Singapore, April 7 A Singapore minister said on Tuesday that the current global instability stems from the world's transition from the "old world order" to a "new world order" that has yet to emerge.
Foreign Minister Vivian Balakrishnan also called for accelerating intra-regional trade, investment flows, and connectivity across Southeast Asia, Northeast Asia, and extending it to India, Africa, and South America, given that the region is set to suffer most from the energy disruption caused by the conflict in West Asia.
"The current global instability stems from being in a transitional phase between the ‘old world order’ of the past eight decades and a new world order that has not yet emerged. This interregnum represents the most dangerous phase of geopolitical change," Balakrishnan said.
Speaking at a conference attended by global investors, policymakers, and industry leaders under the theme “Rewired, Reshaped, Redefined: Asia’s Role in a New World Order”, he highlighted “Asia’s Unique Energy Vulnerability.”
"There's still a lot more that we can do to double down on intra-Asian trade, intra-Asian investment flows. A lot more we can do on infrastructure and connectivity within both Southeast Asia and Northeast Asia, and across the Indian Ocean to India and beyond that to Africa and South America," Balakrishnan said at the conference organised by the Investment Management Association of Singapore (IMAS).
This includes digital, fiscal, and monetary connectivity through initiatives like cross-border instant payment systems, he said.
Unlike previous Gulf conflicts, today's disruptions to the Straits of Hormuz disproportionately impact Asia, with over 80 per cent of energy flowing through this choke point destined for Asian markets rather than America, making Asia the epicentre of any disruption, the minister said.
"So, the epicentre of the dislocation and the disruption from that choke point is Asia," he warned.
He pointed out that modern conflicts do not require destroying all shipping through strategic waterways - they only need to create enough risk that insurance brokers refuse coverage.
"You don't need to sink every ship that passes. You just need to sink enough so that the investment managers and, importantly, the insurance brokers say I will not cover shipping insurance. That's enough to shut down the waterway," he said.
He pointed out that Asia's economic potential could only be realised with sustained peace and stability, and added that the best architecture, infrastructure, markets, and investment managers could not compensate for regional instability.
"You can have the best architecture, the best minds, the best infrastructure, the best functioning markets, the best investors or investing managers. But if we cannot sustain peace and stability in Asia, we won't fulfil our potential," he said.
Southeast Asia is emerging as a major economic force, with ASEAN's cumulative GDP approaching the USD 4 trillion mark, a threshold that places it alongside India, Germany, and Japan, positioning it as one of the key engines for global economic growth, the minister said.
"So, the point is actually we have the potential to be one of the key cylinders firing away for the global economy," he said.
He also called for the “continued importance of multilateralism” and said that, despite multilateral institutions being on life support, small nations must continue to support reformed multilateralism because they need safety in numbers and a voice in global affairs.
The UN Charter and collective action remain essential for protecting global commons, he said.
"Don't put it in the coffin yet, because in fact what the world needs is reformed and functioning multilateralism. And the reason we have to do that is that we are small. We will never be a major military power. We do need to seek safety in numbers," he said.
The minister noted that big powers now operate with less restraint and take narrow definitions of national interests with shorter time horizons.
“We live in a more violent and volatile world, physical choke points and delivery still matter despite financial derivatives, and no region can remain an isolated oasis of stability if its surrounding area is in turmoil,” he said.
