Wednesday, 23 November 2016

Singapore working to avoid deep social divides: PM Lee

It is developing a sense of identity among people and helping the less well-off
By Chong Zi Liang, In Lima (Peru), The Straits Times, 22 Nov 2016

Prime Minister Lee Hsien Loong said Singapore must avoid the deep social divides laid bare by the recent US presidential election and Britain's Brexit referendum. He said the Government has taken a two-pronged approach to stop such divisions here.

One is to develop a sense of identity and togetherness among the people and the other, to have policies that "make everybody know that if you're in Singapore, not everybody is equally well off, but even if you're not well off, you're not badly off".



People also need to be fairly treated, Mr Lee added, and Singapore has given a leg up to the less well-off through steps such as Workfare for low-income workers and the Pioneer Generation Package to help the elderly with their medical bills.

For workers, there is SkillsFuture to train them for the new economy.

"There is no magic formula," he said, adding that people have to work hard and governments need to have workable policies.

He was speaking to Singapore reporters on Sunday when wrapping up a five-day trip to Peru for the Asia-Pacific Economic Cooperation (Apec) Summit.

Mr Lee noted that in the United States, the Democrats dominate the cities and both coasts, while Republicans populate the Mid-west and the heartlands. With Brexit, the split was between London and the rest of the country, and also along education and income levels.

Such social divides cannot be allowed to widen in Singapore as rebuilding bridges will be very difficult, he said.

Mr Lee also urged caution in drawing comparison between the polls in Singapore and what happened in the US and Britain.

Earlier this month, US President-elect Donald Trump won by appealing to voters in the Rust Belt states such as Ohio and Michigan, who felt they had lost their jobs in the once-powerful industrial sector because of globalisation.

In June, Britons voted to leave the European Union, in part due to anxiety over immigration.

Last week, academic Gillian Koh described Singapore's 2011 General Election as a "mini-Brexit vote", as immigration was a hot-button issue during the campaign.

Asked about the comparison, Mr Lee said "there's massive difference in scale" between those two polls and the Singapore outcome. "The changes induced by globalisation, the Rust Belt problems, the uncertainty of jobs, these are real problems which people feel," he said.

They need to be addressed, but people must also "feel their concerns have been heard and have been attended to", he added.

Leaders, too, have to get people to understand that certain issues, such as technological and economic changes, are not something the Government can wish away or which are a result of a wrong set of policies, he said.

This year's summit took place amid rising anti-globalisation sentiments, and Apec leaders pledged in a statement to ensure policies "contribute in concrete terms to raising people's quality of life and enhancing social equity in the region".

Similarly, Mr Lee said at Sunday's Leaders Retreat that the fruits of globalisation can be spread more evenly by supporting small businesses, digital trade and services.

"Given the current backdrop, it is important that Apec addresses issues arising from globalisation and emphasises inclusive growth, so that people who have not directly benefited from trade are not worse off and left behind."





World in watchful state after US election: PM Lee
It would be a big loss if US turns inwards but world must wait and see as Trump forms team, he says
By Chong Zi Liang, In Lima (Peru), The Straits Times, 22 Nov 2016

President-elect Donald Trump, who had campaigned on an anti-trade platform, may have stoked fears of protectionism in the United States, but Prime Minister Lee Hsien Loong does not see a mood of despair descending on the world.

It is more a mood of watchfulness, as the world awaits the team he assembles and the policies his administration implements, Mr Lee said at a media conference with Singapore reporters.

He noted that past US presidents, including Mr Bill Clinton, Mr George W. Bush and current leader Barack Obama, have had to modify their campaign positions "in the light of the test of reality and experience".

"So I fully expect that when the new administration comes in, they will have to review their positions," Mr Lee said.

This time, however, the US campaign was a lot harsher than previous ones, in tone and in rhetoric, he added. "So to make an adjustment is harder, but we have to wait and see."



Mr Lee made the point when he was asked about the mood at the Asia-Pacific Economic Cooperation (Apec) Summit that ended in Peru on Sunday.

