There’s no win-win situation in fragmented world

Speaking at the Morgan Stanley Asia Pacific Summit in Singapore on Wednesday, Education Minister Chan Choon Sing said Singapore would not take sides in geopolitical conflicts and would instead adopt positions that uphold the rule of law.

He said the world must remain interdependent despite pressures to break up, because any kind of fracture would make individual countries “suboptimal” and suffer economically.

“With interdependence comes risks,” Chan said, “but a fragmented world with less interdependence, where people and big countries believe they can increase their own security, and indirectly exacerbate another country’s insecurities.” If they don’t, it can’t be a win-win situation.”

Singapore’s Education Minister Chan Chun Sing (pictured here in 2019) said: “Global businesses have a voice and they need to make their voice heard, that you prefer a unified world, not a fragmented one.”

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It is important to remember that a more interconnected world is a safer world. But today, due to pressures, both domestic and global, there is a temptation to think that if the world, two different blocs, were to break apart, each of the different blocs would do so. Be safer.”

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If fragmentation continues, countries and companies will underperform, Chan said, “instead of … enjoying the rapid growth of the past 50 years based on an integrated global system.”

In recent months, when Russia entered Ukraine, we protested against it. People ask, is this a pro-American move? Or is this an anti-Russian or anti-Chinese move? none

Chan Chun sing

Minister of Education Singapore

Citing the example of the Cold War, he added that now, the international security system based on rules and trade order is “under pressure” once again and it cannot be “assumed as a matter of course”.

He mentioned Russia’s war in Ukraine and the WTO dispute settlement crisis as some of the gaps in this system.

Speaking directly to business leaders and investors at the investment conference, Chan called for global integration.

“Global businesses have a voice and they need to make their voice heard, that you prefer a unified world, not a fragmented world,” Chan said.

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He said Singapore would also play its part by building bridges and “reciprocity” among the disintegrating blocs.

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“We believe there will be a premium for connectivity, stability, progress, cohesion and trust,” Chan added.

Morgan Stanley Investment Management said in a separate note on Wednesday that fragmentation is beginning to destabilize the global economy.

Globalization and the disruption of supply chains, for example, are fueling inflation, said Andrew Harmstone, chief portfolio manager at the firm.

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“Global trade as a percentage of GDP has grown very quickly in the past, which has contributed to a very low rate of inflation. But the trend towards growth again will reduce trade,” he said.

According to the Hinrich Foundation, although terms such as “friendly support” have been added to the trade policy vocabulary of the United States and other countries such as Japan, little has been revealed about their meaning.

“If governments seek to intervene in the supply chain, they must accept that they see the risks better than companies. But it is unclear which market failures will be addressed by friendly support policies without further fragmentation of the global trading system.” said Hollitte Harput, author of the Hinrich report.

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“The best guarantee” for the survival of a small country

Chan said Singapore will continue to refrain from taking sides, but will take firm positions.

“In recent months, when Russia entered Ukraine, we opposed it. People are asking, is this a pro-American move? Or is it anti-Russian or anti-Chinese? None. When the United States went to Grenada, we “When the Soviet Union moved into Afghanistan, we opposed it.” Chan said.

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We believe that the rule of law, especially in the international arena, is the best guarantee for the survival of a small country.

“And this is not only true for Singapore, but I would suggest that it is true for all ASEAN countries as well.”

While positive words were exchanged between US President Joe Biden and Chinese President Xi Jinping on the sidelines of the Group of 20 meeting on Monday, it is important to watch for next steps, Chan said.

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