1 00:00:06,010 --> 00:00:08,850 Speaker 1: Hello, this is uh Ci time, a podcast series on 2 00:00:08,850 --> 00:00:11,770 Speaker 1: markets and economies from DBS Group Research. I'm Tim Moerbeek, 3 00:00:11,840 --> 00:00:15,189 Speaker 1: chief economist. Welcoming you to our 173rd episode. 4 00:00:15,810 --> 00:00:19,079 Speaker 1: Today, we're delighted to welcome back Dr. Koor Hoey to 5 00:00:19,079 --> 00:00:23,180 Speaker 1: the podcast. Dr. Hoey is NTUC professor of International Economic 6 00:00:23,180 --> 00:00:26,459 Speaker 1: relations at the S. Rajaratnam School of International Studies at 7 00:00:26,459 --> 00:00:30,860 Speaker 1: Nanyang Technology University in Singapore, but that's not his real identity. 8 00:00:30,940 --> 00:00:34,619 Speaker 1: That's his current identity. We can associate Hobi with the 9 00:00:34,619 --> 00:00:37,778 Speaker 1: previous stint, 2016 to 2025, when he was the chief 10 00:00:37,779 --> 00:00:41,500 Speaker 1: economist of AMRO, which stands for ASEAN plus 3 Macroeconomic 11 00:00:41,500 --> 00:00:42,500 Speaker 1: Research Office. 12 00:00:42,909 --> 00:00:45,900 Speaker 1: He there he was responsible for country and regional surveillance 13 00:00:46,279 --> 00:00:50,199 Speaker 1: for those countries as members of ASEAN plus 3 related 14 00:00:50,200 --> 00:00:53,259 Speaker 1: research activities of the ASEAN plus 3 economies as well. 15 00:00:53,680 --> 00:00:56,599 Speaker 1: For me personally, my association with Hoey goes back even 16 00:00:56,599 --> 00:00:59,799 Speaker 1: further when we were both staff at the International Monetary. 17 00:00:59,869 --> 00:01:04,230 Speaker 1: Fund, you see, the prior to the Amrose stint, Hui 18 00:01:04,230 --> 00:01:06,970 Speaker 1: spent his career between the MAS Monetary Authority of Singapore 19 00:01:07,150 --> 00:01:10,470 Speaker 1: and the IMF in Washington DC. Hoy, welcome back to 20 00:01:10,470 --> 00:01:12,510 Speaker 1: Kobe time. You are one of the early guests of 21 00:01:12,510 --> 00:01:16,889 Speaker 1: this podcast, going back to episode 22 back in July 2020. 22 00:01:18,669 --> 00:01:22,440 Speaker 2: Thanks, Simon. Thanks for the kind introduction and thanks for 23 00:01:22,440 --> 00:01:25,610 Speaker 2: inviting me back to this podcast again. 24 00:01:26,639 --> 00:01:29,628 Speaker 1: It's great to have you. I have been reading some 25 00:01:29,629 --> 00:01:32,470 Speaker 1: of your recent work, and I wanted to sort of 26 00:01:32,470 --> 00:01:34,730 Speaker 1: chat a little bit about your current state of thinking 27 00:01:35,150 --> 00:01:39,459 Speaker 1: with respect to trade, with respect to Asia. So let's 28 00:01:39,459 --> 00:01:42,230 Speaker 1: begin with something you wrote a few months ago. Huy, 29 00:01:42,319 --> 00:01:43,709 Speaker 1: it's been about a year. 30 00:01:43,879 --> 00:01:46,279 Speaker 1: Liberation Day shock. We got a bit of a shock 31 00:01:46,279 --> 00:01:48,900 Speaker 1: a few days ago with the IEPA tariffs and now 32 00:01:49,279 --> 00:01:52,120 Speaker 1: Section 122 under which Donald Trump is putting on additional 33 00:01:52,120 --> 00:01:55,230 Speaker 1: tariffs in lieu of some of those things. I just 34 00:01:55,230 --> 00:01:57,559 Speaker 1: want to get a sense of your assessment of how 35 00:01:57,559 --> 00:02:00,669 Speaker 1: has the global economy, particularly key Asian economies, dealt with 36 00:02:00,669 --> 00:02:01,160 Speaker 1: this shock. 37 00:02:02,790 --> 00:02:05,349 Speaker 2: Uh, very well, right? Uh, and you can see that 38 00:02:05,349 --> 00:02:07,830 Speaker 2: from the outcome, but I think, you know, that's the 39 00:02:07,830 --> 00:02:11,570 Speaker 2: billion dollar question. How do we end up doing so well? 40 00:02:12,979 --> 00:02:16,850 Speaker 2: So as you said, if you go back to April 2nd, 2025, 41 00:02:17,020 --> 00:02:20,940 Speaker 2: Liberation Day, you know, uh, we're all bracing for an 42 00:02:20,940 --> 00:02:24,779 Speaker 2: economic hurricane, I think, uh, the standard model including ER, 43 00:02:24,970 --> 00:02:28,709 Speaker 2: you know, we will reach around the model and we 44 00:02:28,710 --> 00:02:33,520 Speaker 2: were predicting much weaker growth for the region, uh, a, a, 45 00:02:33,940 --> 00:02:36,919 Speaker 2: a very slow, uh, very sharp. 46 00:02:37,860 --> 00:02:41,729 Speaker 2: Uh, lung in growth for the US and, and the 47 00:02:41,729 --> 00:02:45,369 Speaker 2: market was crashing, you know, so but then you look 48 00:02:45,369 --> 00:02:49,330 Speaker 2: at the situation today, right, uh, the region is growing, 49 00:02:49,490 --> 00:02:52,440 Speaker 2: I mean, I think the estimate now is that ASEAN 50 00:02:52,440 --> 00:02:55,970 Speaker 2: grew at 4.8%, which is even higher than the uh 51 00:02:55,970 --> 00:03:01,610 Speaker 2: liberation day forecast, right, pre-liberation day forecast, and the US 52 00:03:01,610 --> 00:03:02,710 Speaker 2: is doing 2%. 53 00:03:03,220 --> 00:03:05,859 Speaker 2: And we were expecting high inflation and inflation in fact 54 00:03:05,860 --> 00:03:07,679 Speaker 2: is quite, quite low, right? 55 00:03:08,869 --> 00:03:12,229 Speaker 2: So we're scratching our head and asking, you know, how 56 00:03:12,229 --> 00:03:14,820 Speaker 2: do we get go so wrong? What what did we miss, right, 57 00:03:14,949 --> 00:03:18,550 Speaker 2: about the the situation? And I think, you know, there 58 00:03:18,550 --> 00:03:21,948 Speaker 2: are 4 several factors, you know, uh, one of them 59 00:03:21,949 --> 00:03:24,850 Speaker 2: is what we call the taco trade, right? As you know, 60 00:03:24,949 --> 00:03:29,330 Speaker 2: taco means Trump always chickens out. This was a term 61 00:03:29,850 --> 00:03:33,429 Speaker 2: coined by Robert Armstrong of Financial Times, right, to describe 62 00:03:33,429 --> 00:03:38,440 Speaker 2: Trump's behavior and it basically, uh, the market and 63 00:03:38,770 --> 00:03:45,250 Speaker 2: Uh, basically businesses, uh, decided the game, uh, you know, 64 00:03:45,369 --> 00:03:48,910 Speaker 2: the behavior of Trump, right? So, 65 00:03:49,630 --> 00:03:52,190 Speaker 2: What happened is that they don't believe that Trump is 66 00:03:52,190 --> 00:03:55,789 Speaker 2: going to follow through with his threat. So when the 67 00:03:55,789 --> 00:03:59,190 Speaker 2: market crashed, you know, with about 15% in the first 68 00:03:59,190 --> 00:04:02,990 Speaker 2: few days, I think Trump basically pulled back, right, and 69 00:04:02,990 --> 00:04:07,830 Speaker 2: announced the 90 day pause and also a baseline of 10% 70 00:04:07,830 --> 00:04:11,740 Speaker 2: for tariffs, right? And shortly after that, the market rallied 71 00:04:11,740 --> 00:04:14,869 Speaker 2: very sharply, as you know, and it continued to rally 72 00:04:14,869 --> 00:04:18,170 Speaker 2: beyond July 2nd, you know, after the 90 day pause. 73 00:04:18,919 --> 00:04:22,498 Speaker 2: So I think this explains to a large extent, you know. 74 00:04:23,339 --> 00:04:26,289 Speaker 2: Why the, the economy is doing so well, but this 75 00:04:26,290 --> 00:04:31,209 Speaker 2: taco trade also had an unexpected uh uh effect because 76 00:04:31,220 --> 00:04:36,859 Speaker 2: uh importers and retailers decided to front load their imports, 77 00:04:37,470 --> 00:04:39,100 Speaker 2: and they build up inventories. 78 00:04:39,350 --> 00:04:43,829 Speaker 2: And many of them decided to delay the pass-through. And 79 00:04:43,850 --> 00:04:46,828 Speaker 2: that was one reason why I think inflation didn't shoot up, right? And, 80 00:04:47,040 --> 00:04:50,209 Speaker 2: and that kept inflation down and allowed the Fed to 81 00:04:50,209 --> 00:04:52,609 Speaker 2: keep the whole rates and even the cut rates, right? 82 00:04:52,820 --> 00:04:56,428 Speaker 2: And that helped to support the, the, the, the demand. 83 00:04:57,049 --> 00:04:59,549 Speaker 2: So despite the very weak labor market in the US, 84 00:05:00,049 --> 00:05:03,230 Speaker 2: you know, I think the US, uh, reduced spending was 85 00:05:03,230 --> 00:05:06,929 Speaker 2: relatively strong and that in turn support you know export 86 00:05:06,928 --> 00:05:07,970 Speaker 2: from the region, right? 87 00:05:08,690 --> 00:05:12,890 Speaker 2: But I think we also missed two major structural shifts, 88 00:05:13,200 --> 00:05:16,450 Speaker 2: you know, global, global trends. The one is the, the 89 00:05:16,450 --> 00:05:22,409 Speaker 2: China's green boom, you know, and you know, despite a 33% 90 00:05:22,410 --> 00:05:26,130 Speaker 2: collapse in China's export to the US, right, China's overall 91 00:05:26,130 --> 00:05:30,329 Speaker 2: export went up by 5.5%, right? Uh, it's EV export 92 00:05:30,329 --> 00:05:34,850 Speaker 2: to ASEAN went up by 75%, to Africa by 270%, 93 00:05:34,970 --> 00:05:35,510 Speaker 2: almost tripled. 94 00:05:36,500 --> 00:05:39,869 Speaker 2: And its exports to Europe also went up by about 10%. 95 00:05:40,380 --> 00:05:43,459 Speaker 2: So it wasn't just diversion of trade, it was basically a, 96 00:05:43,769 --> 00:05:47,450 Speaker 2: a big shift in the global supply chain towards, uh, 97 00:05:47,540 --> 00:05:52,170 Speaker 2: you know, uh, the green uh renewable energy. And the, 98 00:05:52,178 --> 00:05:55,899 Speaker 2: they call it the three green industries in China, right? 99 00:05:56,178 --> 00:06:01,940 Speaker 2: They account for about EVs, solar panels, wind turbine, and batteries. 100 00:06:02,260 --> 00:06:04,200 Speaker 2: They account for about 10% of the economy. 101 00:06:04,950 --> 00:06:09,029 Speaker 2: But the eco but they, I think last year, they 102 00:06:09,029 --> 00:06:13,869 Speaker 2: accounted for 25% of the growth, right? And that's about 1.5% point. 103 00:06:14,690 --> 00:06:19,529 Speaker 2: So without the EVs, uh, or green, green and industries, 104 00:06:19,850 --> 00:06:23,049 Speaker 2: growth would have been much weaker in China and they 105 00:06:23,049 --> 00:06:26,369 Speaker 2: managed to get a 5% growth last year, thanks, I 106 00:06:26,369 --> 00:06:28,929 Speaker 2: think a lot to this green, green industries. 