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Singapore businesses must wean off Govt reliance: Panel

TODAY reports: The greater accountability attached to using Government funds can put a lid on the types of ventures and opportunities that local enterprises go into and, in turn, limit their growth, say panelists.

SINGAPORE: While a top-down approach has transformed the Republic from a Third World nation to a developed economy, Singapore’s future growth requires businesses here to shift from this dependency on the state, said panelists at an industry forum on Monday (Feb 15).

This is because the greater accountability attached to using Government funds can put a lid on the types of ventures and opportunities that local enterprises go into and, in turn, limit their growth, they said.

“I think what’s holding us back is that we cannot get around the idea that the future of Singapore doesn’t need to be a state-led future. It will be us because we must be the trailblazers, we must be the pathfinders,” said Dr Gillian Koh, deputy director of the Institute of Policy Studies.

“Over the years, the GLCs (Government-linked companies) conquered many markets. It became that we need the big boys, GLCs or Temasek, to go first and we piggyback on them. That dependency has not gone away ... (but such a) bargain has a certain level of parameters set,” she added.

Dr Koh was speaking at The New Singapore: Re-imagining Singapore forum organised by DBS on Monday. The forum, inspired by the Singapore Business Federation’s (SBF) Position Paper for a Vibrant Singapore, was attended by about 70 institutional investors who are clients of DBS Bank and DBS Vickers Securities.

Panelist Irvin Seah, an economist at DBS, said there should be more bottom-up initiatives, and the SBF position paper is an example of how businesses here can drive change.

“I think that’s a good development. Companies coming together, pitching in one single voice about what they think we should restructure, how we should restructure. That’s a good starting point. However, we really need to think out of the box ... We should focus on companies that are small in size but big in ideas, taking a bet on local companies that are adventurous. Tax revenues from companies like that can help to sustain social spending,” said Mr Seah.

Ms Joanne Guo, SBF’s assistant executive director, said that with social spending expected to rise in the coming years as Singapore’s population ages, it is timely to look at the growth drivers that are needed to fund this expenditure.

“Many cities are reinventing themselves to get a greater share of the global market. (We hope) that the paper can start the Government thinking about issues that businesses care about ... We need business growth to fund increase in costs,” she said.

The Government has set up the Committee on the Future Economy to chart the country’s future growth path amid rising business costs and an ageing population. Previous committees tasked with developing economic strategies, as well as the SBF position paper, have called for greater emphasis on innovation and growing local enterprises in order for Singapore to remain competitive globally.


Read the original TODAY report here.