Reasons to believe S'pore can thrive despite challenges ahead: DPM Heng

This is provided it continues to restructure along three lines to drive growth, he says

- Goh Yan Han

 

It will be harder for Singapore to achieve economic growth in the coming years, as it comes up against internal constraints and a tougher external environment.

But there is strong basis for optimism that the Republic can continue to thrive, provided that it continues to restructure along three lines to drive productivity-driven growth, Deputy Prime Minister Heng Swee Keat said on Feb 27.

These lines are sustaining efforts to transform Singapore's economy through shared ownership, building a strong innovation ecosystem and continuing to be a trusted partner for the world, DPM Heng said in Parliament.

He was speaking on the second day of the debate on the Budget delivered by Deputy Prime Minister Lawrence Wong on Feb 16, which DPM Heng described as a "confident path forward for Singapore, as our domestic and global environments change".

Laying out the challenges ahead, DPM Heng noted that the world is currently facing a slow-growth, high-inflation environment.

Despite the great benefits brought by three decades of globalisation, the mood has shifted from collaboration to competition, partly driven by technological change that is reshaping jobs and competitiveness across countries and industries, he said.

"From globalisation anchored in economic competitive advantage, we are now seeing fragmentations based on political alignment," he said. "This, together with the recent upsurge in geopolitical unrest, has brought new uncertainties." At home, the days of "catch up" growth are over as Singapore becomes a mature economy, while its resource constraints - be they labour, land or carbon - are becoming biting, added DPM Heng.

The country's ageing population means local labour force growth is shrinking quickly to zero, which means Singapore has to double down on growing through productivity, which is hard.