107 00:06:29,609 --> 00:06:32,649 Speaker 2: Now in the US I think we all saw, you know, 108 00:06:32,928 --> 00:06:35,570 Speaker 2: what happened with AI. I mean we, we knew that AI, 109 00:06:36,049 --> 00:06:38,609 Speaker 2: you know, is very disruptive. I think what we missed 110 00:06:38,609 --> 00:06:43,369 Speaker 2: was this massive investment in data centers, right? And you know, 111 00:06:43,450 --> 00:06:48,208 Speaker 2: they were investing $100 billion per quarter in AI data 112 00:06:48,209 --> 00:06:49,089 Speaker 2: centers and AI. 113 00:06:50,230 --> 00:06:54,190 Speaker 2: And as a result, you know, uh, you know, it 114 00:06:54,190 --> 00:06:57,469 Speaker 2: give a big boost to the US economy, uh, and 115 00:06:57,470 --> 00:07:02,359 Speaker 2: Jason Furman, you know, uh, basically estimated that without this 116 00:07:02,359 --> 00:07:05,109 Speaker 2: massive investment, growth in the first half of the year 117 00:07:05,109 --> 00:07:09,670 Speaker 2: would have been 0.1% instead of 2%, right? Uh, so 118 00:07:09,670 --> 00:07:11,829 Speaker 2: I think we, we sort of missed out on that 119 00:07:11,829 --> 00:07:14,309 Speaker 2: part of the, because we were looking at the, the 120 00:07:14,309 --> 00:07:15,510 Speaker 2: tariff and you know. 121 00:07:16,040 --> 00:07:19,220 Speaker 2: And we, we know that AI is disruptive but we 122 00:07:19,220 --> 00:07:22,700 Speaker 2: are thinking much more of the future when AI becomes, 123 00:07:22,760 --> 00:07:27,850 Speaker 2: you know, uh fully implemented. So, so that accounts for 124 00:07:27,850 --> 00:07:31,500 Speaker 2: why the US economy is quite strong, despite the fact that, 125 00:07:31,519 --> 00:07:34,578 Speaker 2: you know, labor market was weak and the other factor 126 00:07:34,579 --> 00:07:38,399 Speaker 2: is that uh you know, I think because the market uh. 127 00:07:39,899 --> 00:07:43,339 Speaker 2: Uh, you know, was, uh, booming due to the fact 128 00:07:43,339 --> 00:07:48,079 Speaker 2: that they decided to ignore, uh, the, the terror threat. Uh, 129 00:07:48,260 --> 00:07:49,760 Speaker 2: there's a strong wealth effect. 130 00:07:50,950 --> 00:07:53,390 Speaker 2: And I think that accounts for the fact that, you know, 131 00:07:53,619 --> 00:07:56,779 Speaker 2: spending also was very strong and consume and the household 132 00:07:56,779 --> 00:08:01,059 Speaker 2: actually cut the savings down from about 5% to 3.5%, right? 133 00:08:01,429 --> 00:08:05,190 Speaker 2: So there's a 1, 1.5% this drop in, in savings 134 00:08:05,190 --> 00:08:09,268 Speaker 2: rate and that helps to support the economy as well. Uh, 135 00:08:09,910 --> 00:08:12,510 Speaker 2: and then in the, in the region, uh, you know, we, we, 136 00:08:12,630 --> 00:08:16,459 Speaker 2: in Emerald, we always thought that the region is relatively robust, 137 00:08:16,510 --> 00:08:19,429 Speaker 2: you know, and they have a policy space. 138 00:08:20,100 --> 00:08:23,540 Speaker 2: But the, but in last year, you know, normally when 139 00:08:23,540 --> 00:08:26,720 Speaker 2: you have risk aversion, right, the currencies come under pressure, 140 00:08:26,739 --> 00:08:30,149 Speaker 2: but last year, the US dollar weakened, right? And so, 141 00:08:30,220 --> 00:08:33,020 Speaker 2: you know, the, the retail currencies actually strengthened against the 142 00:08:33,020 --> 00:08:33,679 Speaker 2: US dollar. 143 00:08:34,349 --> 00:08:37,679 Speaker 2: And that provides space for I think central bank to 144 00:08:37,679 --> 00:08:41,348 Speaker 2: ease policy and we saw that, you know, in the Philippines, 145 00:08:41,510 --> 00:08:46,520 Speaker 2: in Indonesia, in Malaysia even, and, and Thailand I think 146 00:08:46,520 --> 00:08:49,320 Speaker 2: was a bit of a laggard, but eventually they also 147 00:08:49,320 --> 00:08:53,880 Speaker 2: cut rates. uh, so I think that also helps to 148 00:08:53,880 --> 00:08:57,640 Speaker 2: explain why the region did relatively well. Uh, yeah, so, 149 00:08:57,760 --> 00:09:00,320 Speaker 2: so those are the the factors, you know, that help 150 00:09:00,320 --> 00:09:04,020 Speaker 2: to explain why the global economy, but especially. 151 00:09:04,419 --> 00:09:08,289 Speaker 2: Asia did much better. Uh, we came up at 4.8%, 152 00:09:08,299 --> 00:09:11,539 Speaker 2: as I said, and that was even better than last, uh, 153 00:09:11,619 --> 00:09:16,218 Speaker 2: the year before, we, I think that was 4.7%, uh. 154 00:09:17,890 --> 00:09:21,669 Speaker 1: Do you see the factors that you just described remaining 155 00:09:21,669 --> 00:09:25,070 Speaker 1: in place in 2026 and therefore, would you expect a 156 00:09:25,070 --> 00:09:29,099 Speaker 1: pretty decent growth outcome for Asia and the US this 157 00:09:29,099 --> 00:09:29,590 Speaker 1: year as well? 158 00:09:31,650 --> 00:09:33,690 Speaker 2: For the inflation passed through, we thought it's going to 159 00:09:33,690 --> 00:09:33,859 Speaker 2: happen uh. 160 00:09:36,280 --> 00:09:39,719 Speaker 2: This year, right, uh, but now that the Supreme Court 161 00:09:39,719 --> 00:09:43,460 Speaker 2: has struck down, you know, the tariff, uh, and declared 162 00:09:43,460 --> 00:09:47,280 Speaker 2: that it's illegal under EPA, right, uh, the retailers may 163 00:09:47,280 --> 00:09:50,390 Speaker 2: get the money back, right, and they may not have 164 00:09:50,390 --> 00:09:53,619 Speaker 2: to pass through, uh, but of course, Trump has decided 165 00:09:53,619 --> 00:09:56,900 Speaker 2: to impose a 15% lower tariff rate. 166 00:09:57,599 --> 00:09:59,840 Speaker 2: So there's a bit of uncertainty about how much of 167 00:09:59,840 --> 00:10:02,619 Speaker 2: the tariff is going to remain and at what level. 168 00:10:03,039 --> 00:10:05,478 Speaker 2: But certainly, I think, you know, I think the retailers 169 00:10:05,479 --> 00:10:08,359 Speaker 2: cannot continue to absorb the the tariff, the cost of 170 00:10:08,359 --> 00:10:10,719 Speaker 2: the tariff, and they're gonna have to pass through some 171 00:10:10,719 --> 00:10:13,960 Speaker 2: of that, you know. So inflation may be a bit sticky. 172 00:10:14,619 --> 00:10:17,770 Speaker 2: I don't think it's going to go, you know, sharply higher, 173 00:10:17,940 --> 00:10:21,340 Speaker 2: you know, uh, but certainly, uh, you know, I think 174 00:10:21,340 --> 00:10:24,419 Speaker 2: that's going to be continue to be a drag on the, on, 175 00:10:24,500 --> 00:10:27,619 Speaker 2: on demand in the US, you know, and slow down 176 00:10:27,619 --> 00:10:31,500 Speaker 2: the economy, uh, somewhat, um, but I think the region 177 00:10:31,500 --> 00:10:33,859 Speaker 2: is OK. I mean, and the irony is that I 178 00:10:33,859 --> 00:10:39,479 Speaker 2: think Chinese export, you know, was also, uh, exporting deflation 179 00:10:39,809 --> 00:10:42,059 Speaker 2: because Chinese, uh, if you look at the PPI export 180 00:10:42,059 --> 00:10:44,039 Speaker 2: prices actually was, was declining, right? 181 00:10:44,419 --> 00:10:47,169 Speaker 2: So they also have to keep inflation down to some extent. 182 00:10:49,609 --> 00:10:50,919 Speaker 2: But now I think we are in a period of 183 00:10:50,919 --> 00:10:56,270 Speaker 2: uncertainty because you know, if the Supreme Court decision, you know, uh, and, 184 00:10:56,570 --> 00:11:00,770 Speaker 2: and the Trump's counter measure by imposing the 15% tariff, 185 00:11:01,049 --> 00:11:02,848 Speaker 2: we don't know where it's gonna, how it's going to 186 00:11:02,849 --> 00:11:03,270 Speaker 2: work out. 187 00:11:05,229 --> 00:11:07,109 Speaker 1: Right, I mean, for a country like Singapore, for example, 188 00:11:07,190 --> 00:11:09,950 Speaker 1: if it is indeed 15% baseline, then of course that's 189 00:11:09,950 --> 00:11:13,349 Speaker 1: a big shock because the understanding with the US was 10% 190 00:11:13,349 --> 00:11:16,750 Speaker 1: for Singapore and then a country like one of the 191 00:11:16,750 --> 00:11:19,869 Speaker 1: ASEAN countries which have sort of done 18 or 19% 192 00:11:19,869 --> 00:11:21,950 Speaker 1: deal with the US, they actually get a downward revision. 193 00:11:22,020 --> 00:11:25,349 Speaker 1: So it could be quite heterogeneous, and you're right, we 194 00:11:25,349 --> 00:11:28,569 Speaker 1: really don't know exactly where this thing settles. Yeah, more uncertainty. 195 00:11:28,760 --> 00:11:31,210 Speaker 1: But Hobi, just to stay with that argument. 196 00:11:31,559 --> 00:11:36,280 Speaker 1: But we have outperformed expectations in 2025, and you have 197 00:11:36,280 --> 00:11:41,280 Speaker 1: issues like China's green spending or USAI spending, buoying regional 198 00:11:41,280 --> 00:11:43,919 Speaker 1: demand and for, for these products as well as part 199 00:11:43,919 --> 00:11:48,440 Speaker 1: of the global supply chain. So in general, do we 200 00:11:48,440 --> 00:11:52,520 Speaker 1: expect to see the same kind of buoyancy that China 201 00:11:52,520 --> 00:11:54,880 Speaker 1: on the back of green and US on the back 202 00:11:54,880 --> 00:11:57,919 Speaker 1: of AI is doing simply because we're an export intensive region? 203 00:11:59,729 --> 00:12:01,630 Speaker 2: I, I think so. I mean, I mean, in the 204 00:12:01,630 --> 00:12:04,070 Speaker 2: case of China, I mean, green, of course, is, is, 205 00:12:04,150 --> 00:12:08,340 Speaker 2: you know, booming, but they have, as you, as you said, uh, 206 00:12:08,580 --> 00:12:12,169 Speaker 2: excess capacity issue and they have an in the in the, 207 00:12:12,190 --> 00:12:16,348 Speaker 2: you know, anti-evolution policy right now, which is working its 208 00:12:16,349 --> 00:12:19,150 Speaker 2: way through the system, right? So I think that it's 209 00:12:19,150 --> 00:12:20,109 Speaker 2: going to dampen growth. 210 00:12:20,205 --> 00:12:22,885 Speaker 2: Of the EV industry to some extent, you know, because, uh, 211 00:12:22,924 --> 00:12:26,364 Speaker 2: you know, there's going to be a, a sort of restructuring, 212 00:12:26,455 --> 00:12:30,265 Speaker 2: you know, uh, of the industry, uh, and I think 213 00:12:30,265 --> 00:12:33,044 Speaker 2: that there are signs that it's happening, right, but it 214 00:12:33,044 --> 00:12:35,885 Speaker 2: may take a year or two to, you know, uh, 215 00:12:36,044 --> 00:12:40,744 Speaker 2: before it's, uh, come, it's fully, fully, uh, followed through. 