Even as a developed economy, Singapore must still pursue growth and upgrading: PM Wong
Many CEOs of multinational firms have expressed confidence in Singapore as a stable and trusted base to do business, he says in National Day Message
THE government will forge new opportunities for Singaporeans, redouble efforts to keep the cost of living stable, and strengthen the social support system, said Prime Minister Lawrence Wong in his first National Day Message on Thursday (Aug 8).
In a pre-recorded message taped at the Istana, he said that a developed economy like Singapore cannot expect to grow as rapidly as before.
Even so, there is still a need to pursue economic growth and upgrading, through innovation and productivity. And this, said PM Wong, is why the government is investing in research and development as well as new technologies such as robotics and artificial intelligence.
Major infrastructure projects are also in the works, he said, citing examples such as Changi Airport Terminal 5 and the Tuas Port, to “sharpen our competitive edge” as a global logistics hub.
“These strategies are working,” said the prime minister, adding that he has met with the chief executives of many multinationals in recent weeks, who have all expressed confidence in Singapore.
“In a fractured and troubled world, they see Singapore as a stable, trusted and reliable base to expand and grow their operations in Asia,” he said.
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PM Wong said that many global brands across different industries have opened new facilities in Singapore, among them Pfizer, Hyundai, GlobalFoundries and Maersk.
BioNTech will soon open a mRNA manufacturing facility here, which would be the German biotechnology giant’s first such facility in the Asia-Pacific region.
While he pointed out that these investments will propel the economy forward and create new jobs for Singaporeans, PM Wong said these will be different jobs from what people are used to, as they demand new capabilities.
“We must actively prepare our workforce to seize such opportunities,” he said, citing the ongoing effort to help workers pick up new skills or hone existing ones through the SkillsFuture initiative.
The government will also work closely with the labour movement and employers to “equip every worker” for the future economy, he said.
Inflation a ‘major concern’
Turning to the pressing worry about the rising cost of living, PM Wong said that inflation remains a major concern for Singapore, as it is for many other countries today.
“We recognise how rising prices are impacting Singaporeans, coping with day-to-day expenses,” he said. “We cannot control global prices, but we can and we have shielded Singaporeans from the worst effects of global inflation by keeping the Singapore dollar strong.”
The prime minister said that with higher economic growth this year, the government expects wages to also increase.
Last month, the Monetary Authority of Singapore said that Singapore’s full-year economic growth will likely come in closer to the potential rate of 2 to 3 per cent, with core inflation expected to ease more significantly in the final three months of 2024.
The central bank’s gross domestic product growth forecast is in the upper half of the Ministry of Trade and Industry’s forecast range of between 1 and 3 per cent. In 2023, the economy grew by 1.1 per cent.
In his message, PM Wong said the government will continue to cushion the impact of inflation, especially on the lower and middle-income groups, via support measures such as CDC vouchers, cash payouts and utilities rebates.
Over the longer term, he said that the key to managing the cost of living would be to foster innovation and enhance productivity across the economy.
“Then, we can expect wages to increase by more than inflation, and improve the overall quality of life for Singaporeans,” he said.
Turning to the ongoing worries over housing affordability, PM Wong noted these concerns as he shared that the government has already imposed extra cooling measures and ramped up the supply of new HDB flats, which have helped stabilise the property market.
In October, the first batch of flats under the HDB’s new Standard, Plus and Prime framework will be launched. Buyers who receive heavier subsidies will have to return these amounts to HDB when the flats are resold later, which PM Wong said helps keep the system fair.
“These innovations in our housing policies reflect our commitment always to be a nation of homeowners. We are determined to keep public housing in Singapore accessible, affordable and fair for all,” he said.
On the point about strengthening the system of social support, PM Wong said the government is investing more in social infrastructure, with several moves in the last two Budgets to uplift lower-wage workers, support vulnerable families and boost retirement adequacy.
PM Wong said that when he delivers his first National Day Rally speech on Aug 18, he will share some ideas on how the government will take further steps to strengthen social safety nets, enhance support for families and help Singaporeans recover from employment setbacks.
‘Formidable challenges’ ahead
Earlier in his message, PM Wong spoke of “new challenges” that lie ahead in a dramatically changing world that is riddled with conflict and geopolitical tensions. There is also growing populism, economic nationalism and protectionism that governments have to deal with.
“These are powerful forces that shape our operating environment. They are what keep me awake at night,” he said. “Granted, we are no longer building a nation from scratch, but neither can we afford to cruise along and just rely on existing formulas.”
The challenges ahead for Singapore are “formidable”, with no quick and easy solutions and no model answers to refer to.
“But the bigger the problems, the greater is our resolve to tackle them head-on, and to turn vulnerabilities into strengths,” he said.
PM Wong said that Singapore may be a young nation that’s turning 59 this year, but there are “good reasons” to be confident about the future.
“Despite the challenges, we will take Singapore onwards and upwards. Ours will be a future full of exciting opportunities and possibilities,” he said.
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