Home Team Promotion Ceremony 2025 – Speech by Mr K Shanmugam, Minister for Home Affairs and Minister for Law

Home Team colleagues,

Ladies and gentlemen,

Good evening.

1. First, our heartiest congratulations to all the promotees. You have played an incredible part in the success of Home Team. We have managed to do well so far only because of the collective effort of every Home Team officer, driven by a deep sense of duty to Singapore. So I thank all of you for consistently giving your best.

Evolving Global and Security Landscape: US Tariffs

2. What am I going to talk about today? Once in a while, I talk about the broader issues which are important to Singapore. And I talked about Ukraine and Russia some years ago, maybe two or three years ago. Today, I want to talk about the environment which has a huge impact on us, and the economic impact could potentially be serious. And if that happens, then why is it relevant to you? Because the security situation could also be seriously affected, and it can have an impact on the work we do. So it is important that, as leaders in Home Team, you understand the situation and look down the road to see how it can impact on our work.

3. Now we have entered, in my view, and the view of many others, a new phase of security challenges since 2 April. For the most part of our history as a nation, we have been supported by free trade and globalisation. It simply means countries could trade with each other. There were a clear set of rules. Look at it as different countries – I do what I can do best, trade with you; you do what you best, trade with me. There are no barriers – that is simplifying it – but relatively low barriers. And we prospered in this environment. And in fact, our external trade is three times our internal economy, and we were part of the global economic system. Whenever we faced challenges within Singapore, whether it's recessions in mid-80s, whether it's the oil shock, whether it was Konfrantasi, even before. Subsequently, Asian Financial Crisis of 1998 or the Global Financial Crisis of 2008, SARS in 2003, and COVID.

4. We tightened our belt. We rode it through, but we could trade our way out of trouble, because the external environment was conducive, and that way, as long as we ran things well within Singapore, we could bring in the investments, create the jobs, create the growth, pay for what we need - infrastructure, social subsidies, housing, have surpluses.

5. All of that has changed now. The US is 26% of the global GDP - one quarter; it is one third of the consumption, and the US, after the Second World War, was instrumental in building this globalisation and free trade system.

6. For many reasons, which I won't go into now, they are now saying we want to tear up that - that's off. We are going to put up walls, and if you want to deal with the US, if you want to trade with the US, do it one-on-one. Do it one-on-one means Singapore goes and negotiates with them; Malaysia goes and negotiates with them. The bargaining power is very different, and therefore the Americans can demand whatever they want. It is no longer based on international rules that apply to all. There will be a huge disparity of power, and it will be a very different environment, because there will be no free trade. In today's environment, raw materials could come from Indonesia, they go to Malaysia for the first level of processing, they come to Singapore for a second level of processing, they then go to China or Vietnam for finishing, and then they export it to the US, Europe, and so on. So that one-on-one deals means all of these supply chains, all of these factors where different countries come together to make a product, would be gone. It's not going to be possible, or very difficult.

7. The tariffs - you all know what happened, various tariffs were imposed on ‘Liberation Day’, and global stock markets tanked. As I go around and I talk to people - it came as a surprise to me - that I was told those in their 20s invest in cryptocurrency; those in their 30s invest in stocks, particularly US stocks. So it's a brave world. So a fair number of people in Singapore in their 20s, 30s, 40s, I think (are) feeling from the effect now, but US$6.6 trillion was wiped out, hasn't quite recovered, Asia too. Now the Americans have paused the higher tariffs. They've carved out some exemptions.  They have paused it for three months, with a couple of threats, one of which is that they will impose duties on semiconductors, and the second on pharmaceuticals, both of which he is saying he might do in the next two to three weeks. If he does that, it's going to affect us, because those are two very important exports that we have for the US. It could be up to 8% of our GDP that is seriously affected. But leaving aside that, three months pause means that in these three months, there will be no investments. Everyone will be very cautious, because you don't know what's going to happen at the end of three months. Effectively, you take three months out of one year, there is no way this year can be better than last year, where the economic activity is reduced. As I talk to SMEs, they are already feeling it. The workers are idle because the business has gone down. MNCs have begun to restructure their internal environment because they are not quite sure of the export. Certainly, there is no new hiring. Forget about wage increases.

