CEREMONY FOR CONFERMENT OF HONORARY DOCTORATE OF LAWS DEGREE (2007)

SPEECH BY MR LEE KUAN YEW,MINISTER MENTOR, AT THE CEREMONY FOR CONFERMENT OF HONORARY DOCTORATE OF LAWS DEGREE BY THE AUSTRALIAN NATIONAL UNIVERSITY, 28 MARCH 2007, 11.00 AM AT CANBERRA


I thank the ANU for the honour, and the Vice Chancellor for his generous citation.

Overview of Global Landscape

I first officially visited Canberra just over 42 years ago, in March 1965. It was a different Australia and a different world. Singapore was then a state in Malaysia. Five months after my visit, Singapore became independent, and was asked to separate from Malaysia by PM Tunku Abdul Rahman. It was by no means certain that an independent Singapore could survive. Communism loomed large and the Indonesian Confrontation was on-going. We had severe communal tensions between Malays and Chinese. We were largely a population of immigrants who had to come together under British rule. It was not certain that we could unite and become a nation. This is a quest that is on going.

The shock of the withdrawal of British troops announced in January 1969 made it urgent to build our armed forces. We built from scratch. We had to re-make our economy. A small nation without natural resources to support the 1.5 million people, we had to educate and reorganise ourselves and our economy. Instead of the four languages schools under the British, we needed one common language. Each community passionately wanted to retain its own mother tongue. We could not have imposed English on them. Instead, we made all schools bilingual, mother tongue as first language and English as the second or vice-versa. After a few years parents discovered that those with English as the first, and mother tongue as the second language got the better jobs. This helped us move from an entrepot to a manufacturing and services economy.

In the 1950s and 60s Australia was already active in the region, especially in Malaya and Singapore, and later Malaysia. Many Singaporeans benefited from schemes like the Colombo Plan and came to study here in Australia. Australian troops helped fight the communist insurgency in Malaya. When Indonesia mounted ‘Confrontation’ against Malaysia from 1963 to 1967, Australia, together with Britain and New Zealand, helped protect the Malaysian federation. At my urging, Australian troops remained in Singapore after the British announced their withdrawal in January 1969. The Five-Power Defence Arrangement, with active Australian membership, provided a measure of security for a young nation and continues to be relevant today. Since the 1980s, our armed forces have trained in Australia.

During World War 2, over 10,000 Australian troops were taken prisoners in Singapore in February 1942. In the years after Britain joined Europe in 1972, we began to sense that Australia and Singapore have similar strategic views. Our assessments of future developments in the region and the world are nearly the same. We both recognise and accept the pre-eminence of the United States for the next few decades and welcome its presence in the region. We openly acknowledge the vital role that the US plays in underpinning security and stability in our region and thus enabling trade and investments to flourish for all to benefit. A stable and prosperous Asia-Pacific is in the best interest of all, including Australia and Singapore. The maintenance of this virtuous cycle depends on stable relations among the region’s powers, US, Japan and fast growing China.

The defining moment after the Cold War has been the September 11 attacks in the US, followed by other attacks, including those in Bali, which involved many Australian casualties. The conflicts in Afghanistan and Iraq involving the military presence of both our countries, are ongoing. The fight against terrorism does not lie simply in military and security operations. In the fight against terrorism, we face similar problems of ensuring that our Muslim communities are not alienated from the rest of society. To maintain religious and racial harmony we have to combat religious terrorism and counter extremism by persuasion, rehabilitation and counselling. Singapore is fortunate that our Muslim religious leaders are speaking out against extremist teachings and ideology. Singapore’s approach to this sensitive and emotionally charged problem is to integrate, rather than assimilate, our Muslims. Our different racial/religious communities are free to retain their respective cultures and practise their religions, and work together using English as our common language and we expect all to be loyal Singaporeans who accept that our nation is secular, not based on religion. We believe the ideological struggle within Islam can only be settled by Muslims themselves, with the non-Muslim world giving support to the moderates. The outcome of the war against the Jihadists in Iraq and Afghanistan will have a profound influence on Jihadists the world over.

For Singapore, ensuring our water supplies is a life and death issue. We are a compact city state with an annual rainfall of around 90 inches. With technological advance we have been able to recycle and reuse water through membrane technology that costs less than half the cost of desalination. Maybe Singapore’s experience can be of value in alleviating the effects of drought. Australia faces a vastly different situation. It has periods of drought with devastating effect on agriculture and growing inconvenience to urban areas, but it is not literally a life and death issue.