216 00:12:41,205 --> 00:12:43,525 Speaker 2: In the meantime, I think, you know, uh. 217 00:12:44,099 --> 00:12:48,140 Speaker 2: And the rest of the world, right, is still demanding 218 00:12:48,140 --> 00:12:53,539 Speaker 2: that the export the products and importing those EVs and 219 00:12:53,539 --> 00:12:56,000 Speaker 2: solar panels, except maybe for the US. 220 00:12:56,849 --> 00:12:58,690 Speaker 2: So I think that's going to support China's growth to 221 00:12:58,690 --> 00:13:01,569 Speaker 2: some extent, and in the real estate drag, uh, which 222 00:13:01,570 --> 00:13:03,890 Speaker 2: is the main drag on the economy, I think that 223 00:13:03,890 --> 00:13:08,150 Speaker 2: is also, uh, slowly, uh, work, working itself way out, 224 00:13:08,530 --> 00:13:10,729 Speaker 2: you know, uh, I think the Chinese have decided not 225 00:13:10,729 --> 00:13:13,950 Speaker 2: to do a big bang, uh, in, in, in that area, 226 00:13:14,130 --> 00:13:16,169 Speaker 2: and I think that's probably the right thing to do 227 00:13:16,169 --> 00:13:19,570 Speaker 2: because you don't want to over overstimulate the, the real 228 00:13:19,570 --> 00:13:22,429 Speaker 2: estate sector and, you know, and, and do all the. 229 00:13:23,099 --> 00:13:23,700 Speaker 2: Uh 230 00:13:24,599 --> 00:13:28,409 Speaker 2: Reforms that they were putting in, you know, uh, but, 231 00:13:28,599 --> 00:13:30,559 Speaker 2: you know, if you look at the, I mean, you know, 232 00:13:30,679 --> 00:13:33,159 Speaker 2: real estate sectors typically takes 4 or 5 years to 233 00:13:33,159 --> 00:13:36,479 Speaker 2: work itself out, right? And it's been about 5 years 234 00:13:36,479 --> 00:13:40,710 Speaker 2: since the, the real estate crash in 2021. So, you know, 235 00:13:40,880 --> 00:13:44,119 Speaker 2: we were hoping that it will work out its way 236 00:13:44,119 --> 00:13:46,799 Speaker 2: out by the end of last year, but it looks 237 00:13:46,799 --> 00:13:48,858 Speaker 2: like it's going to take another year or two, you know. 238 00:13:49,280 --> 00:13:50,340 Speaker 2: So that's China. 239 00:13:50,750 --> 00:13:53,000 Speaker 2: And for the US, I think that the boom in 240 00:13:53,000 --> 00:13:56,359 Speaker 2: the AI, I mean, especially the investment in the data 241 00:13:56,359 --> 00:13:59,520 Speaker 2: center is so big that the market is beginning to 242 00:13:59,520 --> 00:14:03,319 Speaker 2: pull back somewhat, and there's been a correction in some 243 00:14:03,320 --> 00:14:06,010 Speaker 2: sectors of the economy, which I think they think is 244 00:14:06,010 --> 00:14:08,679 Speaker 2: going to be disrupted by AI, right? I don't know 245 00:14:08,679 --> 00:14:13,159 Speaker 2: if you saw the recent report or study, which talks 246 00:14:13,159 --> 00:14:14,539 Speaker 2: about the disruption of AI. 247 00:14:14,890 --> 00:14:18,109 Speaker 2: Uh, one of the co-authors just appeared on Bloomberg this morning, 248 00:14:18,429 --> 00:14:22,210 Speaker 2: and you know there's like a possibility potential of a 249 00:14:22,210 --> 00:14:26,809 Speaker 2: negative spiral in the economy, and it is going to 250 00:14:26,809 --> 00:14:31,530 Speaker 2: be even much more damaging, you know, than the other 251 00:14:31,530 --> 00:14:32,770 Speaker 2: disruption that we that we have. 252 00:14:33,020 --> 00:14:34,359 Speaker 1: You're talking about the Citrini report. 253 00:14:35,809 --> 00:14:38,450 Speaker 2: Yes, yes, I, I haven't read the report myself, but 254 00:14:38,450 --> 00:14:41,570 Speaker 2: I just saw the one coauthor on Bloomberg. Yeah. Yeah, 255 00:14:41,690 --> 00:14:43,890 Speaker 1: it's quite remarkable that a blog post can cause so 256 00:14:43,890 --> 00:14:46,690 Speaker 1: much disruption. I think it also tells you that, just 257 00:14:46,690 --> 00:14:49,070 Speaker 1: to connect to your earlier argument, the market is so rich. 258 00:14:49,409 --> 00:14:52,530 Speaker 1: Any excuse right now would be a reason for a sell-off, uh, 259 00:14:53,000 --> 00:14:55,760 Speaker 1: whether it is coming from a blog or actual earnings 260 00:14:55,760 --> 00:14:58,890 Speaker 1: outcome or company order flow. Um, we, uh, 261 00:14:58,950 --> 00:15:01,669 Speaker 1: Just to stay on with China for a second, you're 262 00:15:01,669 --> 00:15:04,750 Speaker 1: talking about the world's demand for solar panels and EVs 263 00:15:04,750 --> 00:15:07,750 Speaker 1: will continue. I think in the coming decade we will 264 00:15:07,750 --> 00:15:13,020 Speaker 1: see made in China robots developed in China, pharmaceutical drugs, 265 00:15:13,429 --> 00:15:16,030 Speaker 1: and a wide range of things, and perhaps toward the 266 00:15:16,030 --> 00:15:18,330 Speaker 1: early part of the next decade, made in China planes 267 00:15:18,739 --> 00:15:22,169 Speaker 1: that we will become enthusiastic consumers. So this, this a 268 00:15:22,580 --> 00:15:25,070 Speaker 1: Uh, move up of China on the value chain. Uh, 269 00:15:25,140 --> 00:15:27,320 Speaker 1: I think you have written about this. It's absolutely remarkable. 270 00:15:27,659 --> 00:15:29,140 Speaker 1: And I will want to touch on this later in 271 00:15:29,140 --> 00:15:31,969 Speaker 1: this podcast when we talk about green transition. But right now, uh, 272 00:15:32,369 --> 00:15:34,760 Speaker 1: just from the general to the specific, let's talk about 273 00:15:34,940 --> 00:15:39,099 Speaker 1: our own country, Singapore. Uh, what's your evaluation of Singapore's 274 00:15:39,099 --> 00:15:41,900 Speaker 1: shock absorption capacity, not just last year, but take the 275 00:15:41,900 --> 00:15:44,940 Speaker 1: last decade, for example, we've faced quite a few shocks. Uh, 276 00:15:45,099 --> 00:15:46,539 Speaker 1: just give us your evaluation. 277 00:15:48,099 --> 00:15:50,489 Speaker 2: Yeah, I mean, if you look at Singapore's performance, I 278 00:15:50,489 --> 00:15:52,809 Speaker 2: mean you have to, you know, give it an A+. 279 00:15:53,570 --> 00:15:57,280 Speaker 2: It's not, it's very difficult not to uh give it a, 280 00:15:57,770 --> 00:16:01,200 Speaker 2: it's remarkably resilient, right? And you know, they've been hit 281 00:16:01,200 --> 00:16:04,039 Speaker 2: by several shots, one in a row or one after another, 282 00:16:04,250 --> 00:16:07,559 Speaker 2: especially since 2000. I think the biggest shock is the pandemic, 283 00:16:07,679 --> 00:16:11,830 Speaker 2: even bigger than what we're going through right now, right? 284 00:16:12,039 --> 00:16:13,630 Speaker 2: It basically shuts down the whole economy. 285 00:16:14,340 --> 00:16:17,750 Speaker 2: And then you have the inflation spike up from the 286 00:16:17,750 --> 00:16:23,289 Speaker 2: war in Ukraine, the Trump tariff war, the mounting protectionism, 287 00:16:23,780 --> 00:16:28,469 Speaker 2: geo fragmentation, the U.S.China trade tension. So you know all 288 00:16:28,469 --> 00:16:30,760 Speaker 2: these are coming together and. 289 00:16:31,229 --> 00:16:34,979 Speaker 2: But you know Singapore, uh, I think that the it's main, 290 00:16:36,030 --> 00:16:38,630 Speaker 2: the reason why it's been so resilient is that it's 291 00:16:38,630 --> 00:16:42,549 Speaker 2: a very strong macro fundamentals, right, you look at all 292 00:16:42,549 --> 00:16:45,190 Speaker 2: the key indicators, they're very strong. 293 00:16:46,030 --> 00:16:50,630 Speaker 2: Uh, you know, fiscal reserve, right, fiscal buffers. There was 294 00:16:50,630 --> 00:16:55,309 Speaker 2: some monetary policy, low inflation, very large current account surpluses, 295 00:16:55,630 --> 00:16:59,270 Speaker 2: and very large fiscal reserve, very sound financial. So, you know, 296 00:16:59,539 --> 00:17:03,969 Speaker 2: I think the economy itself is, is fairly robust and strong, 297 00:17:04,189 --> 00:17:06,050 Speaker 2: and it's able to absorb a lot of the shocks. 298 00:17:06,540 --> 00:17:09,579 Speaker 2: But, uh, more specifically I think, you know, it's built 299 00:17:09,579 --> 00:17:14,060 Speaker 2: up a huge war chest in terms of the fiscal reserve, right? Uh, 300 00:17:14,079 --> 00:17:18,099 Speaker 2: and it's been able to leverage on this, you know, uh, it, 301 00:17:18,180 --> 00:17:21,959 Speaker 2: it to buffer the shocks. I mean, as you know Singapore. 302 00:17:23,050 --> 00:17:25,530 Speaker 2: Uh, the government is very reluctant to spend the reserve. 303 00:17:25,609 --> 00:17:27,329 Speaker 2: Now it has a rule where they spend, you know, 304 00:17:27,530 --> 00:17:32,170 Speaker 2: half of the dividends or the earnings from the reserve, right? But, uh, 305 00:17:32,209 --> 00:17:34,689 Speaker 2: it's been very reluctant to draw down the reserve, you know, 306 00:17:34,910 --> 00:17:38,409 Speaker 2: and even during the Asian financial crisis, I don't think 307 00:17:38,410 --> 00:17:41,010 Speaker 2: it drew down the reserve, you know, but during the, 308 00:17:41,089 --> 00:17:44,109 Speaker 2: when the pandemic hit, uh, you know, they drew down 309 00:17:44,109 --> 00:17:46,909 Speaker 2: $64 billion right, you know. 310 00:17:47,349 --> 00:17:50,390 Speaker 2: Uh, and you know, and they were able to support 311 00:17:50,390 --> 00:17:55,109 Speaker 2: the economy in a way that most other countries cannot, right? Uh, especially, 312 00:17:55,180 --> 00:17:57,228 Speaker 2: you know, these are liquidity shops, you need to provide 313 00:17:57,229 --> 00:18:01,390 Speaker 2: income to the households and businesses to stay alive, and 314 00:18:01,390 --> 00:18:02,530 Speaker 2: so they were able to do that. 315 00:18:03,339 --> 00:18:06,819 Speaker 2: Uh, the fiscal stimulus package was like $90 billion. It's like, 316 00:18:06,900 --> 00:18:11,060 Speaker 2: you know, uh, it's a huge percentage of GDP, 15%, 317 00:18:11,099 --> 00:18:14,979 Speaker 2: I think, or something in that order, right? And you know, 318 00:18:15,219 --> 00:18:18,180 Speaker 2: I was taken aback myself because, you know, we were 319 00:18:18,180 --> 00:18:20,060 Speaker 2: trying to encourage the government to, you know, to be 320 00:18:20,060 --> 00:18:23,099 Speaker 2: more braver and, and the government was braver than what, 321 00:18:23,219 --> 00:18:25,159 Speaker 2: what we thought it would do. 322 00:18:26,339 --> 00:18:29,260 Speaker 2: So I think the, the, the, the outcome of this 323 00:18:29,260 --> 00:18:31,459 Speaker 2: is that, you know, they came out of the pandemic 324 00:18:31,459 --> 00:18:35,438 Speaker 2: with very little scarring, right, unlike many countries, right? Uh, 325 00:18:35,900 --> 00:18:38,040 Speaker 2: and then during the pandemic, there was a shift towards 326 00:18:38,040 --> 00:18:42,219 Speaker 2: uh digitalization and again you can see that the government 327 00:18:42,219 --> 00:18:45,579 Speaker 2: was very, uh, you know, uh, proactive, you know, they're 328 00:18:45,579 --> 00:18:49,800 Speaker 2: trying to get the economy shifted into a digital economy 329 00:18:50,060 --> 00:18:50,979 Speaker 2: in order to. 330 00:18:51,680 --> 00:18:55,760 Speaker 2: Mitigate the shock of the shutdown, right? Uh, so as 331 00:18:55,760 --> 00:18:58,719 Speaker 2: a result, I, I think they, they did a fairly 332 00:18:58,719 --> 00:19:01,760 Speaker 2: good job there, although they missed the call many several 333 00:19:01,760 --> 00:19:04,780 Speaker 2: times in terms of the, uh, you know, the, 334 00:19:05,540 --> 00:19:07,969 Speaker 2: The spread of the pandemic, right? 