Trust is necessary to defuse tensions on the India-China border and across the Taiwan Strait, and any miscalculation will upend decades of regional peace and stability, Singapore’s deputy prime minister Lawrence Wong has said.
Singapore sees India as a key strategic partner, especially in emerging areas such as fintech, payments connectivity and digitalisation, Wong, who is set to take over as prime minister under the city state’s leadership transition, said in an exclusive interview. Excerpts:
Q. This was your first visit to India and second official overseas visit, after Malaysia, as deputy prime minister (DPM) of Singapore. What were your objectives and key takeaways from the visit?
A. India is a key strategic partner for Singapore. That’s why I wanted to have this visit soon after my appointment as DPM. In particular, I had an excellent discussion with Prime Minister Narendra Modi, where we reaffirmed our longstanding bilateral relations and discussed new areas of cooperation.
One important platform to take our relationship forward is the new India-Singapore Ministerial Roundtable (ISMR), launched during my visit. We had candid and wide-ranging discussions amongst the ministers at the roundtable, and this reflects the deep reservoirs of trust between our countries, built up over decades. We agreed on a few key areas to focus on, including energy security, digitalisation and skills development.
During the visit, I reconnected with old friends and made new ones. I had the pleasure of visiting Gujarat and, in particular, GIFT City. We already have a connection between our stock exchanges (the NSE-SGX connect), and we hope to do more in other areas, including cooperation in fintech.
To sum up, I will say India has been and continues to be an important partner for Singapore. I am excited about what the future would bring for us both.
Q. Singapore has unveiled a roadmap for overhauling its financial services industry to strengthen its position as a key player in technology, digitalisation and green fintech. Could you tell us how India can fit into it?
A. Our refreshed roadmap for the financial services industry lays out strategies to further develop Singapore as a leading financial centre over the next five years.
With its burgeoning fintech industry, India is a natural partner for Singapore in this space. So, we will continue to strengthen collaboration with India to improve operational efficiencies, build financial networks, and spur innovation and growth opportunities for both countries.
For example, under our fintech cooperation, we have agreed on regulatory sandbox collaborations, which will enable cross-border experimentation and innovation in both jurisdictions. Payments connectivity is a priority for both countries – we are collaborating to link Singapore’s PayNow and India’s Unified Payments Interface. This will enable cheaper, faster and more secure cross-border funds transfers, including remittances between both countries. We will continue to promote our digital marketplaces, to offer small and medium-sized enterprises greater access to financial education, trade discovery and matching, and digitalisation solutions.
Q. How does Singapore see the prospects for the Indo-Pacific Economic Framework for Prosperity (IPEF) and what are your views on India opting out of one of its four pillars of trade? Is this a disappointment akin to India’s decision to stay out of RCEP?
A. Singapore welcomes IPEF as a forward-looking initiative to significantly deepen economic engagement within the region. This is in line with our longstanding approach to upholding an open, inclusive and rules-based global order.
Participating countries all recognise that IPEF must be able to deliver concrete benefits for their citizens and businesses. We can go beyond the scope of a traditional free trade agreement and find new and creative ways to achieve such benefits across all four pillars.
IPEF is intended to be inclusive and flexible. It provides an opportunity for governments to work together on shared priorities while recognising that different IPEF partners are at different starting points. Although India has not joined the trade pillar at this juncture, our understanding is the door remains open for it to do so when it is ready. Meanwhile, we welcome India’s active participation in the other three IPEF cooperation pillars together with all other IPEF partners. This is a testament to countries’ recognition of IPEF’s potential to advance economic cooperation in the region.
Q. Is the Chinese economy’s slowdown a concern for global and regional economies? How will it impact global trade?
A. The global economic outlook has dimmed, due in part to rising interest rates and the continued high cost of energy and food. With growth slowing, global trade will inevitably be affected.
Specifically, China is a large export market and a major trading partner to over 120 countries. Developments in China will therefore impact the economies of its trading partners, especially those in the Asia-Pacific region.
Another worrying issue is the rising tensions between China and the US, which could exacerbate ongoing supply chain disruptions and contribute to growing headwinds to global trade and economic growth.
The strategic choices that both sides make will set the parameters of the emerging global order, the health of the multilateral rules-based trading order, and in turn, determine the trajectory of global trade and the post-pandemic global economic recovery.
During this period of economic uncertainty, it is crucial that economies not turn inward but remain open and connected. Singapore, therefore, supports the multilateral rules-based trading system and will continue to deepen our trade ties with all our trading partners.
Q. With India positioning itself as a major manufacturing destination, do you think India can be an alternative to China as an investment destination or manufacturing base for global MNCs?
A. Both India and China have strong manufacturing bases. China remains a major manufacturing hub, accounting for more than 20% of global manufactured exports last year. India, too, is an important manufacturing centre in its own right and remains an alternative option for companies looking to diversify their supply chain. With the right investments, I believe India can meet its ambition to boost its manufacturing sector’s GDP contribution to 25% by 2025. This includes its recent efforts to strengthen its network of free trade agreements to encourage exports, such as its FTA with the UAE recently.
Q. How do Singapore view tensions on the India-China border and the flare-up in the Taiwan Strait?
A. Tensions are not ideal for the region’s development and prosperity. We, therefore, welcome the recent disengagement of Indian and Chinese troops in eastern Ladakh and hope both sides keep up dialogue to find a peaceful resolution to border issues. In addition to dialogue, trust also remains necessary to defuse tensions on the India-China border and across the Taiwan Strait. We continue to watch the cross-strait situation with concern. Any miscalculation or mishap will upend the regional peace and stability we have enjoyed for decades, and result in severe trade, supply chain and security fallouts. We hope that all sides will exercise restraint and refrain from actions that further escalate tensions and focus on trust-building instead.
Q. Singapore is among the guest countries for the G20 Summit to be hosted by India in 2023. How can Singapore contribute to achieving India’s G20 priorities?
A. Singapore is honoured to be invited by India to participate in the G20 during India’s G20 Presidency. India will be leading the G20 at a critical time, where multilateral cooperation is needed more than ever.
Singapore will do its part to support India in facilitating inclusive and sustainable recovery for all countries. This includes strengthening global health resilience and improving pandemic prevention, preparedness and response.
Singapore shares common interests with India in building digital infrastructure and facilitating cross-border digital payments and trade. The “India Stack”, in particular, has wide application in financial inclusion and public service delivery. We are therefore keen to support India’s G20 Presidency to drive the development of a global digital infrastructure with interoperability and good governance. International cooperation in the regulation of digital assets is also likely to grow in tandem with digitalisation.
Finally, we look forward to working with India to scale up sustainable finance and help countries accelerate their energy transitions in a practicable manner. This includes innovations like blended finance, energy transition mechanisms and carbon credits to mobilise more private investments toward this important cause.
Q. Is there a timeframe for the DPM to take over as the prime minister under Singapore’s leadership transition? What will your priorities be for the future relationship with India?
A. We have just completed our leadership succession process in Singapore, and I am honoured that my colleagues in the Cabinet have chosen me to be their next leader.
The next general election in Singapore has to take place by 2025. We are still discussing the options for leadership transition and the timing of when I would take over as prime minister. For now, I am focused on my expanded responsibilities as well as our national priorities to secure Singapore’s future. One key aspect of this is to strengthen ties in the region and explore new areas of growth and cooperation.
That is why I have come to India – you are an important and trusted partner for Singapore. There is great scope for further cooperation between our two countries, including in fintech and innovation, food and energy security, digitalisation, green technology, and skills development. I hope to deepen our relationship in these aspects and on a personal level in the years to come.