Professor Tommy Koh: challenges for the 21st century.

• Author: Harland, Bryce
• Position: Singapore ambassador - New Zealand Foreign Policy - Panel Discussion

On 17 March the NZIIA joined with the Institute of Policy Studies and the Centre for Strategic Studies in holding a seminar on prospects for the 21st century. The discussion was led by Singapore's Ambassador-at-large, Professor Tommy Koh, who chaired the UN Conference on the Law of the Sea in the 1970s, and played a large part in the Rio de Janeiro Conference on the Environment and Development in the 1990s. Professor Koh's main speeches and articles have recently been published under the title The Quest for World Order: Perspectives of a Pragmatic Idealist.

The 21st century will provide good opportunities for small countries, Koh argued. The increased importance of international trade, and the impact of technology, is changing the balance of comparative advantage and favouring countries which are outward-looking and competitive. Small countries have no alternative to competing in the global market -- as Singapore Airlines does. The rise of a cosmopolitan elite all round the world underlines the need for excellence in one of three key areas -- thinking, manufacturing or trading. That is why Singapore is making an effort to attract the best people from all over the world, by offering them attractive terms of employment.

Economic decisions are increasingly being taken by the global economy: the power of the state is declining, that of markets is rising. This change does not always bring stability: the floating of the US dollar in the early 1970s was followed by violent fluctuations in exchange rates. But, for better or worse, world currency markets are now the arbiter of economic policies.

How can small states best cope with this change? First and foremost, by avoiding debt: nowadays governments cannot afford to rely on borrowing. Second, by investing heavily in education: the greatest asset a country has is its people. Third, by concentrating on multilateral diplomacy: the influence of a small country depends largely on the quality of its representatives in multilateral organisations like the United Nations and the World Trade Organisation. Finally, a small country like Singapore or New Zealand needs to define its goals -- to assess its own strengths and build on them.

It is not easy for New Zealand to concentrate on knowledge-based industries, it was pointed out. This country is deeply divided on two key areas -- education and health. The important question, Koh replied, is not whether these services are provided by the state or by the...