335 00:19:08,880 --> 00:19:11,979 Speaker 2: Um, well, the other, the other factor, as I mentioned 336 00:19:11,979 --> 00:19:15,208 Speaker 2: is that, you know, Singapore is basically a safe haven, right? 337 00:19:15,270 --> 00:19:17,520 Speaker 2: I mean, it seemed to be highly, 338 00:19:18,239 --> 00:19:20,959 Speaker 2: They place to park your money and manage your reserves, 339 00:19:21,000 --> 00:19:23,879 Speaker 2: so they get a lot of inflows from other places 340 00:19:23,880 --> 00:19:25,420 Speaker 2: whenever there is a risk aversion. 341 00:19:26,410 --> 00:19:28,989 Speaker 2: You know, in the region or even even outside the region. 342 00:19:32,800 --> 00:19:34,139 Speaker 2: So it's never. 343 00:19:34,900 --> 00:19:37,660 Speaker 2: At risk, in terms of a balance of payment crisis, 344 00:19:37,739 --> 00:19:39,079 Speaker 2: I think the risk. 345 00:19:40,060 --> 00:19:43,310 Speaker 2: Only for a country like Singapore it's very political, you know, uh, 346 00:19:43,760 --> 00:19:46,579 Speaker 2: because the financial side is very strong anyway, you know. 347 00:19:47,000 --> 00:19:50,119 Speaker 2: And finally, they are very proactive. I mean, you've been 348 00:19:50,119 --> 00:19:53,040 Speaker 2: here long enough, you know that Singapore prides itself for 349 00:19:53,040 --> 00:19:58,439 Speaker 2: being paranoid about its survival. They are always looking around 350 00:19:58,439 --> 00:20:00,459 Speaker 2: to make sure there are no hidden risks, you know. 351 00:20:01,030 --> 00:20:05,698 Speaker 2: And trying to be one step ahead of the game. Uh, so, 352 00:20:05,719 --> 00:20:08,199 Speaker 2: you know, they set up all these review committees every 353 00:20:08,199 --> 00:20:11,159 Speaker 2: few years to review policies to see, make sure that 354 00:20:11,160 --> 00:20:14,160 Speaker 2: they are still fit for purpose and you know what 355 00:20:14,160 --> 00:20:16,160 Speaker 2: else needs to be done in order to, you know, 356 00:20:16,359 --> 00:20:17,859 Speaker 2: make uh Singapore more. 357 00:20:18,500 --> 00:20:20,958 Speaker 2: Uh, competitive, you know. 358 00:20:21,449 --> 00:20:24,879 Speaker 2: And recently they just set up the AI council, in 359 00:20:24,890 --> 00:20:29,159 Speaker 2: a chaired by p.m. himself, and I remember after the 360 00:20:29,160 --> 00:20:31,790 Speaker 2: Asian financial crisis, you know, they set up the economic 361 00:20:31,790 --> 00:20:34,750 Speaker 2: review committee, and I was a member of that committee 362 00:20:34,839 --> 00:20:37,889 Speaker 2: under the former prime minister. So you know, they are, 363 00:20:37,989 --> 00:20:42,770 Speaker 2: they are constantly uh very vigilant, you know, very uh 364 00:20:42,770 --> 00:20:46,589 Speaker 2: worried about this, their, their competitiveness and you know, taking 365 00:20:46,969 --> 00:20:49,069 Speaker 2: measures to make sure that they don't fall behind. 366 00:20:50,439 --> 00:20:53,560 Speaker 1: Well, in that case, let's talk about that vigilance issue, 367 00:20:53,839 --> 00:20:58,280 Speaker 1: but from a forward-looking context. All this Citrini report and 368 00:20:58,280 --> 00:21:02,439 Speaker 1: AI related discussion, let's bring back to in the context 369 00:21:02,439 --> 00:21:06,958 Speaker 1: of Singapore, what's your sense about Singapore's challenges with respect 370 00:21:06,959 --> 00:21:08,260 Speaker 1: to the ongoing AI wave? 371 00:21:10,119 --> 00:21:12,280 Speaker 2: Well, I think I wrote a little bit about that 372 00:21:12,280 --> 00:21:16,869 Speaker 2: in the SG60 article, and you know, like everybody else, 373 00:21:16,920 --> 00:21:20,920 Speaker 2: I think it's going to be very disruptive, right? And, and, 374 00:21:21,000 --> 00:21:22,479 Speaker 2: and I think that's the reason why they set up 375 00:21:22,479 --> 00:21:25,159 Speaker 2: this community because I think we are just at the 376 00:21:25,160 --> 00:21:29,198 Speaker 2: beginning of this disruption, right? Although you already, you know, 377 00:21:29,280 --> 00:21:31,079 Speaker 2: I think the fact that the labor market is weak 378 00:21:31,079 --> 00:21:32,839 Speaker 2: in the US is probably a reflection of the fact 379 00:21:32,839 --> 00:21:36,198 Speaker 2: that the hiring is slowed down, you know, although the 380 00:21:36,199 --> 00:21:37,420 Speaker 2: firing has not started. 381 00:21:37,800 --> 00:21:39,689 Speaker 2: But the firing is going to come, right, because we 382 00:21:39,689 --> 00:21:41,688 Speaker 2: know that AI is going to displace a lot of 383 00:21:41,689 --> 00:21:43,709 Speaker 2: this mental labor. 384 00:21:44,619 --> 00:21:48,250 Speaker 2: Especially, uh, those at the entry level, you know, uh, 385 00:21:48,469 --> 00:21:51,750 Speaker 2: they don't need as many research assistants. Now AI can, 386 00:21:51,869 --> 00:21:56,150 Speaker 2: you know, uh, do a lot of the para paralegal work, uh. 387 00:21:57,089 --> 00:22:00,010 Speaker 2: So, and not only that, uh, I think once you 388 00:22:00,010 --> 00:22:05,208 Speaker 2: combine AI with robotics, you have humanoids, it's gonna disrupt 389 00:22:05,209 --> 00:22:08,030 Speaker 2: manual labor as well, right? Uh, and I think that 390 00:22:08,040 --> 00:22:11,650 Speaker 2: that's the reason why this uh reports for the criminal. 391 00:22:12,910 --> 00:22:17,400 Speaker 2: Report was, was so alarming, right? Uh, we, we are 392 00:22:17,400 --> 00:22:19,599 Speaker 2: still at, at, in the early stage and we don't 393 00:22:19,599 --> 00:22:22,270 Speaker 2: know how disruptive, it is going to be because it, 394 00:22:22,319 --> 00:22:25,000 Speaker 2: it gets to a point where the economy is presumably 395 00:22:25,000 --> 00:22:28,920 Speaker 2: highly productive, right? The, the, the productivity is showing up 396 00:22:28,920 --> 00:22:31,919 Speaker 2: probably in, in profit to some extent, right, but it's 397 00:22:31,920 --> 00:22:34,780 Speaker 2: not showing up and because of the high productivity of 398 00:22:35,880 --> 00:22:37,060 Speaker 2: technology and, and capital. 399 00:22:37,410 --> 00:22:41,089 Speaker 2: You know, the workers have been displaced and so I 400 00:22:41,089 --> 00:22:46,170 Speaker 2: think the big challenge for our profession, economics profession, you know, 401 00:22:46,369 --> 00:22:51,050 Speaker 2: the traditional constraints seems to have broken down and there's 402 00:22:51,050 --> 00:22:53,290 Speaker 2: going to be a challenge on how do you deploy labor. 403 00:22:53,589 --> 00:22:56,469 Speaker 2: I still believe that the the services sector is going 404 00:22:56,469 --> 00:22:59,619 Speaker 2: to be able to create new, you know, new, new 405 00:22:59,619 --> 00:23:02,188 Speaker 2: types of products, new services and new ones, and be 406 00:23:02,189 --> 00:23:05,468 Speaker 2: able to eventually absorb many of these workers who are 407 00:23:05,469 --> 00:23:08,969 Speaker 2: displaced from, from the traditional service sector. 408 00:23:09,750 --> 00:23:12,260 Speaker 2: But the, you know, it's a transition. I mean, we 409 00:23:12,260 --> 00:23:15,270 Speaker 2: talked about the green transition, but I think the AI 410 00:23:15,270 --> 00:23:17,989 Speaker 2: transition is here and it's going to be even much 411 00:23:17,989 --> 00:23:21,709 Speaker 2: more challenging than, than the green transition. At least the 412 00:23:21,709 --> 00:23:25,550 Speaker 2: green transition is a long fuse. The AI transition, I 413 00:23:25,550 --> 00:23:28,530 Speaker 2: think it's quite immediate over the next 3 to 5 years, 414 00:23:28,869 --> 00:23:30,750 Speaker 2: and we're going to have to deal with it, uh, 415 00:23:30,829 --> 00:23:33,510 Speaker 2: you know, um, with that challenge. 416 00:23:34,520 --> 00:23:36,599 Speaker 1: Sure, but it's interesting that you sort of, you know, 417 00:23:36,760 --> 00:23:40,560 Speaker 1: put to these big disruptive forces side by side. We 418 00:23:40,560 --> 00:23:43,800 Speaker 1: talk incessantly about the cost of green transition and what 419 00:23:43,800 --> 00:23:47,150 Speaker 1: it means for industry and, you know, whether carbon tax 420 00:23:47,150 --> 00:23:51,000 Speaker 1: is ruinous for industry earnings or not. We're not thinking 421 00:23:51,000 --> 00:23:53,160 Speaker 1: along those lines when we talk about the AI transition 422 00:23:53,160 --> 00:23:53,670 Speaker 1: because that is 423 00:23:53,719 --> 00:23:56,510 Speaker 1: A very, very costly transition you just talked about only 424 00:23:56,510 --> 00:23:58,609 Speaker 1: in the context of the US $100 billion a quarter, 425 00:23:59,040 --> 00:24:03,280 Speaker 1: perhaps going to be even higher in 2026. And if 426 00:24:03,280 --> 00:24:05,479 Speaker 1: companies are going to spend that much money and on 427 00:24:05,479 --> 00:24:07,000 Speaker 1: top of that are going to become very productive and 428 00:24:07,000 --> 00:24:09,079 Speaker 1: make money, I would think there is some role for 429 00:24:09,079 --> 00:24:12,280 Speaker 1: taxation and redistribution of that money for the winner take 430 00:24:12,280 --> 00:24:12,599 Speaker 1: all 431 00:24:12,599 --> 00:24:13,000 Speaker 2: economy. 432 00:24:14,300 --> 00:24:17,489 Speaker 2: Yes, and so the challenge right now is whether, you know, 433 00:24:17,810 --> 00:24:21,459 Speaker 2: the government are willing to step in and play a, 434 00:24:21,579 --> 00:24:24,239 Speaker 2: you know, a role in terms of redistributing the, the 435 00:24:24,500 --> 00:24:29,979 Speaker 2: the the the additional productivity that is coming from AI right? 436 00:24:30,619 --> 00:24:32,560 Speaker 2: But you know what we have seen so far in 437 00:24:32,560 --> 00:24:36,380 Speaker 2: the US is, you know, basically a reluctance to, you know, 438 00:24:36,520 --> 00:24:39,359 Speaker 2: to tax the rich, right? And in California, they want 439 00:24:39,359 --> 00:24:42,800 Speaker 2: the property tax and, you know, I think everybody's, you know, uh, 440 00:24:43,239 --> 00:24:47,520 Speaker 2: is resisting that, uh, but in, in the Netherlands, I 441 00:24:47,520 --> 00:24:50,079 Speaker 2: understand they are also thinking along the same line, they're 442 00:24:50,079 --> 00:24:53,780 Speaker 2: going to tax notional increase in your, in your assets. Uh, 443 00:24:54,119 --> 00:24:57,150 Speaker 2: so I, I think that you, our traditional paradigm where, 444 00:24:57,160 --> 00:24:59,719 Speaker 2: you know, you are paid according to your manual productivity. 