Published: 08 April 2023
Minister K. Shanmugam delivered a keynote address and gave an interview at the South China Morning Post Conference on 29 March 2023.
He shared his views on the Ukraine-Russia war, tensions in East Asia, competition between Hong Kong and Singapore, the Foreign Interference Countermeasures Act, Singapore’s anti-drugs stance and leadership changes in Singapore, among other topics.
- Read transcript of Minister K. Shanmugam's interview with South China Morning Post at the sidelines of the China Conference: Southeast Asia
- Read Minister K. Shanmugam's keynote address at the South China Morning Post China Conference: Southeast Asia
Interviewer: Your recent speech on Russia and Ukraine really resonated with a lot of people, not just in Singapore but elsewhere. And it was really widely reported and shared, and I think it went viral, actually, in some circles.
Minister: Foreign policy speeches don't go viral.
Interviewer: That was what I was surprised by, but I think a lot of the people who follow these things closely, were reading it chapter and verse. So, with that background in mind, do you have a view as to China's recent 12-point peace plan shared with Russia's Putin, when the two leaders met recently?
Minister: China calls it a position paper, not a peace plan. To me, as I said in the speech, the starting point is that the Russian invasion of Ukraine, which is a sovereign country, is not acceptable. And there can be no excuses or reasons for it. I did make a second point in the speech that there are many others who played a role in the events leading up to this. And there is not enough attention or focus that has been paid today in the media, or even in public discourse, about the role that others have played.
I think you have to start with the United Nations Charter, which guarantees the sovereignty and territorial integrity of countries. That starting point has got to be respected – territorial integrity and sovereignty. It’s fundamental. How that is achieved, is something that has to be sorted out. Ukraine and Russia have to find a solution. The international community will have to work towards that. I assume at some point, China will discuss its position paper with Ukraine. So far, they haven't met yet. So, it is a step, China's position paper, but I'm sure the Ukrainians will have views on some aspects of the position paper.
Interviewer: You cited earlier in your speech Gideon Rachman’s view about the parallels between today and the 1930s, and that there was every chance that we would slide into conflict. And you mentioned two regions that are potentially ripe for a hot war – one is Ukraine and Russia, which is already happening, and East Asia.
Minister: Rachman’s point was that he looked at 1930s, and drew some parallels. I'm not saying I agree with him, but he is an observer whose views are worth thinking about. In the 1930s, you had a rising power in Europe, you had a rising power in East Asia, and they felt that that the then-current world order did not accommodate their interests. Today, Russia is not quite a rising power. It’s already a significant power, it’s a superpower. You have China, which has also risen, is a superpower, and will continue to rise. And, he is drawing that parallel – that both think that the current world order doesn't accommodate their viewpoints.
One example, which I have referred to in the past, in a slightly different context: you look at China's voting rights at the World Bank, and how even though the US Administration was agreeable to increasing that, Congress blocked it. And you can understand, in some respects, the viewpoints as to why China is feeling the way it does. None of us thinks that any of this justifies a hot war. But the point that Rachman makes, is that just like in the 1930s, now, you have a situation where you have strong powers in Europe and Asia which are dissatisfied with the world order. And the world is being divided into blocs, and military alliances are being formed. He doesn't mention those, but that is in the backdrop, bringing us into a situation that is getting more and more tense. And I think he has a point.
Interviewer: Specifically about East Asia, what are your views and concerns about who's fuelling the tensions in East Asia? Could you elucidate on your assessment on what's happening in that region and the big power play?
Minister: What I can say is this. Asia Pacific, I think everyone recognizes is going to be extremely important. When a region is economically important, it is also strategically important. It is strategically important to the US, both because it's a Pacific power, and its closest ally in this region, Japan, is the third largest economic entity in the world. You have South Korea and you have Australia. And that's why I alluded in my speech, to blocs being formed with military echoes. I mean, they are already allies, There are also other countries which are interacting with them, well, who are not quite allies yet, on the one side. You have China, on the other side, with various countries which are more aligned with China.
