In addition to the United States, Singapore has also become a must-visit destination for Taiwanese presidential hopefuls. From People's Party Chairman Ko Wen-je to the Kuomintang's rising star, Chiang Wan-an, as well as the Kuomintang's official presidential candidate, Hou Youyi, all view Singapore as one of their first stops on the campaign trail.

Singapore has carefully balanced its power relations and maintained its crucial regional position amid complex geopolitics. Its stable governance has attracted the funds and talent flowing out of Hong Kong following the implementation of the draconian National Security Law and zero-COVID policy. It also punches above its weight within the ten ASEAN nations. At the annual Shangri-La Dialogue held in June, it was able to bring together the defense ministers of China and the United States.

In April of 2022, Singapore became one of the first countries to allow quarantine-free entry. Lawrence Wong, then the Finance Minister and one of the co-leaders of the cross-ministerial epidemic response team, was announced by Prime Minister Lee Hsien Loong as the country's fourth leader; he was promoted to Deputy Prime Minister in June.

The emergence of Wong symbolizes at generational shift into the "post-Lee era" in Singapore's political society, and some view it as a paradigm shift in Singapore's political scene.

The 50-year-old Wong only entered Singaporean politics in 2011. He does not come from a political family; his family lives in a public housing complex like the average Singaporean, and he relied on good academic performance to obtain a government scholarship and enter the civil service system. He also once served as private secretary to Prime Minister Lee Hsien Loong.

He gives the impression of being unpretentious and low-key. His personal Instagram pictures of him playing the guitar. Wong was once described by The Economist as "the kind of man you would want to have a beer with."

In an exclusive written interview with CommonWealth Magazine, Wong calls on countries to be careful in their efforts to de-risk as it could lead to a more fragmented and decoupled global economy. "Everyone will be worse off, especially trade-dependent economies like Taiwan and Singapore," he warns.

The content of Wong's interview is as presented below:

CommonWealth: What are the biggest changes in the geopolitical and economic environment in Asia and the rest of the world compared to the pre-pandemic period?

Lawrence Wong: We are entering a different world due to several factors.

First, Russia’s invasion of Ukraine has completely changed the security situation in Europe. The war remains deadlocked and how it unfolds will have broader implications for the world. 

Second, relations between the US and China have deteriorated. This has raised tensions over flashpoints in Asia, including the Taiwan Strait and the South China Sea.

Third, global trade and investments are increasingly being driven by concerns about national security.  This is accelerating the move towards a more fragmented global economy.

Fourth, technological change is continuing to accelerate, and will have a disruptive impact on many jobs and workers. 

Fifth, global risks are continuing to build up, be it the possibility of a future pandemic, which can be more virulent than Covid-19, or the longer-term threat of global warming.  

Collectively these trends will make growth and progress more challenging for small and open economies like Taiwan and Singapore. To continue to thrive, we will need to find ways to adapt to the changing global economy, facilitate continued peace and stability, and strengthen our societies. 

CommonWealth: How is Singapore responding to these new global trends? Which part of Singapore’s positioning has changed, and what has not?

Wong: Over the decades, Singapore has become a key hub for trade, capital and innovation in both Asia and the world. 

Our reputation as a reliable and trusted node in the global economy has also been enhanced from our handling of the pandemic. 

Singapore will double down on these competitive advantages. 

We are therefore strengthening our status as a logistics hub by expanding our seaport and airport capacity. 

We are broadening and deepening our links with other countries, including new markets in the Middle East, Latin America and Africa.  

We are also finding new ways to connect, especially in the fast-growing digital economy. That’s why we are embarking on Digital Economy Agreements with like-minded countries to establish rules and interoperable standards for cross-border trade in digital services. 

We can expect more shocks and disruptions in this increasingly volatile and uncertain world, which will place more stresses on our societies and our people.  

So we are reviewing our policies comprehensively, and looking at ways to refresh our social compact. One area of focus is to provide more support for our workers, and to help them continuously re-skill and up-skill themselves. We will also strengthen our social safety nets, especially for the elderly and vulnerable groups, to provide them with greater assurance and protection in life. 

CommonWealth: The changing of geopolitical trends has led many countries and companies to pay attention to supply chain resiliency. For security and risk-diversification considerations, many companies are setting up part of their operations to ASEAN nations such as Indonesia, Thailand and Vietnam. What role does Singapore play in this? What are the new challenges?

Wong: We can understand why countries and companies are seeking to diversify their sources of inputs.  No one wants to be overly reliant on a single supplier for raw materials, key components, or technology. 

Singapore and ASEAN countries will strive to be a trusted node in the evolving configuration of regional supply chains. That is why Singapore has been working together with our neighbours to make Southeast Asia more attractive to global businesses. 

We are deepening economic integration in ASEAN, including streamlining our customs and trade arrangements, and enabling real-time cross border payments. Singapore will also do our part to facilitate investments in Southeast Asia, leveraging on our strengths as a financial centre, and a reliable business and logistics hub. 

But we hope that countries and companies will be careful and judicious in their de-risking efforts. Because if de-risking is taken too far, it would prompt reactions and unintended consequences. 

Over time we would end up with a more fragmented and decoupled global economy, split into competing regional blocs. This would leave everyone worse off, especially trade-dependent economies like Taiwan and Singapore.

