"New Century - New Players, New Rules?"


My fellow panelists, 
EU High Representative, Miss Federica Mogherini, 
Australian Defence Minister Kevin Andrews, 
Ladies and gentlemen,


This year's Shangri-La Dialogue is held in a special year for Singapore, as many of you know, as we Singaporeans celebrate 50 years of independence. Thank you for being present and sharing this Golden Jubilee with us and for your contributions that have made this year's Shangri-La Dialogue a success. Many of you have fed-back that you found the Shangri-La Dialogue impactful and relevant. We are very happy when we hear that because we do want to serve a function as host, but it is your presence and contributions that make the Shangri-La Dialogue a success that it is. Let me also thank the many Ministers for their condolences on Mr Lee's passing and the admiration for his life's work and legacy.

Impoverished and beset with a multitude of challenges at its founding, Singapore has been transformed over this half century. Singapore's founding leaders and pioneer generation, with Mr Lee Kuan Yew as the first Prime Minister, deserve much of the credit for putting us on a firm path to progress. But, it would be remiss not to credit also the international milieu that was conducive for countries like Singapore in this region to develop and prosper together. Many of you come from countries, friends and partners of Singapore that we thank for helping us in our progress, whether through trade or directly in our security and defence. But, half a century on from Independence, the world too has changed on us and indeed for everyone else. We are into a new century, with new players on the world stage in the Asia-Pacific region.

A Changing International Order

For this reason, I titled my speech as "New Century - New Players, New Rules?" In the ensuing decades post-second world war, as many of the ASEAN countries gained independence, including Singapore in 1965, the United States (US) and leading western powers reconstructed, rebuilt and redefined the international system coming out of the ravages of war. This included the Marshall Plan for Europe, and the rebuilding of Japan and Korea. A rules-based system through institutions like the United Nations, the World Bank, the International Monetary Fund, and the General Agreement on Tariffs and Trade took root and strengthened to promulgate an international order acceptable to the global community based on shared interests and mutual benefit. For defence, North Atlantic Treaty Organisation (NATO) in Europe, and US treaty alliances and the Five Power Defence Arrangements (FPDA) in this region provided the security umbrella. The system was by no means perfect, and not without periodic setbacks - the Vietnam War and the Cambodian conflict, among others - but it was generally inclusive and resulted in progress for many states. To quote former Indonesian Defence Minister Dr Juwono Sudarsono, "America's 'forward presence'…provided 'vital strategic assurance', guaranteeing regional and financial growth. America's dominance over the global commons was the critical pillar enabling all East Asia export-based strategies, augmenting Japan, South Korea, Taiwan and China to develop their trade, finance, investment and banking reach." Indeed, the global commons were enlarged to facilitate trade, inter-dependence, peaceful settlement of disputes and respect for sovereign rights. ASEAN and even later entrants, China and India, were net beneficiaries of that stable system, which became more global and inter-connected.

However, the international system as we know it is in flux for Asia today. China and India are no longer poor, at least not in aggregate terms, and certainly not marginalised by the Cold War or sequestered behind the Bamboo Curtain. China is now the world's second largest economy in nominal terms. India's Gross Domestic Product (GDP) has more than tripled since the turn of the century, exceeding countries like Canada and Russia. Japan is the third largest economy in the world.

New institutions and bold initiatives have emerged from this shift and will be new engines to drive development in this region in this new century. The BRICS - Brazil, Russia, India, China and South Africa - have set up a New Development Bank, headquartered in Shanghai last year, with an initial capital pool of US$50 billion and a currency reserve of US$100 billion. China is taking the lead in establishing the Asian Infrastructure Investment Bank (AIIB), capitalised at US$100 billion, and headquartered in Beijing. China has also launched its "One Road, One Belt" initiative, and set up a US$40 billion Silk Road Fund. It proposes an era of expansion of infrastructure and connectivity, with Asia, if not China, at its heart. According to one estimate, these initiatives could have an impact on more than four billion people in 65 countries. Japan has also offered, in collaboration with the Asian Development Bank, US$110 billion in funding for infrastructure in Asia over the next five years. The Trade Promotion Authority bill, which will facilitate the finalisation and conclusion of the Trans-Pacific Partnership (TPP), is now making its way through the US Congress. Singapore certainly hopes that the TPP will form one of the driving forces that shape the economic future for this region.

