SINGAPORE: Singapore is in a “stable position” in its fight against the COVID-19 pandemic but it must remain vigilant amid profound uncertainties, Deputy Prime Minister Heng Swee Keat said in Parliament on Monday (Oct 5).
These uncertainties include how effective other countries will be in containing the pandemic and reopening their economies, as well as when an effective and safe vaccine can be developed.
But the country will adapt to living with the coronavirus even with these unknowns, said Mr Heng in a ministerial statement that sought to provide an update on Singapore’s response against the pandemic and its strategies to emerge stronger from the crisis.
The Government has worked out the steps on how to further reopen the economy safely, with details of a Phase 3 roadmap to be released by the multi-ministry task force “in the coming weeks”, said Mr Heng.
This will include the expected timeline for moving to Phase 3, changes to current regulations on the size of group gatherings and at mass events, he said.
Singapore is working “very actively” to secure early access to safe and effective vaccines, if and when they become available, said Mr Heng.
This includes being an early supporter of the COVID-19 Vaccine Global Access (COVAX) Facility, a global initiative to accelerate the development and production of potential vaccines while ensuring equitable access.
Singapore is also looking at procuring vaccines from a number of pharmaceutical companies, while supporting local efforts in developing a vaccine and the building up of manufacturing capacity.
When it comes to COVID-19 testing, Singapore has increased its polymerase chain reaction (PCR) testing capacity and is close to the target of being able to conduct 40,000 laboratory tests a day. It is also evaluating new testing technologies that are less invasive and can produce results more quickly.
Such enhanced testing capability can help the country to safely resume more activities sooner, Mr Heng said.
Swift contact tracing and isolation of infected individuals are also key to limiting the spread of the virus, in addition to safe management measures, he added.
MORE SUPPORT FOR FIRMS, WORKERS
The Government has set aside close to S$100 billion to fight the COVID-19 pandemic, including four Budgets from February to May and an additional round of tapered support in August.
All of these measures have “substantially cushioned” the economic damage, said the Deputy Prime Minister.
The Monetary Authority of Singapore estimates that the four Budgets will prevent the economy from contracting by a further 5.6 per cent in gross domestic product this year, and 4.8 per cent in 2021.
The slew of measures will also cushion some of the rise in resident unemployment rate by about 1.7 percentage points this year.
“This could mean about 155,000 jobs saved over these two years, although we will still see job losses overall. More than half of the jobs saved are due to the Jobs Support Scheme alone,” Mr Heng told the House.
Given the difficult path to recovery, the Government will continue to focus on alleviating near-term pains over the next six months, so as to help businesses and workers to emerge stronger.
Mr Heng, who is also Finance Minister, announced extensions to several help initiatives.
This includes the extension of the Enhanced Training Support Package for another six months until Jun 30, 2021, to provide higher course fee subsidies for firms in the hardest-hit sectors such as air transport, retail and tourism.
The scheme will also be extended to the marine and offshore sector from Monday.
But in recognition of the gradually recovering economy, the Government will lower the absentee payroll rates to 80 per cent from January 2021, capped at S$7.50 per hour, said Mr Heng.
The Government will also provide companies who hire people with disabilities with a higher tier of wage support – at 50 per cent – under the newly announced Jobs Growth Incentive.
This will apply to new hires from September this year to February next year, as Mr Heng noted that those with disabilities may face greater challenges in finding jobs.
Under the Jobs Growth Incentive, the Government funds between 25 and 50 per cent of the wages of each new local hire in firms that increase their total local headcount. The support is for the first S$5,000 of gross monthly wages, for up to 12 months.
Several capability-building grants will also be extended and enhanced to help businesses to internationalise, transform and digitalise. These include the Market Readiness Assistance Grant, the Productivity Solutions Grant, the Enterprise Development Grant and the PACT programme.
Details will be announced by the Ministry of Trade and Industry in the coming weeks.
The Temporary Bridging Loan Programme will be extended for a further six months until September 2021, but at reduced levels. At the same time, the central bank will extend the MAS Singapore Dollar Facility for Enterprise Singapore Loans until September 2021.
Support available under the Enterprise Financing Scheme will also be adjusted to help local companies access financing in areas such as trade and project needs, said Mr Heng, adding that further details will be announced later.
“Even as we shift our approach in supporting businesses and workers as the economy recovers, we will make sure that support does not taper off too sharply,” said Mr Heng.
Support for businesses "will ultimately benefit" workers, he added.
“The best way to protect the welfare of our workers is a good job. By helping viable firms stay afloat during this difficult period, they can retain their workers. By helping firms to restructure and retrain their workers, they can emerge stronger."
FUTURE ECONOMIC ROADMAP
In his ministerial statement, Mr Heng also sketched out a “refreshed” roadmap for the Singapore economy beyond the immediate crisis.
