Strategies for a more resilient world

warm welcome to the many people joining us online I'm Bronwyn Maddox the director of Chatham House and I'm delighted to be bringing us together for this discussion of strategies for a more resilient world I did think of calling this a hard time to run a country but this is a much more upbeat forward-looking and indeed international title and we're going to have I think an absolutely fascinating discussion I'm delighted to have here Singapore's senior minister I've had the pleasure of knowing for some time and have always been impressed on the uh by the way in which he grapples with the problems of individual countries many many different countries and the problems and answers to those countries working together he's as I said senior minister in Singapore my colleagues have prompted me coming in here to remind us all though I'm not expecting a response that he's announced his candidacy to be president of Singapore it is a crucial non-non-party Affiliated role in Singapore a position that allows uh that person to challenge the government on behalf of the uh the people and he is eminently qualified for that he's served her years as um in different roles as Deputy Prime Minister Finance Minister education Minister he is currently the chair of the central bank that will step down from that as he uh prepares to make his case for this post and he has chaired the group of 30 an independent Global Council for economic and financial leaders over the last five years is currently the chair of the group's Board of Trustees he took over that post from Jean-Claude Tricia and was recently succeeded by Mark Carney I could read out but I would take up much too much of the the scant hour we have many of the other things he has done internationally working with a huge range of people at a very high level to bring together discussions on the kind of problems that countries regions and all our societies now face but let me let me stop there because we want to save the time for this discussion he's going to make some uh opening remarks I'm then going to fire some questions at him but please start getting your questions ready and online as well I I will start weaving them in as well and please join me in welcoming the senior Minister thank you [Applause] thank you ronwood I'm very happy to meet everyone in the room and to be addressing those who are listening in online I should just clarify by the way that the role of the president in Singapore is not to challenge the government on behalf of the people but the president is elected directly by the people in order to preserve the Integrity of the Singapore system Financial Integrity as well as the Integrity of key appointments of the public service it's a very important innovation in our democratic system that we embarked on a few decades ago and one that I'm offering to put myself forward and that's all I'm going to say about my my intended role in the next few months as a candidate in the presidential elections so the topic of this talk and this discussion has to do with how we achieve a more resilient world and I framed it thus in discussion with Bronwyn because we first we have to first recognize that we are in a fundamentally disorderly world we're not just seeing a series of bad events we're not just seeing seeing happenings coming about because of Bad actors whether it's Putin or anyone else we are in a situation that is inherently disorderly and we've got to recognize that if you want to then build resilience and optimism we've got to recognize what we are up against and the fact that it's not idiosyncratic but it is baked into the system disorder uncertainty and fragility it's a big into the system so we've got to recognize it and develop strategies that are realistic ambitious and doable and we've got to move our populations together with us to be able to build that new optimism in a very different world we know the causes we know that geopolitically we're in a different era we know what's happened in the U.N based system how Ukraine was able to happen with impunity we also know more fundamentally that we are not a new phase of the relationship between the U.S China and the middle powers we are not yet in a multi-polar world but we are no longer in a unipolar world and then in particular adjusting to China's rise as an economic power and one that's increasingly wanting to play a role in global rule making is going to take some time and we have to move past the phase where China's rise is merely disorienting towards a phase where we respond to China's rise so as to enable a new stability in a new way of collaborating internationally which is not about I win you lose but about how we can all keep advancing and develop a system which provides for Prosperity on the part of ordinary citizens in all our countries so that's the geopolitical fundamental shifts very different from not just the end of the Cold War not just the time when things Xiaoping began liberalizing China but even different from 20 years ago second I think we are economically in a new phase the advanced world for reasons that are demographic but go beyond democracy faces the prospect of somewhat higher inflation for a period of time I don't think it's just a current cycle and it's not just about the questions are not just about whether the FED raises interest rates by another 50 basis points but really in the new phase of somewhat higher than comfortable inflation plus weaker growth the fact is private investment is weaker than it has been for a long time to come sorry it's been it's been weakening over a long over a long period there's a basic Trend in private investment and corresponding to that there's also been a Slowdown in productivity growth across most of the advanced world at the same time the developing world faces risks that are of a different scale than anything we've seen in decades there's a real risk of development