EVEN as the region works on free trade agreements such as the Regional Comprehensive Economic Partnership (RCEP), it must do so in a way that is not exclusive, said Deputy Prime Minister and Minister for Finance Heng Swee Keat at the Milken Institute Asia Summit on Thursday: "This is not going to be Fortress Asia."
On the contrary, such efforts aim to shore up the multilateral trading system, and continue to inject momentum in the Doha round of World Trade Organization negotiations, he said.
Mr Heng was speaking in a dialogue with think tank Milken Institute's chairman Michael Milken. Observing that the Asia-Pacific is at the centre of global challenges and changing alliances, Mr Milken asked what should be taken into account to be successful amid such "interesting times".
One encouraging thing is that Asia "continues to believe in free trade, globalisation, in the division of labour", replied Mr Heng, pointing to Asean's free trade agreements, including the RCEP that is in the works.
"We should work with all like-minded countries in the world to continue to sustain momentum for free trade and globalisation," he said. Crediting the global division of labour for much of the prosperity and progress achieved in past decades, he added: "We now need a new division of global labour in a way that allows us to maintain peace and stability."
In a wide-ranging dialogue, Mr Heng spoke on key economic priorities such as regional infrastructure and the future of food, as well as government policies in areas such as education.
However, to a Reuters question on whether the government would consider more expansionary spending to help with the economic downturn, Mr Heng quipped: "I will address that when I deliver my Budget statement soon." Reiterating a stance that various ministers have expressed, he said: "We are ready to do what needs to be done at the right time."
To Mr Milken's question on Singapore's role as a regional financial centre and how it will tackle future challenges, Mr Heng said a key lesson from past financial crises is that the financial system must be closely coupled to the real economy to ensure both stability and growth.
"Finance is the lifeblood of the economy," he said. "Whether it flows to the right or wrong places is critical... If it is detached from the real economy, you will have problems."
Singapore takes risk management very seriously, he added. While financial innovation must continue, the question is how to manage it well: "Where are the needs in the economy, in society, where we can grow financial resources to make a difference?"
In the regional context, Singapore hopes to continue working with regulators in the region to maintain financial stability, said Mr Heng. Another important question is how the region can promote financial inclusion, particularly through digital finance, given how citizens in countries such as Indonesia and the Philippines may be spread over huge geographical areas and many islands.
Payment systems and regulatory frameworks must be updated to support the rise of digital payments and e-commerce for security and efficiency, he added. "I hope that the region can do more to promote greater interoperability and inter-payment."
On regional infrastructure, Mr Heng noted Singapore's Infrastructure Asia initiative that hopes to marry demand and supply in the region, with proper structuring and risk management for projects that are "buildable, maintainable" and have an economic or social return on investment over time.
At a domestic level, Mr Heng highlighted important areas for the future such as 3D printing; digitalisation in the services economy in professions such as law and accountancy; and food science, from alternative proteins and vertical farming to advances in nutrition.
He also spoke on how Singapore is now working on expanding education "at both ends": investing heavily in preschool education at one end, and partnering with companies to encourage lifelong learning at the other.
On the latter, he said: "We are now working very closely with companies to make sure that our company bosses take this seriously. You can't introduce a new machine without the workers wanting to embrace it."
He noted the role of Singapore's trade unions in this process, with the unions not simply picketing for higher wages, but instead working with firms to persuade workers to undergo training for greater productivity.