"It is a mood of watchfulness, of waiting to see, and being cautious not to foreclose options prematurely, so that you find yourself at a dead end unnecessarily," he said in the wrap-up session on his five-day trip to the annual event in which leaders of the 21 member economies meet to discuss economic integration and trade. The US leadership transition will take place in January next year.

Mr Lee also felt it would be a big loss should the US turn inwards, as American engagement in the region is positive for security, economic and trade reasons.

"So if you do not have that, you lose something valuable. If in fact the US turns inwards and becomes protectionist and anti-free trade, then of course the loss is even greater," he said. "But whether that happens is speculation."



As for the Trans-Pacific Partnership (TPP), Mr Lee said it would be a big loss if the trade pact does not come into fruition, given its strategic and economic importance.

"It would make a lasting contribution to the stability and the prosperity of the region, so we lose that, well, life goes on. But you have lost something precious and which would have been very worthwhile having," he said.

Mr Lee said much work and compromise had gone into the 12 TPP member countries reaching an agreement, and it would not be easy to negotiate a new deal with different conditions.

The TPP can go into force only if it is approved by six countries that account for at least 85 per cent of the group's economic output - which means ratification by both the US and Japan is essential. But ratification by the US now seems unlikely, in view of Mr Trump's opposition to it.

At a TPP leaders' meeting on Saturday, Mr Obama had said he will continue to raise awareness of the agreement's importance back home. The leaders of the other 11 TPP countries had also said they will push ahead with the deal.

"We will see how the Americans decide... and if in fact after two years they do not take it forward, we will examine our options again. We still have some time," said Mr Lee.





Freeing global trade and dealing with social divides at home
Prime Minister Lee Hsien Loong fielded questions on the TPP, US election and his government's policies on equity in a media interview at the end of a five-day visit to Peru for the Apec Summit.
The Straits Times, 22 Nov 2016

Q New Zealand Prime Minister John Key said he sensed tremendous despair when he was in Peru because the US elected a candidate that campaigned on a protectionist, anti-trade platform. So what is your take on the mood throughout the meetings and particularly at the Trans-Pacific Partnership (TPP) Leaders' Meeting?

A I would not put it in quite the same way. I think what happened in America is very, very significant; we know how President-elect (Donald) Trump campaigned and the platform on which he campaigned. Now we will have to see how he assembles his team and what policies they settle on once they have come into office, studied the problems and weighed the options. So I think it is a mood of watchfulness, of waiting to see, and being cautious not to foreclose options prematurely so that you find yourself at a dead end unnecessarily.

So when it comes to the TPP, we discussed it among the members, you saw what I said at that meeting, which is that we will continue with the ratification process. I think many of the countries are going to do that. Then we will see how the Americans decide and how they would like to take it forward, and if in fact after two years they do not take it forward, well then, we will examine our options again. We still have some time.


 


Q You stressed that the fundamentals of TPP remain unchanged. But looking at the timeline, with the possibility of the TPP without the US looming in the background, would that not affect the TPP's quality, a trade agreement that was meant to set the bar?

A Well when I say the fundamentals remain unchanged, I mean the fundamental justification for the TPP is valid, we believe in it, and I think it is still valid.

The TPP as an agreement has got rules as to when it comes into effect - what, how, when does it happen. The rules say that within the first two years, it will come into effect when all 12 countries ratify it. Beyond the first two years, if we have not got 12 countries, if we have 85 per cent of the GDP and six countries ratified, then it comes into effect. So in other words, there is an established definition as to when the TPP comes into effect. And it could still happen, but to happen, it requires the United States, so we will have to see how that goes.

The TPP without the US means it is a new agreement, that means, the 12 minus one will have to get together and sign an agreement with a different coming-into-effect clause. And that is fresh negotiation, and that is not so easy to do because New Zealand is taking the present treaty through their Parliament and Japan is taking their present treaty, it cleared the Lower House, it is going to the Upper House, so if you sign a fresh agreement, you have to go through it again. So we have not come to that bridge yet, we will cross it if and when we come to that.