falling off the map and large parts of Africa and the rest of what we call the global South seeing either regression or a standstill and we've got to avoid that we've got to do everything to avoid that because it'll have ramifications not just for those very large growing populations but will have ramifications for ability to be able to address climate change a global war term cycle instability the loss of biodiversity and the deterioration of Global Peace we've got to address the development Challenge and treat it as a global challenge so that's the economic shifts third of course we have those existential shifts we are way behind in the race to address climate change we are way behind in the race to address that three-headed environmental crisis global warming a global Water Cycle that's out of kilter in the loss of biodiversity basically we have to recognize that we're moving from an earth system that was broadly stable for most of human history to one that is now unstable and it requires much more urgent and much Bolder action not just individually within Nations but collaboratively across Nations and fourth interacting with these first three challenges interacting with the gradual breakdown of geopolitical order the weakening of economic prospects and the sharpening of the existential risks fourth we have growing domestic polarization in many democracies particularly in the advanced world that makes it difficult to address those first three challenges and makes it now a Confluence of challenges that I would call a perfect long storm domestic International existential economic geopolitical not just an accidental Confluence of events but now a structural Confluence of events that we are landed with and the solutions therefore have to be political as well at home how do we bring confidence back to ordinary working populations how do we develop a politics that's not just about the adversary not just about the other but the politics that's about opportunity opportunity backed by real paths for improvement starting from Beyond all the way through life how do you avoid winning votes not by casting the other as the adversary how do we win votes not by fomenting divisions how do we win votes not by reflecting Grievances and accentuating them but instead strengthening the politics of the center and developing a mood of optimism that comes from the the real possibility of everyone moving up together we will not solve our Global challenges we will not address Global polarization if we do not tackle domestic polarization and soon I think there are four basic shifts required when we think about strategies for more resilient World in a world which is fundamentally uncertain and disorderly the first is the macroeconomic policy the stuff that makes the headlines every day whether the fed's going to raise interest rates what's happening to the debt ceiling in the U.S and the like but it makes headlines for the wrong reasons the challenges we Face are far more fundamental than the short term first we have to accept that macroeconomic policy is monetary or fiscal policy is no longer simply responding to economic Cycles the booms and busts of economies and during the boom years you try to sort of lean against the wind and during the bus years you try and stimulate your economy using other monetary or fiscal policy they're not in the world that is predominantly about Cycles we are now in a world of shocks in the last two decades we've had three pandemics one Global financial crisis one major war in Europe which is not just about Europe and we've had a crisis of insecurity stretching across large belts of the world food insecurity Health insecurity and of course physical insecurity it's a world of shocks that are not simply unpredictable but are the result of slow moving changes the underlying changes and currents very obviously in the environment but also the underlying political and economic currents but it shows up now as shocks from time to time and a whole orientation in economic policy has to be not to wait for each new crisis to occur another financial crisis another pandemic and the like but to be in a state of permanent preparedness to build up our defenses for the next shock and the next cycle in the next Crisis prevent and prepare rather than wait to respond and you've got to invest a lot more in prevention and preparedness rather than response because first it's far far cheaper it's far less costly to human life as you could tell from the pandemic had we prepared better we would have had far fewer loss of lives and we'd had to expand far far less public resources nationally and globally so prevention is by far the most efficient and Humane strategy compared to waiting for the next shop in crisis and then having to respond to it and it means therefore that monetary and fiscal policy has to build up buffers in normal times knowing that another crisis is coming you've got to invest in preparedness which is largely a task of fiscal policy and monetary policy has to avoid storing up risks in normal times and the experience of the last 12 years has been one where monetary policy aimed largely in attempting to raise inflation has led to a very significant buildup of risks not just inflation risks but more fundamentally Financial risks so we need to be more circumspect about the role of monetary policy once you're passed an immediate crisis you've got to be able to build up buffers to respond to the next Crisis and fiscal policy then becomes the even larger challenge because in fiscal policy we have the challenge not just of building up buffers ensuring that you don't run very large deficits in peacetime in between crisis but you've also got to do that in a context where at least in the advanced world spending is going to be on the uptrend for very for structural reasons societies are getting older one of the fundamental roles of governments is to look after the elderly