Interview: Interdependence is key to Singapore's economic survival
Minister-in-charge of the Smart Nation initiative Vivian Balakrishnan on how a tiny state finds big opportunities
SINGAPORE As a small, trade-oriented nation, Singapore's economic survival depends on being part of an open, integrated network with other nations, a strategy it intends to follow in the digital age, according to Vivian Balakrishnan, minister-in-charge of the Smart Nation initiative.
In his ministerial post, Balakrishnan, who entered politics in 2001 after working as an ophthalmologist and an associate professor at the National University of Singapore, is helping oversee the country's road map for enhancing quality of life and the economy through technology. He recently sat down with the Nikkei Asian Review to talk about the initiative and about Singapore's role in an increasingly interconnected world.
Is being small an advantage for becoming a Smart Nation? It's much easier and more cost-effective for a small state to roll out infrastructure. We take advantage of being small and move quickly. We have a single-layer government, not even two houses. More than half of our cabinet members are engineers. We can change regulations and legislations quickly. But a small state does not have a large economy, so it is important to be connected, to be a part of a network.
Being a hub state often requires being diplomatically neutral. Do you see Singapore as striking a balance between the U.S. and China? [Be] friends to all, don't make enemies, stand for your national interests in a principled way, be a reliable and honest partner with everyone. This is the karma of a small state. Over the next 20 years, I see a multipolar world. In order to take maximum advantage of this ongoing technological, digital revolution, we have to interconnect. By sharing, by being open and by being integrated, we become mutually dependent. It's not zero-sum rivalry, not forming rival blocks or trade blocks.
Because we are small, we believe in openness, in interdependence, in collaboration. Singapore always tries to be a friend to everyone. That doesn't mean we don't have our own national interests. We do. As a small state, we have to believe in international law and in multilateral institutions. We have to support global organizations and global norms. Because we are a transshipment port and, in future, we would also be transshipping digital ideas and services, it's very important to be an honest, reliable broker. It is a source of competitive strength.
How serious do you think the situation is in the South China Sea, where China is increasingly asserting its territorial ambitions? The main thing I am worried about is a trade war. And I don't want and I hope there will not be a trade war, whether it is with the U.S. or China or in Japan or in other parts of Asia. As long as there is no trade war, the prospects for Southeast Asia are very bright. I am not so worried about a hot war. Right now, I am more worried about a trade war. And I hope that good sense will prevail.
What are the areas of focus under the Smart Nation initiative? We are a very dense city. One area which we want to solve is public transport. We believe that the real revolution in transportation is not autonomous cars, but autonomous public transport that meets peoples' needs and decongests roads. This is one big challenge we have, which we want to use smart technology to address, to make living in the city safer, greener, more sustainable and more efficient.
Singapore lags behind China in areas such as electronic payments. How do you plan to catch up? In the digital economy, e-payments are essential. We need to catch up on going cashless as quickly as possible. Our vision is for it to become presenceless, cashless and paymentless. One of the big obstacles is a secure digital identity. We are working on a digital ID which will include both biometric features for security as well as a public key infrastructure to enable secure digital signatures. The key is that we want to create shared platforms. We even want to open up government PKIs to the private sector, so they can all ride on it.
Will government-linked companies continue to play a major role in the digital age? What's important is to have open platforms, level playing fields, rule of law, competition and innovation. Those are essential. It is not so much about the role of state-owned companies -- that's all from the last industrial revolution. The correct questions are: What are you creating? Are you competitive? Are you scalable? Are you using the latest technology? Are you secure? In the new economy, the old structures of ownership are not so crucial. It's about ideas and how ideas are used and how ideas are shared.
What is the government's role? This is a digital revolution. The only way that you get to the cutting edge is to invest in research and development. From 2016 to 2020, [the government] set aside 19 billion Singapore dollars ($14 billion) to it. The focus is on four key areas: advanced manufacturing, life science, digital services and urban solutions. These are areas that are not only relevant, but also the areas where Singapore has competitive strengths.
Interviewed by Nikkei staff writer Takashi Nakano