The regional prosperity that China's proposed maritime silk road through the South China Sea could bring should set territorial disputes over these waters in perspective, former foreign minister George Yeo said yesterday.
Speaking at a forum organised by the Institute of Southeast Asian Studies, Mr Yeo said the question to ask in the region is: "Are we better off quarrelling over the rights to small islands and reefs and the treasures underneath, or are we better off trading?"
Mr Yeo's speech was on China's ambitious plan to revive what it calls the "Two Silk Roads": The 21st Century Maritime Silk Road to traverse the South China Sea and the Indian Ocean, and the Silk Road Economic Belt, an overland route running through Central Asia.
These plans are unfolding rapidly and will connect large parts of the world in a way never before, he said. "Connectivity on such a scale changes economic patterns and changes life's fortunes," he emphasised, adding that China's growth "radiates like a hydraulic fluid in all directions."
Mr Yeo urged Asean members to realise this potential for unprecedented prosperity, rather than be fixated on their overlapping claims in the South China Sea.
Throughout history, the South China Sea was not a barrier separating South-east Asia from China - but "an Internet" which connected the two regions, he noted.
"If you see the waters in that light, then everything is set in perspective. And if we look back later, (we might think) how silly those quarrels were," he said.
The forum was on Asia and the middle-income trap - the phenomenon in which countries lose their edge after attaining certain income levels. Mr Yeo said Singapore could avoid this trap only if it remained alert and flexible to "earth-shaking" changes around it, like the revival of the silk roads.
Entrepreneurship and risk-taking among the population were essential, and the Government's role should be to facilitate this, he added. But political moves that go against flexibility and dynamism, like freezing wages, would trap a society and economy. He added that maintaining social solidarity, and ensuring that different groups do not see their interests as conflicting, is also key.
During a panel discussion, several economists reflected on the hurdle that politics poses to economically sound solutions in some societies. Peking University economist Justin Lin Yifu cited the vicious circle facing some European countries: "If the country is trapped, it cannot create enough jobs especially for young people, and in such a situation, it's easy for politics to turn into populism - which will enforce the hurdles to overcoming the trap, because it becomes very hard to enact reasonable economic policies."
This article was first published on June 4, 2015.
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