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Diversified, growing economy gave govt negotiating muscle in IR talks: Chan Chun Sing
IN THE negotiations leading up to the S$9 billion investment committed by Singapore's two integrated resorts (IRs), the country's position was strengthened by its lack of over-reliance on that sector, Minister for Trade and Industry Chan Chun Sing told the media on Friday.
The IRs jointly contribute about 1 to 2 per cent of gross domestic product (GDP) annually. Following the investment, they 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 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."
Investments secured in other sectors, such as the manufacturing industry, also gave the government greater leverage, he added.
Nor are the gaming taxes paid by the IRs a major contributor to government revenue: "Our revenue base is also not dependent on or held ransom by gaming revenue."
Betting taxes, including those from non-IR sources, constituted 3.6 per cent of government operating revenue in the 2018 financial year.
Nonetheless, Mr Chan noted that each IR's fresh S$4.5 billion investment in non-gaming facilities is important, as Singapore's tourism industry faces competition from upcoming IRs, tourist attractions, and MICE facilities in other countries in the region. "We must ensure that we constantly refresh ourselves."
"Our job is not to play catch-up. Our job is to make sure that we stay one step ahead of the competition constantly."
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", bringing not just an increase in capacity but including new capabilities and attractions, he said.
Marina Bay Sands (MBS) will build a fourth tower with an entertainment arena, a luxury hotel, and more MICE space.
Resorts World Sentosa's plans include new areas in Universal Studios Singapore. The expansion plans are expected to directly create up to 5,000 jobs in total, with some two-thirds to be filled by locals.
Asked if he was confident that enough local manpower could be found, given service industry complaints about shortages, Mr Chan said the point was "to provide Singaporeans with the choices, the diversity of jobs".
"It's good for us to keep the labour market tight, as that benefits Singaporeans," he said. Whether the roles can be filled "depends on what the IRs offer them".
Fielding other questions, Mr Chan said the MBS plans should not require road expansion as infrastructure for the Marina Bay area was planned long in advance. He declined to comment on the possible effect on short-term property prices in the area.
As for the decision to extend the exclusivity period to end-2030 - meaning that no new casinos will open in the meantime - Mr Chan said that although other IR operators had expressed interest in entering Singapore, no talks were started.