8. If you look at what the world leaders are saying, British Prime Minister Starmer says, “This is the end of the world as we know it”. It is being spoken of in very dystopian terms – “end of the world as we know it”. IMF chief has raised significant risks to global economy. Most serious economists think that there is a 60 percent chance of recession in the US, which means likely recession in many other parts, possibly in Singapore too. The Japanese Prime Minister says this is a national crisis. Chancellor-elect in Germany says this is an urgent problem, dramatic, and threatens to deteriorate further.

9. We don't know whether the world, as we know, has gone permanently, or Mr. Trump will have a change of heart, but it is going to be a very difficult environment; and inevitably, big countries will start giving incentives and putting up more barriers, because when the US does it, others have to do it too.

10. So, China, India, all the others that we trade with will start doing this so that they can attract the investors, which means investors go to them rather than come to Singapore.

11. Business uncertainty will increase. Investment flows are likely to come down. Trade is almost certainly likely to slow down, and the implications for us are immediate impact on jobs – existing jobs, as well as ability to create new jobs.

12. We've already downgraded our GDP growth forecast for this year from one to 3% down to zero to 2% - zero can easily go into minus. That means how we run our public services will be impacted, because our budget is going to be impacted; our ability to collect taxes, fund programs, maintain health care, keep up other areas of social and public spending. It's all going to come under pressure. There are therefore wider implications as well for the international order and a direct implication for security.

13. Now, 40 years ago, in 1985, Mr. Lee, then Prime Minister, gave a speech to the US Congress. It's an honour. They don't often invite statesmen to give speeches to their Congress. Mr. Lee was invited. He told them that if ever the US lost the will to maintain free trade, there will be trouble. He said that for decades, the maintenance of political boundaries was made possible because countries can fulfill the ambitions through trade rather than seeking territory.

14. Before the Second World War, countries had to acquire territory to get new markets and get resources. The system the Americans put in post-Second World War meant you can become rich without having to go and send the army to other countries; and you can acquire their resources through trade by working hard without having to conquer them. But if, he said, this path – the trading path to prosperity – is closed off, then countries probably will return to traditional patterns of conquest and influence to secure their markets.  He stressed that the United States was the anchor economy of the free market economies of the world, and the US has a primary responsibility to uphold the rules of international conduct. Now those words, very wise, even more relevant today, because the US basically has taken the paper and torn it up into shreds  and says, I'm not going to follow this – the global trading system, I‘m tearing it up.

15. Now, at the same time, the US is also tearing up the rule book on the global security system. Post-Second World War it anchored the security system in the world. Soviet Union was self-contained. The rest of the world, US was a global policeman, Seventh Fleet in the Pacific Ocean, that means your ships can go through the Pacific Ocean and South China Sea without being harassed, without being attacked, Indian Ocean, Atlantic Ocean. Highways of the world.

16. Peace around the world was largely maintained by the Americans. Now they say, “Well, I don't want to pay for this. I don't see the benefit in it.” There are benefits. I don't need to go into that. But what it means is that once the US withdraws from this role, every country will have to look at its own security by itself. So if you look at Asia, one simple example, Japan and China have issues. Today, Japan relies on the American nuclear umbrella. Once they can no longer rely on America, they will have to upgrade their forces. They have the capability of going nuclear. Will they do so? I'm sure those conversations are taking place.

17. South Korea, once the nuclear umbrella of the Americans is withdrawn, they will have to think because they have North Korea with nuclear weapons facing them. So you have a nuclear Pakistan, nuclear India, nuclear China, you may have a nuclear Japan, and nuclear South Korea and a nuclear North Korea. Does it make for greater stability or lesser stability?