interest costs are going to go up because we've in many countries overborrowed and interest costs are almost certain to be a larger proportion of government budgets and in the major Powers National Security costs are also going on so there is a secular uptrend in fiscal spending and how do we in that context still exercise physical discipline and build up buffers in all in peace time in between crises it requires new fiscal strategies that are more targeted less Universal it requires strategies where infrastructural investment and the role of the public sector in particular is that of stimulating private investment mitigating risks of investment so as to be able to mobilize the private sector and it requires also in many instances strategies to raise revenues in a progressive fashion there are very few solutions that do not require all those three dimensions more targeted spending aimed at those who need support the most second strategies to mobilize private investment rather than having to use the public balance sheet to invest in large-scale infrastructure both domestically and internationally and thirdly Progressive Revenue raising fair and equitable and that way we stand the chance of addressing the longer term Fiscal challenges but also building up buffers in peacetime before the next Crisis so you have enough ammunition to deal with the next Crisis so that's macroeconomic policy and I've spoken a bit longer on that first challenge because I think it's somewhat neglected Second Challenge the Global Commons we're way behind on the race as I mentioned but this is a challenge that we can deal with we think of climate change and we think of the vast amount of spending that's required to mitigate global warming and to adapt to the consequences of climate change we think of it as a burden and there's a endless debate about how much should be transferred from this part of the world to that part of the world from the global North to the global South and so on so forth it's fundamentally not the right training it's not a game of aid this is actually the largest opportunity for economic growth that we've seen in decades we're only going to be able to solve the challenges of the Global Commons climate water biodiversity by investing at a higher level for a long period of time and if you just take the rough estimates by the IMF the iea and others if you have to invest let's say three percentage points of GDP more than before it translates into a very significant booth in GDP growth something like zero seven point seven percent per year so roughly speaking without being too precise and without pretending that there's some Precision in any of the models roughly speaking we have the opportunity to boost economic growth by 20 to 25 percent more that we've seen in the last two decades whether even further boost in the developing world so treat it as an opportunity for growth requiring investment that must earn a decent return and which can be mobilized by the private by the public sector seeing its role particularly through the multilateral development Banks to mitigate risk so as to be able to unleash sufficient private capital investment particularly in the developing world so this challenge can be solved it requires collaboration it requires prudent thinking about how we use the multilateral development Banks which are extremely efficient instruments for the multiplication of public capital and how we use them in particular to mobilize private investment in the developing world third challenge U.S China it's not on a good trajectory there's a pause right now in an attempt to talk to each other more at several different levels but we're not no one is expecting an early Dial down intentions we're in a polls but fundamentally we have to recognize that China's rise was a success of the global system it occurred largely through Market liberalization by participating in an international trading system and by improving agricultural productivity that's fundamentally what most economists would agree China's Rights was about not very much of it was about statehood Enterprises most of it was about unleashing the forces of the private economy it was avoid thinking either that China or Asia's rise is inexorable or thinking that China's somehow going to shrink and decline we must avoid thinking that the final outcome is going to be some great Triumph of one system over another in fact it is most unlikely that we're going to see the Triumph of one system one method of government over another one system of values over another we're going to have to coexist and we're going to have to coexist in ways that serve the interests of our own populations and how U.S and China find a new stability a new understanding and a new stability will also shape prospects for the rest of the world to coexist coexist with the US and China but avoid thinking in binary terms and avoid overreading the intentions of each other this is most unlikely to be about a competition between two systems that ends up with one triumphing triumph triumphing over the other learn to coexist learn to collaborate and avoid the appealing thought of a cold piece a cold piece is likely to be highly unstable and one that's fraught with tensions and with high risk of conflict think in terms of collaboration competition and rules of the game to ensure Fair competition especially through the WTO process and in that regard we have to think hard about industrial policy which is the Rage of the Day in the US and Europe and many other parts of the world in China itself and a good part of industrial policy today has a protectionist Land part of it is very well intentioned particularly that dealing with the need to invest more in climate mitigation but it also has a protection is slant and if we think that industrial policy and for that matter foreign policy has to be aimed at serving the interests of ordinary working people we have to