 


Q Did countries express concern during the TPP Leaders' Meeting and did President Barack Obama give any reassurances in terms of the US' involvement?

A Well, President Obama basically said the President-elect comes in with his team; the team will have to study the options and will have to reach conclusions as well on what they will do and what they will not do, and if you look at previous presidential elections, quite often positions are taken during the campaign which, after the team has won, you come into office and reassess your position and you may have to modify your position in the light of what you discovered, in the light of the test of reality and experience.

And it has happened with every campaign, whether it is George Bush Sr, whether it is Clinton, whether it is George Bush Jr, or even Mr Obama himself. So I fully expect that when the new administration comes in they will have to review their positions, but of course this time the US campaign has been a lot harsher than previous ones, in tone and in rhetoric. And so to make an adjustment is harder, but we have to wait and see.



Q If the US actually takes a more passive role when it comes to pushing for free trade, how will that affect the strategic balance in the Asia-Pacific region?

A Well, we have always believed that the US engagement in the region is a plus, and is a plus not just because of the security aspects but also because of the economic aspects, as well as trade. So if you do not have that, you lose something valuable. If in fact the US turns inwards and becomes protectionist and anti-free trade, then of course the loss is even greater. But whether that happens is speculation. We will have to see how events develop.



Q Japan's Prime Minister Shinzo Abe said that if the TPP does not go on with the momentum, it will die forever and then there will be a spread of protectionism. He put it in very stark terms. Would you put it in the same way?

A I think it will be a great loss if we do not have the TPP. It is a very important deal, it is strategically significant, it is economically very considerable, it covers 40 per cent of the world's GDP, and it would make a lasting contribution to the stability and the prosperity of the region. So we lose that, well, life goes on, but you have lost something precious and which would have been very worthwhile having.

And you will one day try to make a different deal, but it will have to be a fresh deal under new conditions, and it will not be easy to negotiate. Because to reach a deal like this, the TPP itself has taken, what, six years of negotiation, eight years since we started, and then six since the US came on board and very hard work, enormous amount of effort, argy-bargy, compromise, deals worked out.

Finally you have a package, a document several thousand pages long. And it is valid, you should sign it. If you do not sign it, time passes, new events develop, new technology, new markets, new economic trends, it becomes harder to sign the agreement and you have to negotiate a new one then. And that is not so easy.


 


Q  On elections, in the US, we saw that there was a group of voters who expressed their grievances that they were not heard by the political establishment. In Singapore, there was a piece by an academic who called GE2011 a "mini-Brexit", Dr Gillian Koh. She described the GE2011 as our "mini-Brexit" vote because of the hot button issues - immigration and labour policy. What lessons can be drawn from the recent US election results?

A I think in any election there is a mix of motives, people vote for or against the political party. It is partly the policies, it is partly the promise, it is partly an emotional identification or lack of identification, sometimes it is a desire for change. One of the factors which will influence voters is whether they feel in a good mood or not, whether they are satisfied or not with life, and that depends on what their expectations are and how things have turned out. And sometimes the world develops in a certain direction and you have to go with it. And it can be very difficult to go with it.

I mean, the changes induced by globalisation, the Rust Belt problems, the uncertainty of jobs, these are real problems, which people feel. You have to address them, you have to make people not only deal with the problems but make people feel their concerns have been heard and have been attended to.

At the same time, also be able to get people to understand that there are problems, but some of these are not avoidable and are not something which the government can wish away or which are a result of the wrong set of policies. Because technology changes, the economy changes, some of these... you can't easily control just by issuing a policy. So when it comes to the election, it's how do people feel, how well have you met their aspirations, at the same time, how well have we been able to make people understand what is happening, and accept that we are doing the best for them. And sometimes you do better, you get strong support, sometimes you don't and then you lose some votes.