So, you see this, and you have potential flashpoints. North Korea is one flashpoint; Taiwan is another flashpoint. So you have the blocs, you have economic growth which makes this region important, you have consolidation of political and public perception in the US – that China has to be dealt with in some way, or for want of a better word, “contained” I suppose – and you have a clear view that's coming out from China that they will obviously not be constrained.
So, you have very antipathic views, you have blocs being formed, and you have flashpoints. All the factors which can potentially lead to a very sticky situation are there. It’s in nobody's interest.
Interviewer: So, how viable is this concept of staying neutral?
Minister: How viable is this concept of staying neutral? It’s more viable than joining one side or the other.
Interviewer: Elaborate? Isn’t it fraught with difficulty because you have to make choices.
Minister: It’s fraught with difficulties. But, on the other hand, we have to look at where we are, given our trading relationships and strategic relationships and our own needs. And as I have said – I don’t know if I’ve said this publicly, but as I’ve said before – a Singaporean leader doesn’t go to bed worrying about whether China or the US has military designs on Singapore. That’s not a primary concern. Singapore’s security framework doesn’t factor that in. Security framework is, how do we make sure that we have a strong defence to protect ourselves, but it’s not that you’re looking at the US or Europe or China.
So, if there’s a dispute, it’s between them, but it’s going to damage all of us. And any sensible person, whether from those countries or from outside, will say there has got to be responsible leadership. And what’s the best thing Singapore can do other than to continue to counsel responsible leadership? We are price-takers, but we can only say what is sensible. And how does it make our position better, then, to be clearly on one side or the other?
Interviewer: Moving on to a slightly easier topic, this was mentioned in your speech also, about how in the last few years, Singapore has attracted a record number of family offices. Obviously, there’s a lot of movement of capital into Singapore and into Hong Kong. Last week, the Financial Times described the movement as possibly creating the Caymans of Asia in this region. What is your own take on that view?
Minister: I mean, to talk about Hong Kong and Singapore being likened to Cayman Islands, I think it’s another clickbait. These are serious centres. We are the chair of the Financial Action Task Force this year. When I want to transfer $5000 from one account to another, the bank asks me questions. My own money. That’s Singapore. There is so much clean money that is going around in the world, you don’t need to be looking at funny money. Those days are gone. Hong Kong and Singapore, both, are centres which are world-class, with good regulatory framework, and there is enough clean, good money that you can deal with.
Sometimes – and I’m not saying that about this particular FT article – sometimes, these statements are made with a tinge of envy. Because perhaps the centres which are losing out, which could be attracting this money, are not as attractive as they once were, and many of these newspapers are stationed in those countries. That’s one. Two, if you, today, look at financial centres, isn’t it obvious that there are some places in the world which have long harboured – and we are talking about top financial centres in the world – which have long harboured questionable money? And I’m not referring to Singapore and Hong Kong. So, I think when you live in glass houses, you have to be careful about throwing stones.
Interviewer: Looking at the issue from another dimension, where there’s influx of wealth and talent, are you concerned about the possibility of them imposing new pressures on divisions within Singapore society? Class divisions?
Minister: The way I would put it is – this is a serious issue that needs to be continuously thought about. In a very small place like Singapore, where you can travel from one side of the island to the other in about 40 minutes by road, the people with a lot of wealth live right next to the people with less wealth.
I think we have done a very good job in assuring Singaporeans of their important needs, like housing, education, healthcare, jobs. So, any urban financial centre, international financial centre – you can take New York, you can take London, you can take Singapore, Hong Kong – it will attract capital. It will attract people of talent, Singaporeans as well as others, and their incomes will be on the international scale. A banker who runs a regional office will be paid according to global standards. Somebody else who doesn’t reach that position is going to be paid very differently. And this applies in all these places. The difference between Singapore and most of these places, in fact, all these places – Dubai, Hong Kong, and so on – is if you didn’t like it, from Hong Kong, you can move to other parts of China; from New York, you can go to the Midwest, if you wanted a different pace of life and a different quality of life; from Dubai, you can also move out. Dubai itself is more than 2000 square kilometres.