aim for absolute performance in each of our countries as the principal gold not relative performance and if we go for a system that is protectionists that imposes restrictions or that has negative spillovers on the rest of the world where your actions domestically have negative spillovers on the rest of the world you might be able to preserve relative superiority at least for some period of time but it is almost certainly at the cost of absolute performance everywhere most economists would agree on that so avoid strategies that merely go for relative superiority and are the expense of absolute performance because the ordinary worker depends on absolute performance the growth of an economy the jobs have been created the quality of jobs being created and the opportunities for social Mobility it's not about how well this economy is doing relative to another economy somewhere else in the world that doesn't improve the life of ordinary workers so just remember that absolute performance and a International competitive game in which if I win you don't need to lose has to be the way forward absolute performance remains at the interests of ordinary working people everywhere in the world so let me stop there but I want to end with one final point it only works if the politics also seeks to work against rather than to accentuate domestic polarization we're not going to achieve a less polarized world without a less polarized set of societies our own societies and that requires a politics that is more long-term more optimistic rather than focused on the adversary or focused on divisions between people and it also requires dealing with a challenge that we have not found a solution to as yet but a very large challenge internationally which is the industrial scale misinformation that is now eroding the basic pillars of democracies and we have to be forthright about addressing these challenges internationally because it's not a problem that can be solved by any one country I am optimistic I'm optimistic because I think the basic ingredients for a more resilient world are there the ability to have public private collaboration on a scale we've never before seen is there and the opportunities for New Politics with the strengthening of the center in politics is there and the opportunities for the US and China to have a new understanding and to find new stability in their relationship that will serve the interests of ordinary working people in their societies as well as globally is there as well so I stop on that note I'll be very happy to have a discussion with broadband and take questions thank you [Applause] that was terrific thank you very much indeed and people oh there's some fascinating questions coming in please do keep sending them online and here uh begin to get yours ready um and lots of places I could sort you've covered so much um we start with your sense of the perfect long storm as you've called it I mean the things that really make it much much more difficult um for governments of all kinds to make the judgments they they have to make but I want to pick one of start with one of the more positive points which is about investment an attracting investment um you describe the three you know things that that when you were talking about fiscal policy that have to be done and I was thinking um not parochially of the British press at the moment where the discussion about how to raise tax and how to Target and cut public spending is um is it feels like an arithmetic wrestling match in every every page of the papers um but your third Point uh is one that also applies to many countries about how to attract investment and indeed how to make the most of the revolution in Ai and the need for Green Technology that is going uh on at the moment and so if you were going to advise as you do governments are around the world but even particularly with an eye to um uh say the UK government how would you advise a government goes about making itself making its country particularly attractive at this moment of very rapid change well that's a that's a important question and a broad one and perhaps I can address it in two parts one has to do with social policies social reserves as it were and the other has to do with economic competitiveness on social policies as I mentioned earlier we've basically run out of space in most advanced countries to be able to Simply spend on everyone and at the same time have some sustainability in depths and we now have to face the task of targeting spending more carefully Healthcare is the biggest challenge in the advanced world because of Aging the UK is a bit of a outlier even compared to Europe because of your system of universal benefits in the NHS very sensitive topic but the the world that was envisaged by beverage when the policies were first enacted has turned out to be a very different from the world that we've had the fact is advances in medical technology increased vastly increased life spans and the fact that most people would like to have the latest drugs and treatments and not see as the privilege of only a few has meant vastly increasing health care costs and we are able to address that by a strategy that is actually more Progressive which is to support the poor more and to ensure that upper middle-income people and the rich pay their share for health care costs either you do that or you have to ration Health Care by having very long cues or having some people go abroad for treatment which is just not very fair and not Progressive so I think it's a fundamental Challenge and I speak it's not just a challenge for the UK but it's a challenge for several other Advanced countries as well targeted subsidies are critical in healthcare the use of insurance as a solution that pools risks is important but if you simply go for the ultimate insurer being governments the government simply paying for all costs you end up with a ever increasing bill that has to