Yip Wei Kiat, Singapore's Ambassador to South Korea. [Photograph by Park Sae-jin]
SEOUL -- Singapore and South Korea, which are dependent on external trade, should advocate a "rules-based" global economic system and diversify their trading partners to cope with growing protectionism and reduce the risks of unexpected events like trade conflicts between the superpowers, the Southeast Asian country's top envoy said.
Singapore and South Korea, which share similar perspectives on many issues, have common interests in advocating "a rules-based global economic system and ensuring freedom of navigation in international waters", Ambassador Yip Wei Kiat said in an interview with Aju News.
"Like many other trade-dependent economies, we are concerned about any escalation in the cycle of expanding tariffs as it will have a negative impact on global trade and growth," he said.
However, Sino-U.S. trade conflicts will have a limited impact on Singapore as China accounts for only about 14 percent of its total trade, the envoy said, adding a network of bilateral and multilateral trade agreements provide "a certain level of stability to our trade and economic performance" in an increasingly complex international environment.
A rules-based multilateral trading system works best for a small and open economy like Singapore, which has "very limited direct influence" on trends in the global economy, Yip said. "To lower our risks from unexpected developments, we try to diversify our trade as far as possible."
The recent trend of protectionism has a socio-political element as people have not been able to evenly benefit from globalization and liberalization, putting political pressure on governments and politicians to pay attention to how to divide, he said.
"As a result, there is a tendency for countries to adopt more protectionist postures. This is especially the case since the gains from globalization are also not evenly distributed among countries."
Instead of resorting to protectionism, Yip suggests the better policy option is for countries and governments to strive for inclusive growth by adopting measures to ensure that no one is left behind and help people to retrain and acquire new skills so that they continue to have the opportunities to realize their aspirations in life.
"Given the increasingly complex global economy and a trend of growing protectionism, there is a strong argument to be made for Korea to diversify its trade partners to reduce the risks of unexpected events," he said.
The Association of Southeast Asian Nations (ASEAN) is at the center of President Moon Jae-in's initiative to diversity South Korea's trade route and reduce its heavy trade and economic reliance on China and the United States. Yip agrees that Southeast Asia is not only an attractive market for Korean products but also an appealing production base for Korean companies due to relatively low business costs and a highly trainable workforce.
Relations between ASEAN and South Korea have seen steady growth for three decades, but there is still "much-untapped potential" for greater cooperation and exchanges, the envoy said.
He said the ASEAN Economic Community, launched in 2015, will make Southeast Asia a single market and production base, and a highly competitive region. "This will help companies to lower their business costs and facilitate the movement of goods, capital and skilled labor across the region."
Urbanisation will drive regional growth, but at the same time, it will create many challenges, Yip said, adding ASEAN countries have embarked on their own projects for sustainable development.
He said the ASEAN Smart Cities Network (ASCN) aimed at harnessing digital technologies and the strength of each country to realize the potential synergies of integrating individual efforts will improve people's lives, create new opportunities and ensure that no one is left behind in the digital revolution.
The envoy said ASEAN members countries would welcome South Korea's active participation as they are working on deepening cooperation to facilitate cross-border e-commerce transactions, developing a digital integration framework and building an innovation network.
Singapore has proposed a number of initiatives to strengthen the ability of ASEAN member states to deal with economic or security-related shocks, enhance their innovative capacity to meet the challenges of disruptive new technologies and leverage on technological solutions to improve people's lives and deepen regional economic integration.
What South Korea and Singapore should do, he says, is to focus on complementary strengths and seize the opportunities they provide as they devote a lot of resources on addressing the challenges and harnessing the opportunities presented by the Fourth Industrial Revolution.
Yip said the two countries are among those leading the application of technology in smart cities, urban solutions, autonomous vehicles, biotechnology, robotics and advanced manufacturing. "There is much room for us to combine our efforts to seek out new solutions in these areas and capitalized on the opportunities for mutual benefit."
Due to its strategic location, Singapore has served as a hub for different types of economic activities with its open economy and business-friendly policies attracting foreign investment. As a city-state with limited choices in development strategies, Singapore has been compelled to adjust policies and reinvent the economy on and on. Along the way, Yip said Singapore had placed emphasis on specific industries such as electronics, financial services, petrochemicals and biotechnology.
However, Singapore is now adopting a different approach because attention shifts to the Fourth Industrial Revolution and various aspects of life are being disrupted by technological advances and innovation, said Yip.
Being a smart nation goes beyond using individual technological devices, programs and systems at homes or workplaces, the envoy said, adding Singapore wants to harness digital technology extensively and systematically "as a national effort to improve lives, build closer communities, empower our people to achieve their aspirations through good jobs and opportunities and encourage our businesses to innovate and grow."
The high level of connectivity in Singapore has provided a framework for the launch and expansion of many initiatives such as e-government services, e-payments, autonomous vehicles, smart homes, integrated healthcare solutions and the use of open data and analytics to improve urban transportation and environment, he said.
And South Korea is very strong in info-communications technology and has much relevant experience and expertise to share with other countries, Yip said. "There is therefore many opportunities for Korean companies to work with the Singapore government or companies."
reporter
Lim Chang-won
cwlim34@ajunews.com
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