HOW SINGAPORE WILL BE AFFECTED
Dr Balakrishnan noted that, particularly for Southeast Asia, the past eight years have delivered not only prosperity but also peace, as the countries are interdependent.
“There was more to lose by having open conflict. There was every incentive to resolve.”
Dr Balakrishnan said that now, the fundamental pillars of integration, interdependence, negotiation, and mutual agreement are at risk of being eroded, bringing major economic impact.
“I expect to see higher inflation, I expect to see slower growth rates, and I expect to see a lot of pressure on the way agreements are reached or, more importantly, the way agreements are implemented and complied with.”
Meanwhile, Mr Shanmugam, who was at Chong Pang Community Club’s launch of “Nee Soon Cares – Each Dollar, Every Heart’ programme, said although Singapore was imposed with one of the “lowest” tariffs of 10 per cent, Singapore will still be affected, given that its trade partners in Southeast Asia and China are bearing the brunt of the tariffs.
The programme enabled 60,000 households across Nee Soon GRC to redeem four essential household items, including rice and canned sardines, worth S$20 using a pre-purchased S$1 ticket.
Mr Shanmugam was joined by fellow Nee Soon GRC MPs, Louis Ng, Carrie Tan and Derrick Goh during the launch.
“Investments flow in (to Singapore) based on international trade with the tariffs that are being imposed across almost every country in the world. It’s going to have a serious effect on economies around the world,” he said.
The Member of Parliament for Nee Soon GRC listed other knock-on effects, such as a potential decline in investments and funding for welfare programmes.
“The investments don’t come in, the jobs are at stake,” said Mr Shanmugam.
He added that this, in turn, would affect the government’s ability to collect taxes and fund welfare programmes and might lead to rising healthcare costs.
“Effectively, what you have is a trade war and it’s going to affect a lot of people.”
THE WAY FORWARD FOR SINGAPORE
Speaking at the launch of the Marsiling-Yew Tee Town five-year master plan at Yew Tee Square on Saturday morning, Prime Minister Wong said that Singaporeans might enter a world that is more “dangerous and unpredictable”.
Despite the “dark clouds” ahead, Mr Wong said Singapore has always overcome such challenges with “grit and determination”, particularly during the COVID-19 pandemic.
“As long as we continue to stand together and look out for each other, I believe we can weather the storm, and build a better tomorrow, a better home and a brighter future for everyone.”
As the world undergoes significant changes, Dr Balakrishnan said the way forward for Singapore is to “double down” on regional and global integration.
These include strengthening ASEAN ties, furthering free trade agreements such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and Regional Comprehensive Economic Partnership (RCEP), and continuing Singapore’s proactive role in signing and abiding by multilateral agreements.
Dr Balakrishnan acknowledged that while the US’ withdrawal from the global system is a significant setback, it still accounts for only 14 per cent of global trade, leaving 86 per cent remaining.
“My hope is that the rest of us will double down on integration, win-win solutions, and signing agreements that we will abide by, both in spirit and in the letter of the law,” he said.
“We need to keep the principle of economic interdependence, efficiency, and competitive advantage. If we can do that, we can still stay in the game.”
Still, it is essential for Singaporeans to stay informed, said Dr Balakrishnan, as there must be a strong focus on domestic preparation, such as social safety nets, education, retraining and upskilling.
“We have both immediate, acute challenges and long-term ones, but Singapore has agency. Singapore has options. There’s a full agenda, and we need to ensure that all this translates into real benefits, hope, and optimism on the ground.”
When asked how Singapore will weather the looming storm, Mr Shanmugam said Singapore has always faced “many serious problems” – from the country’s birth in 1965, economic recessions, the SARS outbreak and the COVID-19 pandemic – and has seen them through.
“You know how we have always solved problems … The key is, in the end, unity within our country,” said Mr Shanmugam.
“The leadership is not thinking of the next election, but five years, 10 years (ahead), and taking the steps that are necessary with the support of the people to get past these dangerous times. And that’s always been the case.”