Singapore, you can’t move out. It’s a sovereign country, which is also a city state, and you are in Singapore. And because wealth creation in Singapore is based purely on being able to compete with the world – it doesn’t produce the resources that Malaysia produces, or any other country produces – it's got to be competitive.
So, in that sense, Singapore and Singaporeans don’t have much choice other than to compete with the world. And if we don't compete, we are not competitive, then the quality and the standard of life in Singapore will be very different. So, there is that pressure to compete. In any such competition, there will be winners and there will be people who don’t do as well. The Government makes sure that most people’s basic needs are taken care of – as long as they work hard. So it doesn’t matter if you don’t reach the top – you will still have a decent life. I think Singapore is actually quite socialist in its policies. You can quote me on that. Because from the time you're born, you get money for being born, and long before you go to school. And then your school is heavily subsidised, and education quality is world class. Your healthcare is subsidised. Your housing, when you get married, is subsidised. Your job – money is topped up if you have low income. So which part of your life doesn't the Government come in and help? And so while the economy is capitalist, the State intervenes quite a lot, on the social side, to redistribute, with a philosophy of helping people.
And so, it is actually a socialist system in many ways, in terms of taking care of people. But, that kind of taking care cannot help everyone be at the same level as somebody who has $1 billion to his name. Government can help with all basic needs, but there will still be differences. So, it's partly a question of making sure that you invest more and more in your people, and making sure that there is natural talent flow among Singaporeans to be able to reach the top, unblocked, that it's not blocked by artificial factors.
And the pure meritocracy that worked very well, now, you need to bear in mind that families which are middle class, parents who are professional – and this happens all around the world – are able to give their children several advantages that parents, other parents who are less well educated, are not able to give.
So yes, there is a meritocracy, but at the starting line, some children are ahead, and the State has got to do what it can at the preschool years, to try and bring all the children up to a certain standard. The State can never substitute parents, but the State can support in some ways. And we are spending billions of dollars in preschool, because education is the common accepted pathway for success. At preschool, at much earlier, you try and give the children the best you can. And during school, the children who are less well performing, you also try and help them, pay a lot of attention to them. So, we're doing all that.
And, you've got to continuously deal with it, explain to people, and keep that compact and trust, so that people understand. An inevitable part of being a global city is that there will be people of high talent and with access to resources, but we have to ensure that everyone can reach there if they have the ability. And even if you don’t, you will be taken care of.
Interviewer: Do you think Singaporeans by and large understand that? Buy into the idea of this compact?
Minister: The compact has on the whole remained good. If you look at surveys: I think going into COVID and coming after COVID, more Singaporeans now say they're more united post COVID, than before COVID. But understanding doesn't mean the work is done. And understanding doesn't mean that it is easily accepted either. It's constant, and you've got to continuously look at what is possible, to make sure that people are well looked after.
Interviewer 2: Prime Minister (PM) Lee Hsien Loong is right now, in China, at the Boao forum. Before going to Hainan, he was in Guangzhou, the capital city of Guangdong, which is also one of the Greater Bay Area (GBA) cities. And, I think the second half of the year, President Xi is going to bring back the Belt and Road Summit, a physical one again, after three years of COVID restrictions. How enthusiastic are Singapore companies or the Singapore Government to seize the opportunities in GBA and the Belt and Road?
Minister: No, I mean, we have enough examples of the Belt and Road; it is well-established. In Singapore, our infrastructure is already so well developed. So, we can understand China focusing the infrastructure of the Belt and Road on other countries.
But, we are an important node in the Belt and Road. And you know that Singapore, we work closely with the nodes in China on transport connectivity. We have done agreements. China's export, logistics, communications, have been growing, and we already are an important link in there. So, when you talk about Belt and Road, in the Singapore context, you're not talking about China investing money into building our roads and transport infrastructure. That's not what anybody thinks, I think. But we play an important role in the whole concept, simply because of where we are, and our role as an international transport, air and logistics hub, and our agreements with China that emphasise that. I think we must see it as part of the big picture.
The Greater Bay Area, I am one of those people who think that it is destined to succeed. I’ve said just now that it’s US$2 trillion GDP, and my expectation is that that will increase. And it is an opportunity not just for Singapore, but for people around the world.
