Small states can flourish amid US-China power struggle, top former Singapore diplomat says

Respected Asia commentator Bilahari Kausikan says smaller countries are not powerless

Bilahari Kausikan speaks in Abu Dhabi on Tuesday about the implications for smaller countries amid growing US-China rivalry. Ruel Pableo / The National

Small states must not be paralysed by the big power rivalry between the US and China, one of Singapore’s most respected diplomats has said.

Bilahari Kausikan, chairman of the Middle East Institute at the National University of Singapore, said small countries can thrive in today’s global economy.

The world's biggest economies have imposed tariffs on many import and export goods. The tariffs cover everything from meat to musical instruments - and some are as high as 25 per cent.

Both have also accused one another of unfair trading practices.

“A smaller country must create relevancy for itself by establishing a clear sense of what its interests are... establish what it wants to be,” he said at a talk in Abu Dhabi on Tuesday.

Mr Kausikan is one of Singapore's best known diplomatic figures. In the past 25 years he has served as the city-state's ambassador to Russia, the United Nations in New York and was ambassador-at-large at its foreign ministry until last year.

Mr Kausikan said that while many argue small states "appear powerless" against two of the world’s largest economies, they are “not entirely without agency”.

“To thrive, these countries have to look at their own capabilities in a very clinical way," he told an audience at the Emirates Centre for Strategic Studies and Research.

“They have to make their own assessment of needs with regard to their regional environment too.”

US President Donald Trump imposed punitive measures against Chinese tech companies that he claimed were a threat to national security, while China targeted US agricultural and manufacturing centres by putting higher tariffs on farm goods and American cars.

While both countries are vital for the world economy, the fact that they are working separate to each other has hurt the global economy and created “complications for the rest of us”, Mr Kausikan said.

“A trade war benefits no one. US consumers have been hurt, in the medium-term it has exposed some of China's vulnerabilities, and overall growth has slowed.

"What all this amounts to is far more complex for international countries like the UAE and Singapore, the smaller countries.

“They will need to navigate through the challenges, not for a few years but for decades, and exercise a great amount of courage."

By focusing on areas of interest that impact the individual state and create opportunities for the people within it, smaller countries can survive and thrive amid the "strategic competition" between the US and China, he said.

By deepening economic co-operation, strengthening regional integration and building up multilateral institutions, regional countries can strengthen their position globally without total reliance on the opposing economic giants.

Mr Kausikan described the UAE as a “pioneer in the region”.

"It has transformed its economy to reduce its dependence on one single resource," he told The National.

"It has done very well in a number of areas including the intellectual area, I mean where we are standing, this is a unique institution leading the way for many discussions on strengthening the global economy."

The country has also made “decisions to benefit its people” by creating job opportunities and introducing policies to make the “socio-economic situation better for residents”, he said.

Hong Kong protesters 'betrayed' by British 

Hong Kong has been betrayed by the British and its own people, Mr Kausikan claimed.

Speaking to The National about the 14 weeks of demonstrations in the city, he said the UK's hands-off approach in response to the protests has been dire.

Under the Joint Declaration signed by the British during Hong Kong’s handover to China in 1997, the agreement was meant to guarantee a ‘one country, two systems’ approach whereby the Communist system of China would not be practised in Hong Kong. He blamed the British for it not materialising.

“The British were the ones who raised expectations that no Hong Kong government could possibly fulfil,” Mr Kausikan said.

“The British ruled Hong Kong as a colony not as a democracy, let’s not forget that.

“It was only on the deathbed of British colonialism that they found religion and started injecting democratic ideas into Hong Kong politics.”

Protests across the city have been ongoing for more than three months and has been called by some as the worst political crisis faced by Hong Kong in the past two decades.

While Mr Kausikan said Britain has once again let down the city’s residents, Hong Kong demonstrators have also been betrayed by their own people too.

“I think the one country, two systems agreement is a nice approach but the emphasis for China has always been one country, not two systems,” he said.

With almost all the property and land in Hong Kong owned by “four or five individuals”, Mr Kausikan said it is impossible for many to own homes there.

“That is the underlying social economic grievance that creates frustration and manifests itself in these demonstrations,” and added that the fundamental mistake in Hong Kong today is the “lack of land reform”.