He noted several shifts under way and accelerated by the pandemic, such as weaker support for globalisation, renewed impetus for digital technology adoption, the continued rise of Asia in global economic weight and a rising momentum of ensuring sustainability and care for the environment. Domestically, Mr Heng said, Singapore is facing slower resident labour force growth.
Mr Heng said the country is at a “critical juncture” in its economic development.
“In the next few years, economies will undergo rapid transitions. Depending on their response, COVID-19 will benefit some and disadvantage others, whether at the firm-level, sector-level, or across the entire economy.
“We must take the actions now that will allow us to not just get through COVID-19, but more crucially, gain ground that will pave the way for our next lap of economic growth in the next five to ten years,” he said in Parliament.
As part of updating the economic roadmap with new realities, the Emerging Stronger Taskforce has been set up since May with “significant progress” made through the first wave of seven industry-led alliances.
READ: Emerging Stronger Taskforce will identify global risks, seize economic opportunities for Singapore: Desmond Lee
Mr Heng said the task force is looking at launching new alliances to explore opportunities in new growth areas, such as medical technology, and will be providing more details.
“All these moves build on our ITM (Industry Transformation Map) framework to deliver a refreshed economic strategy for a post-COVID-19 world, with emphasis on three priority areas,” he said.
GLOBAL ASIA NODE
The first priority is to remake Singapore as a Global-Asia node of technology, innovation, and enterprise, as the region is set to keep growing.
“We must deepen and broaden links to build up Singapore’s role at the heart of Asia’s growth, while forging connectivity with other key markets,” he said.
Mr Heng said this can be done by rebuilding and growing the country’s physical connectivity in travel and trade, as well as enhancing and expanding in digital connectivity.
For the former, Mr Heng cited the example of Singapore’s air hub, which has been badly affected by the pandemic. He said the Government is committed to reviving the air hub and restoring air connectivity.
“The Multi-Ministry Taskforce is studying this carefully as part of our broader re-opening plans, and the Minister for Transport will share more in his Ministerial Statement tomorrow,” he told the House.
Mr Heng said Singapore has to be a key node where new ideas are born and nurtured into globally-competitive enterprises.
As part of this, the Government will unveil a new five-year Research, Innovation and Enterprise (RIE) plan in December.
Said Mr Heng: “The plan will build on earlier investments and enhance research to support areas of national priority, such as early childhood development, lifelong learning, and keeping our seniors healthy.
“We will expand our transformation of the manufacturing, aviation and maritime sectors, and deepen our capabilities as a Smart Nation and sustainable society.”
He added that a major effort will be to integrate the work of the Future Economy Council and the RIE plan, so as to accelerate Singapore's transformation into an innovation-led economy, powered by technology.
“In this way, our businesses can be more competitive and our workers can achieve more.”
The second priority is to have an inclusive economy where growth uplifts all Singaporeans.
“With COVID-19 revealing vulnerabilities in our labour market, we need to better understand its structure, and upgrade jobs and skills across all segments of society,” said Mr Heng.
“To achieve inclusive growth, our workers need to have the skills to stay relevant and we need to provide holistic support to uplift our vulnerable workers.”
As such, the Government will continue to invest significantly in upskilling and reskilling the workforce, so as to equip every worker with right skills to get good jobs.
But even as local workers level up, Singapore will still need to bring in global talent to complement its domestic talent, he said.
“By building on complementary strengths, we can build cutting-edge capabilities in our workforce and our firms, and plug into global networks. This will ultimately benefit all Singaporean workers.”
The Government will continue to update foreign workforce policies carefully, such as the Employment Pass and S Pass rules, to achieve this synergy, he added.
ECONOMIC RESILIENCE, SUSTAINABILITY
Lastly, the Government will invest in economic resilience and sustainability as a source of growth and competitive advantage.
Mr Heng said the pandemic has exposed vulnerabilities around the world.
“Beyond essential goods, critical inputs for industrial production and access to workers were cut off due to global work stoppages and travel bans. Demand also ground to a halt in many industries.”
Singapore must therefore act now to improve its economic resilience by “creatively combine the efficiency of having things ready ‘just in time’ with the resilience of building buffers ‘just in case’”.
For one, the country can produce more essential supplies locally, such as medical supplies like masks and test kits, which can be used both for local consumption and export.
As the world grapples with climate change, environmental sustainability is also an important aspect of Singapore’s economic resilience for a low-carbon and resource-constrained future.
“We will continue to invest in research into energy and resource efficiency technologies, and encourage adoption of these technologies through various incentives,” said the minister.
The Government will also further promote the decarbonisation of the economy and pursue initiatives for a more sustainable economy, he added.
“Taken together, our moves to strengthen our economic resilience and sustainability serve a dual purpose,” said Mr Heng.
“They strengthen our economy so that we can bounce back quickly and better from shocks, while adding to our value proposition as a vital global node in Asia. In turn, all these initiatives will create many new opportunities and valuable jobs for our people.”