Rajaratnam’s speech was meant to be not only a statement on foreign policy, but a blueprint of sorts. “If we cannot expand outwards, we will contract inwards. And if we contract inwards, we will wither,” he declared. In a world then divided by Cold War tensions, he insists that “Singapore must remain relevant to the needs of the world,” or it would go ignored and marginalised.
Five decades on, the phrase ‘global city’ still resonates in the city-state’s policy vocabulary. On July 29, at a conference jointly-hosted by the Institute of Policy Studies (IPS) and the Singapore Business Federation (SBF), IPS director Janadas Devan asked Prime Minister Lawrence Wong what such a vision meant today. “People said we wouldn’t make it, and yet, 60 years later, against all odds, here we are today in Singapore,” says Wong.
“Even in a fragmented world,” he adds, “there will be a global network of cosmopolitan cities that stand out. We want to be one of them — a shining node where the human spirit thrives, where people want to be here to do business and to make things happen.”
As Rajaratnam said over 40 years ago: “We have only two choices, to stay where we are and stagnate, or to go ahead and play our part in the world.” More than 50 years later, Singapore appears poised to stay the course.
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Yet that resolve must contend with a creeping sentiment of complacency. “You hear this from Singaporeans,” Wong says, “that they feel the big moves have all been done. Because we went from the third world to the first. The big, bold moves have already been done in Singapore, and not much more can be done to move Singapore forward.”
He calls this “a misconception.” The work of nation-building, Wong adds, is never finished.
The world is fragmented, though, he continues. In place of the buoyant post–Cold War consensus that shaped much of the city-state’s rise, he notes, today the world is split into camps. “We all know — and we can see — that [the world] is going to be more fragmented, more contested, and it will mean a more inhospitable environment for small countries like Singapore,” says Wong.
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That fragility is not abstract. As the Republic’s trade-to-GDP ratio remains among the world’s highest, shifting geopolitical winds have made its open economy more exposed than ever. Wong, who is also the Minister of Finance, notes that while trade with America is still vital — “even with the tariffs” — Singapore must now also look further afield.
He says: “We will be looking at strengthening our links with different parts of the world, particularly with areas where we may not be so familiar with — Africa, in the Middle East, in Latin America, in the Caribbean.”
Doing so will demand more than diplomacy. “It will require us to step up our foreign policy, which we are doing, but also help businesses navigate in these new environments, which may be less familiar to us,” he adds.
Singaporean firms, Wong observes, are seasoned players across Asia, but not beyond. “To go further afield, then it will take more effort, and MTI will have to work closely with SBF, mount new overseas business missions, get businesses to go overseas to these places, understand the environment, and then think about how we can foster closer economic collaboration.”
The government has not been idle. SBF’s GlobalConnect@SBF programme, launched in collaboration with Enterprise Singapore, has sought to plug SMEs into less-charted markets, from Bogotá, Colombia, to Nairobi, Kenya. More than 2,000 companies have participated since its inception.
The MTI, meanwhile, is stitching together digital and green trade agreements that extend beyond the usual suspects. A Singapore-Africa Business Forum was launched in January. Trade missions have been dispatched to Ghana, Saudi Arabia and Colombia.
Still, traditional relationships cannot be ignored, however transactional they may become. “We would prefer to have zero tariffs, of course,” Wong acknowledges. “But if it’s the baseline rate, then we are in the lowest category. We can live with it, and we can still do business.”
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Just days later, on Aug 1, as indicated by yet another of the White House’s executive orders, Singapore would remain subject to the 10% baseline tariff on exports to the United States.
Deputy Prime Minister Gan Kim Yong had already signalled in May that Washington remained non-committal on a reduction, and that the rate — though unchanged — still mattered. A senior US official noted that Singapore, along with other countries running trade surpluses with the US, falls into the “lowest tariff tier.”
This confirmation came on the heels of an April 28 warning from the Monetary Authority of Singapore (MAS) that the tariff, if sustained, could create a sharp income and demand shock, affecting up to 55% of Singapore’s exports to the US and prompting MAS to cut the 2025 GDP forecast to between 0% and 2%.
Wendy Cutler, vice-president of the Asia Society Policy Institute. Photo: IPS
America is against… all of the above?
The conference also featured an unusually candid exchange on America’s evolving stance towards global governance. On a separate panel titled ‘Fragmenting Global Economy’, Professor Tommy Koh, Singapore’s former ambassador to the United States, posed an interesting question as an attendee.
“I want to ask my friend, Wendy Cutler, to forgive me before I pose the question,” he says, to audience laughter. Cutler is the vice-president of the Asia Society Policy Institute (ASPI), a US think-tank designed to bring forth policy ideas from collaboration between top experts in Asia and US policy makers.
Then comes Koh’s punchline: “America is against free trade — free trade is not dead. America is against globalisation — globalisation is not dead. America is against multilateralism — multilateralism is not dead. America is withdrawn from the World Health Organization (WHO) — WHO has not collapsed. America is withdrawn from the Paris Agreement — the Paris Agreement is alive and well.”
He continues: “So my point to the panel is — America is important, but it is not indispensable, and we should get used to the idea of a world without America.”
Panel moderator, Li Ka Shing Professor in Economics, Prof Danny Quah, playfully asks: “So what is your question?”
Cutler, bemused, responds: “There isn’t really one America right now.” The United States under Trump, she says, cannot be neatly summarised. “Maybe you don’t like some of the stuff we’re doing now, but that doesn’t mean the world doesn’t need or doesn’t want America, or America can’t help, or that America is not going to become part of the world or change looking forward,” says Cutler.
However, she concedes that Trump has been “more than willing” to upend the post-war trade order, even with longstanding partners such as Singapore. Following the Aug 1 tariff announcement, Cutler writes in a LinkedIn post: “For now, President Trump is a victor. He was able to seal deals with important trading partners who, to the surprise of many, accepted one-sided deals, walked away from their WTO commitments, and have found billions of dollars to purchase and invest more in the US.”
Perhaps most importantly, she notes that the next phase of US-China trade policy will matter greatly to Southeast Asia. “I think one of the worst outcomes for Asean or other countries would be that we [the US] force other countries, through these trade agreements, to take very draconian measures against Chinese content, while at the same time we celebrate a big deal with China.”
She concludes: “I personally hope that doesn’t happen and that we find some middle ground, both with not only our trading partners, but also with China.”
