Ethos Issue 7, Jan 2010

Rethinking Recovery: Possible Discontinuities
and Implications for Singapore
Godwin Tang and Valerie Yuen

The creation of supranational regulatory bodies will place increased pressure on member countries to conform to new and stricter international standards and protocols. While this may create opportunities for Singapore to leverage its reputation for clean government and high performance standards, it could also limit our financial policy options. In addition, our financial regulators and institutions may need to address further uncertainty in managing monetary and exchange rate policies, or investment portfolios, should new currencies arise to either complement or even displace the US dollar.

POSSIBLE DISCONTINUITY 4: FROM US UNILATERALISM TO GLOBAL MULTILATERALISM
Based on current trends, the international geo-political system is projected to be markedly different in 2025 compared to today.¹⁸ This can be seen as the latest development in the evolution of an increasingly complex world order, driven by greater diffusion of power. After the Cold War, the international system evolved over time to become "uni-multi-polar",¹⁹ where the US remained the only superpower, but steadily counterbalanced by the gradual "rise of the rest"—regional powers such as China, India, Russia and, to a lesser extent, Brazil and Iran.²⁰

Following the severity of the financial crisis, the world is likely to become increasingly "multi-polar", where strong regional nations compete, conflict and coalesce with each other and alongside influential non-state actors, such as multinational corporations, in the absence of a "global policeman".²¹ Should more supranational and subnational entities (i.e., influential citystates) emerge to contest for power and influence in the international arena, the world could even be shifting towards an era of "non-polarity", where power is even more diffused.²²

Implications for Singapore
As one of the most globalised countries in the world, Singapore will have to be prepared for an increasingly fragmented and chaotic world order as multi-polar systems have historically tended to be unstable. We may have to consider whether there is a need to augment our strategic alliances by establishing even closer ties with China—by 2025, China is projected to overtake Japan as the world’s second largest economy.²⁰ At the same time, there may be value in continuing our current pro-ASEAN-integration stance, to compete effectively against the increasingly influential East Asian bloc.

CONCLUSION
Singapore has experienced both the benefits and ill-effects of globalisation, and must continue to navigate the uncharted territory ahead. The world’s ability to digest and adapt to these key discontinuities will determine whether the next phase of development will be characterised by a different form of globalisation or a dark period of de-globalisation. As always, Singapore will have to stay nimble and adapt to global changes, given its size and lack of natural resources. In the face of possible drastic discontinuities, a strategic rethink of the Government’s fundamental roles, strategies and internal capabilities may be in order. This may include honing in public officers the instinct to identify and anticipate critical uncertainties and their potential implications for our operating environment.

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