445 00:25:00,530 --> 00:25:04,589 Speaker 2: May not work that well in this new economy of AI, uh, 446 00:25:04,599 --> 00:25:07,478 Speaker 2: because the constraints are breaking down and we need to 447 00:25:07,479 --> 00:25:10,859 Speaker 2: have a new paradigm on how to redistribute income and 448 00:25:12,479 --> 00:25:15,670 Speaker 2: otherwise I think we're gonna end up in, in, in this, uh, 449 00:25:15,680 --> 00:25:16,800 Speaker 2: problem that was highlight. 450 00:25:17,130 --> 00:25:19,650 Speaker 2: by this author, these two authors, they talk about talking 451 00:25:19,650 --> 00:25:23,489 Speaker 2: about negative loop where people are displaced and so your 452 00:25:23,489 --> 00:25:27,050 Speaker 2: income declines, your consumption declines and becomes a, a, a 453 00:25:27,050 --> 00:25:30,069 Speaker 2: downward spiral, you know, uh, whereas we need to create 454 00:25:30,069 --> 00:25:32,770 Speaker 2: a redistribute income back to the people so that they 455 00:25:32,770 --> 00:25:33,379 Speaker 2: can spend. 456 00:25:33,939 --> 00:25:36,369 Speaker 2: But, I mean, can the market do it on its own? 457 00:25:36,459 --> 00:25:38,479 Speaker 2: I don't know. I mean, this is a big challenge, 458 00:25:39,180 --> 00:25:41,900 Speaker 1: right? Well, the AI companies better hope there's no collapse 459 00:25:41,900 --> 00:25:44,780 Speaker 1: in consumption because their entire premise is to provide lots 460 00:25:44,780 --> 00:25:46,219 Speaker 1: and lots of service, and they have to make money 461 00:25:46,219 --> 00:25:49,659 Speaker 1: after spending, you know, I think it's $3 trillion so far, 462 00:25:49,699 --> 00:25:51,979 Speaker 1: I think the stock of investment that has taken place 463 00:25:51,979 --> 00:25:55,540 Speaker 1: in this AI complex. Hoy, let's talk about green transition. 464 00:25:55,699 --> 00:25:58,099 Speaker 1: You've also written about this lately, that 465 00:25:58,910 --> 00:26:02,670 Speaker 1: We know that the Trump administration is not interested in 466 00:26:02,670 --> 00:26:05,669 Speaker 1: the science or the economics of green transition, and they 467 00:26:05,670 --> 00:26:09,150 Speaker 1: have been abdicating their role in a variety of ways 468 00:26:09,150 --> 00:26:12,479 Speaker 1: since Trump came back to office. Where do economies like 469 00:26:12,479 --> 00:26:15,949 Speaker 1: Singapore stand? We had all these plans for net zero 470 00:26:16,270 --> 00:26:20,949 Speaker 1: carbon tax, you know, barriers against rising sea levels. We're 471 00:26:20,949 --> 00:26:22,030 Speaker 1: not going to give up on all that, are 472 00:26:22,030 --> 00:26:22,270 Speaker 1: we? 473 00:26:23,560 --> 00:26:24,889 Speaker 2: Oh, and definitely not and. 474 00:26:27,089 --> 00:26:29,469 Speaker 2: I don't think, I mean this is physics, right? I 475 00:26:29,469 --> 00:26:33,280 Speaker 2: mean green transition and it's bigger than Trump. 476 00:26:34,160 --> 00:26:37,800 Speaker 2: So, uh, and you know, physics is bigger than politics 477 00:26:37,800 --> 00:26:42,300 Speaker 2: for sure. So I think, uh, I think what is, uh, uh, 478 00:26:42,959 --> 00:26:45,879 Speaker 2: at least, uh, I think Trump is a bit of 479 00:26:45,880 --> 00:26:48,560 Speaker 2: an aberration and exception, and 3 years later, I think, 480 00:26:48,599 --> 00:26:51,679 Speaker 2: you know, the new administration that comes in, if it's Democrat, 481 00:26:51,880 --> 00:26:54,119 Speaker 2: you know, he's going to undo whatever he's doing just 482 00:26:54,119 --> 00:26:57,219 Speaker 2: like Biden did when he became president, right? 483 00:26:57,719 --> 00:27:01,629 Speaker 2: Uh, but even if he's a Republican, I think, you know, uh, 484 00:27:01,920 --> 00:27:05,199 Speaker 2: they probably will not vote the full extent of Trump, 485 00:27:05,319 --> 00:27:09,310 Speaker 2: you know. But in any case, uh, I, I, I think, uh, 486 00:27:09,500 --> 00:27:14,520 Speaker 2: by not, by disbelieving the climate change, uh, thing, I 487 00:27:14,520 --> 00:27:18,000 Speaker 2: think they're doing themselves a disfavor, you know, uh, because 488 00:27:18,010 --> 00:27:21,319 Speaker 2: they're cutting themselves off from the green, uh, industries, right? 489 00:27:21,680 --> 00:27:24,280 Speaker 2: And but I think, you know, in my view, I 490 00:27:24,280 --> 00:27:25,930 Speaker 2: think the, the. 491 00:27:28,229 --> 00:27:31,310 Speaker 2: The positive development in the last few years has been 492 00:27:31,310 --> 00:27:35,109 Speaker 2: that China has managed to lower the cost of wind transition, right? 493 00:27:35,469 --> 00:27:39,889 Speaker 2: By reducing the cost of solar panel, batteries, EVs, and 494 00:27:40,430 --> 00:27:41,469 Speaker 2: wind turbines, right? 495 00:27:41,869 --> 00:27:44,630 Speaker 2: So for the first time, you know, the green transition 496 00:27:44,630 --> 00:27:47,020 Speaker 2: is no longer as costly as it would be. I mean, 497 00:27:47,030 --> 00:27:50,469 Speaker 2: in the past, green transition was, you know, a burden, right, 498 00:27:50,550 --> 00:27:54,780 Speaker 2: for most developing countries and even for, for, for developed countries, 499 00:27:54,790 --> 00:27:59,109 Speaker 2: and they're asking for, you know, uh, basically subsidies from the, 500 00:27:59,349 --> 00:28:01,369 Speaker 2: from the advanced country in order to 501 00:28:01,910 --> 00:28:04,510 Speaker 2: But now, I mean, look at EVs, they're cheaper than 502 00:28:04,510 --> 00:28:08,550 Speaker 2: the traditional IC cars, right, and Tesla, and solar panel 503 00:28:08,550 --> 00:28:11,270 Speaker 2: costs have come down. So all of a sudden, I 504 00:28:11,270 --> 00:28:14,188 Speaker 2: think the economics is beginning to favor the green transition, 505 00:28:14,339 --> 00:28:16,589 Speaker 2: you know, and there are new, uh, I think the 506 00:28:16,589 --> 00:28:20,109 Speaker 2: technology is still developing, but now you, you, you know, the, the. 507 00:28:20,410 --> 00:28:24,130 Speaker 2: The small modular reactor, right, the SMR, you know, which 508 00:28:24,130 --> 00:28:28,959 Speaker 2: a nuclear reactor that apparently is, is also non-polluting, but 509 00:28:28,959 --> 00:28:30,849 Speaker 2: it is able to provide the kind of power and 510 00:28:30,849 --> 00:28:34,889 Speaker 2: energy that is needed. So I'm actually quite optimistic that 511 00:28:34,890 --> 00:28:41,010 Speaker 2: even without the US, the green transition will continue anyway, right, uh, partly. 512 00:28:41,770 --> 00:28:44,930 Speaker 2: With the help of China because of the uh you know, 513 00:28:45,050 --> 00:28:48,530 Speaker 2: the the the the the PV solar panels, and the 514 00:28:48,530 --> 00:28:53,459 Speaker 2: new renewable energy product that they're producing, right? Uh, and 515 00:28:54,140 --> 00:28:56,339 Speaker 2: And, and I think that is basically the main driver, 516 00:28:56,410 --> 00:28:59,819 Speaker 2: the market forces will drive it, you know, along anyway, 517 00:29:00,060 --> 00:29:04,569 Speaker 2: regardless of, of, uh, of Trump, right? Uh, but I 518 00:29:04,569 --> 00:29:08,280 Speaker 2: think most people do have a sense of, you know, uh, responsibility, 519 00:29:08,339 --> 00:29:10,650 Speaker 2: I think, you know, to try to cap the, the 520 00:29:10,650 --> 00:29:16,290 Speaker 2: increase in the, uh, temperature of the, the earth, uh, 521 00:29:16,540 --> 00:29:19,109 Speaker 2: and so I, I, I, I'm. 522 00:29:19,410 --> 00:29:22,410 Speaker 2: I'm not particularly worried that, you know, Trump is going 523 00:29:22,410 --> 00:29:26,180 Speaker 2: to derail the green transition and you know, Singapore should remain, 524 00:29:26,290 --> 00:29:26,849 Speaker 2: you know. 525 00:29:29,010 --> 00:29:32,410 Speaker 2: I mean, that first in terms of his uh commitment 526 00:29:32,410 --> 00:29:35,969 Speaker 2: to green transition. I mean it's as, as I mentioned, 527 00:29:36,089 --> 00:29:38,760 Speaker 2: Singapore was very proactive, they wanted to be the hub 528 00:29:38,760 --> 00:29:42,319 Speaker 2: for the carbon trading industry, right, trading industry. I'm not 529 00:29:42,319 --> 00:29:44,170 Speaker 2: sure the carbon trading industry is going to be as 530 00:29:44,170 --> 00:29:47,050 Speaker 2: big as, you know, we thought it was going to 531 00:29:47,050 --> 00:29:50,109 Speaker 2: be now that price of green transition has come down, 532 00:29:50,349 --> 00:29:52,900 Speaker 2: but it's lower the carbon tax, you know, the threshold 533 00:29:52,900 --> 00:29:54,810 Speaker 2: at least uh uh for that. 534 00:29:55,290 --> 00:29:59,030 Speaker 2: Uh, but, uh, yeah, and yeah, but the more important 535 00:29:59,030 --> 00:30:02,310 Speaker 2: thing is that, you know, regardless of the, the, 536 00:30:03,150 --> 00:30:07,079 Speaker 2: The progress we made in terms of capping the carbon emissions, 537 00:30:07,160 --> 00:30:10,560 Speaker 2: I think we're going to have, you know, uh, the 538 00:30:10,560 --> 00:30:12,880 Speaker 2: temperatures will rise, you're going to have the melting of 539 00:30:12,880 --> 00:30:15,640 Speaker 2: the ice, sea level is going to rise, and, you know, 540 00:30:15,719 --> 00:30:18,839 Speaker 2: there's going to be a lot of investment adaptation to 541 00:30:18,839 --> 00:30:22,030 Speaker 2: protect the infrastructure and fiscal infrastructure, right? 542 00:30:22,439 --> 00:30:25,880 Speaker 2: And building and that I think Singapore is, is committed 543 00:30:25,880 --> 00:30:29,119 Speaker 2: to that. It set aside $100 billion to, you know, 544 00:30:29,479 --> 00:30:33,839 Speaker 2: uh basically climate-proof the infrastructure and they should go, go 545 00:30:33,839 --> 00:30:36,109 Speaker 2: ahead with that and I think if it does that, 546 00:30:36,239 --> 00:30:39,959 Speaker 2: you know, Singapore may come up ahead of many countries 547 00:30:39,959 --> 00:30:43,719 Speaker 2: in terms of providing a location and and a safe 548 00:30:43,719 --> 00:30:46,540 Speaker 2: haven from the from the weather. 549 00:30:47,760 --> 00:30:51,130 Speaker 1: But Hui, in terms of the regional aspect, because, you know, 550 00:30:51,449 --> 00:30:55,010 Speaker 1: one city-state cannot do this alone, are you a little 551 00:30:55,010 --> 00:30:58,400 Speaker 1: frustrated like I am that we're not having enough progress, say, 552 00:30:58,410 --> 00:31:02,890 Speaker 1: on the regional electricity grid, or, uh, you know, Indonesia, Malaysia, 553 00:31:03,010 --> 00:31:08,300 Speaker 1: Singapore sort of thinking cohesively and holistically together on greenification 554 00:31:08,300 --> 00:31:09,130 Speaker 1: of their economies. 