Singapore launches economic strategy review to stay competitive amid global, tech shifts

SINGAPORE: Singapore announced on Monday (Aug 4) that it will undertake a review of its economic strategy amid structural shifts, including geopolitical realignments and technological disruptions.

The review will chart an economic blueprint aimed at keeping the country globally competitive in the long term, with good opportunities for businesses and workers, said Deputy Prime Minister Gan Kim Yong at a press conference.

It will build on earlier efforts and incorporate fresh ideas to sharpen the country’s economic competitiveness and resilience, said Mr Gan, who is also trade and industry minister and chair of the Singapore Economic Resilience Taskforce.

Mr Gan noted that the latest review is part of the work of the taskforce, which was formed in April to deal with the impact of tariffs imposed by the United States.

The taskforce comprises three work streams – looking at assessing how businesses are being affected and sharing information on what schemes are available, short-term support and developing additional measures if needed, as well as long-term strategies to transform businesses and workers.

The new economic strategy review will replace the third work stream on long-term planning.

The government said the review process will involve wide engagement with businesses, workers and other stakeholders over the coming months. 

Mr Gan said the five committees hope to provide an update of their work and some key recommendations by “early next year”, and publish a final report by mid-2026.

SIGNIFICANT TARIFF-RELATED UNCERTAINTIES REMAIN

This announcement comes days after US President Donald Trump announced a slew of updated tariffs, including a 10 per cent global minimum and levies ranging from 10 to 41 per cent for 69 countries, ahead of an original deadline on Aug 1.

US also said it will levy a 40 per cent tariff on so-called transshipments. The new US tariff directive will take effect on Aug 7.

Singapore faces the baseline 10 per cent tariff.

Mr Gan said the latest tariffs will “raise the aggregate US tariff rates from above 2 per cent at the start of the year to about 15 per cent or higher”. 

“Significant uncertainties” remain even with the latest announcement, he cautioned, citing how negotiations between the US and several major countries, including China and India, are still ongoing.

There is also the possibility of further US tariffs aimed at specific sectors, such as pharmaceuticals, semiconductors and aerospace. Meanwhile, it remains unknown how supply chains will shift as companies factor the latest tariffs into their calculations.

“There will be long-term implications on the multilateral rules-based trading model that will inevitably affect Singapore and the rest of the world. We intend to continue to engage the US administration on these matters,” said Mr Gan.

Singapore will step up its engagements with businesses to find out the impact of the latest developments.

The taskforce has thus far announced a new Business Adaptation Grant to help firms adapt to the new tariff environment, and it will continue to work closely with the Singapore Business Federation (SBF) to study if additional measures are needed.

The government is also keeping a close eye on how workers might be impacted, and will work with the Singapore National Employers Federation (SNEF) and National Trades Union Congress (NTUC) to step up support when needed.

As these near-term measures are being rolled out, Singapore must also start planning for the long term to protect its economy, businesses and workers, which is why it is embarking on the economic strategy review, said Mr Gan.

Asked how the latest review will build on similar economic reviews done previously, such as the Committee on the Future Economy’s (CFE) report issued in 2017, Mr Gan said the challenges faced by Singapore have changed over the years.

Currently, the country faces a “significant long-term challenge” with the global environment set to face rapid changes and further uncertainties due to the US tariffs.

“There are a lot of unknowns going forward but at the same time, there are also opportunities and possibilities. That’s why it is important for us to take a fresh look at our strategy,” said Mr Gan.

That said, the country also has built up strong fundamentals, such as high-quality infrastructure and a highly-skilled workforce. 

“All these are very important strengths that we have built up over the last few decades, and it is also important to see how we can leverage on that to continue to create new opportunities for Singapore and Singaporeans,” Mr Gan said.

Echoing that, Acting Transport Minister Jeffrey Siow, who is heading one of the five committees, said the country is “definitely not abandoning” existing core strategies and is looking to build on the strong foundation that the country has built over the years.

FIVE FOCUS AREAS

The latest economic strategy review will be driven by five committees, each co-chaired by two political office holders and involving stakeholders from the private sector, unions and other organisations. 

The first committee will focus on strengthening Singapore’s global competitiveness. Its remit includes improving the country's value proposition to international investors, building a strong base of globally active Singapore firms and securing its status as a hub for goods, capital, people, data and energy. 

It will be co-chaired by Mr Siow, who is also Senior Minister of State for Finance, and Senior Minister of State for Trade and Industry, as well as Culture, Community and Youth, Low Yen Ling.

The second committee will explore ways to leverage technology and innovation to drive broad-based economic growth. These include catalysing opportunities through technologies such as artificial intelligence and accelerating AI adoption across the economy.

This will be co-headed by Minister of State for Digital Development and Information and Education Jasmin Lau and Senior Parliamentary Secretary for Sustainability and Environment and Culture, Community and Youth Goh Hanyan.

A third committee will focus on strengthening Singapore’s startup and entrepreneurship ecosystem. It is co-chaired by Minister of State for Trade and Industry and National Development Alvin Tan and Minister of State for Manpower, as well as Culture, Community and Youth, Dinesh Vasu Dash.

The fourth committee, led by Acting Minister for Culture, Community and Youth David Neo and Senior Minister of State for Manpower and Health Koh Poh Koon, will focus on equipping workers with relevant skills.

The fifth committee will address the impact of restructuring. It will propose ways to support business transformation, help affected workers transition into better roles, and strengthen system-wide enablers and safety nets to aid re-employment.

This group will be co-led by Minister of State for Home Affairs and Social and Family Development Goh Pei Ming and Minister of State for Defence and Deputy Secretary-General of the National Trades Union Congress Desmond Choo.

The government said the review process will involve wide engagement with businesses, workers and other stakeholders over the coming months. 

Mr Gan said the five committees hope to be able to provide an update of their work by “sometime early next year”, and publish a final report outlining their recommendations by mid-2026.

Asked by CNA about the composition of the committees which include several first-time political office holders, Mr Gan said: “I think the idea is to have a balance of both the experienced ones, as well as the younger ones.”

Describing this as “probably the most effective” composition, he noted that the younger political office holders can provide new perspectives and possibly generate new ideas and recommendations.

At the same time, there are more “experienced” ministers and private sector leaders who sit in the task force who can provide another point of view, Mr Gan added.

Besides Mr Gan, the Singapore Economic Resilience Taskforce includes Digital Development and Information Minister Josephine Teo, Manpower Minister Tan See Leng, National Development Minister Chee Hong Tat, SBF chairman Teo Siong Seng, NTUC’s secretary-general Ng Chee Meng and SNEF president Tan Hee Teck.

Mr Siow was appointed to the taskforce in end-May, replacing Education Minister Desmond Lee.

“You have the benefit of both the old and new, the young and the older, more experienced and the fresh political office holders’ contributions towards the ideas and discussions. So, I think this will benefit the work of the committee,” said Mr Gan.