While Singapore has enjoyed sustained economic growth since independence, weathering many economic crisis with incomes rising substantially; the economy has become more diversified; and Singaporeans today enjoy a quality of life equal to that found in advanced economies.
While the economy has repeatedly being restructured, adapting to global as well as domestic circumstances, with the last major restructuring in 2010, the recommendations of the Economic Strategies Committee (ESC) have directed towards progress ever since.
Although productivity performance has been weak in the domestically-oriented sectors, overall real productivity grew by 2.5 percent per annum between 2009 and 2016. Singapore’s resident unemployment rate has remained low at around 3 percent and the real median wage has grown by 2.6 percent per annum over the same period. For OECD countries, the unemployment rate averaged 7.7 percent and growth in real wages was 0.4 percent between 2009 and 2015.
Unemployment is measured as harmonised unemployment rate. Wages are measured as average annual wages per full-time and full-time equivalent employee. Building an open and connected economy with deep capabilities, and creating opportunities with sustainable wage growth for all Singaporeans will be the two pillars of Singapore’s future economy.
The CFE has studied global trends and re-examined Singapore’s operating assumptions and model, to chart its next phase of growth. What do we need to retain and what must we change to remain competitive and relevant in the world?
The CFE charts out Singapore’s next phase of growth by building an open and connected economy with deep capabilities, and by providing opportunities with sustainable wage growth for all Singaporeans.
“The CFE’s strategies and recommendations will help keep Singapore open and connected to the world, while building deep capabilities in our people and businesses to benefit from the opportunities that we can create. As we put these strategies into action, we must find new ways of working together to achieve our shared goal of sustaining growth and creating good jobs for all Singaporeans,” said Finance Minister and Co-Chair of CFE, Heng Swee Kiat of the CFE report.
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There have been significant structural shifts in external environment in the last few years. Global growth has been subdued and is expected to be lower than in the previous decade. Global productivity growth has been sluggish, though technological changes could yet generate new waves of innovation and breakthroughs.
Growth in the US has recovered since the Global Financial Crisis, but not to pre-crisis levels. Europe continues to face structural problems, including high youth unemployment. Asia remains a bright spot, with some economies growing rapidly.
The CFE is confident that despite the challenging global environment, there are many opportunities for Singapore to innovate, deepen its capabilities, remain connected and stay relevant to the world. Singapore companies are well-poised to tap into several growth sectors. For example, the rise of the middle-class and urbanisation in Asia will increase demand for finance, hub services, logistics, as well as urban solutions.
Scalable healthcare technology solutions can help meet both own domestic healthcare needs, as well as growing demand abroad. The digital economy presents opportunities both within specific sectors like Infocomm technology (ICT) and media, and will also transform other sectors like real estate. In advanced manufacturing, new technologies and the rise of complementary services can raise productivity.
It is important for Singapore to retain a globally-competitive manufacturing sector, with further value-added from manufacturing-related services. With subdued economic and productivity growth globally, the Committee on Future Economy (CFE) has identified seven mutually-reinforcing strategies for Singapore’s next stage of growth in its report.
Co-Chair of CFE and Minister for Trade and Industry (Industry), Mr S Iswaran added: “With rapid changes in the global economy, the imperative for Singapore remains the same – to be an open economy that is connected to the world and relevant to its needs. The CFE recommendations aim to help our people and our enterprises develop deep capabilities that will enable Singapore to reshape our economy and seize new opportunities at home and globally. Ultimately, our efforts must translate into better opportunities for all Singaporeans, with sustainable wage growth and meaningful careers, and a conducive environment for firms to start, grow and soar.”
The Committee was established in January 2016 to address the new challenges that Singapore face. After a year of discussion and consultation with more than 9,000 stakeholders, the Committee submitted its recommendations to the Prime Minister on 9 Feb 2017.
Also read: CFE Identifies Advanced Manufacturing as a Growth Area to Boost Singapore’s Economy
Image credit: gov.sg