be met by taxes of someone so I use that just as an example but the second example that I really want to highlight again because it's neglect it's too it's obvious and yet it is neglected is that and this ties up both social policies with economic competitiveness a whole approach when I talked about improving improving absolute performance and not just trying to have a relative lead over each other internationally a whole approach has to be 90 percent building up the capabilities of our population and 10 making sure that no one else is abusing their position in the global system and that 10 sometimes becomes thirty percent if someone is egregiously abusing the rules of the WTO right now we're very far from that mix there's very little effort being made to develop the capabilities of domestic populations starting from the earliest years of life where the gaps once entrenched last all the way through life all the way through what happens to ordinary working people during their careers we stop investing in them and we leave it to the market but the Market's always too short-term because an employer is mainly interested in what that worker can do today in that particular job with that particular technology rather than prepare that worker for a new technology or prepare that worker for a job with another employer there is a basic market failure the state has to step in and this has to be an opportunity for State private sector unions and people collaboration to invest in people regularly through their working lives so as to keep upskilling reskilling and making sure that the quality of jobs that are available to them goes up and it's it's just the most neglected element of public policy in too many countries and I'm not even talking about the developing world where in a large part of sub-Saharan Africa and South Asia and parts of Southeast Asia childhood stunting currently ranges from 25 to 40 percent of kids under the age of five childhood stunting once you're on that situation at the age of five your life is blighted do you mean physical lack of nutrition it is educational it is both mental and physical or a society quite apart from being grossly unfair on the families and individuals involved so we've got to it when I talk about 9010 we've got to start thinking about domestic capabilities skills opportunities and human potential as fundamental to both social and economic policy including economic competitiveness rather than what I can do to hold the adversary down if the adversary if the adversary is not playing by the rules take action ideally through multilateral means sometimes through bilateral agreements but Focus first and foremost on what we can do to maximize our own capabilities thank you for that one um you know a a long time on this we're both exploring the the development and indeed what it means for um individual countries I was thinking of uh as you're talking as I said not to bring it just back to the UK but of the projections that if you simply extrapolated Health spending now you would end up with in the phrase you know a Health Service with a small country attached um it it is on that kind of scale let me take you to one of your other Central points about how countries can react to the rise of China and the relations between us and China and you've made a very strong pitch for countries of all kinds not to deal with this an antagonistic way to look to ways to live with China's uh rise and also see this as a zero sum and so on um how would you advise those two countries though the US and China to go about this they are at a point of some tension well you've called on countries to solve their internal um polarization the one thing on which American politics appears to be agreed uh is to be tough on China yeah what would you say to the political uh leaders of of the US and China well I'd say first um if you look at the by the way they know uh there are no Saints here uh both of them need to make adjustments both of them need to avoid a sense of hubris with regard to the superiority of their own systems and both of them need to recognize that there's actually a great deal in common in the way they go about trying to improve lives and grow incomes China is not the Soviet Union the Soviet Union was largely isolated from the global trading and investment system and was also very small compared to what China is today China is deeply inserted in the liberal economic order and has a deep interest in its preservation and that's those are huge grounds for seeing eye to eye and developing rules to make sure that trade is fair investment is fair intellectual property is protected these are rules that can be developed even to ask someone like Henry Kissinger he'll say you need a new detaunt but you're not talking about countries which are fundamentally strategic adversaries it's totally different from the Soviet Union or today's Russia so with China I think both sides have to find have to recognize that China's size and the fact that it's not going away and the fact that it is going to keep climbing the Innovation ladder requires a strategy of interdependence with some constraints if you don't have a strategy of interdependence it doesn't mean that China gradually with us away it eventually Rises anyway but when it finally gets there it might not exceed your capabilities in the most advanced ships but when it finally gets there it will know who made it extremely difficult for it to get by and that makes for a dangerous World far better that you have an interdependent world with interoperability and rules of the game to ensure that intellectual property is safe and rules of the game to make sure that you don't unfairly subsidize domestic competitors at the expense of international competitors subsidized domestic producers at the expense of international competitors but that can be developed I mean that's not a new game I mean that's what the WTO has been about