I think Brexit and the US presidential elections, compared to what happened in Singapore, I think there's massive difference in scale.



Q How then do we prevent such sentiments from taking hold in Singapore, taking into account that people's mood could perhaps change?

A There is no magic formula, you have to work together, you have to work hard. The Government must have policies which generally will be working for people. At the same time, we have to develop a sense of identity and togetherness within Singapore so that you don't have a deep divide within the society.

In Brexit and in the US, I think there is a very deep divide, in the US between the blues and the reds, the Democrats and the Republicans, two sides. The Democrats, many of them are in the cities and the two coasts. The Republicans are in the mid-west and the heartlands.

In the case of Brexit, there was also divide, a divide geographically between London and the rest of the provinces, the rest of England; educationally between the well-educated and the not so well-educated; and also in terms of income, between the better-off and the not so well-off. So these are social divides which we have to try very hard not to allow to widen and to split our society because if you do, you may mean well, but to rebuild those bridges, it's very difficult.



Q When you spoke about America's rust belt, you emphasised the need for equity. Is your government looking at policies for aggressive redistribution?

A What we have been doing is what we believe is the way forward. On the one hand, to focus a lot on giving our people skills and abilities which will help them to do well in the new economy whether in schools, polys, universities, ITE, or in life through SkillsFuture. On the other hand, to make sure that everybody feels fairly treated and if you're not doing so well on your own, well you get an extra leg up.

So therefore we have Workfare which is a very substantial scheme. We've got schemes like Pioneer Generation package to take care of (the) older people... and we've got basic schemes like our healthcare system, our HDB home ownership schemes, which make everybody know that if you're in Singapore, not everybody is equally well off, but even if you're not well-off, you're not badly-off.

I think that's very important and if you compare to where we were just 10 years ago, the schemes which we have introduced and the amount which we are doing and spending, it's gone up considerably.

So I think the spending, the welfare scheme, the social safety nets is one part, but the self-reliance and giving people the ability to look after themselves and investing in people, I think that is another very important part.
















TPP leaders vow to press on with ratification of trade deal
PM Lee says Singapore will amend laws to bring into effect the pact by early next year
By Chong Zi Liang, In Lima (Peru), The Straits Times, 21 Nov 2016

Leaders of Trans-Pacific Partnership (TPP) nations pledged to press on with the landmark trade deal that hangs in the balance after the United States presidential election.

Prime Minister Lee Hsien Loong told fellow TPP leaders at a meeting on Saturday (yesterday morning Singapore time) that Singapore will amend legislation to bring into effect the TPP by early next year.

"While the circumstances have changed, the fundamental rationale for the TPP has not changed. It remains important, both economically and strategically," Mr Lee said.

"It will integrate our economies and set a high standard for future regional trade agreements, especially in the Asia-Pacific, and foster prosperity, security and stability in the whole region," he added.

Leaders of the 12 TPP members also agreed to continue to seek domestic approval for the pact.

At the hour-long meeting, held on the sidelines of the Asia-Pacific Economic Cooperation (Apec) Summit, the US also said it would raise awareness of the agreement's importance back home, said Mr Yasuhisa Kawamura, a spokesman for Japanese Prime Minister Shinzo Abe.

The TPP can come into force only if it is approved by six countries that account for at least 85 per cent of the group's economic output - which means ratification by both the US and Japan is essential.

But ratification by the US is now unlikely after President-elect Donald Trump won the Nov 8 election on an anti-trade platform.

The other TPP members are Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.

Negotiations began in 2010 and concluded last year, and Mr Lee welcomed Japan and New Zealand taking steps to ratify it.

"Let us continue to take a long view. The world is watching carefully how we will respond," he said. "We should stay the course and we must not undo the good work that has been done over the past six years."

Mr Abe, who has invested much political capital in realising the TPP, said he would continue to explain its merits to those who misunderstand that it benefits only large corporations and not small firms.