555 00:31:10,849 --> 00:31:13,420 Speaker 2: On the green transition, uh, I think there's a lot 556 00:31:13,420 --> 00:31:17,500 Speaker 2: of goodwill and, you know, uh, and discussion about how 557 00:31:17,500 --> 00:31:20,979 Speaker 2: they should work together, you know, because it's a win-win 558 00:31:20,979 --> 00:31:23,810 Speaker 2: kind of thing. I mean, there may be some, uh, 559 00:31:24,020 --> 00:31:26,530 Speaker 2: you know, uh, I mean in the case of Indonesia, 560 00:31:26,780 --> 00:31:30,500 Speaker 2: they want to, uh, promote or develop their green industry, 561 00:31:30,660 --> 00:31:33,738 Speaker 2: especially since they're bigger, right? And they want to build 562 00:31:33,739 --> 00:31:35,939 Speaker 2: a factory, they want to build the EVs and. 563 00:31:36,300 --> 00:31:39,540 Speaker 2: And and use that to industrialize the economy. But that 564 00:31:39,540 --> 00:31:43,349 Speaker 2: doesn't clash with, I think Singapore's own interest. I mean 565 00:31:43,349 --> 00:31:46,890 Speaker 2: Singapore should actually be an investor in those industries itself, right? Uh, 566 00:31:46,939 --> 00:31:49,099 Speaker 2: you can benefit from that because that's the industry of 567 00:31:49,099 --> 00:31:49,560 Speaker 2: the future. 568 00:31:49,959 --> 00:31:52,880 Speaker 2: And there's no reason for Singapore to, you know, compete 569 00:31:52,880 --> 00:31:56,640 Speaker 2: with Indonesia on those, on this, in those areas. The 570 00:31:56,640 --> 00:31:59,069 Speaker 2: bigger problem I think that Singapore is having is the 571 00:31:59,069 --> 00:32:03,770 Speaker 2: transmission of electricity from Laos down to Singapore. Along the way, apparently, uh, 572 00:32:03,959 --> 00:32:06,640 Speaker 2: you know, Thailand and Malaysia wants to have a cut 573 00:32:06,640 --> 00:32:10,270 Speaker 2: of the the fee or something, and that's, you know, 574 00:32:10,599 --> 00:32:14,020 Speaker 2: preventing the, the, the, the, the. 575 00:32:14,770 --> 00:32:18,459 Speaker 2: Arrangement for working out, right, um, but I, I think 576 00:32:18,790 --> 00:32:22,160 Speaker 2: market forces are, are more powerful, you know, uh, in 577 00:32:22,160 --> 00:32:25,270 Speaker 2: this case, because the economic now now helps, you know, 578 00:32:25,760 --> 00:32:29,119 Speaker 2: before when uh when, when green energy was very expensive, 579 00:32:29,199 --> 00:32:31,800 Speaker 2: it would take a lot of uh work to get the. 580 00:32:31,875 --> 00:32:34,224 Speaker 2: Countries cooperate and make sure that you know these things. 581 00:32:34,594 --> 00:32:37,435 Speaker 2: But I think now that the the cost of uh 582 00:32:37,435 --> 00:32:40,275 Speaker 2: green energy is much lower. I think market forces on 583 00:32:40,275 --> 00:32:42,635 Speaker 2: its own is going to to help to drive the 584 00:32:42,635 --> 00:32:47,555 Speaker 2: process rather than a regional agreement. Although of course regional 585 00:32:47,555 --> 00:32:48,954 Speaker 2: agreement always helps. 586 00:32:49,310 --> 00:32:49,319 Speaker 2: Right. 587 00:32:51,280 --> 00:32:54,520 Speaker 1: Uh, so, you know, implicit in what you're saying is 588 00:32:54,540 --> 00:32:59,020 Speaker 1: an expression of optimism of the technological progress of China 589 00:32:59,020 --> 00:33:02,540 Speaker 1: because they seem to be the leaders in this area, uh, with, 590 00:33:02,640 --> 00:33:04,650 Speaker 1: with the US sort of having abdicated it. So yeah, 591 00:33:04,729 --> 00:33:08,560 Speaker 1: let's hope that Chinese tech, subsidized or not subsidized, as 592 00:33:08,560 --> 00:33:11,040 Speaker 1: long as it's cheap, we should just take it and 593 00:33:11,290 --> 00:33:12,819 Speaker 1: finance our green transition with that. 594 00:33:13,540 --> 00:33:18,060 Speaker 1: Um, Hoey, you were talking a little bit earlier about 595 00:33:18,060 --> 00:33:21,979 Speaker 1: Singapore's shock absorption capacity in the context of Singapore's large 596 00:33:21,979 --> 00:33:26,339 Speaker 1: reserves and how that helped prevent scarring from the 2020, 597 00:33:26,380 --> 00:33:28,359 Speaker 1: 2021 pandemic. So I want to 598 00:33:28,854 --> 00:33:30,574 Speaker 1: Would you like to expand on that issue a little 599 00:33:30,574 --> 00:33:33,555 Speaker 1: bit that Singapore has a social imperative for inclusive growth. 600 00:33:34,055 --> 00:33:36,675 Speaker 1: So what kind of policies would you like to see 601 00:33:36,675 --> 00:33:39,814 Speaker 1: to address that, given still, you know, quite a bit 602 00:33:39,814 --> 00:33:43,834 Speaker 1: of dialogue going on in this economy about the inequality 603 00:33:43,854 --> 00:33:44,094 Speaker 1: situation? 604 00:33:45,660 --> 00:33:49,319 Speaker 2: Yeah, you know, the, it's probably the most delicate issue 605 00:33:49,319 --> 00:33:55,739 Speaker 2: for Singapore, uh, inclusive growth in the sense that, you know, 606 00:33:55,810 --> 00:33:59,260 Speaker 2: Singapore is a small city-state, you know, it's very diverse, 607 00:33:59,339 --> 00:34:03,660 Speaker 2: it's aging, it's shrinking, and we need the immigrant population, right? 608 00:34:03,780 --> 00:34:06,969 Speaker 2: I mean, that's uncomfortable truth in order to sustain our growth, 609 00:34:07,160 --> 00:34:12,340 Speaker 2: you know, and, and remain dynamic and support uh the the. 610 00:34:12,729 --> 00:34:15,188 Speaker 2: So at the same time, I think, you know, the, 611 00:34:15,789 --> 00:34:19,607 Speaker 2: the local population feels that, you know, I mean that 612 00:34:20,049 --> 00:34:24,018 Speaker 2: there are times when there are too many foreign foreigners 613 00:34:24,018 --> 00:34:27,668 Speaker 2: in the country and it's getting crowded out and you 614 00:34:27,668 --> 00:34:30,829 Speaker 2: know they are benefiting much more than the local population is. 615 00:34:31,280 --> 00:34:34,560 Speaker 2: Uh, and so I, I don't know, I mean we 616 00:34:34,560 --> 00:34:36,629 Speaker 2: take Grab, right? I mean one thing that struck me 617 00:34:36,629 --> 00:34:40,399 Speaker 2: is many of them are relatively young and they used 618 00:34:40,399 --> 00:34:43,040 Speaker 2: to be middle managers somewhere, but they lost their job 619 00:34:43,040 --> 00:34:45,899 Speaker 2: and you know, they ended up, uh, doing Grab driving. 620 00:34:46,300 --> 00:34:48,560 Speaker 2: So many of them do feel that the, the, the 621 00:34:48,560 --> 00:34:49,709 Speaker 2: pressure from the foreign population. 622 00:34:51,004 --> 00:34:52,695 Speaker 2: And then if you look at the, uh, you know, 623 00:34:52,844 --> 00:34:56,175 Speaker 2: there's a lot of report nowadays about how the local business, 624 00:34:56,375 --> 00:34:58,895 Speaker 2: SMEs are closing down because they cannot afford the rent 625 00:34:58,895 --> 00:35:01,054 Speaker 2: and the new ones are coming in, and there are 626 00:35:01,054 --> 00:35:04,013 Speaker 2: new ones coming in, but they are mostly foreigners, right? Uh, the, 627 00:35:04,054 --> 00:35:07,384 Speaker 2: the new immigrants. Um, so I think on the one hand, 628 00:35:07,455 --> 00:35:10,395 Speaker 2: we do need the, the, the new immigrants, right? 629 00:35:10,780 --> 00:35:13,100 Speaker 2: And we need, but at the same time, we need 630 00:35:13,100 --> 00:35:16,759 Speaker 2: to deal with the concern of the local population that 631 00:35:16,760 --> 00:35:19,379 Speaker 2: they are being squeezed out, you know, of of pressure 632 00:35:19,379 --> 00:35:21,679 Speaker 2: and the cost of living is rising because of them. 633 00:35:22,300 --> 00:35:25,340 Speaker 2: So I think here, fortunately, I think the government has 634 00:35:25,340 --> 00:35:28,709 Speaker 2: sufficient financial resources to be able to come up with 635 00:35:28,709 --> 00:35:31,560 Speaker 2: a more generous social compact, right? 636 00:35:31,899 --> 00:35:35,850 Speaker 2: Uh, to address, especially the vulnerable group, right? To, to, 637 00:35:36,010 --> 00:35:39,919 Speaker 2: to provide them with, uh, uh, you know, a, a, 638 00:35:40,010 --> 00:35:42,969 Speaker 2: a basic minimum income, I mean that, that's my, you know, 639 00:35:43,169 --> 00:35:47,090 Speaker 2: a more affordable housing and security, that, that's been the, the, 640 00:35:47,209 --> 00:35:48,009 Speaker 2: the main complaint. 641 00:35:48,149 --> 00:35:51,739 Speaker 2: I mean, not just from the low, the low-income group, 642 00:35:51,750 --> 00:35:56,429 Speaker 2: but even for the middle-income, uh, uh, household. Uh, so 643 00:35:56,870 --> 00:36:00,469 Speaker 2: luckily I think the Singapore has the HDB program, I 644 00:36:00,469 --> 00:36:04,290 Speaker 2: think that has probably elevated, mitigated a lot of the 645 00:36:05,050 --> 00:36:11,330 Speaker 2: The concern among the Singaporeans, uh, but, you know, because 646 00:36:11,330 --> 00:36:13,489 Speaker 2: they can afford to do more, I think they ought 647 00:36:13,489 --> 00:36:16,489 Speaker 2: to do more and you know, going forward, as I said, 648 00:36:16,639 --> 00:36:19,569 Speaker 2: there's going to be a disruption in the employment, there's 649 00:36:19,570 --> 00:36:22,569 Speaker 2: going to be the gig economy is going to get bigger, right? 