The Singapore Summit is an important event held every year since 2012, during the F1 race, and brings together big-time business, political and thought-leaders from all over the world.

It features numerous luminaries addressing key geopolitical and socioeconomic issues of the day, and every year, a prominent Singaporean minister takes the helm at its Friday evening opening dialogue.

This year, the summit was headlined by Deputy Prime Minister and Finance Minister Heng Swee Keat, who spoke at length on the need to renew the fraying social compact in countries.

Heng elaborated that this was a necessary step in order to address the following three challenges facing societies worldwide: widening inequality, inter-generational divide, and increasing political polarisation.

Social compact

Heng said that the social compact is the relationship that exists between governments and their people, and also the relationship that exists between companies and societies.

He further highlighted that these relationships had changed, and pointed to Brexit, the 2016 U.S. Presidential election, the Yellow Vests movement in France, and the ongoing protests in Hong Kong, as examples of how societal interests had fractured.

As such, it has become difficult for governments to secure a mandate to make important changes.

Heng added that this was especially worrying, given that the global economy stood at a crossroads, with a trade war between the U.S. and China, slower economic growth in Asia and a weak economy in Europe.

And what are these three challenges that need to be addressed?

1. Widening inequality

Heng first explained the increasing inequality gap in Singapore as an example.

Here, Heng attributed the widening gap to two factors—globalisation and technology, both of which had their benefits, but also costs which could threaten Singapore's social fabric.

The former, he said, created more opportunities and "resulted in massive wealth accumulation" for the already wealthy, but at the same time introduced sharper competition to those in the middle class.

Meanwhile, technology had enabled much innovation and growth, but had also displaced many livelihoods.

To resolve the widening inequality at both ends of the age spectrum, Heng emphasised the need for the government to "invest in our people" through education.

Heng referenced Prime Minister Lee Hsien Loong during his National Day Rally (NDR) 2019, on the importance of preschool education as the "new starting point", and pointed out the enhancement of existing preschool subsidies.

As for older folks, Heng added that the government was making an effort to encourage lifelong learning.

Other social policies aimed at mitigating inequality were also brought up.

This included housing, where housing grants have enabled 85 per cent of low income households to own their homes, along with introduction of the Pioneer Generation and Merdeka Generation Packages to help balance healthcare costs for older Singaporeans.

2. Inter-generational divide

Heng stated that the growing differences in concerns and interests between generations was also something that challenged Singapore's current social compact.

He cited examples such as the Brexit referendum, where the young and old were split over whether or not Britain should leave the European Union.

Inter-generational equity was therefore critical. Heng reiterated the necessity of both investing in the younger generations, and for the young to "share the fruits of progress with our seniors".

Heng highlighted Singapore's extensive national reserves, the net returns of the investment of which has contributed significantly to the country's source of revenue.

Thinking ahead about Singapore's long-term future was something the government prioritised as well, Heng added, which was done through investments in education and "vibrant and dynamic" infrastructure such as the new Jewel Changi Airport.

Investments in climate change-mitigating infrastructure and policies was another example of foresight too—PM Lee announced during the NDR that S$100 billion would be spent to protect the country from rising sea levels.

Heng noted that the onus was on the government to "act now" or "future generations will bear the consequences of our inaction".

"For our people, this means an equal commitment to ensuring that future generations have enough to also see through crises and plan for their future. So we try our best to keep politics focused on long- term challenges and opportunities."

3. Increasing political polarisation

On this matter, Heng pointed towards the division of the Republican and Democrat parties in the U.S. along ideological lines, and the squeezing out of the middle ground in parts of continental Europe.

He noted that such divisions had also been exacerbated by technology, resulting in echo chambers, silos and fake news.

Heng further stated that such polarisation was damaging as it pitted people against one another and ultimately undermined the cohesion of a country.

As such, there is a need to broaden the common space, and bring people with opposing views together so as to stop such a trend.

Here, Heng brought up measures that Singapore had implemented thus far, such as the mixing of races in housing estates, laws to maintain racial and religious harmony, as well as laws to protect minorities.

He also highlighted the tripartite system, as another means of deepening cohesion, in which government, unions and business work together to grow the economy, rather than confront each other across the picket line.

Such a model, Heng highlighted, has been key in overcoming multiple crises thus far.

Additionally, the upshot of such inclusive measures is that it has built a system that rewards and encourages engagement with the middle ground.

Heng acknowledged however, that it will be challenging to continue on such a course, as society becomes more diverse in its views and needs, while differences evolve, and income and wealth disparity are sharpened.

Heng then turned to the launch of the "Singapore Together" movement as an initiative to address such a challenge.

Heng defined the movement as such:

"To emphasise a governance model that brings people of different backgrounds, concerns and perspectives together to make common cause. To expand the common space for discussion and debate. But more importantly, we want to go from talking, to walking the talk."

He further added that it was especially important to acknowledge the demands of young people to play a larger role in civic society and the political process.

Business leaders must step up to help with the renewal of the social contract as well

Heng subsequently wrapped up his speech a call to business leaders to play a greater role in renewing the social order of the countries they operated in.

He noted that some business leaders have championed conscious capitalism, while others have launched initiative to support sustainable development goals.

Heng added that multilateralism remained the way forward, especially in tackling global challenges such as climate change, poverty, food security and cybersecurity.

He stated:

"We must not forsake multilateralism simply because the current ground sentiments are shifting away from it. Instead, it is our role as leaders to uphold this system collectively, and convince others that this is the best way forward."

Top photo by Ashley Tan