Singapore must remain open, even as rest of world turns inwards: PM Lee
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The changes around the world will have major consequences especially for small, open countries like Singapore, said Mr Lee.
“We have always depended on open trade, making friends around the world, looking for opportunities to cooperate with others,” he said. “We have relied on a secure, peaceful Asia, an international order where countries big and small cooperate and compete according to rules which are fair to all; where small countries have a right to their place in the sun.”
“That is how we have prospered these last 50 years.”
He added: “Yes, we worked very hard, and earned our success. But we were also very lucky to enjoy this international environment. We attracted foreign investments, negotiated FTAs, worked with other countries, expanded our exports, traded, prospered.”
But now, said Mr Lee, other countries are flexing their muscles and becoming increasingly assertive.
“Nobody can tell how relations between the big powers will develop,” he admitted. “If US-China relations grow tense, Singapore is going to be in a very difficult spot, because we regard both as our friends and do not want to have to choose between them.
As a major centre for asset management and private banking Singapore has no choice but to remain open and neutral, as competition between much larger countries increases. There has been a great deal of internal debate about the role of foreigners in pushing up the price of real estate and the rising cost of living and it is probably these points the PM is referring to in his statement. Negotiating a path forward during what is likely to be a time plagued by higher political uncertainty all over the world is going to take a deft hand and strong governance. Against that background Singapore is in a positive position.
The Singapore Financials Index broke out to new 12-month highs last week and extended that move today. A clear downward dynamic would be required to question medium-term scope for additional upside.
The US Dollar pulled back against the vast majority of currencies today. It encountered resistance in the region of the January highs against the Singapore Dollar and a clear upward dynamic will be required to question potential for a reversionary move.
The Strait Times Index has been confined to a volatile range for six years but is now testing the upper side of its most recent congestion area.