You are here
Quick takes: CFE paints broad strategies, key is in implementation
THE high-powered Committee on the Future Economy (CFE) unveiled on Thursday its recommendations on how Singapore's economy can be reshaped and remain relevant to the world.
Seven wide-ranging, "mutually-reinforcing" strategies that should help the economy, now in an advanced stage of development, grow by 2 to 3 per cent per year on average, were unveiled.
Here are some comments by economists:
Selena Ling, Head of Treasury Research and Strategy, OCBC Bank:
"The CFE thrusts are not intrinsically different or totally groundbreaking from earlier government strategic plans, but reinforce the growing need to stay connected even amidst an emerging shift by some of our key trading partners towards protectionism and insular growth.
"Singapore will essentially have to continue to keep up a brave front and push on with free trade and investments, notwithstanding the US pushback on TPP post-Trump. This is to a large extent inevitable because Singapore remains a small and open economy with no economic hinterland market."
Ms Ling also noted other key points made by the CFE. These include:
· Growth sectors and opportunities are there for the taking
· Maintain a globally competitive manufacturing sector at around 20 per cent
of Gross Domestic Product (GDP)
· Focus on skills acquisition and lifelong learning for Singaporean workers
· Innovation remains a key growth engine
· Ongoing efforts to build strong digital capabilities
· Connectivity, both external and digital, are important
· Industry Transformation Maps are the way forward
· Tax regime review
Jimmy Koh, UOB:
"Singapore last reviewed its economic strategies in 2010 following the recommendations of the Economic Strategies Committee (ESC).
"The Government signals in the CFE the next decade of GDP growth to be 2-3 per cent, a significant mark down from the 3-5 per cent target set in the earlier Economic Strategies Committee. In the past, the 3-5 per cent was to be supported by 1-2 per cent labour supply growth and 2-3 per cent labour productivity growth. Although we managed the former, our labour productivity grew an average of 0 per cent since the 2011 General Elections.
"The CFE GDP target thus lowers public expectations and implies 1 per cent labour supply growth with a 1-2 per cent labour productivity growth, which is much more manageable.
"Uncertainties will be the new norm.
"The CFE recommendations are longer-term strategies, not short-term measures to boost growth and thus should not be expected to lift the growth rate for 2017 in itself (UOB forecasts 1.8 per cent GDP growth in 2017). With the broad key strategies in place, we see implementation as the key aspect to the success. Next up will be Singapore's Budget 2017, which will be delivered on Feb 20. We anticipate more insights on the operationalization of the CFE strategies in the upcoming budget."