During my last official visit in 1994, I said at the luncheon hosted by National Press Club in Canberra the global story of our age is the resurgence of Asia, in particular China. China's increasing economic heft will increase its influence in world affairs especially in the Asia Pacific. Now India is also rising and must be factored into the balance. With India and China both on the rise, all other countries in the Asia Pacific including the US and Japan, will gradually adjust to their positions. It is this tri-lateral balance between the major powers in North East Asia, US, Japan and China, that has maintained security and stability in the wider Asia-Pacific region and so made for the high economic growth the region has enjoyed. China needs such an external environment for several decades to improve its economy and reduce the imbalances between its fast growing coastal provinces and its less advantaged inland provinces.

Singapore and Australia share the same view of inclusiveness in the regional architecture of co-operation. So Singapore strongly supported the inclusion of Australia, New Zealand and India in the East Asia Summit. Australia has proven to be an important and constructive member. The APEC Economic Leaders' Meeting will also come full circle this September, when Australia hosts the Leaders' Summit. Australia has contributed vital pieces to the construction of this regional architecture through your FTAs with Singapore, and on-going negotiations with ASEAN, China and Japan.

Australia's Growth

Australia has had exceptional and continuous growth for the past 15 years, despite the ups and downs in the world economy. The real net wealth per Australian has risen by over A$150,000 since 2001[1], unemployment is at a record low of 4.5%, government debt has been almost completely eliminated, while budget surpluses have continued to be accumulated. You have persevered in your economic reforms, and the Heritage Foundation's 2007 Index of Economic Freedom placed Australia 3rd out of 161 countries.

Australia has ridden on Asia's growth. In 2005, the value of your goods and services exported to East Asia grew by 25%, fuelled by China's strong growth. In contrast, exports to the US fell by 0.8%[2]. China has also overtaken the US as your second-largest trading partner, while India has jumped from being Australia's 13th largest export market in 2000 to 7th largest in 2005[3]. Currently, more than half of Australia’s top 10 trading partners, including Singapore, are in Asia.

China has over US$1 trillion in accumulated reserves. It has begun to invest abroad. Economists estimate that by 2010 its Overseas Direct Investments (ODI) will overtake its inflow of Foreign Direct Investments. China needs natural resources. Australia is resource rich and will receive billions in Chinese ODI in investments, in the resource sector.

Natural resources comprise one-third of Australian exports in 2005[4]. Your Treasurer Peter Costello has cautioned that high commodity prices will not last forever as other suppliers of resources emerge and Australia’s own mining companies begin to increase supply to meet China’s demand. I understand that the drought is expected to cause a ¾ percentage point reduction in Australia's GDP growth in 2006-2007[5].

China’s economic weight is also reflected in Singapore’s trade and investment figures. China is Singapore’s third largest trading partner in 2006 from ninth position a decade ago and it is the top destination of our investments in the last decade. Already more than 2,350 Chinese companies are in Singapore. They will increase as China expands abroad in Asean. We also have over 2,580 Indian companies.

Knowledge Economy and Role of the ANU

For small economies like Singapore, competitiveness in niche areas is vital. Singapore has had to make structural adjustments as our lower end industries lost cost-competitiveness vis-à-vis China and India. We have concentrated on continuous training for retrenched workers to be employable in jobs requiring higher skill sets. Knowledge will increasingly power our economy.

In June 2006, the Prime Ministers of Singapore and Australia witnessed the signing of research collaboration and service agreements between Singapore's research agency A*STAR and the Australian Phenomics Facility (APF) of the ANU on the analysis of mouse strains to understand causes and manifestations of Type I Diabetes and autoimmune disorders.

Australia is also moving into the knowledge economy. It has a strong national research base. The ANU has played a critical role. It is internationally recognised as one of the top research universities in the world. The Shanghai Jiao Tong University Institute of Higher Education's "Academic Ranking of World Universities" rated ANU as the top in the Asia Pacific. The ANU is situated right in the seat of Government, with ample opportunities to engage policy-makers, to inform, educate and help ensure that policy-making has sound foundations.

The ANU has an MOU with the National University of Singapore (NUS) to conduct research projects. The ANU and the NUS also offer a number of joint degree programmes at the Bachelor, Masters and Doctorate levels[6]. The ANU has made a contribution to strengthening our bilateral relations.

Such exchanges add to the relevance of each to the other. They are some of many strands in the fabric of our relations. The golden strand is our common strategic view, that the present strategic balance in the Asia Pacific with the US as the pre-eminent power provides stability and security that enables all to develop and grow in peace.