Economy to grow by nearly 3% in 2017: PM Lee

Washington

SINGAPORE'S economy should grow by close to 3 per cent this year, Prime Minister Lee Hsien Loong said on Sunday evening (Monday morning, Singapore time).

He gave his upbeat assessment of the country's prospects in a short speech to over 200 Singaporeans at a reception held at the Singapore's Embassy in Washington, DC.

It comes as advance estimates from the Ministry of Trade and Industry this month put year-on-year growth for the third quarter of this year at 4.6 per cent. Mr Lee attributed this to a strong showing by the manufacturing sector, and added that services had performed "okay" as well.

In August, the government had revised its growth estimates for this year to between 2 per cent and 3 per cent; Mr Lee said he expects the full year figures will be at the upper end of this range.

He is on a six-day working visit to the US that began last Saturday.

Singapore Airlines and Boeing will also sign a S$19 billion agreement for at least 39 new planes on this visit, in a deal that will create a lot of jobs, he said in his speech.

He also told the Singaporeans that Singapore's ties with the US are wide-ranging, and these go on, regardless of a change in administration. It is also important for Singapore leaders to get to know key players in every administration, as there is much at stake in Singapore's ties with the US, he added.

America is a big factor in the region, so it is important to know its thinking, he noted.

Mr Lee added that while Singapore's economy is doing better, a difficult part it needs to work on is improving productivity. "We have to work at it patiently sector by sector," he said, noting that 23 industry-transformation maps are being rolled out; these will help "create better jobs for our people", he added.

Mr Lee took part in a dialogue attended by American business leaders at the Economic Club of Washington, DC on Monday. He said the US has to sustain its economic engagement of Asia, and that the region continues to offer opportunities to US businesses.

Meanwhile, the peace and stability of the Asia-Pacific, which decades of such engagement has helped to shape, is also a vital US national security interest. A new US administration with a radically different approach has not turned the substance of US ties with Asia upside-down, he said.

On the economic front, trade across the Pacific exceeds that across the Atlantic and US multinationals have major investments in the region. There are investment and technological gaps US companies can fill, growing middle classes to purchase US products, and great scope for US businesses to grow new markets, make fresh investments and create prosperity on both sides of the Pacific.

On the strategic front, the US has major allies in Asia and US-China ties remain the most important bilateral relationship in the world. And successive US administrations have built up ties with the region and sought to ensure its stability.

There have been concerns among many countries around the world - including American business leaders - that America's recent inward turn and distancing itself from multilateralism has weakened prospects for growth and for stability.

Mr Lee acknowledged that while this may not be the time to start major new trade initiatives - President Donald Trump withdrew the US from the Trans-Pacific Partnership earlier this year - the US should still uphold free trade and tackle issues that arise with its partners. America's attitude on these issues is key, he added.

"Do you still believe that you have the most to gain from an interdependent world, open exchanges and multilateral rules? How will your relations with China develop?" he said.

"How America answers these questions will determine not just prosperity, but war and peace - not just in Asia, but the world."

Asia remains one of the most dynamic regions, with its economies among the most vibrant and fastest growing, accounting for two-thirds of global growth today, the prime minister noted.

Chinese companies such as Alibaba and Huawei, or Indian companies like Bharti Enterprises and the Mahindra Group, are world-class multinational corporations (MNCs).

The region as a whole is also becoming more integrated and interdependent. Asean has formed an economic community that will be the fourth largest single market by 2030.

And it is pushing ahead on the Regional Comprehensive Economic Partnership, a free-trade pact that brings together the grouping and six key trading partners - including China and India.

"It is a way to bring countries together and increase the incentive to work together rather than to collide with one another," he said.

Meanwhile, India has been making progress in opening up. And China, the single most important driver of Asia's prosperity and integration, has been enhancing its interlinkages with the region.

"Asian countries want to benefit from the trade and economic opportunities China offers", Mr Lee said.

This is why they welcome Beijing's initiatives, such as the Asian Infrastructure Investment Bank and the Belt and Road Initiative.

From a strategic point of view, these are a constructive, stabilising way to accommodate China's growing influence in the international system, he added.

At the same time, Asian countries want an open, inclusive regional architecture, not a world divided into rival blocs, he added.

Having prospered under a global, multilateral system of trade and finance, they have substantial economic links with Europe and the US - and want to maintain and grow these, even as they deepen cooperation within Asia, he said. THE STRAITS TIMES