Don't Count Out Globalisation, Says Former MAS Chief

The fragmenting of the global economy will be an enduring trend, but this does not mean that the world will inevitably become less integrated and interdependent.

- Wong Pei Ting

Despite visible setbacks such as tariffs and rising protectionism, former central bank chief Ravi Menon argued on July 29 that globalisation will continue to take place, driven by economic and market forces in search of efficiency and growth.

But given the opposing forces acting on the global economy, the onus is on countries to scan the horizon, discern underlying trends and shape a new form of globalisation, Mr Menon said at a July 29 conference organised by the Institute of Policy Studies and Singapore Business Federation.

He noted that world trade reached record highs following the US-China tariffs imposed during the first Trump administration, and that today's highly integrated supply chains would be very difficult to untangle.

The law of comparative advantage — which posits that countries benefit from specialising in producing goods and services they are good at — is also "extremely difficult to dislodge", said Mr Menon, who became Singapore's first ambassador for climate action following his retirement from the Monetary Authority of Singapore on Jan 1, 2024.

"Business people know this — they see supply chains shifting and configuring, not completely collapsing and breaking down.

"Like water in nature, trade finds a way... maybe less efficient, more frustrated, but it seems to find a way."