it is not difficult to formulate such rules if you look at you is more difficult to enforce them though as the WTO has found including in the case meets the Appellate Court to come back into business um and it's in everyone's interest that it does but if you look at you know what's the cause of this disquiet and this sort of uh disenchantment um I I regularly look at the Gallup and pure surveys of domestic public opinion and opinion around the world and if you look at the attitudes of Americans towards China is China a Force for good or is China um a good thing for the U.S a threat right a threat there was a general drift up in perceptions of China being a threat over the last 20 years but something did happen in 2016. there was a step change in the Curve and I don't think that step change in the curve was occasioned by any new strategy on the part of China or any new development in China's market share or China's actions in any regard it was domestic politics politics matters politics matters it shapes people's minds it adds to a sense of grievance and it creates an opponent in the easiest possible way which is not the opponent of Technology not the opponent of skills that require investing in but a foreign opponent politics matters and I think we're trundling down a road where we are in the politics of pessimism and grievance and it has to be redressed otherwise we are just all worse off there are many people who would accept that explanation for at least part of what's gone on in the development of the US the U.S political approach to China but would you agree that there has also been a change of President xi's China in its approach for example to Taiwan the kind of language used and so on that it too has hardened its start I think if you read China carefully and there are those who look Beyond this sort of headline statements and read very carefully what China says it says and does uh two things are clear First China doesn't yet feel it is ready to be an equal with the U.S at the center stage but it wants to play a more major role in rule setting in the IMF at the World Bank in trade and in other areas second on Taiwan um no serious re uh Observer including those who are very close observers and who are engaged in this believes that China wants war with Taiwan neither does the U.S and it's extremely important to preserve prior understandings on Taiwan and preserve the constructive ambiguity on Taiwan that has lasted for decades on the part of both the U.S and China thank you it's not going to be our last chance to discuss that although it might be um today let's go to questions and there's some terrific one oh great and there's some terrific ones online as well all right I'm going to take them in pairs because there's lots of hands up um let me take the two people here in the second row starting on the aisle please mine will be very quick um you and grantame Chatham House member I've worked for a number of international organizations on uh trade projects the such as the Asian development bank quick question what were the positives and negatives in your view from the Shangri-La meeting last week okay thank you and next to you uh my question is about the multilateral banks as well to what extent do you think that the international financial institutions have reformed since the Bretton Woods conference have they kept up with the modern changing world with the introduction of sustainable development goals in the SG or are they still using their decisions uh based on an old framework great thank you there's no compulsion to say who you are but if you'd like to we'd certainly be interested when's rippage I'm a doctor and a UK youth Delegate for the G20 thank you very much indeed very good so um on the first question I think you know the the mere fact of meeting in the same place um is something we must count as a achievement given how um difficult the relationship has been between the US and China and the Shangri-La dialogue plays that function um I would say I wouldn't say there was a huge Meeting of Minds but there was an ability to listen to each other um I'm I'd say we are all encouraged too by the fact that both the US and China do want to increase that um piece of interaction but there's Janet Yellen or Jake Sullivan or blinken and their counterparts on the other side holifung and wangi and others there's a desire to increase interaction and hopefully we'll see a meeting in San Francisco between the two presidents so there is a desire to talk um and uh we have to count that as a as a positive on your Christian which is a very large one I would say there's now a window of opportunity for serious reform in the amongst the international financial institutions uh particularly the World Bank and the mdbs I happen to be a member of G20 expert group that just had a virtual meeting yesterday by the way um that's working very hard on the fundamental shifts required at the World Bank and the mdvs along the lines of what I was talking about earlier how do we use limited public capital in our International institutions to multiply resources and in particular to be able to invest it a lot on a larger scale in both development and sustainability at the same time both development and climate mitigation and adaptation at the same time the challenge is to do both together because it cannot be an either all you can't just talk about global public goods and invest in climate mitigation and adaptation if you're not continuing to reduce poverty improve lives while ordering people who are low income and want to move up to Middle income and enable governments to achieve National development objectives it just won't happen they'll junk the global public goods part of it so you've got to do both together but when you do both together the cost of capital goes up because many of the Technologies required if if for instance if you talk about an infrastructure project if you want to