SPEECH BY PRIME MINISTER GOH CHOK TONG AT THE SINGAPORE INSTITUTE OF INTERNATIONAL AFFAIRS 40TH ANNIVERSARY CELEBRATIONS LUNCH ON WEDNESDAY, 27 NOVEMBER 2002

A DIFFERENT WORLD

Thank you for inviting me to SIIA's 40th Anniversary celebrations.The five years since the 1997 currency crisis have been profoundly unsettling for Southeast Asia.

The crisis destroyed wealth carefully accumulated over many decades. It also triggered political instability in several countries, most notably Indonesia.

Then just as the region was recovering, Al Qaeda terrorists attacked the New York World Trade Centre and the Pentagon. This awakened the world to the global threat posed by Al Qaeda.

A few months later, Singaporeans were shocked to discover that Al Qaeda terrorists were also planning attacks in Singapore. The terrorists were assisted by a local extremist group - the Jemaah Islamiyah. We have since uncovered Al Qaeda's links with several other radical Islamic groups in our region. The Bali bomb blasts have further reinforced our fear that Southeast Asia has become the new theatre of operation for Al Qaeda.

The next crisis point for our region will be the war against Iraq. This war seems likely, unless there is a regime change in Iraq or Iraq disarms. The war will have serious implications for Southeast Asia. Besides its impact on the economies, it will arouse strong anti-American feelings among the region's Muslim populations.

These events of the last five years are a rude awakening for younger Singaporeans. They grew up assuming that the stability and growth of the 1980s and early 1990s were the natural order of things. Therefore, when faced with the current adversity, some of them lose heart easily, believing that Singapore's situation has never been worse. Their flagging spirit is palpable.

This afternoon, I want to put things in perspective. We are indeed facing great challenges. But it is not true that things have never been worse. We have lived through graver global and regional upheavals. Let me take the establishment of SIIA 40 years ago as a convenient reference point for our trip into history.

THE PAST

In September 1961, a group of Singaporeans and expatriates formed the SIIA.They wanted to deepen Singaporeans' knowledge of international affairs. SIIA's founders understood that Singapore's future would be heavily dependent on the outside world.

They were right. External events did and still do affect our destiny. In June of the year that SIIA was formed, the Berlin Wall went up. A year later, the US and the then Soviet Union brought the world to the brink of nuclear war over the Cuban Missile Crisis.

The situation in Asia was also tense. In 1961, China and the US faced each other with unremitting hostility, after having fought each other to a bloody stalemate on the Korean Peninsula seven years earlier. In 1962, China and India fought a short-lived war along their border. Throughout the 60s and early 70s, Southeast Asian countries faced serious
threats from China-backed communist insurgencies. In Singapore, for instance, the PAP was engaged in a life and death struggle against the Communist United Front. Our precarious economy was continuously battered by communist-led union and student agitation. Unemployment was a high 15 per cent in 1961. In 1962, 165,000 man-days were lost in strikes. Singapore joined Malaysia in September 1963, but had to leave after only two years. These were tumultuous years which saw several racial riots. At the same time, Sukarno's Indonesia threatened to crush the newly formed Malaysia. During this Konfrontasi, Indonesian soldiers landed in southern Johor. In Kota Tinggi, they ambushed and wiped out a platoon from the Second Battalion of the Singapore Infantry Regiment. Bombs also went off in busy Orchard Road.

At independence in 1965, we faced a bleak future, made gloomier by the early withdrawal of British military forces from Singapore. This rendered us extremely vulnerable, as the SAF was then in its infancy. It also worsened the unemployment situation.

The regional situation of the 60s was also bleak. Almost every Southeast Asian country was at loggerheads with some other Southeast Asian country. Tensions were high between Singapore and Malaysia in the immediate aftermath of Separation. The Philippines claimed Sabah from Malaysia. And irredentist movements in southern Thailand caused Bangkok and Kuala Lumpur to eye each other suspiciously.

Meanwhile, the war in Indochina escalated. After South Vietnam, Cambodia and Laos fell to the communists in 1975, the frontline moved to Thailand's borders. A triumphant Vietnam declared menacingly that it did not consider the non-communist Southeast Asian countries "geniunely independent". Later, thousands of Vietnamese took to the seas and risked their lives to escape oppression. They became known as the boat people. Several hundreds landed in Singapore.

THE PRESENT

I recount the world we lived in to tell younger Singaporeans that the uncertainty they face today is not exceptional. We have gone through worse times.

