Singapore

Allow me first to congratulate His Excellency Mr. Diogo Freitas do Amaral, and Portugal, on his election to lead the General Assembly through this important fiftieth session. I should also like to record Singapore’s appreciation to his distinguished predecessor, His Excellency Mr. Amara Essy of Côte d’Ivoire. I also take this opportunity to thank our Secretary-General, Mr. Boutros Boutros-Ghali, for his continuing dedication to the purposes of the United Nations. In recent years the United Nations has had much to do with peace-keeping and human rights. They are important matters, but the United Nations is not just about peace-keeping or human rights. International economic cooperation is one of the important purposes of the United Nations as defined by our Charter. Poverty breeds conflict, but abject poverty makes a mockery of all civil liberties. Our Secretary-General’s Agenda for Development should give cause for all of us to reflect on the United Nations role in the world economy. Of the five decades of the existence of the United Nations, four have been dedicated to development. Vast sums have been expended, but with what result? Specialized agencies like the United Nations Children’s Fund (UNICEF), the World Health Organization (WHO), the United Nations Population Fund (UNFPA) and the United Nations Development 21 Programme (UNDP) do not hit the headlines, but are the most successful institutions in the United Nations system. They make quiet, unglamorous, but no-less-valuable contributions to human dignity and international order than do the Blue Helmets or the High Commissioner for Human Rights. Unfortunately, however, there is a limit to what the specialized agencies can do to help uplift the individual national economies. The latest United Nations World Economic and Social Survey announces the good news that the global economy has reached the cruising speed of 3 per cent growth. But for many countries this news is somewhat abstract and irrelevant to their day-to-day concerns. That same report speaks delicately of distinctions between robust, vulnerable and weak developing economies. This polite language only masks the continuing reality of degradation, poverty, misery, disease and death. Ten years ago the United Nations Conference on Trade and Development (UNCTAD) officially classified 36 Member States as least developed. Five years ago this number had risen to 42, and as of August this year there were 48 least developed countries. All forecasts project an even more skewed distribution of global income. The marginalization of more than a quarter of the membership of the United Nations in the world economy must surely be recognized as a serious problem. Those Members cannot be shunted aside indefinitely without provoking a major breakdown of international order. Yet today key development institutions are under attack. Indeed, the very role of the United Nations in the global economy risks marginalization. Why is this so? First, lack of a consensus on a post- cold-war strategic rationale for development is one important factor. Secondly, the endemic tension between the United Nations and the Bretton Woods institutions, a contest for power and control, is another factor. Thirdly, the failure of Member States, especially major contributors, to pay their dues in full and on time has created severe budgetary pressures on the United Nations to cut back development programmes. These, however, are only partial explanations. The key factor is the failure of the United Nations to respond to the central economic phenomenon of our time: the globalization of the international economy and the emergence of what has been termed a borderless world. For better or for worse, sovereign nation-States will be around for a long time to come. Governments are and will continue to be key players in the world economy. But a model of sovereign States, interacting only at the margins of their existence, no longer adequately describes the contemporary world economy. Modern technology and communications have led to money, trade and investments flashing across borders in ways that Governments cannot control. This is redefining the very notions of resources, wealth and value. Therefore, we have to cope with a globalized international economy in which national actions are no longer adequate or effective, but in which, at the same time, Governments and States still cannot be disregarded. Europe, the Americas and the Asia-Pacific region have responded in different ways, such as with the European Union (EU), the North American Free Trade Agreement (NAFTA) and, in a looser form, the Asia-Pacific Economic Cooperation (APEC). Africa is also looking at its own regional economic groupings. These experiments represent some of the most significant developments in contemporary international relations. They may define a post-cold-war structure for international order in the next century. The United Nations, like its individual Members, is struggling to comprehend and catch up with the implications of a globalized international economy. But the United Nations has been more sluggish to respond than many of its Members. When we speak of regionalization in the United Nations, we are referring primarily to the regional commissions, which, however, are entirely divorced from the important regional economic groupings. This is a symptom of a wider problem. At a time when most significant developments in the world economy are taking place outside the United Nations, one can legitimately ask what the role of the United Nations is in the new world economy. There is a danger that it will play no role at all unless it urgently takes stock of its current approach to economic issues. Saving the United Nations from being relegated to irrelevance requires an attitudinal shift that cuts across both North and South. Member States from both the North and the South must accept a new discipline. We must forsake ideology for pragmatism and posturing for