add sustainability to that infrastructure project it'll cost a little more particularly because the Technologies are not yet mature and it requires therefore a global public subsidy and there are ways in which we can do that and yet mobilize a lot more private resources so this is one of the you know when I talked about the four challenges I would say this is the one where we more or less know what the solutions are and they can be done but we've got to be willing in the U.S Congress and all legislatures to provide the necessary Capital to the multilateral development Banks because the extremely efficient tools of public policy we've got to be willing to provide them the necessary capital thank you for those right let's take another uh pair here in in the pink and again on the aisle and then I'll come to you too hi my name is Anna Freeman from Imperial College um so a bit about your sort of like the infrastructure analogy you just pulled how do you create sort of a business case for investing that bit extra just for the sustainability or for resilience or so sort of who pays for that okay thanks okay and over here on the aisle I'd just like to bring you closer to home Thailand um because when you said something about this uh how to create not to win the world without fermenting divisions that's what's happening in Thailand now you see that the party later between the most seats he's not able to form a government at the moment due to so many political factions and some interference from The Establishment allegedly Thailand is very close to Singapore and it's one of it was the first country that brought in this Asian financial crisis How concerned is Singapore as a neighbor and member of our sin to the repetition the recycling of this the richest circles cool Constitution election and cool again thank you sustainability who pays and Thailand divisions right so on your first question is partly related to the the one we just had I think basically um private markets overprice the risk of investing in the developing world particularly in Africa and we've got to find a way of reducing that risk premium and reducing the cost of capital of investment part of that why do I say overpriced part of it is not overpriced but reflects genuine problems governance problems political changes new governments coming in and sometimes redoing all projects and the like and that part can be addressed the mdbs when they work with governments have to set very clear rules to ensure stability and regulation but also to develop the capacity capacity in Project preparation capacity in developing whole sectors capacity in National development still such an important part of Economic Development developing institutions and capacity to be able to see through development strategies but another part of the reason why risks are price or high is just the perception that long term something's some bad events will materialize and private actors private firms just price it in um and it's very hard to explain the extraordinarily High interest rates uh that some developing countries have to play have to pay based on their actual observed record of um canceling projects or you know not fulfilling their obligations so on that I think we need a more concerted strategy of public-private collaboration involving the mdbs the development Finance institutions the private sector philanthropies and National governments to just reduce the perception of risk through a more coordinated strategy but we value begun we barely begun addressing that basic risk perception and I think it has to be addressed quite forthrightly um on your question um you know we we are most diverse to commenting on other countries politics um okay if you talk about countries that break International norms Russia invading Ukraine what Myanmar is doing domestically we all have to comment and we do what we can to ensure that um bad behavior is discouraged um but Thailand will have to find its own equilibrium I I would be very wary as someone who's still a sitting member a senior member of the Singapore cabinet to comment on what the best Solutions are but we we each have to find our own equilibrium or dispensation in democracy thank you so I'm I'm not answering your question satisfactorily but that's a stance I would take basically I'm going to come to you too in in a moment let me just take two online and thank you for sending them one from Karen Patel saying um do you think that Ukraine Russia has increased uh the kind of uh geo-economic geopolitical fragmentation you've been talking about and an interesting one from Anita punwani saying can incumbent leaders build resilience if those are the very leaders who brought us to this state of permal Crisis or do we need to focus on giving the next generation of leaders the agency to bring about change so Ukraine Russia and its impact on all this and one generation and the next yeah two very good questions um I think Ukraine Russia is not just about Ukraine I think the weakening of the international order extends Beyond the the problems of Ukrainian territory there was a flagrant break in norms and in the U.N rules and the fact that a large number of countries although they condemn Russia were willing to go along with penalties is indicative of the state of the world we live in there's a weakening of multilateral commitment to the rules of the game that is worrying on the second question um one generation and and another so it's saying it interestingly can incumbent leaders really do all these things we're here calling on them to do if they're the ones who have contributed as she is suggesting to to this state of Perma crisis she's using the uh word that is often used about this or do we need to hand it over to the next Generation right so I mean the reasonable answer will be you can't expect very much from those who are responsible for fomenting divisions or fomenting that more polarized State of