Murray McCully

9 MARCH, 2016

Address to Lee Kuan Yew School of Public Policy

Acknowledgments

• Professor Kishore Mahbubani

• Distinguished guests

• Ladies and gentlemen

Thank you for the opportunity to address you today and to share New Zealand’s perspective on some of the pressing issues facing our region and the world.

Before I begin, I’d like to acknowledge this School’s founder, Lee Kuan Yew, as we approach a year since his passing.

Mr Lee’s determination and vision for Singapore is evident in the confident, vibrant nation that Singapore has become over the past 51 years.

Many New Zealander’s, myself included, have great admiration for Singapore’s remarkable achievements in recent decades.

It has been my pleasure to meet both Singapore’s Foreign Minister and Home Affairs Minister this week in order to take stock of relations between New Zealand and Singapore and to chart a course forward.

New Zealand and Singapore have a lot in common:

• we are island nations with relatively small populations;
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• we have open, outwardly-focused economies;
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• we are both heavily invested in the stability and prosperity of the Asia-Pacific region;
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• and we work together to address regional challenges – such as terrorism and people smuggling – which, if left unchecked, will undermine our countries’ safety and prosperity.
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Today, our two countries are more closely connected than ever.

Our two-way trade stands at almost NZ$3 billion and Singapore has become a major source of foreign direct investment and tourists for New Zealand.

This is underpinned by enhanced air services.

The strategic partnership between Singapore Airlines and Air New Zealand has given travellers more and better options for travelling between New Zealand and South and South East Asia.

As strong believers in open, trading economies, Singapore and New Zealand have been regional and global leaders in building an economic architecture which delivers results and raises living standards.

We were founding members of the P4 grouping which recently culminated in the signing in New Zealand of the Trans-Pacific Partnership.

We also enjoy close cooperation on defence matters and this has extended to joint deployments in Timor-Leste, Afghanistan, and as part of the current coalition countering ISIL.

Last year, New Zealand and Singapore commemorated 50 years of formal diplomatic relations and today I would like to talk to you about the shift in New Zealand’s trade and foreign policy priorities which have taken place in the past half a century.

Up until 1973 New Zealand was heavily reliant on Britain – politically and economically.

In the 60’s Britain took around half of our total exports, but that came to an abrupt end when they joined the European Economic Community.

Almost overnight our best customer was shopping elsewhere and New Zealand was left looking for new markets.

It is no coincidence that around the same time New Zealand established formal relations with the People’s Republic of China, and the Association of South East Asian Nations (ASEAN).

Fast-forward to 2016 and Britain accounts for only three per cent of our total exports.

The Asia-Pacific region now accounts for over 70 per cent of our two-way trade and China and Australia are our largest trading partners.

This shift is also reflected in the makeup of New Zealand society.

Around 12 per cent of our population are now of Asian origin – and in our largest city, Auckland, that proportion is 24 per cent - and 75 per cent of all international visitors to New Zealand last year were from the Asia-Pacific region.

In the space of half a lifetime – we have gone from seeing ourselves as “the Britain of the South Pacific” to being a country inextricably tied to developments in the Asia-Pacific region.

And you would have to say we have backed the right horse.

By 2020 Asia’s emerging middle class is expected to triple – reaching 1.75 billion people.

This creates obvious opportunities for New Zealand.

Developing middle classes historically result in a corresponding demand for meat, dairy, wine and the sort of tourism offerings that New Zealand can provide.

Of course – this all needs to be a two-way street.

As New Zealand’s economic prospects become increasingly tied to our partners in the Asia-Pacific region, we are also more focused on the political and security challenges facing the region.

The key vehicle for engagement on these issues is the suite of regional discussions hosted by ASEAN – especially the East Asia Summit and the ASEAN Regional Forum.

While there have been occasional proponents of alternative regional architecture, the fact remains that these ASEAN-brokered meetings remain the primary vehicle for engagement on regional issues – a role that is reinforced by the decisions of the US and Russia to join the EAS and the enthusiasm of the EU and Canada to enhance their ties to the regional body.

NZ greatly values its 40-year partnership with ASEAN and our seat at the table in the important regional discussions ASEAN hosts.

And we especially value the great friendship shown to NZ by Singapore as a source of wise counsel and deep insights on regional matters.

The South China Sea is one area where all of these issues come together and affect everyone in the region, including New Zealand and Singapore.

The maritime and territorial disputes in the South China Sea are not new. They are complex and they have spanned decades.

But over the past few years we have seen heightened tension.

A particular cause of that heightened tension has been reclamation and construction activity and deployment of military assets in disputed areas.

We regard all of these activities as unhelpful regardless of the party responsible.

We were pleased to hear President Xi Jinping’s commitment last year that China would not militarise new features.

We would like to see all claimants move further to demilitarise disputed areas.

Increased tension also raises the risk of miscalculation. History has shown us that any incident in the South China Sea can escalate, even if that was not the intention of the countries involved.

Serious confrontation would have implications for everyone in the region, given the importance of the South China Sea for the global economy as well as stability in our own neighbourhood.

While New Zealand does not take a position on the various territorial disputes, we do have a stake in how these disputes are managed. It directly affects our interests.

We strongly promote a rules-based system that employs diplomacy to support regional stability.

As a country with one of the largest EEZs in the world, New Zealand regards the UN Convention on the Law of the Sea as particularly important.