practicality in order to concentrate on a more focused and compact economic agenda. This will give the United 22 Nations the tools it needs to cope with the new kind of global economy that is emerging. The United Nations must emphasize its strengths, not its weaknesses. It is not the best forum to negotiate specialized and technical matters. Neither is the United Nations an executive body for matters of trade or finance; that role properly belongs to the Bretton Woods institutions and the World Trade Organization. The strengths of the United Nations are political, which is a plus because the new world economy demands political as well as technical responses. The new globalized economy has sharply focused development issues that policy makers and theoreticians have grappled with for decades. The strictly economic debate over appropriate development strategies is over. Opting out is clearly not an option. It will only accelerate the pace of marginalization. However, it has become equally clear that the magic of the market is not enough. Only the United Nations can meet the two resulting political challenges. They are, first, coping with the political consequences of rapid but uneven economic growth and, secondly, helping the least developed to build the institutions that will allow them to plug into the globalized economy. Let me elaborate. First, the process of rapid growth in some countries has caused political tensions between the successful developing countries and the mature Western economies. The latter have continued to grow, but more slowly and without significant increases in employment or improvements in real living standards. Job creation and job protection will certainly be high on the agendas of political leaders throughout the industrialized world for at least the next decade. There has been a concerted and sometimes very vocal effort to link economic issues to workers’ rights, human rights, social conditions and environmental standards. Developing countries view this as bad faith, feeling that the industrialized countries are using any pretext to hobble and handicap the developing world. The critical issue is not really the rights and wrongs of the case. It is managing shifts in relative positions of power. A way has to be found to contain the inevitable strains and stresses between the old rich and the newly affluent economies. Continuing tensions are debilitating and will slow growth for everyone. The goal is to shape an international order that will both optimize conditions for growth and facilitate the rescue of the least developed countries. There will be little attention paid to their needs if there is constant jostling and tension between the successful developing countries and the mature economies. There is therefore a need for overarching frameworks that can help manage relations between the successful developing countries and the mature economies. There is a need to impose a global coherence and discipline on the emerging international system built around regional economic groupings. This is not a function that can be performed by the Bretton Woods institutions or even the World Trade Organization. After all, the first reaction of Europe and the United States to the conclusion of the Uruguay Round was more assertive unilateralism. To play a role in forging such frameworks, the United Nations must find the political will to reach genuine consensus — not just on paper — on a realistic global economic agenda. But this will require self- discipline. When one reads the action plans and agendas of many United Nations economic bodies, it is sometimes a depressing exercise in political archaeology. Layer upon layer of issues, some dating back to the 1960s and the 1970s, are added with every passing session of the General Assembly and conference. Their relevance to contemporary problems is dubious. What is very puzzling is that, in reality, most Member States have in actual national practice long since discarded the attitudes and policies which are still faithfully placed on the United Nations agenda and solemnly debated and discussed in an archaic annual ritual. United Nations economic bodies must therefore eschew the temptation to pretend to micro-manage international economic affairs by delving into the nitty- gritty of issues they sometimes imperfectly comprehend. But I do not advocate a completely laissez-faire approach. A globalized economy urgently demands management precisely because it is rapidly moving beyond the control of even the most powerful. But it requires different management techniques. The day of the hegemonic manager of the international economic system is passing. In the new world economy, international order can be assured only by the development of rule-based multilateral regimes that define broad parameters for 23 economic forces that are not susceptible to micro- management. So the United Nations is the only universal international Organization with a Charter that gives it a mandate to range across the spectrum of issues that require attention. If the United Nations can find the political will and self-discipline, it will be potentially well placed, in our view, to develop a genuine consensus on an agenda for such regimes. Rule-based multilateral regimes are not just in the interest of small and weak States. The predictability and stability they confer benefits all of us. It will be increasingly uncomfortable and difficult for even the strongest to assert themselves unilaterally in a globalized economy where business, finance, trade and industry cannot always be neatly categorized along national lines. A blow aimed at an opponent’s chin may end up bruising one’s own shoulder. If the United Nations can develop consensus on an agenda, its relationship with the Bretton Woods institutions and the World Trade Organization will naturally fall into place. It will clearly be their responsibility to flesh out and implement the global regimes on an agenda agreed to by the