACTIOUS & FRAGMENTING WORLD

Introduction

1. Good afternoon.

2. Thank you for the invitation to exchange ideas with you all.

3. We are just emerging from the COVID-19 pandemic.

1. But COVID-19 is not over.
2. We may yet be surprised again.

4. Even as the fallouts, and opportunities, from COVID-19 are still unfolding, our world has to grapple with new uncertainties and insecurities:

1. The Russia-Ukraine War.
2. Fractious US-China relations.
3. Further supply chain disruptions and fragmentation.
4. Potential financial market instabilities.
5. Greater domestic contestations and more acute political instabilities across many countries – both developed and developing.

5. The questions before us are:

1. How do we make sense of these developments, and more importantly;
2. How can we better prepare ourselves to survive, or even thrive?

Making Sense and Making Choices

6. Amidst the uncertainties, there are some clear markers for us to think about the future.

7. First, the rules-based international security order of the previous few decades, can no longer be taken as a given.

1. The ability of multilateral organisations, to uphold the international rule of law, has always been suspect.
2. The Russian invasion of Ukraine has laid bare the inadequacies of our global systems and institutions.
3. Self-interest, and even short-term tactical interests; rather than high principles and longer-term strategic interests, will more often than not define the actions of many countries, including many big and medium powers.
4. All these will add to the challenge and complexity of mobilising global action for issues of global importance, such as climate change.

8. Second, the rules-based international trading order can also no longer be taken as a given.

1. The multilateral trading system is becoming increasingly fragmented, as a result of fractious domestic politics and international geopolitics.
2. The WTO Dispute Settlement Mechanism has been paralysed for some years now.
3. Mired in resolving conventional trade disputes, the WTO has been unable to focus on establishing new rules of cooperation for new growth areas, such as the digital and green economies.

9. Third, the international financial order has come under increasing strain.

1. There are many contributory factors.
2. The financial and fiscal discipline, or rather lack of, of the major economies.
3. Fears that the global financial system will be weaponised, which have spurred countries to diversify and generate their own alternatives leading to a more fragmented global financial system.
4. The emergence of alternative financial systems, powered by digital connectivity and blockchain technologies, that are unregulated and independent of conventional central banking systems also poses new challenges to the international financial order.

10. Fourth, big power competition. US-China contestation in diverse fields – from geopolitics, to military, technology, finance and even ideology – will shape the new international order.

1. War is not inevitable. But neither is peace guaranteed.
2. Conflict is likely if the US and China misinterpret each other's intent and miscalculate each other's capabilities.
   1. If the US believes that China will challenge, undermine, and usurp the US-led global order, through all means, including unfair ones; or
   2. If the Chinese believe that the US will do everything to stunt, stop or reverse China's "peaceful rise", or that the US is undermining the Chinese Communist Party's legitimacy, right to rule and sovereignty;
   3. These will precipitate conflict, sooner rather than later.
3. Both sides cannot afford to look weak because of their domestic preoccupations.
4. But "unity", or rather "homogeneity", of perspectives on either side, in a domestic echo-chamber, aggravate the possibility of misreading of each other's intent.
5. There is no quick antidote to strategic distrust.
   1. However, there can be a better chance to avoid miscalculation, if there is more and regular communication, as well as efforts to check blind spots and revisit assumptions, at every level.
   2. The COVID-accentuated reduction in the frequency and intensity of exchanges at all levels should be a concern to both sides, and certainly to the rest of the world.
6. Time, effort, and patience are required. Statesmanship, courage, and strategic vision, on both sides, will serve everyone better, than political opportunism.

11. Fifth, domestic insecurities and instabilities will reinforce the difficulty and fragility of international cooperation.

1. Beyond the US and China, more intense global competition has accentuated domestic insecurities and inequalities in many countries.
   1. Individuals who feel disadvantaged by global competition are demanding more protectionist, more populist, and more immediate measures to address their concerns.
2. At the same time, the combination of a fragmented world and a fractious domestic populace has reduced the political space for governance based on long-term considerations.
3. This will only produce sub-optimal outcomes, to everyone's detriment.
4. In attempting to address the problem of being unequally rich, we may end up being equally poor.

Can Singapore Thrive in Amidst These Challenges?

12. Can Singapore continue to thrive amidst these?

1. We are under no illusion of the challenges ahead.
2. Neither are we daunted.
3. We are focused on the opportunities, while conscious of managing the challenges.

13. In this fractious and fragmenting world, we believe there will be a premium for connectivity, stability, progressiveness, cohesion, and trust.

14. We are determined to create these competitive advantages to play to our strengths.

15. First, the ability to bridge and interoperate across fragmenting blocs,

1. to allow the mobilisation of capital, the aggregation of talent and the protection of intellectual property will become more important.
2. The more fragmented the world threatens to become, the greater the premium for places that can allow global talent and businesses to bridge gaps and serve markets across fractures.
3. Singapore is and will continue to be one such place.
4. We don't take sides. We take positions to uphold existential principles and the international rule of law for the greater good of all, and for the long-term.
5. We are committed to being a consistent and reliable partner. We will not sacrifice this for short-term political expediency or populist tendencies.
   1. From the depth of the two global oil crises of the 1970s to the global pandemic in the 2020s, we have kept ourselves open and connected to the world, so as to enable our international partners to fulfil their commercial obligations.
   2. This is one reason why investors have continued to keep faith with us, and worked even more with us after every crisis.
6. We endeavour to value-add to our bilateral and multilateral ties through a deep understanding of their needs and aspirations.
   1. We seek mutually beneficial relationships with all – countries and companies big and small.
   2. In our region, we strongly support the continued development of an open and inclusive regional architecture, be it ASEAN, CPTPP or RCEP.
   3. We will continue to facilitate cooperation and dialogue in new and emerging areas, such as the green and digital economies, both in the region and beyond.