Japan's Lower House has approved the TPP and it is now before the Upper House. "Although we received harsh criticism from the media and the opposition parties, we cannot stop our efforts for domestic support or we will see the death of TPP and rampancy of protectionism," Mr Abe added.

Mexican Finance Minister Idelfonso Fajardo had said Mexico, Australia and Malaysia have agreed to press ahead with approval.

At yesterday's meeting, the TPP leaders, including US President Barack Obama, also affirmed the economic and strategic importance of the pact.

Mr Lee thanked Mr Obama for personally leading the TPP, and noted that all members had worked hard to take the trade deal this far.

"I shared President Obama's hope that after the new administration has settled in, deliberated on the matter, and taken advice, it will in due course take a considered decision," he said. Mr Lee also agreed with Mr Abe that leaders had to keep up the momentum and "show that it benefits all of us".

At a separate forum before TPP leaders met, New Zealand Prime Minister John Key outlined possible outcomes for the pact. Members could go ahead without the US, or renegotiate it completely.

Or, they could make "cosmetic changes" so Mr Trump can present it as a better deal. This could mean renaming it the "Trump Pacific Partnership", he quipped to laughter.

Mr Abe's spokesman Mr Kawamura told reporters it was too early to predict what the new policies of the Trump administration will be like.

Meanwhile, Chinese President Xi Jinping said China will continue to open up its economy amid rising protectionism globally, and urged fellow Apec members to work towards lowering trade barriers.















China will open door wider for trade, says Xi
Chinese leader urges Asia-Pacific economies to press on with building a regionwide free trade area
By Chong Zi Liang In Lima (Peru), The Straits Times, 21 Nov 2016

Chinese President Xi Jinping said that China will continue to open up its economy amid the rising protectionism around the world that has led to a slowdown in world trade.

Speaking at the Asia-Pacific Economic Cooperation (Apec) CEO Summit on Saturday, he urged economies in the region to persist in building the Free Trade Area of the Asia-Pacific (FTAAP), that aims to link Pacific Rim economies from China to Chile.

He added that China was committed to concluding negotiations for the Regional Comprehensive Economic Partnership (RCEP), seen as a rival to the United States-backed Trans-Pacific Partnership (TPP) that was dealt a blow after businessman Donald Trump was elected US President on an anti-trade platform about two weeks ago.

"China's door will never be shut, and will only be opened wider," he told business leaders in his keynote address at the Apec CEO Summit.



The TPP and the RCEP are seen as possible pathways towards eventually realising the broader FTAAP.

But with uncertainty surrounding the TPP's fate, the Asean-led RCEP is now widely seen as the only viable pathway to the FTAAP.

Seven TPP countries are included in the RCEP, which involves all 10 Asean members plus Australia, New Zealand, China, Japan, South Korea and India.

At a separate Apec CEO Summit panel on Saturday, New Zealand Prime Minister John Key had said the TPP was part of the Obama administration's Asia pivot to refocus the US' resources and project its leadership in the region.

Asked if the world will turn towards China for economic leadership if the TPP falls through, he said: "If the US is not there, that void has to be filled, and it will be filled by China."

Australian Prime Minister Malcolm Turnbull, commenting on the RCEP separately, had told reporters that it is not as far-reaching as the TPP, but "the more access we can get to more markets for our exports, the better".

Both trade pacts aim to cut tariff and non-tariff barriers, but the RCEP calls for lower and more limited rules and standards.

US President Barack Obama - in championing the TPP - had argued that if the US did not take the lead in setting trade rules, it would allow other countries to set standards that are not as stringent.

The TPP can come into force only if it is approved by six countries that account for at least 85 per cent of the group's economic output.

This means that ratification by both the US and Japan, as the world's No. 1 and No. 3 economy respectively, is essential.

But ratification in the US is unlikely with Mr Trump's election win.

But leaders of the 12 TPP member countries pledged at a meeting on Saturday that they would push ahead with getting approval of the deal in their home countries.

