Heightened tensions, uncertainty could be turning point in world trade: SM Lee

Serious economic, strategic implications if trade-to-GDP ratio starts to fall, he warns

- Vanessa Paige Chelvan

The world cannot assume global trade will continue keeping pace with gross domestic product (GDP) amid heightened strategic tensions and policy uncertainty, including those brought about by a new administration in the US, Senior Minister Lee Hsien Loong said.

If the trade-to-GDP ratio begins to fall, there will be serious economic and strategic implications, which will dampen economic growth in many countries at the least, said SM Lee at a lecture during the opening of the Singapore Maritime Week. This will cause further social and political problems domestically and internationally.

"In that event, the world would truly enter a new epoch, which it has not seen since the Second World War," the former prime minister said on March 24, adding that the present moment could prove to be "another turning point".

SM Lee said it is Singapore's hope that world trade will continue growing, whatever the uncertainties and turbulence ahead. This is not just to sustain the maritime industry, but also to enable more productive and prosperous lives around the world.

Singapore's task, he said, is to do its part to enable and foster growth of international trade, and make its economy and maritime industry more efficient, competitive and trusted.

This is so that others will still want to trade and do business here, whatever the state of the world, and the Republic can continue to make a living for itself, added SM Lee.

Over the past 60 years, Singapore's economy has flourished in tandem with globalization. The world was generally peaceful and stable, and the global order was underwritten by the US, supported by its allies in Asia and Europe, SM Lee said. It was during this time that multilateral institutions, such as the United Nations, were established, and international laws and treaties were negotiated and adopted.