16. Second, our desire to create value by providing a predictable and progressive business environment.

1. We appreciate the time necessary to gestate impactful investments – from deep tech, to biopharma, green tech, digital infrastructure and other capital-intensive sectors.
2. We also appreciate the need to evolve our rules quickly to match the rapid evolution of new business models and technologies.
3. Progressiveness based on principles, and predictability to support evolving needs are not oxymoronic but two sides of the same coin for us.

17. Third, the ability to stay competitive and cohesive. For Singapore, these are again two sides of the same coin that must come together.

1. Our open and meritocratic system enables us to mobilise talent and ideas from the across the globe. This has allowed us to remain competitive on the world stage.
2. At the same time, our competitiveness is not based on the abilities of individuals alone, but on the strengths of our system.
3. As a small city state, we have been able to take tough and necessary decisions for the long-term. This has only been possible with a strong and cohesive society as our foundation.
   1. Our cohesiveness has allowed us to withstand pressures to succumb to factional demands, especially as insecurities and inequalities grow.
   2. We have done this not by capping the top, but by constantly uplifting the bottom by doing more for them, and running a fair and meritocratic system to provide fair opportunities to all.
4. We are committed to take care of those with the least, providing hope for the broad middle, and encouraging those with the most to contribute more.

18. Fourth, we compete on the speed of our evolution, rather than the size of our resource base.

1. Our education and training system must and will increasingly focus on supporting our people to learn for life, and stay relevant and competitive for life.
2. We believe that no amount of frontloading will be sufficient for a constantly and fast evolving world.
3. The task of learning for life and training for life must be a triple helix of commitment from the individual, industry and institutions.
   1. The individual to have the sense of urgency and agency to want to learn for life, to keep improving to stay relevant.
   2. The industry to commit to investing in their employees in tandem with their business transformation. That instead of focusing on employee's first degrees and diplomas, we will increasingly recognise stackable and accessible micro-credentials to meet the specific needs in a timely manner.
   3. The institutions will refresh our training pedagogies and andragogies for different generations of adult learners, package them in an accessible manner for everyone to be able to learn anything, anywhere, anytime.
   4. The definition of success for our education system cannot be just how well our students do in the first 15 years of their life in their exams. But our definition of success is how well they do in the next 50 year of their lives beyond the school system. Another definition of success is how well we produce a cohort of 30 to 40 thousand students each year for the job market, but also how we retrain, reskill and upskill about half a million adult learners each year, equivalent to 20 to 25% of our local workforce.
4. Our frontier industries will need to work closely with our academic institutions to help the next generation of learners keep pace with business and industry demands.
5. Likewise, our research institutions must work closely with industries to translate our research outputs into market outcomes.
6. Finally, our industries and institutions must connect and collaborate with the best and brightest across the world to create new value propositions.
7. And this is important. Knowledge is becoming increasingly commoditised. Our value-add comes from value creation. Our challenge is not just to equip our people the know-how to solve yesterday's problems with yesterday's solutions. Our challenge is to be able to define, to frame tomorrow's challenges and find solutions.
8. This will allow us to achieve the speed of evolution necessary to stay globally competitive, and make it much harder for us to be displaced by price or size.

19. Fifth, we focus our efforts on niche areas that play to our strengths – the combination of high trust, high touch, high tech sectors.

1. There is a reason why Singapore favours finance, biopharma, deep tech and other intellectual property intensive sectors.
2. The reason is their need for a high trust environment where companies and innovators can be assured of their intellectual property and consumers can be assured on the standards and quality of the products and services.
3. For us to be in the sectors requiring "high touch", our people must be prepared to deeply understand our worldwide customer base, by living and working overseas in their formative years to build up the deep knowledge and wide networks to succeed in the highest echelons of global leadership.
4. This is why we spare no effort to provide opportunities for our youths to connect with the rest of the world beyond Singapore, from a young age to their years in the universities, polytechnics and ITE.
5. Technology has given us new capabilities to collaborate. We will continue to establish and build connections, both physical and virtual, around the world.
6. In the history of mankind, the fate of small nations has always been quite sad, because they have always been constrained by geographical size or location. We believe that in this juncture in history, we have an opportunity for small cities like Singapore, to transcend our geography to connect with the world. We use the world as our hinterland and markets, so that we are no longer prisoners of geography.
7. The wider our networks, beyond the well-trodden paths, the more diversity of ideas and value-add we can bring to the table.

Conclusion

20. Let me conclude. We are at a critical phase of our nation's development as we emerge from COVID-19 to confront the new challenges of more frequent disruptions, greater uncertainties, and heightened insecurities.

21. There is a Chinese saying that in every crisis lies an opportunity.

1. We believe so too.
2. We are never done building Singapore.
3. We are never done sharpening our competitiveness.

22. We look forward to partnering you for Singapore to remain a safe harbour to tap on the immense opportunities in the region, and to be a shining beacon of progressive ideas and principled leadership.

23. Thank you.