650 00:36:22,820 --> 00:36:26,209 Speaker 2: And they need to address the needs of the gig 651 00:36:26,209 --> 00:36:27,169 Speaker 2: workers because 652 00:36:27,225 --> 00:36:29,604 Speaker 2: Most of them, you know, they need to have a 653 00:36:30,104 --> 00:36:33,465 Speaker 2: CPF account so that they can save for retirement. I 654 00:36:33,465 --> 00:36:35,945 Speaker 2: mean most of them don't contribute to that. We have 655 00:36:35,945 --> 00:36:38,665 Speaker 2: to find a way to address that problem and the 656 00:36:38,665 --> 00:36:41,774 Speaker 2: healthcare benefits, you know, I think most of them are 657 00:36:41,774 --> 00:36:45,985 Speaker 2: probably on, on the basic, very basic healthcare, and we 658 00:36:45,985 --> 00:36:47,504 Speaker 2: need to do better than that, you know. 659 00:36:47,909 --> 00:36:49,750 Speaker 2: So, you know, there's a lot of these kind of 660 00:36:49,750 --> 00:36:52,989 Speaker 2: social issues that need to be addressed, uh, and we have, 661 00:36:53,070 --> 00:36:54,949 Speaker 2: I think we have the resources to deal with that 662 00:36:54,949 --> 00:36:57,229 Speaker 2: kind of issues. And at the same time, you know, 663 00:36:57,310 --> 00:36:59,629 Speaker 2: I think we need to make the foreigners who are 664 00:36:59,629 --> 00:37:00,969 Speaker 2: becoming citizens feel. 665 00:37:01,300 --> 00:37:04,529 Speaker 2: You know, accepted as citizens, right, and you know, uh, 666 00:37:05,070 --> 00:37:09,388 Speaker 2: so I think this was something mentioned by Tan Kim Yong, 667 00:37:09,459 --> 00:37:12,030 Speaker 2: the deputy prime minister, recently in a speech that he 668 00:37:12,030 --> 00:37:15,830 Speaker 2: was making, so I think this is an area which 669 00:37:15,830 --> 00:37:20,379 Speaker 2: is most delicate and difficult for the government to deal with. 670 00:37:20,739 --> 00:37:22,669 Speaker 2: But you know, the, the, the, the fact of the 671 00:37:22,669 --> 00:37:25,209 Speaker 2: matter is that we need the immigrants in order to grow. 672 00:37:25,550 --> 00:37:28,299 Speaker 2: Of course, I think one of the 673 00:37:28,889 --> 00:37:32,810 Speaker 2: The silver lining from AI and robotics and all that 674 00:37:32,810 --> 00:37:36,790 Speaker 2: is that we are aging very rapidly, right, and, and, 675 00:37:37,260 --> 00:37:40,330 Speaker 2: and the population is shrinking, and in future, I think 676 00:37:40,330 --> 00:37:43,590 Speaker 2: humanoids may be able to replace some of the, you know, the, 677 00:37:43,810 --> 00:37:47,479 Speaker 2: the shortage of labor, but even so, I mean, we, I, 678 00:37:47,610 --> 00:37:51,409 Speaker 2: I think we need the, the, the immigrant population in 679 00:37:51,409 --> 00:37:54,169 Speaker 2: order to balance the ratio, but. 680 00:37:54,520 --> 00:37:57,169 Speaker 2: You know, so I, you know, it's it's a transition 681 00:37:57,169 --> 00:38:00,050 Speaker 2: problem as I mentioned, uh, you know, uh, the AI 682 00:38:00,050 --> 00:38:04,370 Speaker 2: uh into the economy and you know, I, I, and 683 00:38:04,370 --> 00:38:07,129 Speaker 2: I think it can be managed, uh, you know, with 684 00:38:07,129 --> 00:38:08,889 Speaker 2: the resources that the government has, you know. 685 00:38:09,879 --> 00:38:12,560 Speaker 1: So on the gig economy side, I mean we've seen 686 00:38:12,560 --> 00:38:14,600 Speaker 1: this issue play out in certain states in the US 687 00:38:14,600 --> 00:38:18,198 Speaker 1: where people who drive for ride sharing companies or who 688 00:38:18,199 --> 00:38:24,000 Speaker 1: work in very loosely structured, you know, contracts with large 689 00:38:24,000 --> 00:38:27,279 Speaker 1: tech companies, that the regulators, the local governments have stepped 690 00:38:27,280 --> 00:38:30,639 Speaker 1: in and said that those employees should be seen as 691 00:38:30,639 --> 00:38:33,000 Speaker 1: full-time employees. They're not just part time. Therefore they should 692 00:38:33,000 --> 00:38:37,520 Speaker 1: be given provisions of retirement savings, health insurance, and so on. 693 00:38:38,500 --> 00:38:42,570 Speaker 1: Would you want more regulatory intervention like that in Singapore? 694 00:38:44,570 --> 00:38:48,520 Speaker 2: Uh, if we need to in order to make sure 695 00:38:48,520 --> 00:38:51,100 Speaker 2: that they are well provided for at in old age 696 00:38:51,100 --> 00:38:54,179 Speaker 2: and they have sufficient, uh, you know, benefits, uh, medical 697 00:38:54,179 --> 00:38:55,120 Speaker 2: benefits and all that. 698 00:38:55,600 --> 00:38:58,879 Speaker 2: Uh, but you know, there may be other ways to 699 00:38:58,879 --> 00:39:00,760 Speaker 2: do this. I, you know, I, I'm, I, you know, 700 00:39:00,959 --> 00:39:04,290 Speaker 2: personally I haven't studied this issue, uh, well enough, uh, 701 00:39:04,760 --> 00:39:07,830 Speaker 2: but I agree that, you know, it is an issue and, and, 702 00:39:07,840 --> 00:39:09,679 Speaker 2: you know, if you don't deal with it now, you 703 00:39:09,679 --> 00:39:11,959 Speaker 2: have to deal with it later, you know, when, you know, 704 00:39:12,000 --> 00:39:14,760 Speaker 2: as the population continues to age, and you know how, 705 00:39:14,879 --> 00:39:19,149 Speaker 2: how it is for most, uh, uh, uh, you know, uh, 706 00:39:19,429 --> 00:39:20,280 Speaker 2: gig workers. 707 00:39:20,689 --> 00:39:22,810 Speaker 2: They are very short term. They, you know, prefer not 708 00:39:22,810 --> 00:39:25,049 Speaker 2: to contribute to CPF if they can, right? And if 709 00:39:25,050 --> 00:39:28,489 Speaker 2: they do, they contribute a minimum amount and so they 710 00:39:28,489 --> 00:39:30,290 Speaker 2: end up at the end, you know, when they retire 711 00:39:30,290 --> 00:39:33,310 Speaker 2: they they don't have sufficiency. This was the problem for the, 712 00:39:33,850 --> 00:39:36,610 Speaker 2: for the, uh, I think the, um, what do you 713 00:39:36,610 --> 00:39:41,009 Speaker 2: call it, the, the medical generation, right, but I think 714 00:39:41,010 --> 00:39:44,689 Speaker 2: that generation basically at that time, you know, the CPF 715 00:39:44,689 --> 00:39:45,770 Speaker 2: cover was not. 716 00:39:46,250 --> 00:39:49,489 Speaker 2: Very expensive, and many of them, their incomes are low anyway, 717 00:39:49,610 --> 00:39:52,209 Speaker 2: so they don't have sufficient savings, you know, to provide 718 00:39:52,209 --> 00:39:55,649 Speaker 2: for them, for the, for the retirement. But uh I 719 00:39:55,649 --> 00:39:58,609 Speaker 2: think now we should be a lot more forward-looking and 720 00:39:58,610 --> 00:40:01,209 Speaker 2: proactive in terms of dealing with the problem before it 721 00:40:01,209 --> 00:40:02,189 Speaker 2: becomes a problem. 722 00:40:03,510 --> 00:40:07,399 Speaker 1: Singapore has a fairly flat income tax structure. Would you 723 00:40:07,399 --> 00:40:09,360 Speaker 1: want a more progressive taxation system? 724 00:40:11,050 --> 00:40:14,169 Speaker 2: I don't think we need a much more progressive tax system, 725 00:40:14,250 --> 00:40:16,090 Speaker 2: you know, I mean, if you look at the, the, 726 00:40:16,209 --> 00:40:19,110 Speaker 2: the budget, right? They balance the budget every 5 years 727 00:40:19,110 --> 00:40:21,010 Speaker 2: and have a surplus, at least last year they had, 728 00:40:21,120 --> 00:40:25,529 Speaker 2: you know, about 1.5% uh surplus, right? Uh, so I 729 00:40:25,530 --> 00:40:27,929 Speaker 2: think that the revenue that's coming in is, is, you know, 730 00:40:28,010 --> 00:40:30,750 Speaker 2: it looks like it's sufficient to be able to uh 731 00:40:31,090 --> 00:40:35,050 Speaker 2: to uh pay for some of these uh news. 732 00:40:35,125 --> 00:40:37,044 Speaker 2: Initiative and all that. I mean, of course, if you 733 00:40:37,044 --> 00:40:38,834 Speaker 2: need more money, then it's a different issue. I mean, 734 00:40:40,235 --> 00:40:44,405 Speaker 2: California or US, they're running out of money and we 735 00:40:44,405 --> 00:40:46,875 Speaker 2: need to tax the billionaires and even there you get 736 00:40:46,875 --> 00:40:50,205 Speaker 2: a pushback, right? Uh, but Singapore, I think we've been 737 00:40:50,205 --> 00:40:53,084 Speaker 2: quite fortunate that the sovereign wealth fund has been able 738 00:40:53,084 --> 00:40:56,245 Speaker 2: to generate sufficient savings to cover, you know, the, the 739 00:40:56,245 --> 00:40:59,145 Speaker 2: gap between the the tax and and expenditure. 740 00:40:59,590 --> 00:41:04,629 Speaker 2: But also, uh, and even so, I think, uh, some of, some, 741 00:41:04,709 --> 00:41:06,949 Speaker 2: you know, a lot, Singapore is very conservative in the 742 00:41:06,949 --> 00:41:09,179 Speaker 2: sense that even for capital expenditure, a lot of it 743 00:41:09,179 --> 00:41:12,479 Speaker 2: comes from current current revenue rather than, you know, uh, 744 00:41:12,500 --> 00:41:14,620 Speaker 2: in the form of a, of a bond or something, 745 00:41:14,870 --> 00:41:18,500 Speaker 2: and they should stretch out the, the, the, the burden, uh, 746 00:41:18,510 --> 00:41:22,090 Speaker 2: into the next generation rather than bring on the current generation. 747 00:41:22,830 --> 00:41:25,310 Speaker 2: So that way you are able to, you know, reallocate 748 00:41:25,310 --> 00:41:27,649 Speaker 2: your spending, you know, to other priorities. 749 00:41:29,020 --> 00:41:34,428 Speaker 1: Right, right. Consumption smoothing, expenditure smoothing. Hoy, you spent a 750 00:41:34,429 --> 00:41:40,080 Speaker 1: full decade running a regional multilateral organization. You worked a 751 00:41:40,080 --> 00:41:44,770 Speaker 1: lot on the regional vulnerabilities, the importance of regional integration. 752 00:41:45,149 --> 00:41:48,030 Speaker 1: So now that we are in this rather uncertain world, 753 00:41:48,179 --> 00:41:52,469 Speaker 1: tariff and great power rivalry, balancing with AI disruption and 754 00:41:52,469 --> 00:41:53,469 Speaker 1: green transit and so on. 755 00:41:53,820 --> 00:41:59,449 Speaker 1: So what is the outlook for regional integration? Do we 756 00:41:59,449 --> 00:42:01,129 Speaker 1: need a United States or Southeast Asia? 757 00:42:03,639 --> 00:42:06,638 Speaker 2: Well, you know, we're talking about the development of multipolar 758 00:42:07,320 --> 00:42:10,840 Speaker 2: world rather than, you know, uh, so I, I, I 759 00:42:10,840 --> 00:42:13,959 Speaker 2: think the, the, the, the, the, the time when the US, 760 00:42:14,080 --> 00:42:16,439 Speaker 2: you know, is the hegemon, right, and, and, and, and, 761 00:42:16,530 --> 00:42:19,529 Speaker 2: and basically set the rules, uh, is, it's probably over. 762 00:42:19,840 --> 00:42:22,718 Speaker 2: But originally it, it, so you, you already seen on, 763 00:42:22,830 --> 00:42:26,560 Speaker 2: you know, different blocks in form, which is not a 764 00:42:26,560 --> 00:42:28,959 Speaker 2: bad thing, you know, I mean, you look at, uh, ASEAN. 765 00:42:29,000 --> 00:42:29,679 Speaker 2: I mean, ASEAN. 766 00:42:30,159 --> 00:42:33,300 Speaker 2: It's been a struggle to build up over the years, 767 00:42:33,639 --> 00:42:36,919 Speaker 2: but ASEAN is, uh, I think, uh, grown and become 768 00:42:36,919 --> 00:42:41,040 Speaker 2: much more mature now, uh, you know, and it's able 769 00:42:41,040 --> 00:42:43,659 Speaker 2: to convene, uh, you know, for instance, a leader summit 770 00:42:43,659 --> 00:42:45,899 Speaker 2: where it's able to get the president of the US 771 00:42:45,899 --> 00:42:49,679 Speaker 2: and China to come together and and talk and all that. Uh, 772 00:42:50,040 --> 00:42:52,600 Speaker 2: this is a collective action problem, right? We know that. 773 00:42:52,830 --> 00:42:58,419 Speaker 2: You know, ASEAN is a very diverse region, and there 774 00:42:58,419 --> 00:43:02,229 Speaker 2: are differences of views and interests. Even the border is 775 00:43:02,229 --> 00:43:03,290 Speaker 2: still between countries. 