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Diversified economy strengthened Singapore's position in IR talks: Chan Chun Sing
SINGAPORE'S growing and diversified economy helped to strengthen its position during negotiations for the S$9 billion investment committed by the two integrated resorts (IRs), Minister for Trade and Industry Chan Chun Sing told the media on Friday. Setting this in the broader context of Singapore's economic strategy, he said: "We don't want to be held ransom by one particular industry."
Together, both IRs contribute about 1 to 2 per cent of gross domestic product (GDP) annually. Following the investment, the IRs are expected to draw an additional 500,000 international visitors each year, contributing some S$500 million to GDP annually.
Highlighting Singapore's diversification at various levels - across sectors, within the tourism sector, and even within the four MICE industry areas of meetings, incentives, conventions and exhibitions - Mr Chan stressed that relying on any one sector would make the economy vulnerable to volatility.
The negotiations leading up to the deal announced on Wednesday took over two years, beginning shortly before the original exclusivity period expired in March 2017. In those two years, Singapore's economy was "growing steadily and diversifying", he said. "That is very important. That gives us latitude to negotiate."
Nor are the gaming taxes paid by the IRs a major contributor to government revenue, he added: "Our revenue base is also not dependent on or held ransom by gaming revenue."
But Mr Chan noted that each IR's fresh S$4.5 billion investment in non-gaming facilities is important given the competition that Singapore's tourism industry faces from upcoming IRs, tourist attractions, and MICE facilities in the region: "We must ensure that we constantly refresh ourselves."
The IRs themselves "have many choices" on where to invest, he noted: "After the success of the IRs, many other countries are copying our model. ... It is (a question of) whether they invest here and be part of our system, competing for us, or they put their money somewhere else and then they'll be competing against us."
The government and the IRs agreed that the expansion projects "must be economically viable and attractive", representing not just an increase in capacity but including new capabilities and attractions, he added.