The Portal

Extracts of PM Goh Chok Tong,s Interview with The Straits Times, carried in the Straits Times on 26 January 2001.

Approach to Bilateral Ties

Q: Many readers are concerned about Singapore's difficult relations with its two closest neighbours, Malaysia and Indonesia. They ask how the Government intends to manage its relations with these two countries.

A: We have to be realistic as to how they see us.
One, we are a small country. Two, we are regarded as a predominantly Chinese country. Three, we are wealthier than our neighbours on a per capita basis.
So, we've got to manage these differences from our neighbours, and the way they look at us.
And because we are small, because we are perceived to be rich, it's a difficult relationship to handle because when their countries have problems, they expect us to be quite generous with our funds.
But these are not funds from oil or from natural resources; they are from taxes of the people. So we've got to help in a way that is meaningful.
We can't just be pumping aid to the poor in our neighbourhood.
So, sometimes, we are seen by our neighbours as not being helpful enough.
But I have got my political ground. I have to be able to go to Parliament to explain what I do, otherwise I would be in trouble. So it does make for a more difficult relationship with our neighbours.

Q: How will Singapore manage these difficult relations?

A: Well, I think we have to always hold on to principles. We'll respond quietly and in a dignified manner to whatever allegations have been made against us.
There is no point giving blow for blow.
Both sides cannot win that way. So, over time, we do hope our neighbours will begin to understand that Singapore is different and we react in a rational manner.
And I hope Singaporeans will understand too that when we are quiet, give a very soft reply, that we are not weak. Our replies are soft but we are not weak.
If they think that we are weak, well, that's bad. No, it's soft but inside (slapping his chest), there is a lot of firmness. So that way, I think we can ride whatever controversies there may be.
If you thump your chest louder than the other side, I think the controversies will go on for a long time because the other side too must thump even louder than you do.
Then facts don't get understood and further misunderstandings will happen. So we will always be responding quietly in a dignified manner and on principles.
And I would say we should actively help where we can in a meaningful, long-term, constructive way.
This is to play the role of a catalyst -- technical cooperation, technical assistance plus schemes which will work if there is political certainty on the other side, like the loan scheme and the investment scheme that we have for Indonesia. Those are very meaningful schemes which will work.
But there must be political certainty on the other side for investors to want to invest. Once there is, Singaporeans will want to invest in Indonesia.
Then foreigners will want to invest and the schemes are there to help them.
We've got to be creative enough to work out these constructive, meaningful schemes which will help if the conditions are right.
If conditions are not right, you can't do anything.

Q: Do you find it hard to resist the expectations of neighbouring countries for financial help?

A: Well, they expect us to do more but we just have to explain, say that "I too have my political problems to worry about and I can help you in this way but not the other way".
But I have to get them to understand, and Singaporeans to understand too, because there are some very good-hearted Singaporeans who think we should do more, and be more generous.
There are some 500 million people in Asean. One-fifth of them is poor, that's 100 million. Would three million people have the capacity to help 100 million poor people?

Q: In fact, some Singaporeans wonder whether our neighbours have a point when they say that Singapore is profit-oriented and calculative.

A: They are right up to a point. We are profit-oriented, we are calculative, we are logical, we are rational but that doesn't mean we are selfish.
Whatever we do, we would work it out, and make sure it is useful and constructive. That doesn't mean we are selfish. Selfish means you exploit, you don't help others because you keep everything for yourself.
No, when a scheme will work, we would put the money in. We would put $5 billion for investments into, say Indonesia, if the scheme will work. And if the $5 billion will over time be recovered, I would say we do it.
But if it is just a matter of giving grants and financial aid which may not work, we will not do it. It's not just Indonesia which I'm talking about.
We are under pressure from the international community to do more, to help the poor in the world. It's not a new phenomenon, not a new pressure.
It's been on us for the last 15, 20 years, because on a per capita basis we are much better than many countries in the world.
So we worked out a scheme called the Singapore Cooperation Programme where we train thousands of people in Singapore and send them back with skills.
But if you were just to give funds generously to the poor in the world, I think our reserves will go in no time and it still would not make any difference to the countries which receive the funds.
When there are disasters like earthquakes in Sumatra and other places, we will help. But there are so many troubled spots in the world. You know, when you give something, there are more coming, so you've got to stretch your dollar.

Q: Do you think Singapore has an image problem with our neighbours?

A: Well, there is an image problem with them. They think because of the way we handle things, we are not what they want us to be.
And coming back to the question of size. (Former Indonesian President) Habibie said we were a little red dot. Basically what he meant was, "You are just a small fry, you better behave like a younger brother".
Well, so if you don't behave like a younger brother, you've got an image problem. If you are subservient, obsequious, jump the moment others say jump, and sit down when they command us to sit down, then we will not have an image problem.
But I say, "No, why should I? We are a sovereign country, we are your equal.
And let's talk on the basis of sovereign equality.
If we've got an image problem this way, we're quite happy to live with this image because that's the only way for Singapore to survive.
You want to be sovereign country, you have to behave like a sovereign country.

Leapfrogging the Region

Q: One of the three challenges which you highlighted for Singapore was to keep it from being pulled under by the troubled neighbourhood. How can Singapore avoid this?