776 00:43:03,649 --> 00:43:07,359 Speaker 2: Uh, so it's always, you know, a journey, a mission 777 00:43:07,969 --> 00:43:10,370 Speaker 2: and a goal rather than, you know, uh, something that 778 00:43:10,370 --> 00:43:12,370 Speaker 2: you can put together and, you know, I mean, I 779 00:43:12,370 --> 00:43:15,330 Speaker 2: work in Emerald, you know, and, you know, in the 780 00:43:15,330 --> 00:43:17,638 Speaker 2: last 9 years that I was there, you know, it was, 781 00:43:17,729 --> 00:43:21,330 Speaker 2: it was trying to basically consolidate, uh, and build up 782 00:43:21,330 --> 00:43:24,149 Speaker 2: Embro to the point where, you know, it's taken, uh, 783 00:43:24,159 --> 00:43:26,969 Speaker 2: as a, as a credible MDC, right? 784 00:43:27,330 --> 00:43:30,209 Speaker 2: Um, and then I think, and, and sitting around the 785 00:43:30,209 --> 00:43:32,889 Speaker 2: table with all the different country, you know, uh, partic, 786 00:43:33,489 --> 00:43:37,169 Speaker 2: you can tell that, you know, and everybody has goodwill, 787 00:43:37,250 --> 00:43:39,469 Speaker 2: they want to be able to collaborate, but some, there 788 00:43:39,469 --> 00:43:43,399 Speaker 2: are times when you know there are real differences of, uh, interest, right, 789 00:43:43,489 --> 00:43:46,750 Speaker 2: and that prevents them from coming, reaching a consensus. 790 00:43:47,645 --> 00:43:50,185 Speaker 2: But the fact that you do sit together and talk and, 791 00:43:50,205 --> 00:43:55,504 Speaker 2: you know, is very important, and I think that should continue, uh, 792 00:43:55,514 --> 00:43:58,405 Speaker 2: regardless of Trump. And you know, my sense is the 793 00:43:58,405 --> 00:44:01,444 Speaker 2: rest of the world actually are, are not, uh, feel 794 00:44:01,445 --> 00:44:03,725 Speaker 2: that this is a good thing anyway, and, and, and 795 00:44:03,725 --> 00:44:08,584 Speaker 2: would like to continue, right, despite Trump's, uh, so what 796 00:44:08,584 --> 00:44:10,925 Speaker 2: I think now that Trump has decided to declare war 797 00:44:10,925 --> 00:44:12,064 Speaker 2: on Europe. 798 00:44:13,070 --> 00:44:14,989 Speaker 2: Uh, you know, I think we're going to see a 799 00:44:14,989 --> 00:44:18,909 Speaker 2: much more independent Europe, a much more multipolar world where, 800 00:44:18,989 --> 00:44:21,709 Speaker 2: you know, ironically, I, you know, I, I don't know 801 00:44:21,709 --> 00:44:24,989 Speaker 2: what the, uh, dynamics works like. It may be that 802 00:44:24,989 --> 00:44:29,149 Speaker 2: when you have more, uh, different centers, big, big enough, 803 00:44:29,389 --> 00:44:31,819 Speaker 2: you get to a more stable equilibrium than if you 804 00:44:31,820 --> 00:44:34,350 Speaker 2: have uh a hegemon or you have, you know, only 805 00:44:34,560 --> 00:44:35,610 Speaker 2: bipolar world. 806 00:44:36,659 --> 00:44:39,469 Speaker 1: Yeah, because you will not have sufficient clout to bully 807 00:44:39,469 --> 00:44:42,770 Speaker 1: anybody because there will be large enough blocks around you 808 00:44:42,770 --> 00:44:43,429 Speaker 1: to push back. 809 00:44:43,860 --> 00:44:48,300 Speaker 1: Uh, final question is, since you brought in Europe, so 810 00:44:48,300 --> 00:44:52,610 Speaker 1: the European Union has been a pretty, you know, big experiment, 811 00:44:52,780 --> 00:44:57,689 Speaker 1: common currency, border controls are looser, vis a vis travel, 812 00:44:57,979 --> 00:45:01,459 Speaker 1: a lot of labor mobility. So are there some lessons 813 00:45:01,459 --> 00:45:05,179 Speaker 1: from the EU experiment for ASEAN, both what to do 814 00:45:05,179 --> 00:45:06,580 Speaker 1: and what not to do? 815 00:45:09,030 --> 00:45:10,699 Speaker 2: Uh, I'm not fully. 816 00:45:11,709 --> 00:45:15,189 Speaker 2: Conversant in the EU framework, but I know that, you know, 817 00:45:15,270 --> 00:45:18,549 Speaker 2: for instance, I mean they, it was a big success 818 00:45:18,550 --> 00:45:21,790 Speaker 2: for them to be able to form the union and 819 00:45:21,790 --> 00:45:25,560 Speaker 2: have a common currency, right? And that was because of 820 00:45:25,560 --> 00:45:27,739 Speaker 2: the Second World War. They want to prevent war, right? 821 00:45:27,790 --> 00:45:30,029 Speaker 2: And you know, and it's amazing when you go to 822 00:45:30,159 --> 00:45:32,909 Speaker 2: to Europe, right, you can travel freely across and all 823 00:45:32,909 --> 00:45:36,070 Speaker 2: the countries want to go to the Shenzhen or Shenzhen, 824 00:45:36,169 --> 00:45:37,370 Speaker 2: I don't know how you pronounce that. 825 00:45:38,840 --> 00:45:41,600 Speaker 2: Yeah, and I think if we can establish that kind 826 00:45:41,600 --> 00:45:45,080 Speaker 2: of uh uh arrangement in ASEAN, it'll be fantastic, right? 827 00:45:45,360 --> 00:45:49,229 Speaker 2: Where you can travel freely across different countries, right, uh 828 00:45:49,229 --> 00:45:51,360 Speaker 2: without having to get visas and all that, right. 829 00:45:51,870 --> 00:45:54,649 Speaker 2: Uh, but of course, you know, the problem with, with, 830 00:45:54,659 --> 00:45:57,939 Speaker 2: with that arrangement is, you know, the, the, they, they, 831 00:45:58,270 --> 00:46:01,669 Speaker 2: they forget the financial discipline, you know, and as a result, 832 00:46:01,750 --> 00:46:04,350 Speaker 2: you know, there was, uh, of course, this happened because 833 00:46:04,350 --> 00:46:07,549 Speaker 2: of market forces in the countries like the peripheral countries 834 00:46:07,550 --> 00:46:11,540 Speaker 2: like Greece and, you know, Italy take advantage of the common, uh, 835 00:46:11,550 --> 00:46:14,750 Speaker 2: currency to borrow, you know, to build out. But you know, 836 00:46:14,830 --> 00:46:15,669 Speaker 2: if you, if you visit. 837 00:46:15,735 --> 00:46:19,054 Speaker 2: Spain, you can see the infrastructures are new, right? They 838 00:46:19,054 --> 00:46:22,254 Speaker 2: actually benefited from that, but of course they got into 839 00:46:22,254 --> 00:46:25,134 Speaker 2: debt problem, uh, later on. So I mean, we can 840 00:46:25,135 --> 00:46:28,215 Speaker 2: learn the lessons from, from EU in terms of what 841 00:46:28,215 --> 00:46:31,814 Speaker 2: kind of, uh, you know, uh, financial arrangement of fiscal 842 00:46:31,814 --> 00:46:34,504 Speaker 2: monetary that we need in order to make sure that, 843 00:46:34,524 --> 00:46:36,844 Speaker 2: you know, we don't have that kind of issue because 844 00:46:36,854 --> 00:46:39,714 Speaker 2: I think for the problem for ASEAN is that, 845 00:46:40,129 --> 00:46:42,959 Speaker 2: You know, in, in, in Europe it's anchored basically by, 846 00:46:43,310 --> 00:46:45,679 Speaker 2: you know, France and Germany. I mean here in in 847 00:46:45,689 --> 00:46:50,179 Speaker 2: in the region, I don't think, uh, you know, countries 848 00:46:50,179 --> 00:46:54,590 Speaker 2: are big enough to anchor this union yet, but the 849 00:46:54,600 --> 00:46:58,600 Speaker 2: the arrangement that we have, I think is flexible and 850 00:46:58,600 --> 00:47:01,739 Speaker 2: you know, it can be made better and and allow 851 00:47:01,739 --> 00:47:02,780 Speaker 2: freer flow of. 852 00:47:03,229 --> 00:47:06,189 Speaker 2: Goods, services and investment across the region. And I think 853 00:47:06,189 --> 00:47:10,489 Speaker 2: that would be a very good uh uh move for the, 854 00:47:10,889 --> 00:47:12,989 Speaker 2: the region, yeah. Indeed, 855 00:47:13,219 --> 00:47:15,820 Speaker 1: indeed. I mean, as you know, as the single currency 856 00:47:15,820 --> 00:47:19,339 Speaker 1: zone was being prepared, there were a bunch of convergence criteria. Uh, 857 00:47:19,389 --> 00:47:22,339 Speaker 1: I suppose within ASEAN that sort of conversion criteria is 858 00:47:22,340 --> 00:47:24,360 Speaker 1: hard to set up because, as you heard earlier point, 859 00:47:24,510 --> 00:47:27,989 Speaker 1: it's a very heterogeneous uh region with very well. 860 00:47:28,100 --> 00:47:32,089 Speaker 1: The and very developing economies and very aging and very 861 00:47:32,389 --> 00:47:35,149 Speaker 1: young economies and in some cases, you know, the borders 862 00:47:35,149 --> 00:47:38,469 Speaker 1: are not as settled as they were in Europe. So 863 00:47:38,469 --> 00:47:40,790 Speaker 1: I suppose it's a work in progress for ASEAN. We 864 00:47:40,790 --> 00:47:43,449 Speaker 1: could work toward that, but it's got a ways to go. 865 00:47:44,290 --> 00:47:47,049 Speaker 2: Yeah, and we should continue working towards it because you know, 866 00:47:47,290 --> 00:47:49,370 Speaker 2: we shouldn't give up because it, you know, a lot 867 00:47:49,370 --> 00:47:52,290 Speaker 2: of people say ASEAN is a sleepy giant, you know, 868 00:47:52,810 --> 00:47:54,770 Speaker 2: they talk a lot but they don't get a lot 869 00:47:54,770 --> 00:47:56,770 Speaker 2: of time. I don't think that's true when you look 870 00:47:56,770 --> 00:47:58,810 Speaker 2: back over the last 50 years, yeah. 871 00:47:59,800 --> 00:48:02,280 Speaker 1: Absolutely. I mean, the testament of that, Hoy, is when 872 00:48:02,280 --> 00:48:08,040 Speaker 1: I look at a phone or some computer components are 873 00:48:08,040 --> 00:48:11,479 Speaker 1: from various parts of Southeast Asia. They move tariff-free, and 874 00:48:11,479 --> 00:48:14,899 Speaker 1: that itself to me is a is a big accomplishment. Hoy, 875 00:48:15,439 --> 00:48:17,719 Speaker 1: this was fantastic. Thank you very, very much for your 876 00:48:17,719 --> 00:48:18,479 Speaker 1: time and insights. 877 00:48:19,469 --> 00:48:21,049 Speaker 2: Thank you, thank you for inviting me. 878 00:48:26,449 --> 00:48:27,550 Speaker 1: Great to have you back for lunch with pleasure. I 879 00:48:27,550 --> 00:48:28,189 Speaker 1: also like to end 880 00:48:28,189 --> 00:48:29,209 Speaker 2: the podcast 881 00:48:30,379 --> 00:48:33,509 Speaker 1: by thanking our listeners. This podcast was produced by Ken 882 00:48:33,510 --> 00:48:36,679 Speaker 1: Delbridge at Spice Studios. Violet Lee and Daisy Sharma provided 883 00:48:36,679 --> 00:48:38,080 Speaker 1: additional assistance. Kopitan. 884 00:48:38,235 --> 00:48:41,614 Speaker 1: is for information only and does not constitute any investment advice. 885 00:48:41,875 --> 00:48:45,294 Speaker 1: All 173 episodes of the series are available on YouTube 886 00:48:45,294 --> 00:48:49,314 Speaker 1: and on all major platforms, including Apple and Spotify. For 887 00:48:49,314 --> 00:48:51,794 Speaker 1: our research content and webinars, you can find them all 888 00:48:51,794 --> 00:48:54,854 Speaker 1: by Googling DBS Research Library. Have a great day.