CommonWealth: Over the last 30 plus years of the “globalisation era”, Singapore has successfully played the role of a platform for international dialogue. On the military front there is the Shangri-La Dialogue, and on the political front (Singapore) has facilitated the development of ASEAN. When the US and China are entering a stage of competition across all areas, how can Singapore promote dialogue and peace within the region?

Wong: As one of the smallest countries in Asia, Singapore must adapt to the world as it is, and not what we would like it to be. 

With regards to US-China relations, Singapore is not in a position to prescribe what either country should or should not do.  But if the parties find it useful, we will be happy to do our part to facilitate wider conversations and dialogue, as we have been doing through platforms like the Shangri-La Dialogue. 

We will also continue to engage both the US and China through ASEAN. ASEAN has established many fora for dialogue and engagement, like the East Asia Summit, the ASEAN Regional Forum, and the ASEAN Defence Ministers Meeting Plus. These collectively provide a framework for cooperation in areas of mutual interest, such as climate change, cybersecurity, and maritime security. 

ASEAN’s aim is to have an open and inclusive framework for cooperation – one where we can bring together the major powers, including both US and China, in overlapping networks of partnerships.  We hope this will increase the opportunities for mutual engagement, and maximise our chances for continued peace and stability in the region.  

CommonWealth: In many Singaporeans’ eyes, you are from an “ordinary family”. Your father was a salesperson and your mother a teacher, and your family stayed in a HDB. In public settings, you often talk about the importance of being “inclusive” – could you share more about the importance of being “inclusive” and why it is so important to Singapore today?

Wong: Like many Singaporeans, I grew up in a public housing estate.  I did not attend brand name schools. I did not benefit from connections or social advantages in life.  

My parents made very clear from the outset that I had to rely on my own efforts to succeed. They told me that if I did not get into university, I would have to look for a job; and that if I wanted to go overseas to study, I would have to find my own means to support myself.  

Fortunately, I was able to secure a government scholarship to study abroad.  Upon returning, I started work as an economist, and then later found my calling in the public service, because the work was meaningful and fulfilling.  

My experience is not unique. Many of my school-mates too have benefited and done well in our system of meritocracy. 

Lawrence Wong (Source: AP)

I am therefore determined to do whatever I can to build a fairer, more equal and more inclusive Singapore. Singapore must always be a society where every citizen has a place; where everyone is valued for their contributions; and where all are given the opportunities to excel and realise their full potential. 

CommonWealth: Singapore has become a magnet for Asia’s rich and powerful as well as its top talents. However, this has also pushed up costs of living and housing prices. You have spoken about levying taxes on the wealthy and raising GST. Are you not worried about affecting Singapore’s competitiveness? How will you strike a balance between Singapore’s competitiveness and its people?

Taxes and spending are two sides of the same coin, because we operate on a balanced budget, and seek to live within our means.  

So far, we have been able to keep public expenditure in Singapore fairly lean. Government spending today is about 18% of GDP. This is one of the lowest amongst the more developed economies. Yet it has produced good social and economic outcomes.  

Looking ahead, we expect public spending to increase.  With a rapidly ageing population, the government will have to spend more on healthcare and other social needs. We will also have to prepare for longer-term challenges like climate change. 

We are therefore managing this increase in spending carefully – to ensure it is fiscally sustainable, and our economy remains competitive and strong. 

Even as we raise taxes to cover the increase in spending, we will also keep our overall system of taxes and transfers fair and progressive. 

In other words, we strive for a system where everyone benefits from the State’s spending, but the vulnerable benefit more; and where everyone contributes something by way of taxes, but those who are better off contribute more. 

Today, the lower-income Singaporean households receive about S$4 of benefits for every dollar of tax they pay. For the middle-income households, they receive about S$2 of benefits for every tax dollar paid.  The higher-income households are net contributors of tax, and they receive about S$0.30 in benefits for every tax dollar paid.  This is a fair and inclusive outcome.

CommonWealth: You are described as a leader that emerged out of the COVID-19 pandemic. What are the lessons following three years of leading Singapore’s fight against COVID-19 and how have these shaped your thinking in leading Singapore into the future?

Wong: We have learnt much from the experiences of tackling Covid-19 over the last three years. 

The government recently completed a comprehensive review of our handling of the pandemic, including the areas where we could have done better.  

We published the report, and had a full debate on it in Parliament, because we are determined to learn from the experience, and better prepare ourselves for the next crisis.  

My own reflection on the last three years is that in a complex crisis with incomplete information, there will never be a perfect response.  There will always be bumps and setbacks along the way.  What’s critical is the ability to recover from the setbacks and to continue to learn and improve. 

The most important factor in tackling any crisis is trust – trust between the government and the people, and also trust that our people have amongst themselves. When there is trust, people will be prepared to listen to the government’s advice, and to cooperate with tough but necessary measures.  When there is trust, people will have a sense of collective responsibility to do the right thing, and to look out for one another.  

The trust we have in Singapore is something very precious, which we do not take for granted.  My efforts to review our policies and refresh our social compact are ultimately aimed at strengthening this reservoir of trust, so that Singapore will always remain a high-trust society. 

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Have you read?

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• Speak Plainly, Mr. Chairman Xi 

Edited by TC Lin
Uploaded by Ian Huang