In a recent exclusive interview with DEALSTREETASIA, former People's Action Party Member of Parliament Inderjit Singh criticised the Committee for Future Economy (CFE) which was led by Minister Heng Swee Keat. The transcript of the interview was published on Monday (29 Jan).
The CFE was established in Dec 2015 at the behest of PM Lee to address the new economic challenges that Singapore faces. It is a high-powered committee made up of five Cabinet ministers and 25 other members from the private sector.
The committee is led by Finance Minister Heng Swee Keat, with Minister of Trade and Industry S Iswaran as co-chairman. Education Minister (Higher Education and Skills) Ong Ye Kung, Minister for National Development Lawrence Wong and Minister in Prime Minister Office Chan Chun Sing are the other ministers. CFE is supposed to map out a strategy to transform Singapore by embracing innovation so as to become a digital economy.
However, at the interview, Mr Singh expressed his disappointment in Heng's committee.
Rehash of old ideas
"The CFE was something that everyone was really looking forward to. There was an expectation that if something came out, it would inspire us and show the government realised the changes needed for a future economy," Mr Singh said.
"When the report did come out, it was just many old initiatives being rehashed. So it was all about things being tried and tested, but with some fine-tuning. Nothing new came out of it, which was the biggest problem."
Mr Singh said that ideas like innovation and overseas expansion as the second wing of Singapore economy have already been discussed some 20 years ago and Heng's committee were "just rehashing things".
"They’re all the right things to do, but the only way to do it is if we change our approach," he added.
Mr Singh explained, "For instance, there’s lots of intellectual property (IP) in the universities and research institutes. How can we accelerate their commercialisation and entry into the market? Don’t make the transfer of technology so expensive or difficult."
"The CFE implementation team needs to explain how they’re going to go about fostering and implementing innovation. Currently, there are no great ideas," he added.
"But the mistake we’re making is that we have got some very solid industry clusters that we’ve neglected. In the past, we had the semiconductor sector, but after 10-20 years, the government lost interest in it and felt we should shift our focus."
He said that the government should actually concentrate on deepening the skills and capabilities in each of the existing industry clusters and continue to run them as long as possible and innovate on them beyond cost, not just give up on them.
Using Belgium as an example, Mr Singh explained that it has been having a strong textile industry for a long time. Today, they’re still a major player in the world in textile manufacturing, automation, technology, all the parts of that value chain.
"Hopefully, the CFE understands this need for a different approach and really shows the nuts and bolts of how to build up innovation capacities and how we’re going to create the future economy," Mr Singh lamented.
The government is the bottleneck
Mr Singh also criticised the government for being the bottleneck for slowing Singapore's transformation towards the digital economy.
He said that Singapore is not changing fast enough in view of the disruption caused by technology and the effects of globalisation.
"You’re seeing massive disruption of traditional business models and changes coming from automation and robotics. A lot of the reports and research I’m reading indicates we’ve got to change more rapidly," he said.
"But the government is the bottleneck for this right now, because they believe in their past model of success and think this will continue to work."
The past model of success saw Singapore develop an MNC-driven economy but "today, there are many nations around the world who can provide the same kind of appeal for a lower cost and offer a greater availability of talent and a larger market. Our advantages are being eroded and we cannot depend on that anymore."
He went on to criticise the government for not supporting Singapore's SMEs, "We should have shifted gears 10-15 years ago and focused on supporting local enterprises that can be grown into large global corporates."
But the government was content with SMEs playing supporting roles for the MNCs and neglected to make them a focal point of local economic development.
"The whole bottleneck is the government’s economic strategy and if this doesn’t change, then it’s too late. By 2030, 50% of the jobs as we know now would be gone. And if we cannot create new jobs, then it’s not a viable situation," he warned.
"However, if we get the government to change their mindset and get the manpower and resources mobilised to execute the necessary changes, then we’re nimble enough to act as a centre for Asia. But the government has to first let go and not be the bottleneck."
Mr Singh is certainly a rare maverick among the PAP MPs. In 2013 when Parliament voted for the unpopular 6.9 million population white paper, Mr Singh "conveniently" excused himself from the chamber and avoided voting for it. If he was in the chamber, he must then vote "yes" together with the other PAP MPs as the party whip wasn't removed.
In the end, it was 77 vs 13, with the Parliament endorsing the 6.9 million population white paper. The endorsement triggered a first big public protest in Singapore at Hong Lim Park, which made worldwide news.