Interviewer 2: So, Singapore companies are interested in going into the GBA?
Minister: I haven't spoken with Singapore companies specifically on this. I mean, anytime you want to invest, there are some basic rules, such as whether you have something to invest, that can compete or provide a value that local companies cannot. I'm sure there are Singapore companies with that value proposition, and I'm sure they will be looking at it, but I haven't specifically spoken with anyone.
Interviewer: Last year, Minister, you moved a very significant piece of legislation, which is the Foreign Interference Countermeasures Act (FICA). Has it been used since then?
Minister: It hasn’t fully come into force yet. It will come into force in the second half of this year.
Interviewer: Are there players that you were thinking of when you were crafting that legislation?
Minister: There are many players we can think of, but I don’t discuss countries by name.
Interviewer: No specific player in mind?
Minister: I don't discuss specific names.
Interviewer: On Singapore’s anti-drugs stance: You've taken a very tough line on it, you’ve appeared on international media advocating for it. But very recently, our neighbour Malaysia has signalled that they are moving towards ending the death penalty, or even possibly ending natural life imprisonment. What are the implications of those moves on Singapore? And secondly, do you think you are fighting a losing battle, when the use of cannabis becomes more and more widespread? And it is so visible, when you go to Thailand for example, or when you go to the US, you can’t run beyond four stores before running into a CBD shop.
Minister: And what are the consequences of that? Say if you are a policymaker in Singapore, and if you’re not ideological – and I’m not ideological about this – you go on the facts. Has it benefited the countries that have legalised? You look at Belgium, you would think of it as a well-governed country. The Justice Minister says they are in a state of ‘narco terrorism’. The leader of the largest Dutch police union says that all the attributes of a narco state are present in the Netherlands. They control large parts of it. The killings, the destruction of lives, the loss of potential of a huge number – these are the day-to-day realities for so many people. You talk about inequality. Who do you think suffers most out of this? The people who are less well off, they are the ones who die, they are the ones who get pushed into drug trafficking. And we’re talking about Belgium, we’re talking about the Netherlands. I’m not talking about some third-world countries. And these are their descriptors, not mine.
Thailand is work in progress. You see photographs of 10-year-old kids sniffing and taking drugs. And then they introduce a law that says you can’t sell to pregnant women. Well, how are you going to enforce it? Once it’s freely available in candies and everywhere else, it’s difficult. Anything that makes drugs more easily available will become more challenging.
What we do have, is extremely strong support within Singapore, for the stance we take, which outlaws these drugs, and which we make a distinction between pure abusers and traffickers. Pure abusers are not treated as criminals. They don’t have a jail record. We focus on them as people who need help, so they are put into centres. They can’t come out, so they are in detention, but they are given treatment – psychological, as well as medical assistance – and then they are trained to try to get into jobs. They are given a lot of handholding. A lot of State resources are focused on every single abuser, as long as he’s just abused and didn’t commit any other criminal act. And when they come out, they are given help, and there’s no criminal record.
Traffickers, of course, we deal with very differently. And is it working? I think, over 70% of people in the region from where our traffickers come from, say that they understand the laws, and they won’t do it, and that it is a strong deterrence. People within Singapore strongly support the tough criminal law policies.
Not many people have understood that we make a big distinction between pure abusers and traffickers, but you know, we talk about it.
Ultimately, the population of Singapore will have to decide whether they support capital punishment, or they don’t. What I can tell you is that today, there is strong support. Partly because we handle this carefully, and secondly, because we explain our position repeatedly to the public, so the public understands. And the public can see – you walk along the streets of San Francisco, you walk along the streets of many other places.
