Fireside Chat, Interview, Keynote, Conference Presentation
A Conversation with Vivian Balakrishnan, Minister for Foreign Affairs, Singapore | Asia Summit 2026
- Global Systemic Shift: The post-1965 US-led globalization order, characterized by free markets and open supply chains, has ended due to domestic political polarization in the US and internal economic/demographic imbalances in China.
- US internal division is driven by extreme inequality (the richest 50 Americans hold more assets than 150 million others), leading to a binary, zero-sum political paradigm where facts are disputed.
- China faces unsustainable demographic decline (aging population, low birth rates) and an export-oriented economic model that created a domestic imbalance between production and consumption.
- The historical "happy tango" where Chinese manufacturing lowered US consumer prices and recycled trade surpluses into T-bills to keep interest rates low is over, necessitating a new, unsettled world order.
- Strategic Imperatives for Middle Powers: Nations like Canada and Singapore must transition from "just-in-time" inventory models to "just-in-case" strategies, embracing nearshoring and friendshoring to cope with disrupted supply chains.
- Success will depend on which societies can rapidly restructure domestic economies and master emerging technologies (AI, biotech, energy) without fracturing socially.
- The human body and societies have limited capacity to adapt quickly to disruption, creating a risk of paralysis driven by fear and despair.
- Singapore's Strategic Doctrine: Singapore rejects choosing between the US and China, viewing strategic autonomy as existential; the day it loses the ability to say "no" is the day it loses relevance.
- Singapore's value proposition relies on a "trust premium," characterized by the sanctity of contracts, consistent application of laws, and refusal to confiscate wealth.
- The nation maintains relationships with both superpowers by ensuring it is "useful to you, but not made use of" by the other, avoiding the role of a proxy or vassal state.
- Singapore's decision-making is framed by a "whole of society" social contract that is upfront about trade-offs to avoid political paralysis and the erosion of trust.
- Maritime Security and Trade Rules: Singapore views the maintenance of UNCLOS and freedom of navigation as critical to its business model, particularly regarding the Strait of Singapore and the Strait of Hormuz.
- Approximately 40% of global trade traverses the Strait of Malacca and Singapore; any threat to transit passage regimes is a direct threat to Singapore's economic survival.
- Despite the risk of closure, the "Hormuz Shuttle" demonstrates that interdicting oil flows is leaky, with some Gulf states reporting increased revenue by self-insuring oil transport through the strait.
- Singapore opposes any outcome where Iran gains a veto over transit, fearing it would grant Iran strategic dominance and coercive power in the Gulf.
- Global Governance and Emerging Tech: Despite difficulties, the speaker maintains that building international rules for global commons (climate, space, AI, synthetic biology) remains possible and essential.
- The High Seas Treaty (BBNJ) serves as a recent example of successful global consensus on a complex environmental issue.
- Regulatory frameworks are necessary to provide "brakes" for technology; without them, the current era could repeat the Gilded Age's volatility and inequality.
- Singapore's AI strategy involves using "agents" but acknowledges the real threat of losing control over autonomous systems, which can reflect the violent and biased nature of their training data.
- ASEAN Economic Outlook: Singapore aims to lead ASEAN integration to create a composite economy that acts as a raft against global volatility, rather than an arena for superpower proxy wars.
- ASEAN's cumulative nominal GDP positions it as potentially the fourth-largest composite economy globally, with significant growth potential over the next 20 years.
- Regional growth remains robust despite global disruption: Vietnam grew at over 8% in the first half of the year, Singapore at 6.1%, and Malaysia/Indonesia at over 5%.
- Singapore's trade landscape is shifting, with Taiwan replacing China as its largest trading partner, driven by AI and semiconductor demand.
- Future Risks and Opportunities: The speaker identifies three specific risks posed by AI and synthetic biology: loss of control over autonomous agents, the potential for rogue actors to create new weapons of disruption, and the societal impact of AI reflecting human bias.
- The convergence of AI, biotech, and energy promises a new "Gilded Age" of wealth creation, but only if societies can manage the associated volatility and social fractures.
- The current era offers significant financial opportunities and the potential for good, provided nations can maintain trust and avoid panic.