A: Well, I think, first, on the economic aspects, if the countries around us are not going to grow so robustly because of their political problems, we have to leapfrog the region, without forgetting that we are tied to the region.
So we have done a series of FTA (free trade agreement) negotiations.
In a sense, this is building bridges to growth economies outside Singapore.
It's not just for Singapore's own sake; it's also to get these countries to pay attention to Asean, but we serve as a catalyst over here.
If we succeed in negotiating and concluding the FTA with the US, it ties the US to Singapore and therefore to Asean.
Likewise with Japan.
And this was this strategic argument which I used with the Japanese and the Americans -- that they should not ignore Asean just because the region is having difficulties.
This is an important region, the fundamentals are good.
As we seek growth from outside the region, at the same time we also have to help the Asean countries to grow.
So, we have got to consolidate Asean. We have to plan in the coming months, maybe some Asean business trips overseas, Asean investment seminars, to be held in the region or outside. In that way, we can try and build confidence in Asean.

Q: But how realistic is this expectation to build confidence in Asean when many of its members face problems?

A: We have to focus minds on the medium term. The short-term problems are there, you can't ignore them, but do not just take Asean off the economic investment radar screen because of the current problems.
Focus on the medium term. For example, what Asean is doing in terms of liberalising its trade through Afta (Asean free trade area), the Asean investment area and, very important, the e-Asean and get people to focus on some good economic fundamentals in the region. Like in Malaysia, the potential is there. Indonesia, too.
We have to overcome the political problems. It's for the countries concerned to keep that political stability and give confidence to the investors. That definitely is beyond us.
So, we would try and get countries to focus on the medium term prospects of Asean, and they've got to pay attention now, not only after the troubles is over.

Q: As Singapore intensifies its efforts to leapfrog Asean, how can it avoid the rumblings from Asean partners that it is ignoring them?

A: There will be. The Asean neighbours thought we are abandoning Asean. So we've got tell that, far from it, this is in fact to get countries outside to focus on Asean. And once they are anchored to Asean through the FTAs with Singapore and through the economic ties that we've built up with the other countries, they would know that Singapore serves as a very useful platform for
further investments into the region.
But we also hope that there will be a demonstration effect.
If indeed the FTAs bring about benefits to Singapore, we are confident that others in the region would also want to emulate Singapore's example, as indeed the Japanese have understood the importance of FTA and also Australia.
So I believe that our neighbours, after they have stabilised their political situation, they would also begin to explore the FTA route, and we will be there to help them, because we want more people to move into this free trade regime than for just a series of FTAs.
So our FTAs actually will pave the way for this Apec-wide free trade area under the Bogor goals (of free trade and open investment by 2010 for developed economies and 2020 for developing economies) and, of course, we also hope for the new round of negotiations under the World Trade Organisation. It's a stepping stone towards a viable objective.
If the others are not prepared to follow, well, we are not going to be dragged down by the slower movers.

The Water Issue

Q: Some readers ask why Singapore still wants water from Malaysia, given the recurring threats to cut off its supply? Why not work towards self-reliance?

A: I don't think it's wise for us to work for complete self-reliance.
Firstly, Dr Mahathir promised me that Malaysia would always give Singapore water, enough for our consumption. I take him at his word.
Secondly, Malaysian water is cheaper than other means of water for the foreseeable future.
Thirdly, for good reasons, I believe in interdependency with our neighbours.
If we are completely independent of Malaysia, in terms of water, vegetables, other essentials that we buy from Malaysia and there's no economic interaction, I think that will spell more trouble between two neighbours.
So I believe in interlocking our relationships and water is a symbol of this interlocking relationship between the two countries.
Say if Malaysia continues to sell us water, not to meet our entire needs but to meet part of our needs, well, it is a sign to say that "We are going to be interdependent forever, therefore, we must find a way to co-exist happily".

Q: But it can also be used as a leverage, isn't it?

A: Well, it can be used as a leverage which is why we need to have alternative sources of water which can be put in place very quickly, and we have been exploring reverse osmosis.
In fact, there's a plant now which is already operating, which will provide about 2.2 million gallons a day of "Newater", as we call it. This is recycled water.
The technology in membranes will become better and better, which means it will be cheaper and cheaper to recycle used water to get new water. And the cost, to our surprise, is quite low.

Q: Is the cost higher than buying it from Malaysia?

A: At the moment, it's higher.

Q: Some readers ask if Malaysia stop supplying water, can Singapore be fully self-reliant?

A: Yes, we can, because do not forget we are surrounded by the sea.
We can, with sufficient warning, put up the plants to supply all the water that we need, if necessary.
And the water agreements will not expire so soon. The first one will expire in 2011. The second one, in 2061. So we have plenty of time to build up the capabilities.
So, assuming that we can't come to an agreement with Malaysia, that there will be no more water from Malaysia after 2061, we have 61 years to put in place the water supply that we need. And we're not doing this from scratch.
All the available water that can be collected in Singapore is now collected and put into the reservoirs.
We are already recycling water. We are trying out some other desalination plants. So we have plenty of time.
All these technologies, these developments, these experiments must be put in place, so we can then build as we go along, as we near 2061.