And grave as those dangers were, we survived and prospered. We held together as one people, and persevered despite the difficult environment. Likewise, we will overcome our present problems.

I am not trying to brush aside the anxieties felt by many Singaporeans. But we have to place them in perspective. Yes, our economic growth has slowed. Unemployment has gone up to 4.8 percent. But we still have thousands of jobs begging for workers. Most importantly, the Singapore of today is better prepared for the challenges. We have more resources and skills. The international and regional situations are also more favourable than forty years ago.

In particular, the Cold War is over. America is the world's only superpower - some say it is a hyperpower. Some countries prefer a more even international distribution of power. But if that results in global rivalry as during the Cold War, would we be better off?

In this changed world, there will still be occasional alarms. But relations today among the major powers ? the US, Russia, China, Europe and Japan ? are essentially stable. Conflict between them is highly unlikely. The great power proxy wars of the 20th century that destabilised and devastated so much of the Third World, including Southeast Asia, are unlikely to recur in the foreseeable future.

Healthy US-China relations are key to the stability and prosperity of East Asia. There will be disagreements between the two countries. But the US needs China's co-operation in the war against terrorism and to deal with North Korea. In turn, China needs a stable relationship with the US to concentrate on growing its economy and to tap the US market, knowledge and technology. I do not, therefore, foresee serious problems between them in the next five to ten years.

The Taiwan issue is under control, at least for the time being. President Bush has stated publicly that he does not support Taiwanese independence. This has lessened the risk of miscalculation by all parties. And the increasing integration of Taiwan's economy with the mainland is making "one China" an economic reality.

Indeed, economics is increasingly driving international politics, not just in Cross-Strait or US-China relations. Today, when the major powers compete, they do so economically. For instance, China's proposal for an FTA with ASEAN elicited an immediate response from Japan. Japan proposed a Comprehensive Economic Partnership with ASEAN, which includes elements of an FTA. The US joined in with its Enterprise for ASEAN Initiative, under which it hopes to create a web of bilateral FTAs. India too, has expressed
interest in an FTA with ASEAN. This geo-political competition for ASEAN's hand is beneficial for our region. It may well be the turning point for ASEAN.

And China no longer foments revolution in Southeast Asia. It is rapidly opening itself up to the world. Though there may be the occasional domestic hiccup, overall, China will advance. Its growth will have a positive impact on us. China offers immense opportunities, provided we restructure our economy and encourage entrepreneurship to take advantage of them. I have no doubt that a successful and dynamic China makes for a better neighbour than a struggling and resentful China.

It is also a different Southeast Asia. Vietnam is no longer a threat, but a friend. And all ten Southeast Asian countries are, for the first time in history, interacting within a common framework defined by ASEAN. The 1997 financial crisis jolted ASEAN badly and removed much of its gloss. But post 9/11, the US and other major powers have re-engaged ASEAN with renewed enthusiasm.

THE FUTURE

I have long argued for a more integrated ASEAN, so that it will command even greater economic and strategic weight. ASEAN leaders took a major step forward when they decided at the Phnom Penh ASEAN Summit to move towards an ASEAN Economic Community by 2020. I believe an integrated ASEAN is necessary to meet the competitive challenge from Northeast Asia and other regions.

But even as we are today, it would be a mistake to under-rate ASEAN's importance. Whatever its shortcomings, ASEAN remains a vital and irreplaceable framework for maintaining order in a region where peace and stability cannot be taken for granted. No ASEAN member has gone to war with any other ASEAN member. This is not an outcome that was intuitively obvious in 1961. And without ASEAN as an intermediary, it would be difficult for China, Japan and Korea to put aside their historical differences and come
together to pursue regional co-operation. Moreover, ASEAN's market of 500 million consumers is not small. But yes, there are grave challenges for ASEAN, for instance, political Islam.

Southeast Asian Islam has traditionally been syncretic and moderate. However, globalisation has heightened the impact of external influences, particularly from the Middle East. A greater Islamic religiosity is now evident throughout the region. Some Muslims are becoming more rigid and intolerant in the practice of their religion. Two Indonesians who died in recent terrorist bombings were believed to be suicide bombers. If so, this would represent a significant increase in the dangerous nature of the
terrorist threat.

Political Islam is therefore a challenge for secular governments, especially in those ASEAN countries with large Muslim populations. They will have to take firm action to neutralise extremists, while taking care not to alienate the majority of their Muslims. How the governments deal with this sensitive political conundrum will have a profound influence on Southeast Asia's future.