But with globalisation, new transnational challenges have also emerged. Religious extremists and non-state actors like Al-Qaeda and Islamic State of Iraq and Syria (ISIS), piracy, cybercrime and trafficking of humans, drugs, and weapons of mass destruction, are also affecting this part of the world, home to the largest Muslim population globally.

Stability and Shared Interests

We are at a critical juncture as Asia plays an increasingly important role in global trade, international finance and military security. China is now the leading trading partner of all ASEAN states and Australasia. There is, and will be, pressure for the rules that have heretofore governed the international order to adjust to accommodate the nationalistic aspirations of new entrants and rising powers in the Asia Pacific. 

The events in the East China Sea and South China Sea are manifestations of this change in power dynamics. As examples, Air Defence Identification Zones and similar mechanisms for the seas and even potentially underwater for submarines, have been instituted or proposed by states over international waters for purposes of self-defence, while ostensibly protecting freedom of navigation and overflight by others.

Coupled with unresolved legal positions and different interpretations, whether related to sovereignty or application of rules in existing agreements such as United Nations Convention on the Law of the Sea (UNCLOS) to specific circumstances, these uncertainties have resulted in increased tensions and even actual incidents at sea and in the air. 

None would disagree that a rules-based system must prevail if there is to be stability and peace in our region. It has served us well. But any rules framework, while necessary, is insufficient to engender stability and shared prosperity. To be responsive and relevant, alive to the challenges that confront us, rules need to be infused with the correct spirit. What is equally vital is the political commitment to build mutual confidence and trust within that framework, based on shared interests and prosperity. Singapore as a non-claimant state takes no sides over the disputes in the South China Sea, but is concerned that the uncertainties that exist in international agreements or disputes over claims have not built mutual confidence and trust, instead, created instability. Indeed, a deficit of trust now exists and can grow. We must all work together to provide clarity, sooner rather than later - if not on principles or law, then on procedures and practices that maintain regional stability and restore confidence and trust. In this light, the intention to work towards the early conclusion of the Code of Conduct on the South China Sea, which both China and ASEAN leaders reaffirmed their commitment to during the 17th ASEAN-China Summit in November last year, is a positive example that must be followed through to its completion expeditiously. 

Roles of the Key Global Players

Whether established powers or rising, large states or small, all of us have a vested interest to ensure that we maintain a rules-based system with respect for sovereignty and international law, as the fundamental tenets for stability in this new century.  

It would be unrealistic to assume that the current rules, and the existing institutions that promote them, would remain status quo, even as new powers emerge. But even as the hierarchy of power dynamics alter across regions and between states, we have to ensure that the security architecture remains inclusive and operates on rules and norms that have the consensus of the international community at large. 

The alternative of such an inclusive architecture is a factional global system where large powers contest for supremacy, each with its proxy players. Key players like the US, Europe, China, India, Japan and in this region, ASEAN and other "Plus" countries, have a critical role to play in this evolution where new rules and norms are proposed. As leaders, we need to guide this process attentively, exercise leadership and political will, to engender trust.

Conclusion

Ladies and gentlemen, distinguished colleagues, we must ensure that the rules-based framework that has brought peace and prosperity over the past several decades remains relevant and strong. This will require a new consensus that takes into account the realities of the 21st century, while ensuring that principles such as sovereignty, respect for international law and peaceful settlement of disputes that protect the global commons remain at the core of the global order in this century. Let me finally conclude by thanking all of you, together with my co-hosts President Tony Tan, Deputy Prime Minister Teo Chee Hean and Minister Lui Tuck Yew, for your contributions to the Shangri-La Dialogue and wish you safe journey home as the conference ends. Thank you.