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Clear thinking from Singapore
Weekly investor research
10 June 2019
Singapore Prime Minister Lee Hsien Loong has proposed that Emerging Markets (EM) countries form closer regional ties in bid to offset the fallout from the US trade war against China. The need for closer cooperation arises from the fact that the largest problems in the world are of the cross-border variety, such as immigration, the environment, economic and financial contagion and terrorism. Moreover, these types of problem will increase over time as the world inevitably integrates further on the back of rising living standards in EM countries and greater cross-border communications, trade, finance and travel. Cross-border solutions solve cross-border issues. Hence, the logic of forming closer ties between countries. The ideal solution would be cooperation at global level, but if the US does not want to lead then the second best solution is for smaller countries to form highly inclusive regional groups to promote free trade, cross-border capital flows and security.