The greatest challenges are in Indonesia, which has the largest Muslim population in the world. Most Indonesians just want to rebuild their nation and live in peace and prosperity. President Megawati is their best bet. She stands for a secular, modern and outward looking Indonesia. She has begun to take action against the terrorists and extremists in Indonesia. But it will be some years before she is able to restore political equilibrium. She
has to move cautiously so as not to be outflanked by her opponents. She is the best judge of the pace of her fight against terrorism. She needs and deserves the world's support.

The rise of political Islam in the region will also hamper the ongoing war against terrorism.

This war will be long and arduous. It is an asymmetrical war. It will require tremendous resources on the part of countries, but much less resources on the part of the terrorists. This war is also more complex and dangerous than the struggle against communism because the terrorists are motivated by religion. There may be tragedies along the way.

Ultimately, however, I do not believe that the terrorists can win. They are in the minority. They do not speak for Islam. They have no programmes that can make life better for the people they claim to represent. They only kill and strike terror. No civilised government and people support them.

We have severely disrupted the terrorist network in Singapore. They pose no immediate danger. That does not mean, however, that danger is not present.

Terrorism is a global problem. It may be able to strike us even if thereare few or no local operatives. But we are well prepared to face it.

As for bilateral relations, Singapore's ties with Indonesia are good. They no longer have the same sharp edge which existed under President Megawati's predecessors.

On the other hand, relations with Malaysia are clouded by several bilateral issues. But the sum total of our relations with Malaysia is not defined by these differences. There is deep economic integration and inter-dependence between our two countries. Our two police forces co-operate very closely.

And our two defence forces exercise together under the Five Power Defence Arrangement. Bilateral relations will, of course, be better if the outstanding issues are out of the way. We will be patient in resolving these issues, however long it takes.

Indeed, relationships with immediate neighbours will always be complicated. There will be ups-and-downs. We must manage these swings with a certain psychological equanimity; not lapsing into complacency or euphoria when things go smoothly, nor becoming unduly alarmed or despondent when things go bad.

Inevitably, there will be times when we must politely but firmly stand up for our rights as a sovereign nation. We will do this not just on the basis of principles and legal rights, but also with the aim of finding a win-win solution.

The fact is, in our region, co-operation and competition are inextricably intertwined in an inter-dependent relationship. For instance, Singapore is Malaysia's fourth largest foreign investor and its third largest trading partner. We are Indonesia's third largest foreign investor and its fourth largest trading partner. We will be hurt when our neighbours are hurt.

CONCLUSION

Forty years ago, against a backdrop of communist insurgency, ethnic violence, gangsterism and other security and law and order problems, our police force comprised only about 6,000 officers. We had no SAF. Our economic future was uncertain.

Today, we have almost 90,000 well-educated, well-trained, well-armed and professional police officers, including NSmen, auxiliaries and volunteers.

The SAF is strong and prepared. Singapore's economy is sophisticated and robust, with healthy reserves. We have acquired the strength and skills to ride out the worst storms. And we have the political will to take resolute action against terrorists, the economic challenge, and any other threat to our survival and prosperity.

Our international reputation is high. Our international network is wide and strong. It has been further deepened by the FTAs that we have concluded with the US, Japan, Australia, New Zealand and EFTA. Several more with Korea, Chile and Mexico are in the pipeline. With these FTAs, we will enjoy preferential tariffs and wider economic space than that available under the WTO.

Our medium term future is therefore bright, even if the immediate days are cloudy.

And we are not sitting idly by and waiting for the bad weather to pass.

Globalisation is compressing space and accelerating time, forcing international change at an ever greater pace. We are re-making ourselves ? to keep ahead of changes in our external environment. The process may prove uncomfortable, but change and adapt we must, if we are to continue to flourish.

Our foreign policy is an integral part of our response to changes in our external environment. A small country like Singapore can pursue a successful foreign policy only if the country as a whole is successful.

Moreover, globalisation is blurring the distinction between domestic and international policies, and between government and society. As such, a successful foreign policy is not a matter for the government alone. It is a question of the whole society working together - in different ways, but with shared assumptions and common objectives. We need not play the same musical instrument. But we should not forget that we are in the same orchestra.

In this regard, the SIIA should enhance its public outreach with its own musical instrument, for example, a trumpet, so that Singaporeans can hear and better understand regional and international issues, and support our nation's foreign policy goals. Indeed, we must all understand the realities of the world we live in. We must have a sense of what is possible at any moment in time. We must also know our history. If the SIIA can help Singaporeans and foreigners to better understand our foreign policy, it is
worth our supporting.

Happy 40th Anniversary.