Mexican President Enrique Pena Nieto, speaking at an Apec CEO Summit forum before the meeting, said that his country's geopolitical situation meant that the US will always be its closest partner.

"Our eyes will always be set towards North America," he said.

Separately, a spokesman for Japanese Prime Minister Shinzo Abe told a press conference that the TPP remains the "role model" of a "high-quality, 21st-century type of agreement".

"So first of all, we have to fulfil our commitment for the passage and approval of the TPP.

"Then it will have a positive influence over the RCEP negotiations.

"That is the right order we have to follow," said Mr Yasuhisa Kawamura.

Meanwhile, Mr Xi and Mr Obama also met, and Mr Xi spoke highly of Mr Obama's efforts to develop bilateral ties, China's Xinhua news agency reported.

Mr Xi also said he had a phone conversation with Mr Trump, and added he was willing to work with Mr Trump to expand cooperation.

Mr Obama said he and Mr Xi had established a candid, friendly and constructive relationship and enhanced mutual trust, Xinhua said.

Mr Obama also told Mr Xi that he had underlined the importance of US-China relations to Mr Trump, and stressed that there should be a smooth transition of bilateral ties.










Global trade at risk if US turns insular: PM Lee
He says reality must reflect rhetoric when selling benefits of globalisation to the people
By Chong Zi Liang, In Lima (Peru), The Sunday Times, 20 Nov 2016

A United States that detaches itself from the world's economy will risk unsettling the global trading system that it has helped nurture and foster over the decades, Prime Minister Lee Hsien Loong said.

"It's the engine pushing for freer trade for many years," he said, noting that the US pushed for economic integration from the 1960s to 1990s, and played a crucial role in establishing institutions such as the World Trade Organisation.

If the US turns inwards, growth can be pursued in Europe and Asia "but you're missing out on a huge opportunity if America is not part of the story", he said on Friday.

"And it's not only missing out on the positive, but also risking a very big negative in terms of destabilising the global trading and strategic system," he added.



Mr Lee sat on a panel on global economic growth during the Asia-Pacific Economic Cooperation (Apec) CEO Summit and was responding to a question on how the world can adapt if US President-elect Donald Trump follows through on his campaign rhetoric and implements anti-trade policies.

The other panellists were PwC global chairman Robert Moritz; Rio Tinto group executive of growth and innovation Stephen McIntosh; 3M vice-president of Latin America Tamie Minami, and Anbang Insurance Group CEO Wu Xiaohui.

During the hour-long session, the panel discussed global trends such as rising anti-free trade sentiments, and business prospects amid the muted economic outlook.

When an audience member asked how people can be better educated about the benefits of globalisation, Mr Lee said it was not just a matter of education but also "making sure the reality reflects the rhetoric".

Citing how the economic situation has deteriorated in US states such as Ohio, he said investments must be pumped in and programmes set up to improve conditions so that young people feel hopeful about the future.

"Otherwise if we tell them it's all for the best and you are just part of the necessary sorrow in this best of possible worlds, I don't think you are going to win very many votes."

The panel also addressed improving the regulatory environment for businesses.

From Singapore's perspective, Mr Lee said "two complementary, almost contradictory points" are needed to remain business-friendly: ensuring stability, yet staying nimble during times of change. Investors who sink their money into Singapore have to know what to expect and be assured that agreements will be honoured over many terms of government.

On the other hand, when technology disrupts industrial norms, as seen in the rise of Airbnb and Uber, the authorities must recognise that old rules are no longer relevant and come up with a new framework.

Mr Lee also said that Singapore welcomes the One Belt, One Road initiative as China seeks to develop its trade routes and economic integration with its neighbours.

"We think it's the right way for China to engage with the world," he said, noting that Singapore was one of the first to state its intention to join the China-backed Asian Infrastructure Investment Bank.

Still, Mr Lee added that the nature of today's global network is such that "however strong an economy is, not all roads will lead only there". "It is important we understand that in this new world, there is no country which is the middle kingdom," he said.




















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