SINGAPORE – As Singapore navigates this critical juncture of its economic development, its aim is not just to get through the Covid-19 crisis, but to gain ground and pave the way for its next lap of growth, said Deputy Prime Minister Heng Swee Keat on Monday (Oct 5).
Laying out the three prongs of Singapore’s refreshed economic strategy, he added that action taken now will impact the Republic for the next five to 10 years.
“I wish to stress that everything this Government does to protect, reopen, and grow our economy – we do, not for the economy’s sake, but for our people,” Mr Heng said in his ministerial statement ahead of a third Supplementary Supply Bill, which provides for an extra $8 billion in Covid-19 support.
“We strive to secure a way for Singapore to continue to make a good living, so that Singaporeans can have a good life. That is our guiding principle.”
Mr Heng added that the Monetary Authority of Singapore has estimated that this year’s four Budgets, in which Covid-19 support amounted to nearly $100 billion, will prevent the economy from contracting by a further 5.6 per cent of GDP in 2020, and 4.8 per cent in 2021.
Its economic support measures will also cushion the rise in resident unemployment rate by about 1.7 percentage points this year, he added.
“This could mean about 155,000 jobs saved over these two years, although we will still see job losses overall. More than half of the jobs saved are due to the Jobs Support Scheme (JSS) alone.”
In August, Mr Heng had announced that $8 billion more – following the nearly $100 billion spent over four Budgets earlier – will be spent to save jobs, create new ones and seize new growth opportunities. This Bill will go through the usual parliamentary proceedings – it is scheduled to be debated by MPs next week – and has to be assented to by the President.
In his speech, Mr Heng outlined Singapore’s current position and the steps it will take to further reopen safely. He also laid out longer-term plans, such as the three prongs of the country’s refreshed economic strategy.
The first area of focus is to remake the country as a Global-Asia node of technology, innovation and enterprise, Mr Heng said. “We will secure our external economic linkages as a vital global node in Asia, and transform ourselves into a vibrant centre of technology and innovation.”
This includes rebuilding physical connectivity in travel and trade, and strengthening digitalisation. Mr Heng said Transport Minister Ong Ye Kung will share more details of Singapore’s plans to revive its air hub and restore connectivity in his ministerial statement on Tuesday (Oct 6).
Secondly, it will redouble efforts to foster inclusive growth. As the pandemic has revealed vulnerabilities in Singapore’s labour market, it is necessary to better understand its structure and upgrade jobs and skills across all segments.
But it will still be necessary to bring in global talent to complement local talent, even as Singapore carefully updates its foreign workforce policies, Mr Heng said. “By building on complementary strengths, we can build cutting-edge capabilities in our workforce and our firms, and plug into global networks. This will ultimately benefit all Singaporean workers.”
Lastly, it will invest in economic resilience and sustainability as a source of competitive advantage, Mr Heng said. This includes producing essential supplies locally, and ramping up deployment of renewable energy. “Our resilience can be a source of growth, at many levels – for our individuals, industries, nation, and the world.”
In his speech, Mr Heng also went over the Government’s revised revenue estimates, which take into account the revenue forgone arising from measures in the Fortitude Budget. They will reflect a $1.5 billion draw on Singapore’s past reserves resulting from these measures, such as the Foreign Worker Levy waiver, he said.
He also reiterated that there are no plans to draw on past reserves for this latest support package, beyond what was approved earlier. To fund its Covid-19 response, the Government had obtained President Halimah Yacob’s approval twice this year to draw up to $52 billion from past reserves.
“We have dedicated close to $100 billion to support our people and businesses through this difficult period. As we do so, we must be careful not to spend in a way that squanders what generations before us have painstakingly built up,” Mr Heng said.
“Our guiding principle is prudence, not austerity. We will continue to invest decisively in our national priorities, with a deep commitment to leave behind a better future for our children.”
Read highlights of DPM Heng Swee Keat’s ministerial statement Singapore’s strategies to emerge stronger from the Covid-19 crisis.