Dr Chipman, Deputy Prime Minister Sergei Ivanov, Acting Prime Minister Teo, distinguished ministerial colleagues and friends,. It's a little unusual and late for the last session but let me bid you all a warm welcome as host and I want to thank you especially for the kind comments that many of you have, over the last two days, given to Singaporeans and many officers that have been attending to you. I want to echo what Acting Prime Minister Teo said last night. Much of the success of Shangri-La Dialogue has been due to your individual participation and you are the "digits" that bring value to this dialogue. I think the fact that it has come so far in the last ten years speaks of the passion and the engagement and the commitment to this kind of process that improves interaction and dialogue. Let me also thank the IISS for inviting me to be on the closing panel on building strategic confidence and avoiding worst-case outcomes.

Times of Uncertainty and Change

Ladies and Gentlemen, I think you will agree with me that history is never static. At some points, its progression ceases to be linear. Veering off-course, disruptive changes precipitate, forcing incumbent systems and players to radically adjust, as relative positions change. The onus then falls on leaders of that generation to respond decisively, and hopefully with adroit and enlightened statesmanship, form new co-operative frameworks, a buzzword that has often been repeated at this Shangri-la Dialogue These new arrangements must be both inclusive and relevant to changing circumstances, accommodate the self-interests of countries whilst protecting the integrity of the larger system, to provide peace and stability and the necessary pre-conditions for economic growth. For the past 50 years, the World has experienced relative peace and economic growth as a result of foundations that were laid for major institutions of today, such as the United Nations and the European Union in the post-war period. Hundreds of millions have been lifted out of poverty.

Whether we are at a similar cusp of radical change remains to be seen. But almost all would agree that major shocks have occurred within the last decade, whose ramifications are still being addressed. Clear examples are 9/11 and the continuing fight against terrorism; the death of Osama bin Laden notwithstanding, the global financial crisis of 2008; the present risks of sovereign default of some Eurozone countries and political upheavals in Tunisia and Egypt, and the ongoing conflict in Libya.

Two concurrent tectonic movements that will likely precipitate disruptive change are related to demography and economic activity geographically. First, the working-age population worldwide has increased by 40% in the past 20 years, with 95% of that growth occurring in less developed countries, and Asia accounting for two-thirds of that worldwide growth. Second, as many speakers before me have alluded to, the weight of economic activity will shift eastward, from Atlantic to Pacific. China is expected to overtake the US in 2018, in terms of GDP at purchasing power parity, while India could overtake the US on this same measure by 2050.

Against this backdrop, what is certain is that new spheres of economic influence will emerge, which will have an impact on regional and global security perspectives and interests. The trends are clear and let me cite two examples that are relevant to this region. For example, in the past decade, trade between ASEAN and China has grown by around 30% a year on average. China is now the third-largest trading partner of ASEAN. Second example: China is already Australia's largest trading partner, whereas ten years ago, China was only the 10th-largest export market for Australia.

The on-going changes in patterns of trade or demography are inexorable. How then do stakeholders evolve new arrangements to accommodate such shifting influences? I agree with my fellow panelist, Deputy Prime Minister Ivanov, that we need new structures.

Forging Strategic Confidence through Strong Regional Institutions

Over the past few years, Singapore and many like-minded countries within ASEAN have articulated a need for a more open and inclusive regional architecture for this region. These were conditions that I think General Liang Guanglie addressed this morning. He stated quite clearly in terms of what the pre-conditions are. We have argued for a more open and inclusive regional architecture for this region that has ASEAN at its fulcrum. And its comforting and affirming that all the speakers in this forum have so far supported the concept, whether it's US, China, Russia and ASEAN member states. There are sound reasons for this approach. The South China Sea and Strait of Malacca are strategic for global trade and commerce. Over half of the world's shipping, by tonnage, as well as half of the world's oil tanker traffic, sail through these waters every year.

ASEAN obviously has a vested interest in the stability of the region. The neutrality of ASEAN within this crucial region allows it to bring together the major players in an atmosphere of consensus and mutual respect to work together to pursue common interests in peace and stability in the region.

