SINGAPORE: Active public policies are needed to help those who are negatively affected by global trade, said Deputy Prime Minister Tharman Shanmugaratnam on Thursday (Nov 24).
Addressing a Singapore-France economic forum, Mr Tharman said: "We do have a problem, because most of the advanced world is facing a loss of confidence that has to do with the sense of ordinary people as to how much they gain from open economies and societies - and it has to be addressed."
In the United States, President-elect Donald Trump's campaign promise to pull the US out of the Trans-Pacific Partnership (TPP) resonated with voters who feared that the trade deal would affect American jobs and wages.
Mr Tharman noted that the challenge with open economies is that while the majority benefits, there is a "not insignificant" group that loses out. "There has been inadequate effort to bring them back into the game of common prosperity," he said. "And that's the heart of the problem."
He added that the "only positive strategy forward" is to stay open and do "far more" to help those who lose out.
"That requires active public policy; it requires new public-private partnerships, and it requires a new political culture that is about everyone being in the same boat; that is about inclusivity, not just in economic terms but in social terms. And that positive strategy has to infiltrate our political discussions, wherever we are in the world."
The Deputy Prime Minister identified the need for public policy to focus on regenerating towns and cities, as well as creating new jobs. He also spoke of the importance of speeding up the spread of new innovation and technology, as well as the need for lifelong learning.
"Skills are in demand, but the paradox is that the skills that are in demand don't last as long as they used to … because the pace of change has increased, in technology and the nature of jobs," said Mr Tharman.
"And this is all the more why we can't front-load education into just the first 18 or 22 years of a person's life but we have to keep re-investing in every individual throughout their careers – learning through life."
ASIA PACIFIC STILL LOOKING TO OPEN UP ECONOMIES
Mr Tharman added that countries in the Asia Pacific are still looking to open up and liberalise their economies, even as many parts of the advanced world face the temptation to withdraw globally.
"You don't sense that same temptation (in the Asia Pacific)," said Mr Tharman. "Progress may be slow in reforms, economies are opening up in fits and starts. But the direction of travel is still towards greater opening.
"And with or without the TPP, we have the RCEP (Regional Comprehensive Economic Partnership) which is going to go ahead. We have each country still moving in the direction of further opening up. You still have a continent that's liberalising and looking for opportunities for co-operative regionalism and co-operative internationalism."
Mr Tharman told his audience that he was optimistic about the way forward. "We've got to put our minds to it and work out new forms of collaboration that will allow us, at the end of the day, to keep economies open so that the majority can benefit.
"If we don't deal with those who have lost out, we are not going to keep our economies open and everyone will lose out."