18. Any accident, you get a nuclear war. And Taiwan will start thinking seriously as to whether it can defend conventional weapons. That's another issue. So we can no longer rely on international rules to protect us in a security context. We always had a very capable defence force - that was our primary source of protection. But nevertheless, the international rules matter. Suddenly, if you tear that up in the international security situation, it is might is right. Big countries can start dictating to small countries. For that situation, we are not far off from there. At the same time, if you have deep economic downturn in many parts of the world, and the last time this happened was in the 1930s which then led to the Second World War. Now, hopefully it doesn't get there, but you must expect that economic vibrancy could be affected. Jobs are likely to be lost around the world, including Singapore, financial stress. Tailor made for increase in crime.

19. Easier for criminal organisations to recruit. Foreign syndicates will try and get a foothold. So you think of many aspects of crime, there will be more recruits, because the legitimate pathways for prosperity are no longer there, and the social tensions that would be created by economic hardship, economic income disparities, community tensions. People looking for someone else to blame and risks to public disorder, because frustration, anger in communities will build up .

20. All of these are not certain to happen. Maybe there isn't even, hopefully, more than a 50% chance of it happening. But something along these lines cannot be ruled out at this point. Certainly economic stress, followed by economic downturn and a different kind of trading system. We are now desperately calling, linking up leaders of like minds. Our prime minister, together with others of a similar mind are calling up to see what we can salvage of the world trading system, leaving out the Americans. And as somebody put it - take their marbles and go away and don't want to play. See whether we can get all the others to come together and continue to play. It's not going to replace the Americans, because as I said, they are one third of the world's consumption. But some order is better than no order. So we are trying to do that, and that's what the PM meant by there is agency, but there will be stress, and we will be under stress.

Impact on the Home Team

21. That's why it's even more important at this point, that we maintain our professionalism, our strong values have to come in to help us, and our unity as one. In times like this, good leadership is even more important. We need leaders in Home Team who understand how global developments affect our security. Otherwise, you are in a vacuum. You are operating but you don't really realise what has changed, why things are happening, which is why I took a few minutes to talk about and sketch out what might happen. So that you have a context to whatever is happening within Singapore. How it can affect our security, and what must we start thinking about, to anticipate, and how do we adapt, guide our teams to deal effectively with security challenges that may arise. Our leaders, in this context, will need to maintain high morale and resilience amongst our officers, even if our operating environment becomes more difficult. We all hope, we pray that things change in a few months and it gets back to normal. But you know, hope and prayer is not the only thing you can rely on. You have to prepare for the worst while hoping for the best.

Developing Leaders

22. So, our investments in leadership development in the Home Team, it's for times like these,  particularly. The Phoenix programme, Home Team Senior Leaders programme, Overseas programme -  provide exposures to global perspectives, the development opportunities that include dialogues with industry leaders, participation in talent communities, personalised mentorships. I think it's all helped to build a core of strong leaders and effective Home Team that can continue to keep Singapore safe and secure and maintain public trust.

23. We can, and I'm sure we will maintain our standards and our public-facing duties, build the organisation, develop our people and you will lead your officers through these times and in their own way, help them understand these challenges so that they can be effective in their duties. In the short term, three months, six months, nine months, hopefully nothing will change. But we are prepared. We can prepare our officers to deal with the challenges if they come. And I have no doubt, I have every confidence, management has every confidence that we will meet that challenge and that you will continue to lead the Home Team well. Congratulations to everyone, and sorry for the sober speech. But you know, the world is not always as we like it, and we are successful as a Home Team, as Singapore, because we don't sit and try and say - Why has the world changed, nor do we know the changes. We look at it squarely, and then we say okay how do we deal with it. And sometimes that means acknowledging that dark clouds are there. There is rain, but we will deal with it.

24. Congratulations, and thank you very much.