United Nations. But these institutions are correct to resist if, as is now all too often the case, the agenda is impractical and delves too deeply into matters of detail. Secondly, the new globalized international economy has challenged the belief that developing countries could grow simply by relaxing controls and privatizing. This is a necessary but insufficient condition. In all of the most successful developing countries, good, strong and stable government has always played a key role. The World Bank’s 1993 report entitled “The East Asian Miracle” reveals that the miracle was not so much a miracle after all. The secret was getting the macroeconomic fundamentals right. But that has been known for decades. Yet there has been no growth in much of the world. The difference was public policy. Developing countries that try to follow the East Asian model often fail, not because they do not know what the correct economic policies are, but because they lack the political underpinnings to make such policies stick. It is the government that will determine whether a country can plug into the fast moving global economy, or whether it will be bypassed. Therefore, an urgent and delicate problem is how the United Nations can help the least developed to build government and political institutions that will enable them to plug into the globalized economy for development, without intruding too brashly into their domestic affairs. Article 2, paragraph 7, of the Charter is still the basic cornerstone of the United Nations. A multilateral approach to this sensitive question may be more acceptable than crude bilateralism. But to deal realistically with this issue, the United Nations must set aside what has become a largely theological debate about the relationship between democracy, development and human rights — a phrase which has become part of the accepted language of development debates. But it is harmful and misleading if it implies an inevitable or simple linear causality. Of course, these concepts may well be linked in some way. But let us be clear that what we are really talking about is the relationship between democracy and human rights, on the one hand, and development, on the other. In other words, the causality is not linear, simple or inevitable. There is no question that repression is wrong and unhealthy and will stifle growth. There is also ample empirical evidence to prove beyond any doubt that economic growth requires political stability and good government. The terms “democracy” and “good government” are often used as if they were synonyms. Of course they overlap to a degree, but they are not the same thing. Singapore’s experience is that good government must be erected on three interrelated pillars: political accountability, a long-term orientation, and social justice. For long-term stability, Governments must govern with the support of the governed. Governments that do not deliver will not last. But this fact and the need for periodic free and fair elections do not prescribe any particular model of political system or ideology. So the clash and clamour of contending interests, street demonstrations and a rambunctious and abusive press may make for more exciting television for some Western audiences. It may even work for some countries. But more often than not it contradicts the second pillar of good government, which is long-term orientation. That requires the ability to resist populist and sectional pressures and, on occasion, administer bitter medicine to overcome economic challenges. Singapore’s experience has convinced us that the first duty of government is to govern, and also govern fairly. At times, this will require a firm hand. The third element of good government is social justice. There should be equal opportunities for all groups. If the Government is fair to all ethnic, religious and social groups, it will not be beholden to any special interest. This is important in any society. It has been one of the reasons for Singapore’s political stability and social cohesion. But Singapore does not hold itself up as a 24 model, although we are happy, and prepared, to share our experience with anyone who may be interested. No one can prescribe any particular model of political development for any country. Indeed, when this is attempted dogmatically, with only a superficial understanding of the complexities of specific situations, it leads to disaster. Our basic assumption is a fundamentally pragmatic and pluralist one — that there are no models that can be applied everywhere. So growth and stability are linked by a complex and subtle dynamic: an unrelenting search for an equilibrium between the rights of the individual, the claims of the community to which every individual must belong, and the no less urgent need for Governments to govern effectively and fairly. No balance between individual liberty and growth can be valid for all countries are for all time. Every society must find its own appropriate equilibrium in the context of its own historical and cultural experiences if the country is to progress. Singapore straddles the developed and the developing worlds. Our population generally enjoys a comfortable standard of living, and our economy has a relatively sophisticated service and industrial sector, performing global roles. But Singapore also has structural vulnerabilities; it has resource limitations that prevent us from being fully developed as yet. Therefore, it is with a special perspective that we in Singapore observe the ongoing debates in and about the United Nations economic institutions. Sometimes we wonder: whose interests are really served by a prolonged debate, increasingly divorced from global economic reality? Is it the interest of those who want to preserve these institutions, or of those who would prefer to relegate them to some historical dead end? I do not have the answer to that question, but I raise it as one that merits urgent attention. I do not think there is much time left.