Through the ASEAN-centric regional security architecture, we are building confidence, by facilitating robust bilateral and multilateral partnerships. Fundamental principles underpinning this overarching architecture, applied to its many fora and platforms- they are: a commitment to open, inclusive dialogue; cooperation based on mutual respect and confidence-building exercises; resolving differences peacefully in accordance with international law. Only with these guiding principles, can there be a sustainable basis for trust and cooperation.

Arising from these principles, various fora have evolved which facilitate dialogue. The Shangri-La Dialogue is a prime example. With us this year are representatives from 30 countries, including over 30 ministerial representatives. And for the first time, as we have said thankfully, China is represented at the defence minister-level. I told Defence Minister Liang Guanglie yesterday over at lunch that we have been waiting ten years for his presence here. And we hope that he will continue to attend this conference. In its 10th year, the Shangri-La Dialogue has come a long way. It has evolved into a forum where countries can have candid discussions and explore new ways to enhance security. The Ministerial Luncheon which Singapore hosts, has become a regular feature, where defence ministers from across the Asia-Pacific can meet and discuss issues of concern. Of course, for every delegation, a high point of the Dialogue, are the closed-door bilateral exchanges, held privately, on the sidelines. These are valuable opportunities for key players - who may not meet often otherwise - to meet face-to-face, build goodwill, and clarify views and positions.

The East Asia Summit, and ASEAN Regional Forum or ARF, are more formal setups, compared to the Shangri-La Dialogue. The East Asia Summit brings together key stakeholders in the Asia-Pacific, at the heads of government level. We welcome the recent expansion of the East Asia Summit to include the US and Russia. The ARF is larger, being one of the few forums that brings together countries from across the Asia-Pacific.

But we can do more than talk to one another, important as that is. Strategic confidence is also built up through practical defence cooperation, through military exercises and exchanges which facilitate information sharing and enhance transparency. Crucially, they build up personal ties amongst regional militaries and reduce the likelihood of misunderstanding or miscalculation. Armed forces in our region conduct joint exercises under the ambit of frameworks such as the Western Pacific Naval Symposium and the Five Power Defence Arrangements. Of note, over 20 countries participated in the ARF disaster relief exercise conducted by Japan and Indonesia in March this year. There are also operational mechanisms in place such as the Regional Cooperation Agreement on Combating Piracy and Armed Robbery Against Ships in Asia, or ReCAAP, and as mentioned earlier Malacca Strait Patrols, which address specific challenges and enhance trust among participating states.

Among the various institutions in the Asia-Pacific, the ASEAN Defence Ministers' Meeting Plus, or ADMM-Plus, has emerged as a valuable platform for both dialogue and practical cooperation. And on behalf of ASEAN member states, I'm very thankful that the Plus parties have indeed voiced again on how relevant they think and how important they think the platform is. Inaugurated in Hanoi in October last year, the ADMM-Plus facilitates constructive engagement amongst ASEAN member countries and key stakeholders in the region, by identifying shared interests where countries can work together. While countries in the ADMM-Plus may have significant differences over other strategic issues, their defence leaders have made a public commitment to forge practical cooperation through military exchanges on five key security areas for a start: of disaster relief, peacekeeping, counter-terrorism, maritime security, and military medicine. To us, this is an excellent start in building strategic confidence and avoiding worst-case outcomes in the Asia-Pacific. Looking ahead, we can expect joint military exercises involving all the ADMM-Plus countries- 18 countries. Joint exercises increase transparency, and build up people-to-people ties amongst participating military forces. This means that even if tensions exist, especially if an incident takes place, personal ties built up among armed forces and their leaders can provide a basis to communicate, and allows us to back down from the edge of conflict.

Ladies and Gentlemen, few of us can be certain of what the future brings. We remind ourselves that despite all of our forecasting skills the major events within the last decade were mostly unforeseen. We should therefore expend our efforts into maintaining clear and open communication and forging confidence through cooperative activities. These initial steps will help us create a framework based on shared and progressive principles that safeguard the good and prosperity for all. Let me thank you all for your attention and for your kind participation and your contribution in the Shangri-La Dialogue.