Integrated resorts 'cannot be the centrepiece' of Singapore’s economy: Chan Chun Sing
In a media interview on Friday (Apr 5), Mr Chan stressed the importance of diversifying the economy, so as to ensure that Singapore is "never held ransom" by any particular sector.
SINGAPORE: Singapore’s two integrated resorts (IRs) "cannot be the centrepiece" of Singapore’s economy, but must instead be “one of many pieces”, said Minister for Trade and Industry Chan Chun Sing on Friday (Apr 5), as he stressed the importance of diversification in the economy.
In a media interview on Friday, Mr Chan highlighted two important issues Singapore considered during its negotiations with Marina Bay Sands (MBS) and Resorts World Sentosa (RWS): How Singapore can grow its economy and create good jobs for Singaporeans, and how it can strengthen its position as a regional business hub.
“One of the lessons we have learnt in our overall economic strategy is to make sure that we are never held ransom by one particular sector, or to be overly dependent on one particular sector,” he said. “Otherwise the economy will be quite volatile: When one sector gets hit, we’ll take a very big blow.”
He pointed out other investments Singapore has seen in recent years, including Facebook’s commitment to build a S$1.4 billion data centre in the country, its first such facility in Asia.
Within the tourism sector, he added, there are also plans and ideas to diversify, such as the Mandai rejuvenation project and the development of Singapore’s Greater Southern Waterfront. A further step down, he added, is the MICE industry within the tourism sector.
“One of the reasons why the Singapore economy has grown steadily is because we are able to diversify our risks, so that we can have a balance,” he said.
"The IRs are one small part of the MICE industry, which is one small part of the tourism industry, which is one small part of the larger economic strategy. That’s how we stack it up and build up the strategy.
“With or without the IRs, the whole economy must constantly refresh itself, create new opportunities and new jobs,” he added.
Mr Chan's comments come on the back of a S$9 billion expansion plan by MBS and RWS announced on Wednesday.
The additional investment is almost two-thirds their initial S$15 billion investment in 2006, and will see MBS add a new entertainment arena and hotel tower, while RWS will extend Universal Studios Singapore to include two new attractions - Minion Park and Super Nintendo World.
In exchange for RWS and MBS' commitment to expand their non-gaming components, the exclusivity period for the two casino licences will be extended to end-2030.
READ: Integrated resort expansion to create renewed visitor interest in Singapore, more jobs for local workers: Experts
"QUIET CONFIDENCE" THAT SINGAPORE IS ON THE RIGHT TRACK
Mr Chan also pointed out that the increase in investment by the integrated resorts does not correspond to the increase in gaming provisions for both casinos.
MBS and RWS are each currently allowed 15,000 sq m of approved gaming area, but they will be given the option to deploy an additional 2,000 sq m and 500 sq m respectively. This is subject to the payment of additional land costs.
While MBS and RWS are currently allowed 2,500 gambling machines, they will be given the option to increase this by 1,000 and 800 respectively.
“You can deduce that IRs in Singapore are quite different from the IRs elsewhere,” he said, adding that this means the non-gaming component is “much more sustainable” in Singapore.
“That gives us quiet confidence that we are on the right track, and unlike other people, we are not overly dependent on the gaming part,” he said.
When asked by journalists if this means that Singapore’s priority is not to rely on gaming revenue, and if there are lessons to be learnt from world casino capital Macau, Mr Chan stressed that Singapore was “very cautious” about this even 10 years ago.
“We don’t want to end up like that,” he said. “If we end up like that, we would be held ransom as an economy, and we would have betrayed our values.
“That is the lesson we must always remember ... diversification, and not to be held ransom by any market.”
In response to further questions from journalists, Mr Chan added that there were other interested parties keen to set up integrated resorts in Singapore.
NEED TO FIND “SWEET SPOT” IN LABOUR MARKET
During the interview, Mr Chan also stressed the importance of providing Singaporeans with more choices in the labour market. He was responding to questions on whether the 5,000 jobs set to be created by the expansion of the integrated resorts would be those that can be filled by Singaporeans.
Mr Chan said there would a wide variety of positions from the management level down to operations available, and that about two-thirds of those jobs are expected to be filled by Singaporeans.
“From a macroeconomic strategy point of view, it is good for us to keep the labour market tight,” he said. “That benefits Singaporeans. If the labour market is not tight, Singaporeans have no choices, and the bargaining power is quite different.
“I think we’re constantly adjusting to make sure that we are in the sweet spot where the labour market is sufficiently tight for us to uplift the wages of Singaporeans, and yet have enough incentive for the respective companies to adopt technology and productivity measures,” he added.
On the issue of the effectiveness of casino entry fees as a social safeguard for Singaporeans, Mr Chan also stressed that the levies should not be seen in isolation, and should be considered as part of other measures that are already in place.
It was earlier announced that the casino entry fees for Singaporeans and permanent residents would be increased by 50 per cent to S$150 for the daily levy and S$3,000 for the annual levy.
“There are many options – we can increase the price, or we can decrease the time,” he said, in response to questions on how the figures were derived at. “But we set the levy in 2009 ... we should keep pace with inflation.
“But this is not the main social safeguard ... this is just an improvement and a review of the existing social safeguards," he added.
Mr Chan also clarified that the levies collected do not go into the Government's coffers. All levies, he said, are passed on to the Tote Board and used for charitable purposes.