And, I’ve said this publicly – anyone can walk at any time of the day or night in Singapore without worrying. Over 90% of our women feel safe walking home alone at night. When you talk about human rights, I think that’s the most important human right – the ability to be free in your city – and not the pet peeve of a very small group of activists who either because they don’t like the Government, or because they are focused on this ideologically. And nobody has answered the question – have you done a calculation of the number of lives that would be lost if you went softer? It’s a fact. More lives are lost; more lives are destroyed. People don’t look at it like that. They don’t want to look at it. So, a combination of pharma companies, big money, and ideology is driving this in the rest of the world, and also because their systems are not strong enough. You know, some of them are corrupted by the drug traffickers. You just had the chief or a very senior person in law enforcement in Mexico being arraigned in the US. Right or wrong, I don’t know. But in Singapore, no one doubts that our enforcement against drugs works effectively. So, we are perhaps unique in making sure that the enforcement can work. And at the same time, the Police presence and Central Narcotics Bureau’s presence is not that heavy. And, people lead free lives. What do you want to change of that?
Interviewer: What about what Malaysia is doing?
Minister: As I said, anything that makes drugs easier to access, will add to the challenges we face.
Interviewer: One last question, or perhaps one and a half questions. You know you and the PM are probably the only two people who joined Parliament before 1990, who are still in Parliament. So, you've been through three Prime Ministers?
Minister: I have been with three Prime Ministers.
Interviewer: So, will you be around for the fourth one? And the second half of the question is, what's your assessment on how the leadership transition is taking place? How is the new team making their mark?
Minister: I think they are doing well. You look at the various professions – if you want to be a police officer, you need to go for training; you want to be a journalist, I assume you need to go for some training. Some – at least you need to understand the culture of your organisation, somebody edits you more closely in your early years, unless it's an irresponsible organisation. If you want to be a teacher, you need some training.
But you know, if you want to be a Prime Minister, in most countries, you don’t need any training. All you need to do is stand for elections, look somewhat good, say something attractive, and you could be elected. And there are enough places where that has happened. Then it's hit and miss. The person may be good; the person may not be good.
But it strikes me as very interesting that in most places, even if you don't consider the Prime Ministers and the Ministers as having the most important jobs in the country, you would nevertheless think that they are not the least important jobs. And if you want to be in a senior position in a bank, you needed to have worked in the bank for a period, you need to have experience. Even if not at that bank, they will ask you what's your experience? In every job, people want to know your experience. Otherwise, they put you at the bottom and you go up, you train. But not for Ministers, Prime Ministers.
We are, however, different. We think some degree of training is generally useful, some degree of experience is useful, before you become a Minister or Prime Minister.
So, if you look at the current Prime Minister – He came into politics in 1984, he started as a Minister of State. Then, he became a Minister, then Deputy Prime Minister. Look at the Ministries he has been in – Trade and Industry, Finance, Defence – a variety of Ministries.
And, as important as the Ministries, are the weekly Cabinet discussions, the way you deal with problems. You come up against issues – whether it's foreign policy issue, or the American view, Chinese view, the European view, Malaysian view, Indonesian view. How do you deal with this? How do you deal with that? What’s your position from the perspective of a small country? From 1984 until he became Prime Minister in 2004, we are talking about 20 years of experience. How many countries are there where people have 20 years of experience in Ministerial portfolios? There will be some, but it's not common. And then, he becomes Prime Minister. By then, he has pretty much seen most of the problems.
Then you look at his Prime Ministership from 2004 to now, you’re talking about 19 years, nearly two decades. What matters, is you look at the lives of people and their lived reality, the growth in GDP between 2004 and 2023. You look at the crises we have come through. You look at the actual, the median income of people living in my lower middle class housing estate in Yishun. What's the median income? How much has it gone up by, after accounting for inflation? That's what improvement in lives means. How much are they earning now? What's the unemployment rate? Are they able to do the things they want? Do they have enough money in their pocket? I mean, food and basic necessities are mostly taken for granted.
Focus on what has happened between 2004 and 2023. Is that all luck? Luck plays a part. Bad luck can finish you off. But, how much of it is the experience and the ability to do the right things at the right time?
Now, if you look at DPM Lawrence, who has been identified by his peers, he came in in 2011. Before that, he already worked as Principal Private Secretary to the PM and at other senior civil service positions, so he understands public policy. And in politics, he started as a Minister of State, he's now had 12 years. He will have a little bit more before he takes over. Not as much as PM, but quite a lot.
