Singapore

SINGAPORE secured S$17.2 billion in fixed asset investment (FAI) in 2020, far above the Singapore Economic Development Board's (EDB) medium to long-term investment commitment annual goal of S$8 billion to S$10 billion, the EDB said at its year-in-review on Wednesday.

"We had a very good momentum coming into 2020 from 2019," said EDB chairman Beh Swan Gin.

In 2021, the EDB does not expect to achieve a similarly high figure, but is "cautiously confident" of achieving its medium-term goals, he added. The 2020 FAI was the highest since 2008 and 2007, two exceptional years with mega petrochemical projects.

Electronics and chemicals were the top sources of commitments in 2020, accounting for 37.7 per cent and 24 per cent respectively.

Dr Beh noted that every eight to 10 years, there is an up-cycle in investments, driven by semiconductors, and energy and chemicals. If not for Covid-19, 2020 FAI numbers might well have been higher, he added, as some projects were delayed.

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"We are cautiously optimistic for the semiconductor sector that 2021 will remain strong," he said.

The EDB aims to maintain its current investment commitment goals for the medium to long term. Last year, it stopped making annual forecasts for investment commitments.

Calling the EDB figures "promising and encouraging", Minister for Trade and Industry Chan Chun Sing professed "cautious optimism" for the rest of the year, though noting that competition will intensify.

Many significant investment decisions are being made in the next two to three years which will determine the layout of global supply chains, and if Singapore can win some of these crucial projects, it will be able to secure economic opportunities for many years to come, he said.

Total business expenditure from projects secured in 2020 is expected to be S$6.8 billion per year, down from S$9 billion in 2019 but in line with the S$5 billion to S$7 billion aim.

When fully implemented, the projects are expected to contribute S$31.2 billion in value-added per year, with the largest contributors being infocommunications and media (38.4 per cent) and headquarters and professional services (25.7 per cent).

This is why investment commitments from China - mostly in digital and tech - account for nearly 40 per cent of the expected value-added, despite being small in terms of FAI, said Dr Beh in response to media queries.

The projects secured in 2020 are expected to create 19,352 jobs, better than the goal of 16,000 to 18,000.

"The companies remain committed to working closely with us to prepare the local workforce for the available positions," said Mr Chan.

Production jobs formed the greatest share at 45 per cent, followed by digital jobs at 24 per cent, and jobs in business and commercial services at 19 per cent. Asked about the high share of production jobs, Mr Chan said that the three- to five-year trend should be considered, instead of volatile yearly figures.

For commitments secured in 2019, digital jobs formed the greatest share at 49 per cent, followed by production jobs at 29 per cent.

The investment commitments in 2020 were secured despite a challenging environment, said the EDB.

Singapore's efforts to keep borders open, stay connected, and ensure business continuity have given global firms the confidence to keep siting projects in the Republic, noted Mr Chan. But while the EDB has done well in 2020, the road ahead will be challenging with much global uncertainty, he said, laying out four key economic strategies for 2021.

First is strengthening Singapore's position as a critical node in the global value chain, especially new areas of growth such as agritech, biomedical sciences electronics, and infocomm and media.

Second is forging new trade rules in forward-looking areas such as data, finance and technology.

Third is pursuing an innovation-led and sustainable economy, which includes strengthening research and development efforts, encouraging firms to innovate, and developing ESG (environmental, social and governance) solutions.

Fourth is continuing to help firms and workers transform for a "Covid world". "For companies, our support will progressively move from stabilisation to helping them pivot to new areas of opportunities," said Mr Chan.

This targeted help will focus on building up corporate capabilities, as well as assisting companies access additional platforms to innovate and reach markets beyond Singapore.