Singapore GE2020: Navigating choppy waters amid shifting geopolitical tides

How do you sail a tiny boat through massive swells when there is a raging electrical storm, the rudder in the vessel isn’t responding promptly enough to the steering, the familiar lighthouses along the coast have vanished from view and your GPS settings seem to have gone haywire unexpectedly?

That’s the kind of external situation Singapore, the little red cork bobbing on the channel connecting the South China Sea and the Indian Ocean, is facing as it goes into an election in times such as it has never seen before.

Prime Minister Lee Hsien Loong referred to it this week when he announced the July 10 parliamentary polls, pointing to a troubled landscape that includes tense United States-China ties, the looming American presidential election, the Sino-Indian border clashes and developments in the neighbourhood.

As he put it, “we do not know what surprises lie in store for us within the next year”.

In retrospect, this perfect storm of geopolitical contest, rising nationalism and slowing economies – which is what PM Lee was referring to – had been on the bake for at least a decade. But it certainly accelerated with two events: the election of Mr Donald Trump as United States President in 2016 and, in October the following year when his Chinese counterpart, Mr Xi Jinping, declared at the 19th party congress that China was ready to take centre stage and set the model for other nations to follow.

This has now been crowned by the frightening pandemic that has claimed nearly half a million lives worldwide and cratered already-slowing Asian economies.

To understand how much of an insurgent Mr Trump has been since taking office, picture this: From the humble dung beetle in the African savannah to ancient mariners in Asian waters, the constellation of stars called the Milky Way has often been a guidepost for movement on Earth’s surface.

But what if Polaris or North Star – which was what the US effectively was post-war with its bulging sinews and unending appetite for the world’s goods – has gone missing from the constellation? Worse, has actively worked to disrupt it, for instance by threatening trade pacts, bringing the World Trade Organisation close to paralysis and, most recently, announcing a withdrawal from the United Nations World Health Organisation?

Meanwhile, a new Sun has entered the solar system in the shape of China, increasingly unabashed about its size and strength. It is like an Asian elephant that’s discovered its true size vis-a-vis the stick-wielding mahout that gave it orders, and now demands the run of the forest.

This has set up the geopolitical clash of the century. Mr Kurt Campbell, the distinguished scholar and diplomat who retired as the US assistant secretary of state for East Asian and Pacific affairs, recently noted that the centre of global politics has moved from Europe to Asia as the US swivels to confront the pre-eminent rising power.

The mix of ideology into the blend lends even more potency to the contest even as many of China’s Asian neighbours and indeed others quite a distance away sense a new truth: Polaris is not necessarily the brightest in the constellation and may not even have the will to be that.

What’s more, there could be a new beacon – for instance, Ecuador and Zimbabwe, two nations that have borrowed heavily from China, have also benefited from sharp falls in crime rates after buying into Chinese systems of mass surveillance.

The biggest regional uncertainty, of course, is China and where it is heading along a variety of dimensions. Events of the last 50 years suggest that China’s internal struggles have often manifested externally – the 1962 war with India during the Great Leap Forward and the 1979 clash with Vietnam shortly after the launch of massive economic reforms being two examples.

Meanwhile, regional powers like Australia are going the other way. Worried about life as they know it being upended, they seem willing to sacrifice economic growth and the lure of the world’s biggest market to stand up to Chinese pressure and alleged interference in their systems. This month, India and China had gruesome clashes in the high reaches of the Ladakh Himalayas as a resolute New Delhi locked horns with an assertive Beijing.

At the same time, in some regards, the US is beginning to behave like China – extracting a price to access its markets and when it suits it, fusing trade and strategy.

For all his attempts to draw New Delhi more tightly into Washington’s strategic orbit, including offering to mediate in the dispute with China, Mr Trump this week unexpectedly announced a suspension of H1B skilled worker visas, provoking outrage in India’s vital technology services industry which serves tech giants such as Amazon and Google. Indians typically make up 70 per cent of the 85,000 visas issued every year in that category.

Tensions are also spreading into hitherto uncharted areas, including cyberspace and outer space.

Several regional nations perceived to have partisan roles in the geopolitical contest have faced cyber attacks in recent years from state-backed actors, with Australia the most recent victim. Last month, Japan launched its new space defence unit, Space Operations Squadron, to protect its satellites from enemy attacks, adding to a list of nations, including China and India, that have similar outfits.

The biggest regional uncertainty, of course, is China and where it is heading along a variety of dimensions. Events of the last 50 years suggest that China’s internal struggles have often manifested externally – the 1962 war with India during the Great Leap Forward and the 1979 clash with Vietnam shortly after the launch of massive economic reforms being two examples.

Stung now by the embarrassment of the pandemic being first reported from her soil, chafing at the security alignments that threaten her unimpeded pathways to the great oceans not to speak of access to food and energy, she has lashed out at a variety of nations, including Vietnam and to an extent, Malaysia.

In doing so, she has risked pushing countries who wanted to balance ties between the superpowers even closer to America. Indeed, as happened in 2016, when the Chinese coast guard intervened in the Natunas to free a poaching vessel captured within Indonesia’s territorial waters, Chinese diplomacy is having to scramble time and again to soothe the ruffles caused by an assertive and edgy military.

Meanwhile, her giant economy is poised to record its first contraction in decades. Worryingly, unemployment is billowing. Debt failures in the offshore dollar market have already jumped nearly 150 per cent to US$4 billion (S$5.6 billion) this year – more than the total for the whole of last year. Just this Monday, Hilong Holding, an oil services firm, defaulted on a dollar bond after failing to get investor support for a debt swap. Any domestic instability in China will radiate across the region.

The geographical plates of the Malay peninsula and the physical wraparound by the Indonesian archipelago have protected Singapore from the worst maritime disasters, including the 2004 tsunami. That said, the Republic cannot be immune to the political and economic winds that blow in from those countries, particularly its closest neighbours.

Unable to export its way out of this crisis unlike in the time of the Asian financial flu, Malaysia’s corporate sector is poised for upheaval in the second and third quarter as moratoriums on interest and debt payments lift. Close to a million young people will enter the workforce by the year end with shrunken prospects of finding well-paying work.

Indonesia could be in worse shape. More than 3.06 million Indonesians have either been laid off or furloughed as of May 27, according to Manpower Ministry data. The government expects that 5.5 million people in the country’s workforce, dominated by those working in the informal sector, will lose their jobs this year. There are widespread complaints of government relief not reaching intended targets thanks to corruption. Neither are elite circles, including in the ruling Indonesian Democratic Party of Struggle (PDI-P), too happy with their President. Distracted by domestic compulsions, the big worry is that the Jokowi presidency will have little time to pay attention to Asean, which badly requires its largest nation and economy to show more leadership.

It is against this complex external backdrop that Singapore goes to the polls. Whoever wins will have to navigate through choppy international waters, with navigational guides that might no longer be applicable and perhaps even have to be rewritten, and even re-imagined. The tiny Republic, so reliant on global trade and being connected to the world, will find itself tossed and turned by the shifting geopolitical tides.

It is not a happy situation for any government leader, however experienced. China, India, Indonesia – the three big Asian nations and also major investment destinations and tourism markets for the Republic – are all in trouble one way or the other. PM Lee would wish to leave the next prime minister with a strong hand. That may be difficult under the circumstances but he perhaps can take comfort that his putative successor has been well-trained for the role.

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