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Covid-19 to accelerate shifts in global supply chains: Chan Chun Sing
THE Covid-19 pandemic will accelerate shifts in global supply chains and while there is no telling how supply chains will eventually be reconfigured, it is likely that they will be relocated nearer to final demand markets to ensure greater resilience against future supply disruptions, said Minister for Trade and Industry Chan Chun Sing.
The outlook for outward-oriented sectors, such as manufacturing and those related to trade and logistics, remains weak, adversely affected by the sharp slowdown in many of Singapore’s key markets, he noted. The Ministry of Trade and Industry announced on Tuesday morning a downgrade to Singapore’s GDP (gross domestic product) growth forecast this year, from from “-4 per cent to -1 per cent” to “-7 per cent to -4 per cent”.
As we adjust to the new environment, there will be opportunities to fill unmet demand and participate in new supply chains that are formed, said Mr Chan.
“Our posture must be to foster greater regional integration and interdependence rather than to try and maximise domestic production which is inefficient and ultimately unsustainable.”
Mr Chan also outlined three ways the government is helping companies and workers prepare.
The first is by continuing to boost connectivity to the region and upholding Singapore’s status as a financial and logistics hub. This includes the network of digital economy agreements Singapore has started to build with partners such as Australia, New Zealand and Chile which will augment the Republic's extensive network of free trade agreements.
Singapore has also been working with other like-minded countries to ensure supply chain connectivity. Earlier this month, Singapore issued a Joint Ministerial Statement with 10 other countries to affirm Singapore's commitment to ensure supply chain connectivity and to refrain from imposing export restrictions on essential goods.
Mr Chan added that Singapore is also working with other Asean countries to ensure continued supply of essential goods and remain fully committed to signing the Regional Comprehensive Economic Partnership this year.
“Doing so amidst the pandemic would also be a strong signal of our continued commitment to free and open trade, as well as unlock further economic opportunities,” he said.
The government has also rolled out programmes such as the Research, Innovation and Enterprise Plan to deepen companies’ R&D (research and development) capabilities in Industry 4.0 supply chains. Earlier this year the government also introduced Grow Digital under the SMEs Go Digital programme to help small and medium-sized enterprises seize business opportunities in overseas markets through e-commerce platforms.
Mr Chan also said that the government has introduced enhanced training and re-skilling programmes. In March 2020, Workforce Singapore launched a new Redeployment Programme for Supply Chain and Logistics Coordinators, to help firms reskill and redeploy existing rank-and-file workers to take on new or redesigned job roles as companies digitise or transform their business processes.