So are the international legal principles of freedom of navigation and overflight. They are vital for New Zealand’s livelihood.

International law needs to play a role in managing these complex disputes.

In a region with such a diverse range of countries in terms of size, power, wealth and resources, international law provides a platform from which we can build common understanding.

We regret that some of those with interests in this process are not yet parties to the UN Convention on the Law of the Sea, and others have taken a narrow view of how the Convention applies.

We also support the role arbitration can play in resolving complex disputes and we support states’ rights to access dispute settlement mechanisms.

The Philippines has taken this route with its case before the Arbitral Tribunal and a ruling is expected shortly.

We expect all parties to respect the result of the Tribunal’s ruling.

A great deal of focus has been placed on the role and aspirations of China as the major economic power in the region and emerging world power.

In that respect I declare myself to be both a realist and an optimist: a realist because the emergence of a huge economic power was always going to come with ambitions and aspirations to match, and some of these inevitably compete with established players and interests.

Managing that process is the great challenge facing ASEAN regional diplomacy.

But I remain an optimist because China has huge domestic challenges to meet. Sustained economic growth is critical to bringing about the internal transformation that is their key goal.

And that sustained economic growth can occur only in an environment of peace and stability in this region.

One year in to our term as an elected member of the UN Security Council we are pretty sober in our assessment of the Council.

There are some things the Council does well, for example putting its political weight behind significant deals.

Its endorsement of the Minsk Accords and the Iran Nuclear Deal are good examples.

But there are things the Council does not do well.

The Council has dealt itself out of several of the most pressing global issues because it is “too hard”.

Conflict in Syria is the clearest example of this.

For five years the Council achieved very little because it was too hard to navigate the various interests at stake.

National positions became entrenched, with inexcusable consequences for the people of Syria.

We are now seeing some movement through the International Syria Support Group, but it’s been a long time coming and the current truce is very fragile.

We have worked hard with other elected members to lift the carpet on what is happening in besieged areas, such as Madaya and other encircled towns where there are reports of people starving to death.

But we know this is not enough.

We need to see the Council put its political weight behind a negotiated end to the fighting.

This means not shying away from the hard conversations and it means being willing to make compromises.

The challenge for states elected for only a two year term is how we use that time to contribute to making the Council more effective and more relevant.

For our part, we want to see a Council that functions as a problem-solver not a place where states go only to defend their patch at whatever cost.

We acknowledge the reality of national interests and we don’t expect the Council to be an easy place to do business.

But we do expect the Council to discharge its responsibility to maintain international peace and security.

Another serious example of Council inaction is in the Middle East Peace Process.

The Council has not adopted a product on this issue for seven years.

We are told that “now is not the right time” and “the parties are not ready”.

But while we wait, the situation gets worse and the viability of the two-state solution is disappearing.

The reality is there is unlikely ever to be a right time and the parties may never “be ready”.

Last year New Zealand circulated a draft resolution through which the Council could provide a pathway for the parties to get back to the negotiating table.

The Middle East Peace Process is seen as one of the most “impossible” issues in the Council and some may see it as presumptuous for a country like New Zealand to put forward some ideas.

But we think it is the job of elected members to call for better leadership from the Council and it is incumbent upon us to use our term to make contributions.

As a distant state that enjoys good relations with all the players involved, we can add an objective and independent voice.

So in the absence of any alternatives, we will continue to put forward ideas for the Council to deal itself back into the Middle East Peace Process because the Council doing nothing is not an option.

We need to make the Council more flexible and responsive.

For New Zealand, this means a Council that has a sharper focus on conflict prevention and a Council that can adapt its peacekeeping mandates to rapidly evolving situations on the ground.

There is something wrong when we are spending over $US8 billion per year on peacekeeping and a further $US10.5 billion on providing assistance to people affected by conflict but virtually nothing on the prevention of situations escalating into intractable conflict.

The Council should be identifying much more proactively how it can engage early to deescalate and resolve crises.

We need only look at the size and duration of the UN’s current peace operations to see that the Council’s failure to act in preventive mode can have far more devastating consequences for a country’s sovereignty than early Council engagement.

We think part of this challenge lies in finding better ways to work with regional organisations, for example the African Union, and New Zealand is actively supporting such close cooperation.

New Zealand believes we need to improve the Council’s working methods.

The veto’s impact today far exceeds what was envisaged in the UN Charter – to the huge detriment of the Council‘s effectiveness and credibility.

New Zealand has long opposed the veto.

We are working to support initiatives calling for restraint in the exercise of the veto and for more effort to be applied within the Council to avoid its use.

We are also working to improve the Council’s day-to-day functioning.

This includes practical initiatives such as creating space to have unscripted conversations between Ambassadors to shift the Council into problem-solving mode, and basic steps such as talking to key stakeholders in advance of decisions that affect them.

Too much of the Council’s work involves the reading of tedious talking points rather than a serious conversation about potential solutions.

In conclusion, small states need the UNSC but we need it to be more effective.

What is required is a change of culture and of mind-set.

By the end of our term, we want to have shown that New Zealand brings an independent and practical voice to the table.

We want to have been innovative in improving the Council’s working methods in the hope that other elected members can pick up and carry on where we leave off.

We want to have made the Council more aware of the challenges faced by small states, more attuned to the perspectives of elected members and more inclusive of key stakeholders.

Most importantly, we want to see a stronger and more relevant Council because that is in all of our interests.

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