SINGAPORE: The Republic is likely to see slower growth in the next three to five years, as the global economy needs to address imbalances that had arisen from loose monetary conditions and overinvestment in the energy sector, according to Minister for Trade and Industry (Trade) Lim Hng Kiang.
He said this in an exclusive interview with Channel NewsAsia on Tuesday (Mar 22).
Mr Lim was first asked how the Government will use this year's Budget to help companies cope with the global slowdown.
Mr Lim Hng Kiang: We are not facing the same situation as the global financial crisis in 2008, so our response will have to be different. Second, we have to continue our restructuring process, because this is a medium-term process, it is not a one-off and we really have to lay the foundations to prepare for the future, the challenges we face, currently and in the future.
The best way to do this is to make our companies more resilient, more competitive and make our workers future-ready with the skills and competencies to be adaptable and flexible for the economy of the future.
Q: What is the future of manufacturing in Singapore, given the different factors we have talked about, the weak global demand as well as the relatively higher cost of production here in Singapore?
Mr Lim: Overall, we are confident that manufacturing in Singapore is in a very strong position. First of all, we are reasonably well-diversified. We have core strengths and competencies in key sectors, but at the same time, we recognise that the competition is getting stronger and there are new technologies we have to embrace to make ourselves more competitive - for example, additive manufacturing, artificial intelligence, greater use of robotics.
So we are constantly working with our companies to see how they can adopt and adapt these new technologies to keep abreast of the competition.
Q: These technologies you mentioned are also in line with the thrust of productivity. Has the conversation changed? Are businesses still grappling with how to be productive, seeing as how the productivity numbers are still dipping a little bit? How does that compare with our overall target of 2 to 3 per cent?
Mr Lim: We are making modest progress, good progress in our productivity. And companies now understand that this is the way to go, and they are taking full advantage of the various programmes and platforms that the Government has created to help them undertake productivity improvements in their companies.
Q: Are there any key considerations for the Ministry of Trade and Industry, especially from your conversations on the ground, with the SMEs, be it manpower issues; are there any considerations that you think the Budget will be looking at?
Mr Lim: We cannot have a one-size-fits-all (approach). You can have general policies, which are important because the overall business environment is important. But you also need to focus and adopt a sectoral strategy, because what you do for the furniture sector is different from what you do in the precision engineering sector and this is also reflective of our economic situation.
Some sectors are very badly, adversely affected, like the marine engineering sector, but other sectors are doing relatively well.