Economic growth should move closer to centre stage in 2015

A NEW year brings fresh hopes and aspirations, especially after the tumultuous 12 months of 2014. While far from the epicentres of many of the tensions and tragedies that unfolded over the past year, Singapore has nonetheless not been untouched by the geopolitical conflicts, military flashpoints, economic perils, natural catastrophes and other calamities that rocked the world in the past months - and that will, in many cases, reverberate for a long while.

For Singaporeans, those news events are sobering reminders not to take for granted the stability, security, safety and prosperity that the country enjoys. This bears saying even (or perhaps particularly) at the start of a highly auspicious year, one ushered in with great anticipation in view of Singapore's golden jubilee this year. Indeed, Prime Minister Lee Hsien Loong has set the tone for the country's 50th birthday celebrations, which kicked off with a colourful New Year's Eve extravaganza over Marina Bay. SG50, said Mr Lee in his New Year message, "will be a time to look back, give thanks for what we have achieved, and to look forward to the future with confidence".

According to Mr Lee, while many others elsewhere in the world, especially the young, are anxious and despondent about their future, Singaporeans "can have a well-founded confidence" about their prospects - and few would disagree with the Prime Minister. Yet the expectations about continued political stability, strong governance, economic growth and more good years cannot be assumed as a matter of course just by dint of good fortune or sound planning. Even for a sophisticated, well-run economy like Singapore's, big restructuring challenges persist. While Singapore seems to have settled into a 3-4 per cent "mature economy" growth range in recent years - and the economy performed "moderately well" with 2.8 per cent growth in 2014 - it hasn't been able to raise its game on the productivity front, with a third year of weak performance and, in fact, negative numbers for most of 2014. All the best will and efforts (including financial support for firms) to spur efficiency gains haven't yet paid off (at least not in the statistical data). The poor productivity figures may well be the price to pay for the long-haul restructuring drive centred on phasing out low-cost imported unskilled labour; it will likely be a while before Singapore's small and medium-size firms become lean and mean enterprises engaged in automated or high-value work.