Trade and Industry Minister Chan Chun Sing on Monday (6 Jan) stated that Singapore was susceptible to the macroeconomic changes in the last year, being that the economy is small and open.
Non-oil domestic exports fell by 10.1 per cent on a year-on-year basis, from January to November last year.
Last week’s official flash estimates showed that in 2019, growth was 0.7 per cent which was the lowest in 10 years as well as significantly lower than the 3.1 per cent in 2018.
Policymakers settled on a modest forecast of growth this year which sits at around 0.5 per cent to 2.5 per cent. This is amidst the gradual improvement in the global electronics market as well as the slight upward trend of the world economy in general.
Mr Chan stated that “Even though we are cautiously optimistic, there remain several uncertainties in the global economy,” and that economic prospects are “not all just doom and gloom”.
A robust and developed digital economy will allow a small country like Singapore to exceed the economic constraints of geography and size as well as facilitating the entry of enterprises into new markets, Mr Chan further added. Businesses will get assistance from the government in seizing opportunities and navigating challenges. The country must take a long-term approach to economic policies while addressing the short-term challenges that it faces.
In his speech, Mr Chan highlighted three strategies.
The first is to strengthen the fundamentals of the economy so that it can compete with other economies. Of these fundamentals are a strong rule of law, a stable political environment with a united leadership and a pro-innovation regulatory environment.
Mr Chan believed that these strengths are globally recognised as evidenced by the inflow more than S$8 billion of investment in 2019 facilitated by the Economic Development Board, even in the midst of global economic uncertainties. These investments mainly fuel the high-value sectors such as pharmaceuticals, electronics and aerospace. Sectors other than these, such as the S$9 billion expansion of two integrated resorts are not included. “The investments will create many good jobs for Singaporeans, and they reflect the global business community’s confidence in our future,” Mr Chan further added.
The second strategy is to aid Singaporean workers and firms to internationalise. Enhancing the capabilities and initiatives to facilitate the transformation of businesses are some of the provisions which will be announced in Budget 2020 next month.
The third strategy is to pursue new growth avenues. For instance, areas such as robotics and sensors, and additive manufacturing are some of the new industry niches being developed with the joint efforts of the Industry Transformation Maps and Future Economy Council. These new niches will complement the country’s strengths in precision engineering and electronics which will move Singapore up the global value chains. Mr Chan further said that “Singapore cannot completely insulate ourselves from ups and downs in the external environment but there are steps we can take to strengthen our economic competitiveness and build stronger capabilities in our enterprises and workers”.