SINGAPORE: Plans outlined by the Committee on the Future Economy (CFE) are expected to help Singapore businesses carve out niches for themselves. While Singapore firms face increasing competition, analysts have said there are also opportunities as the region becomes better integrated.
The ASEAN Economic Community (AEC) kicked off at the end of 2015. Along with other ongoing multilateral trade talks like China's One Belt, One Road initiative and the Trans-Pacific Partnership, the members of the AEC are expected to present new opportunities to Singapore businesses.
Amid growing regional integration, economists said the Future of Connectivity, one of five sub-committees of the Committee on the Future Economy, will play a key role going forward, in helping Singapore collaborate with economies in the region.
As a whole, the committee is expected to help the city-state strengthen its niche position and economists said this can help local businesses stay ahead of rising competition in the region and capture emerging growth prospects in Asia.
"I think the biggest opportunities will be in services, of course," said chief economist for the Asia-Pacific at IHS Global Insight Rajiv Biswas. "But many other forms of services also offer a lot of opportunities related to infrastructure development. The development of smart cities in the region requires a wide range of services and not just infrastructure development. Many other areas such as water management and IT are a very important part of smart cities."
The Committee on the Future Economy announced five sub-committees following its first meeting on Monday (Jan 11). While the sub-committees have distinct areas of focus, economists said the different groups work complementary to one another in many ways. They also said that synchronisation between the sub-committees will help ensure a more coherent approach to addressing the challenges of a rapidly changing environment.
"Anyone who's doing the infrastructure and thinking of Singapore's connectivity as a hub must equally also be aware and plugged into the kind of skills we're developing and whether those can be exported," said Mizuho Bank senior economist Vishnu Varathan. "The hard manufacturing side and hard capacity side of things must marry with the soft skills we have and the soft exports we want to do. That is where I think it becomes more seamless, and we can derive a lot more synergies from there."
Still, looking ahead, the economists noted that businesses continue to struggle with productivity and cost pressures. They also said that while the committee makes plans for the medium to long term, the challenge lies in striking a balance with ensuring Singapore businesses can cope with near-term constraints.