A sunny island set in the Asian hinterland

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The Straits Times | June 29, 2015
By Parag Khanna

IT IS a promising sign when an anniversary is occasion to look keenly forward as well as nostalgically backwards.

So it is with Singapore's golden jubilee celebrations this August. Singapore's success as a globalised city-state owes itself in no small part to visionary leadership that used scenario thinking to build foresight into global trends and adapt the country accordingly, rising rapidly up the hierarchy of prosperity and respect along the way. The next 50 years will require even more societal acuity.

As much of the Arab world crumbles on the 100th anniversary of the Sykes-Picot agreement that laid down its borders, and Africa and South Asia are just beginning to get their houses in order, Singapore stands out as the world's most successful post-colonial nation.

Rather than become complacent, however, the Singapore Institute of International Affairs has convened over the past two years more than a dozen dialogues and roundtables aimed at anticipating the coming decades in Singapore's strategic environment and internal dynamics - and gathering policy proposals for how to manage a complex future.

Multipolar world

ONE major conclusion is that we are entering an era of permanent multi-regional multipolarity, with America and China, Europe and India, Brazil and Russia all occupying the global stage at the same time.

Each continent is deepening its regional integration to grow its scale, while reaching abroad in a multi-directional (rather than Western-driven) system that is more balanced than ever before.

In short: Every region of the world - including Africa and the Arctic - matters profoundly in this inter-connected system.

This does not mean that small players will be squeezed out. On the contrary, a world of regions features many countries with the diplomatic skill to lead and benefit from regional integration.

Mexico is becoming an investment sensation as it attracts ever more supply chains from America; Saudi Arabia anchors a far more assertive Gulf Cooperation Council; and Singapore stands to gain the most from Asean's emergence as a coherent sub-region.

Indeed, Asia itself is already multipolar - with China, Japan, India, Australia and South Korea among the key power brokers - and we foresee an Asean that comes into its own in the coming decades.

Already it is the world's fourth-largest economic area with a gross domestic product (GDP) larger than India (with half the population) and more annual foreign investment than China.

Given its younger workforce and lower wages, if the Asean Free Trade Area, Asean Economic Community and Regional Comprehensive Economic Partnership all come to pass on current timelines, by 2030 or sooner Asean will have become the central global manufacturing supply chain hub with robust production networks within the region and exports spanning the world.

This means, of course, more trade agreements such as the Trans-Pacific Partnership across the Pacific and investment treaties to protect Singapore's expanding commercial ventures abroad. Singapore, which is effectively the capital of Asean, must take a strong role advancing all of these agreements and the integration they represent.

These deepening economic ties must also be leveraged to diminish the severe income inequality in the region.

From Myanmar to Laos, growing foreign investment and infrastructure spending, together with more pragmatic and inclusive social policy, can make Asia the first developing region to eliminate poverty by 2030.

The present landscape of disparity is thus an opportunity for Singapore to engage even more aggressively as an infrastructure services provider - from sanitation to telecoms - to elevate Asia's neglected corners into thriving markets.

Once-in-a-generation opportunity

ASEAN of course has to take on geopolitical dimensions commensurate with 21st-century realities as well. Traditional Cold War manoeuvring has been replaced by high-speed naval skirmishes and Chinese island-building in the South China Sea, and environmental challenges of deforestation and haze, and the impact of Chinese damming on the Mekong River.

It is self-evident that Asean countries - much like European ones - will continue to put national interests first even as they aspire to "speak with one voice".

That said, each has a clear interest in creating joint commercial ventures among littoral states (including China) for the peaceful and efficient extraction and management of undersea resources to benefit everyone's energy security.

This is a once-in-a-generation opportunity to leverage America's security umbrella to resolve conflicts and build stronger cooperative structures that minimise the risk of miscalculations.

Though the United States has made renewed commitments to engagement across the Pacific, Asia's stability should be its own responsibility. The Asean Regional Forum and East Asian Community have been early efforts in this regard.