Affairs but I think the real challenge if you ask me is in recreating a robust politics of the center and that is a challenge for both those who are left of center and right of Center but not far left and far right we've got to find a way in which the equivalent of Democrat parties labor Social Democratic parties in Europe um address the needs of the working class and avoid the extreme right taking over and winning the allegiance because what's happened remarkably is the way in which the extreme right not the moderate right the extreme right has found ways of winning their allegiance of Ordinary working-class People in a whole range of countries and whilst you can blame it on National strategies and anti-immigrant strategies and the like and sometimes just personal Charisma it is fundamentally a failure of the left a failure of the left to address the needs of ordinary working people when faced with job loss sometimes affecting whole towns and regions and allowing the scars to remain in thicken over time and likewise the right of Center needs to have a strategy that's not just about markets and keeping taxes low and talking about individual responsibility because it's not as if societies have weakened because of a upsurge in individual irresponsibility you know people haven't become suddenly more irresponsible we Face challenges now that require a more active role for the state it has to be an active role for the state that still supports growth because it is much easier to tax people if incomes are growing and it has to be basically a progressive strategy even if you're right of Center you need a progressive fiscal strategy for for it to be sustainable so I think the restoring confidence in the politics of the center has to be extremely important as a political challenge in all democracies thank you I'm going to take that as a kind of answer to another question online from Richard Gosney which is who can best persuade publics to accept a bit less Jam today for more Jam in decades to come the political question of the time um which I but I want to just squeeze in these other uh questions I'm going to take the two of you as you had your hands up first I'm really sorry um here and then behind you in the back yes Ben sorry you started hi um Ben Bland I'm the director of the Asia Pacific program here at Chatham house um Minister I think we'd all share your hope for an improvement in U.S China relations but as we know hope is not a strategy so so failing that Improvement how far do you think middle Powers smaller Powers countries like yours and the UK how far can we shape a more effective multilateral system despite the US and China is that even possible terrific thank you and here Hugo bark I'm currently studying a masters in security resilience and science technology at Imperial so the topics close to my heart similar to the question here do you think small states are able to be more Nimble in this hyper-complex world and do you think larger states by that virtue are more fragile or do you think the larger states are still be able to be better because of kind of economies of scale and the money they can pump into Innovation thank you very much one abstract one and one absolutely to the point of um um I do not make my case on the basis of Hope for the US and China I think there's self-interest on both their parts and particularly the interests of ordinary working people that have to guide their policies and as I mentioned the interest of ordinary working people rests not on relative leads that one country has over another but on absolute performance the fact that you've got to create jobs and to create jobs and improve incomes International Trade counts a free international trading and investment system is the most secure basis for Rising incomes in all our societies and an active state to be able to help those who are displaced principally by technology but also sometimes by International Trade competition that formula is still robust um I believe self-interest and some clarity of thinking still exists amongst the major Powers but to address the other part of your question and the two questions I'd say the what we call the middle Powers small countries like Singapore regions like asean play a very important role we play a very important role in ensuring that as we move from a unipolar world to a multi-polar world which is a shift that cannot be resisted it doesn't become a polarized World in other words where you have one block comprising China and a set of allies and another block comprising the U.S and a set of allies if you notice through our actions in asean Singapore and asean we are members of various economic blocks and sometimes digital blocks we are both members of blocks that involve the United States and blocks that involve China and that creates an overlap between the emerging alliances having that overlap is critical so it's not just your member of one block and not another overlapping blocks are extremely important second keeping each of those blocks open-ended to new members is also extremely important so that has to be our strategy we fundamentally do not determine the outcome in the U.S China relationship that's going to be determined by those two major Powers but I think we play a useful role in avoiding a complete bifurcation and staying engaged actively engaged with the US and China thank you for that and the foreign Secretary of speech did uh UK one did indeed avoid that complete bifurcation we all really sadly going to have to stop there I'm so sorry thank you for these terrific questions thank you for the even more that were coming thank you online there were some great ones that which we couldn't get to but um thank you all for coming uh uh virtual or in person please join me in thanking Minister Thurman [Applause]

Channel: Chatham House

Views: 5,695

Keywords:

Id: 5_WoWg2RTIc

Length: 62min 16sec (3736 seconds)

Published: Fri Jun 16 2023