Inclusive growth, building resilience part of ‘refreshed economic strategy' to recover from Covid-19 crisis: DPM Heng

• Singapore's economic strategy in response to Covid-19 crisis is centred on innovation, inclusivity and sustainability 
• Finance Minister Heng Swee Keat said it takes into account global structural shifts accelerated by the pandemic
• It aims to create better jobs for workers and provide stronger support if they fall
• It also seeks to make the economy more resilient to future shocks

SINGAPORE — To pave the way for Singapore’s economy to emerge from the Covid-19 crisis stronger and more resilient to future shocks, Deputy Prime Minister Heng Swee Keat unveiled a “refreshed economic strategy” centred on innovation, inclusivity and sustainability. 

The three-prong strategy aims to ensure that the country is responsive to global structural shifts, many of which have been accelerated by Covid-19, he said in Parliament on Monday (Oct 5).

For example, he noted, globalisation is weakening, the adoption of digital technology has accelerated, Asia continues to rise in global economic weight and concern about sustainability is gaining momentum.

Domestically, the refreshed strategy aims to create better jobs for workers and provide stronger support to enable them to bounce back if they fall.

“We want to build an endearing home for future generations, and a fair and caring society based on what we stand for as a people,” Mr Heng, who is also Finance Minister, said. 

BROADENING MARKET LINKS

To deliver on these priorities, Singapore needs a dynamic and growing economy, Mr Heng said.

This has become more of a challenge as Covid-19 has changed travel patterns, sharpened the fragmentation of supply chains, and accelerated digitalisation worldwide.

However, Asia — in particular Southeast Asia — will continue to grow as one of the key global engines, he noted, and Singapore must take advantage of this. 

“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.”

This means that Singapore must rebuild and grow its physical connectivity in travel and trade and expand its digital connectivity.

For example, it must re-establish its position as an air hub by reopening its borders gradually, positioning the country as a safe destination, levelling up capabilities, and refreshing its infrastructure.

It will also work to “significantly strengthen” its entire trade and logistics ecosystem, Mr Heng said, by improving the infrastructure to handle larger flows of food, pharmaceuticals, electronics, and e-commerce, for instance.

Beyond these moves, Singapore must also aim to become a place where new ideas are born and nurtured into globally competitive enterprises, he added.

To achieve this, the Government will launch a new five-year research, innovation and enterprise plan in December that will build on earlier investments and enhance research to support areas of national priority, such as early childhood development, lifelong learning, and keeping seniors healthy. 

STRENGTHENING HUMAN RESOURCE

The aim is not just to grow a vibrant, innovative economy, but an inclusive one, where growth uplifts all Singaporeans, Mr Heng said.

“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,” he said. “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.”

The Government will thus continue investing in helping every worker, at every age, continue to improve their skills or pick up new ones, so that they can always get good jobs. 

The country will also need to bring in global talent to complement the domestic talent, Mr Heng 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.

BUILDING ECONOMIC RESILIENCE

Lastly, Mr Heng said, the Government will work on building economic resilience and sustainability. 

He noted that Covid-19 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.

“In doing this, we may have to creatively combine the efficiency of having things ready ‘just in time’ with the resilience of building buffers ‘just in case’.”

For example, Singapore will look at producing more essential supplies at the domestic level, which can be used both for local consumption and export. One example is medical supplies, such as masks and test kits.

And as the world grapples with climate change, Mr Heng noted that environmental sustainability is an important aspect of Singapore’s economic resilience for a low-carbon and resource-constrained future. 

The Government will thus continue to invest in research into energy and resource efficiency technologies, and encourage adoption of these technologies through various incentives.

“Taken together, our moves to strengthen our economic resilience and sustainability serve a dual purpose: 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,” Mr Heng said.

“In turn, all these initiatives will create many new opportunities and valuable jobs for our people.”