Too early to call technical recession, businesses should focus on long-term basics: Chan Chun Sing
Labour Chief and Minister in the Prime Minister Office Chan Chun Sing. TODAY file photo
SINGAPORE – Businesses should focus on long-term fundamentals instead of short-term numbers, Labour Chief and Minister in the Prime Minister Office Chan Chun Sing said on Friday (Nov 18), allying fears that the Republic could slip into a technical recession a day after Singapore’s exports plunged to their lowest in seven months in October.
Responding to media reports which raised the spectre of a technical recession for Singapore’s small, open economy this year given that a hoped-for lift failed to materialise for Singapore’s exporters in the third quarter, Mr Chan said it is too early to tell whether such a scenario will happen.
Some economists had also warned that export outlook remains cloudy, compounded by concerns over US President-elect Donald Trump’s protectionist stance, Brexit and China’s slowdown. But Mr Chan said despite some sectors not performing well like the oil and gas as well as shipping sectors, there are sectors like e-commerce and financial technology that have good prospects.
Speaking at the U Future Leaders Summit on Friday organised by the National Trade Unions Congress, Mr Chan asked participants twice if they were “anxious” at the prospect of a technical recession, which refers to two consecutive quarters of negative economic growth. Instead of focusing on such “short-term numbers”, he exhorted them to concentrate on three long-term fundamentals of good governance, staying relevant, and connecting local businesses to regional and global markets.
Expanding on these when he spoke to reporters after his speech, he said the first fundamental involves having a good governance model that provides a conducive environment for businesses. This means while regulatory practices put in place are meant to stem out bad business practices, they should also enable good innovative practices.
A second fundamental is to connect local businesses to the regional and global markets. Mr Chan said that a report by the Committee of Future Economy which will be released in the first quarter of next year will place more emphasis on how to provide solutions to businesses and to grow local Small and Medium Enterprises (SMEs) as well as startups into multinational corporations.
Finally, he said the third fundamental is to help Singaporeans to "stay alert, stay relevant and stay ahead". For instance, it is imperative to design training courses at a faster speed in order to catch up with the changing needs of the labour market.
"If you look at it from this perspective, I would say that we are in good shape... Focus on the fundamentals and not just be overly distracted by the short term challenges or short-term numbers. Because the long-term fundamentals will determine whether we get out of this situation in a better shape," said Mr Chan.
