The following is the second in a three-part summary extract from the soon-to-be-published ““Creating Jobs and Enterprise in a new Singapore economy – Ideas for Change” by Tan Jee Say, former secretary to the late Dr Albert Winsemius, the economic adviser to the Singapore Government.
Jee Say’s analysis and prescription are ‘persuasive’, according to Lord Butler who as Head of the British Civil Service in the 1980s and 1990s, oversaw the “painful transition” of the United Kingdom from a predominantly manufacturing economy to a knowledge-based one:
“As the former Head of University College, Oxford University, where Tan Jee Say was a student, I am happy to commend his essay “Creating Jobs and Enterprise in a New Singapore Economy -Ideas for Change”. I am not an expert on the Singapore economy but I was Private Secretary to Prime Minister Margaret Thatcher and Head of the British Civil Service in the 1980s and 1990s whenthe UK was making the painful transition from a predominantlymanufacturing and mining economy to a knowledge-based one.Against that background, I find Jee Say’s analysis and prescription persuasive. It seems to me a thorough and well-argued piece of work and as such it deserves the attention of policy-makers.”
You can read Part One here.
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National Regeneration Plan
It is proposed that a massive $60 billion National Regeneration Plan be rolled out with 6 Regeneration Funds of $10 billion each in the following sectors –
1. Industry Regeneration – to provide funds to assist existing manufacturing companies to shift out into services or to relocate their manufacturing operations to neighbouring countries particularly Malaysia and Indonesia so that they can be near home and family and use the services of Singapore-based firms in accounting, law and finance, thus contributing to the development of Singapore as a services hub. Existing manufacturing firms should not be forced out. They should be allowed to remain in Singapore if they can continue to survive and be profitable like any other business enterprises without depending on special favours from any state agency such as rent subsidy, tax incentives or special allocation of foreign worker quotas. Existing incentives already granted should be allowed to run their course but no new incentives should be given.
2. Enterprise Regeneration – targetted largely at young Singaporeans who want to start up their own business ventures particularly in the creative industries; concerned with the generation and exploitation of knowledge and information, creative industries are a key component of the knowledge-based economy. Individual creativity, skill and talent drive these activities which have great potential to create wealth and jobs by generating and exploiting intellectual property. They are the industries of the twenty-first century inwhich our well-educated and well-travelled young Singaporeans can find traction, do well and excel. We should use our resources to support and propel them onto the world stage. By providing grants of up to $1 millionto each start-up, the $10 billion fund will create 10,000 enterprises who will hire at least 20,000 to 30,000 Singaporean staff and generate business for hundreds if not thousands of firms providing services such as accounting, corporate secretarial, banking and finance, legal and public relations advice.
3. Schools Regeneration – the key to educating the young lies in giving personal attention to the child. No two children are the same. Each child is unique. Only personal attention can bring out the best in them. This requires smaller class size so that the teacher has fewer pupils to handle and thus can know his or her pupils intimately, identify their weaknesses and strengths correctly and help them accordingly. Unfortunately, the average class size in the schools has remained about the same as it was 30 to 40 years ago. We should reduce the class size by half, to 15 to 20 pupils per class with smaller class size for weaker pupils. This means doubling the existing resources, that is,training another 30,000 teachers and building another 300 or so schools.
4. Hospitals Regeneration – Singapore is lagging far behind other First World countries in key indicators of healthcare; we have only 32 hospital beds per 10,000 population, about half the average number of 58 beds in high income countries, 17 doctors per 10,000 population compared to an average of 28 doctors in other high income countries, and 53 nurses and mid-wives versus their 81. The $10 billion fund will be used over the next 5 years to add another 8,500 beds in public hospitals and to double the number of healthcare personnel so as to achieve First World norms.
5. Community Regeneration – to rebuild every housing estate into a multiple-use community with new-generation business parks and offices that integrate with schools, hospitals, polyclinics, day-care centres for kids and the elderly, and other public agencies so as to bring jobs and services closer to the people. Under-employed housewives and healthy senior citizens can then avail themselves of the job opportunities including part-time work while still having time for taking care of their children. This will help reduce the need for foreign workers. Travel time to workplaces will also be cut, saving transport costs and valuable time for the family. Local communities will be revitalised and rejuvenated, becoming hives of activity again.
6. Family Regeneration – to tackle the root cause of declining birth rate and shrinking family size by taking away the stress and a significant portion of the costs of bringing up children for families. Such costs are not confined to bringing up children in their early years but throughout their life as dependents right up to tertiary institutions. Measures shall include cash grants of $100-300 per month, waiver of all school fees up to university level, free medical and health benefits for mother and children, improved maternity leave terms forworking mothers, introduction of paternity leave and more day- care centres for children and the elderly in nearby precincts of housing estates.
The 6 Regeneration Funds costing a total of $60 billion over 5 years are well within the means of the Government which has accumulated huge surpluses from annual budgets. In the recent 5 years from 2005 to 2009,the surpluses totalled $106 billion, well in excess of the size of the National Regeneration Plan, and there will be a healthy balance left to finance futureneeds if necessary. There is no need to increase taxes to fund the Regeneration Plan.
Temasek Investment Holdings can also provide funds for the Regeneration as they would take up less than a third of Temasek’s portfoliomarket value of $186 billion. This can be done through outright sale of non-strategic investments and companies, or gradual sale of shares in publicly listed companies which are considered strategic investments. Government’swithdrawal from the commercial sector will have positive effect on the development of an enterprise culture in Singapore. We will then move towardsa level playing field for private companies as befitting a mature society. Onlywhen competition is fair and robust can true talent emerge.
Concluding Remarks – Solid Base for a Sustainable Future
It will take at least 5 to 10 years before Singapore can develop into a full-fledged integrated services hub for the region. To get there, Singapore has to invest heavily in expanding its physical infrastructure and human capital. The 6 Regeneration Funds and the resulting regional integrated services hub will ensure sustainable jobs and enterprise opportunities for Singaporeans in the next 5 years and well beyond.
End of Part Two. You can read Part Three here.
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The writer was with the Ministry of Trade and Industry from 1979 to 1985 where he headed economic and manpower planning and also served as secretary to the late Dr Albert Winsemius, the economic adviser to the Singapore Government. From 1985-1990, he was the principal private secretary to Mr Goh Chok Tong. In 1990, he went into investment banking and subsequently took up fund management. He is a Chartered Fellow of the Chartered Institute for Securities & Investment. He is a graduate of Oxford University where he read philosophy, politics and economics.
He will be sharing his insights of the Budget 2011 this coming Saturday 19th Feb at TOC’s Budget Forum 2011.
