At the conclusion of his 5-day visit to South Korea yesterday (26 Nov), Prime Minister Lee Hsien Loong told reporters that raising govt spending and lowering taxes are not the solution to boost the economy. He said that focus must be on boosting productivity.
He noted that with major economies like the United States, China and Japan slowing down, it is not surprising that the Singapore economy has been sluggish too. But he opined that Singapore should take advantage of the slowness of the economy to redouble efforts at skill upgrading, training and productivity improvements.
Singapore’s economy is expected to grow between 0.5 per cent and 1 per cent this year and is in danger of slipping into a recession. But PM Lee said unemployment in Singapore is still low. “Corporate profits are not as buoyant as before, the leverage is going up, corporate borrowing is going up,” he said.
“If a problem worsens between the US and China, or… the current uncertainties continue, (the two countries) could go into a recession within the next 12 to 18 months. If that happens, we are in greater risk.”
But he assured that DPM Heng is working towards “preparing a Budget which will be strong and suitable to the state of the world and what the Singapore economy needs”.
S$4 billion invested in Andhra Pradesh creating substantial number of jobs for Indian state
Meanwhile, it was reported by Indian news media in Aug that during a meeting between the Singapore High Commissioner to India and the new Chief Minister of Andhra Pradesh State of India, High Commissioner Lim Thuan Kuan reminded the Chief Minister that investments by Singapore companies in his state have exceed Rs 20,000 crore (S$4 billion) creating a substantial number of jobs for the people of Andhra Pradesh state.
Singapore has also actively promoted Andhra Pradesh as a promising investment destination to Singapore and international companies at various international platforms, Lim told the Chief Minister.
Lim was speaking to the new Chief Minister in Aug in view of the Chief Minister’s negative opinions against the Amaravati capital project being developed in his state. The project was initiated by the previous Chief Minister. In the end, the new Chief Minister still decided to cancel the project.
But the Singapore government said the cost incurred in the Amaravati project only ran “a few million dollars”. In a recent issuance of a Correction Direction to opposition party member Brad Bowyer under the newly enacted Protection from Online Falsehoods and Manipulation Act (POFMA), the government said that the Singapore Consortium, comprising Ascendas-Singbridge Pte Ltd which is part of CapitaLand Group and Sembcorp Development Ltd, had only invested a few million dollars in the Amaravati project. The costs incurred have been limited to design services prior to commencement of execution works on the ground, it noted.
“There are no billions of dollars involved,” the government said in its statement.
The government also said that there are several other Singaporean companies which invested in Andhra Pradesh other than GLCs and related parties. “An example of a non-GLC investment in Andhra Pradesh is Indus Coffee Pte Ltd, a subsidiary of a listed company in Singapore,” it added.
However, the government did not give a breakdown of the S$4 billion invested in the Indian state. Nevertheless, the government did acknowledge that GLCs and related parties have invested in Andhra Pradesh.
GIC investing $billions in India creating jobs and boosting Indian economy
In any case, it has been reported that Singapore has emerged as the largest source of foreign direct investment (FDI) into India.
According to latest figures from the Indian Department for Promotion of Industry and Internal Trade, India received the greatest share of FDI inflows from Singapore, valued at US$16.23 billion, in the last Indian financial year. Singapore was followed by Mauritius (US$8.08 billion), the Netherlands (US$3.87 billion), the United States (US$3.14 billion) and Japan (US$2.97 billion). The total FDI inflow into India for the 2018-2019 financial year stood at US$44.37 billion.
And a substantial amount of the investments into India came from the Singapore Sovereign Wealth funds. For example, it was reported in this year:
- 7 Mar – Singtel pulls in GIC for $1.2bn investment in India’s Bharti
- 21 May – Singapore’s GIC, India firm team up to invest US$600 million in hotels
- 18 Jun – Singapore’s GIC eyes up to $1b investment in Indian road assets
- 25 Jun – Singapore’s GIC, Indian firm DLF to build India’s biggest retail mall, report says
No doubt, with so much money invested in India, a large number of jobs would be created for the people of India, boosting India’s economy. Indian PM Modi should be pleased with Singapore.