In the coming months - to say nothing of the coming decades - they will have to become far more responsive and influential if Asia is to achieve the kind of internal stability other global power centres enjoy. The fate of the region cannot be left to US-China strategems and proxy competition alone.

Capture upside of rivalry

THERE are geopolitical dynamics far out of Singapore's control; such is the nature of being a small state, a price-taker as it were in a great power system. It was ever thus.

But fatalism is not good strategy. The question for Singapore is how to be more opportunistic, capturing the upside from the scenario of unabated rivalry.

Remember that while historical pride and national reputation are strong drivers of tensions in Asia, the solution lies in diminishing the incentives for escalation.

There is opportunity to do so, as the world is in the midst of a phenomenal energy revolution that is removing the centuries-old quest for secure oil and gas as a driver of conflict.

To reduce its reliance on fuel imports from the Persian Gulf, Asia can harness and use its collective endowments to build shared infrastructures to pipe and transport liquefied natural gas around the region.

Viewing Singapore as part of an Asian hinterland, and not just as an island city-state, can change our lens of the future. So while some view the trend towards circumventing the Malacca Strait as the greatest long-term strategic threat to Singapore's geographic relevance and its port hub status, the truth is that the role of geography changes over time.

With the proposed high-speed rail that will extend to Kuala Lumpur, and beyond that to Bangkok, and perhaps Laos to Kunming, Singapore will become ever less an island. One day, a bridge or tunnel to Sumatra and the Sunda Straits Bridge to Java will make Jakarta reachable by car.

Already, Singapore has expanded industrial planning across the "Growth Triangle" with real estate and ship-building projects from Johor to Batam.

Even as trans-shipment through the Malacca Strait declines, it is Singapore's role as a gas trading hub that will equally suit the region's integrated energy markets. Singapore has modestly grown its physical geography through reclamation - but it can still massively expand its economic geography.

Indeed, if there is one truism for the 21st century, it is not that World War III is inevitable but that this is will be a connected age of thriving city-states.

Singapore will never sit at the top of the geopolitical hierarchy but it is already Asia's most well-rounded capital with plenty of potential still to exploit.

Commercial tentacles

SINGAPORE'S commercial tentacles are beginning to expand confidently beyond its long-established comfort zones.

Look at North-east Asia. Where Russia, China and the Korean peninsula come together, the potential reunification of North and South Korea portends significant dynamism in commodities and industry. As the North looks to build more special economic zones to stimulate economic activity, it looks to Singapore for lessons.

Further north, a recent joint Sino-Singaporean delegation visited the Russian Far East to invest in food processing and other industries.

Perhaps most significantly, Singapore hosted last month the international gathering of countries joining the Chinese-led Asian Infrastructure and Investment Bank, showing how even the Chinese superpower looks to Singapore to lend expertise - and credibility - to its controversial new multilateral body.

That said, the next 30 years of Sino-Singaporean relations will not be the same as the last 30.

There will be fewer ambitious new industrial parks such as Tianjin Eco-City or Guangzhou Knowledge City, and China is rapidly climbing the value chain with its own industries.

That is why Singapore must opportunistically move forward with playing a similar role in India that is still bereft of quality infrastructure on a national scale.

Singapore has already completed phase one of building a new capital city for the Indian state of Andhra Pradesh, and Prime Minister Narendra Modi has effectively invited Singapore to play a key role in his scheme to have 100 new cities planted across the country.

In a connected world, Singapore must be concerned about dynamics as far as Latin America and the Middle East. Growing trade with the former and radicalism spreading from the latter are immediate realities to which Singapore must adapt.

Then there are the constant high stakes of being an ally of America and friend of China. And yet, whether in the past half-century or the next 50 years, the principles of steadfastly maintaining stability at home while building connections abroad will continue to guide Singapore into a successful future no matter which scenarios come to pass.

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