Right direction: Wong addresses a summit in Singapore. The DPM and Finance Minister’s budget is described by Heng as a confident path forward for the city-state as its domestic and global environments change. — Reuters
SINGAPORE: It will be harder for Singapore to achieve economic growth in the coming years as it comes up against internal constraints and a tougher external environment.
But there is a strong basis for optimism that the republic can continue to thrive, provided that it continues to restructure along three lines to drive productivity-driven growth, said Deputy Prime Minister (DPM) Heng Swee Keat yesterday.
These are to sustain efforts to transform its economy through shared ownership, build a strong innovation ecosystem and continue being a trusted partner for the world, Heng said in Parliament.
He was speaking on the second day of the debate on the budget delivered by DPM and Finance Minister Lawrence Wong on Feb 16, which Heng described as a “confident path forward for Singapore as our domestic and global environments change”.
Laying out the challenges ahead, Heng noted that the world is currently facing a slow growth, high inflation environment.
Despite the great benefits brought by three decades of globalisation, the mood has shifted from collaboration to competition, partly driven by technological change that is reshaping jobs and competitiveness across countries and industries, he said.
“From globalisation anchored in economic competitive advantage, we are now seeing fragmentations based on political alignment,” he said.
“This, together with the recent upsurge in geopolitical unrest, has brought new uncertainties.”
At home, the days of “catch-up” growth are over as Singapore becomes a mature economy, while its resource constraints, be they labour, land or carbon, are becoming biting, added Heng.
The country’s ageing demographics mean local labour force growth is shrinking quickly to zero, which means Singapore has to double down on growing through productivity, which is hard.
“Even as we invest in strengthening productivity, such as growing depth in certain industries, it is impossible to match the scale and size of larger countries,” he said.While the outlook appears pessimistic, Heng said he is upbeat about the republic’s prospects given its record of rallying together to find new ways forward.
He cited how tripartite efforts to transform 23 industry sectors date back to 2017, when the Future Economy Council was formed and then embarked on Industry Transformation Maps.
The plans saw government agencies collaborating with businesses, trade associations and chambers, while unions worked with companies to support workers in reskilling.
In creating these roadmaps, stakeholders across each industry built trust, identified synergies and shared resources and experiences.
“This shared ownership of transformation is critical. Government plans and programmes will remain important, but when enterprises and workers embrace transformation, they can be at the forefront of seizing opportunities,” said Heng.
Singapore’s collaborative approach to transformation is unusual and enviable, and it is how it ensures that the opportunities and benefits from transformation can be shared by all, he added.
Secondly, Singapore must build an innovation ecosystem that enables high-value, cutting-edge work to be conducted here.
This is as technologies such as artificial intelligence offer the prospects of overcoming resource constraints and unlocking new value, powering the Republic’s next bound of growth, said Heng. — The Straits Times/ANN