If you look at PM Goh, I think he came in in 1976 by-elections, and he became Prime Minister in 1990. So, 15 years, also held a variety of portfolios – defence, finance, health, various portfolios.
If you look at the 4G, the people who have been identified, take any one of them. Look at Desmond. He was in public service. Then, he’s been with me at Home Affairs, so he understands security. Now, he is dealing with a problem, an issue which bedevils many countries – housing. And I think he is dealing with it successfully. Because, Singapore’s housing issues are unique. It's a question of how quickly you can get it, and whether you can get it at a certain price, taking into account CPF. Those are the expectations, to pay most of your repayment through your Central Provident Fund (CPF) savings. Which other city, international financial centre, offers you that? He will, I have no doubt, deal with it.
Then, look at COVID – who handled it? A lot of the 4G were involved. All these are invaluable experiences. It doesn't automatically mean that they will succeed, or anyone will succeed. Luck, as I said, plays a part. You will only know when they actually take over. But, whatever you can do to prepare them, I think a lot has been done. The people have been identified, they've been brought in, they have handled different parts. They have looked at policies. They have looked at governance. They have looked at how the world is going. They've dealt with the foreign leaders. So, I think what you can say is the preparations have been done as well as they can. My own role, you could ask the next prime minister.
Interviewer: But would you want to stay?
Minister: The answer is a combination of my views on whether I want to stay, together with the views of the next Prime Minister. That is not a discussion I can have in public.
Interviewer: One last question. What do you think is the most misunderstood thing about you?
Minister: On what's the most misunderstood part of me, I think that is something you should ask others who know me. They will have a better sense. I'm not quite what, sometimes, is publicly thought about me by some people.
I am probably an economic liberal, and on social policy, probably middle ground, maybe slightly conservative, in terms of values. But I’m not somebody who believes in imposing my views or values on other people, or on their lives. The portfolios have required me to take a tough line, but the one motivating factor, which I think is the same for all the other Ministers, is that ultimately, is it good for the broader Singaporean public?
I have been lucky. I was born two months before the PAP Government came to power. I didn’t go to a brand name Primary school. And the choice of a secondary school wasn’t based on connections or any particular advantages, social advantages. It was based on a system that Mr Lee Kuan Yew and his team put in place so that someone from a very modest background, can go to Raffles Institution without having any advantages, other than what you were born with and a family that emphasises education. I was able to get into law school, again, without any specific social advantages. I had zero social capital. And I never had to interview for a job. People interviewed me to try and get me into their law firms. If I had been born in any of the other countries that I could have been born in, I wouldn’t be – forget about being a Minister – I wouldn’t be anywhere as successful as I was in Singapore.
Why was Singapore successful? Why was I and many others successful? Why was it that most Singaporeans moved up in their lives? Not everyone becomes a Senior Counsel, but the vast majority of Singaporeans have done much better, compared with where they started, they moved up. It is Singapore and the system. A clean, effective system, that allowed me to study, get into law school, get into a law firm, do well.
Where did the business for lawyers come from? Because the economic policies were so rational and consistent and farsighted, our economy grew. And when our economy grew, lawyers, accountants, bankers, others, all those who provide ancillary services, were able to do well. Most of my clients were Chinese. Skin colour mattered not. I’ve never, I mean I might have faced, even before people knew me, I might have faced racial intolerance in a mild way, perhaps five, six times. That is my growing experience.
So, I'm a strong believer in that system, but that doesn't mean that you keep to it if it's not working, as I explained to you earlier. If you look at meritocracy, what my parents gave me, is very different from what I give my children. Then, I look at the people in Yishun, and I know that the parents can’t give what many middle-class parents can give, and therefore the state must come in.
Personally, I tend to be far more direct in putting forward my views, and far more clear and direct about taking on alternate views. I believe in saying what I think. I think it's important that we have focused debates, to make sure that chaff and nonsense don’t get currency. My view is that you need to apply the logic to different viewpoints, in the public arena. You have viewpoints, let's debate. Either you're right, or I am right. Maybe, sometimes, both of us are partly right. But you must be prepared to debate.
Interviewers: On that note, thank you very much Minister for taking our questions.
Minister: Thank you.