SINGAPORE — Although Singapore is one of only a handful of countries that has made the transition from middle-income to high-income in the past 50 years, it is not a given that it will stay there, said Trade and Industry Minister Lim Hng Kiang yesterday, as he stressed the importance of restructuring the economy to respond to the challenges posed by changing demographics.
Citing a 2011 World Bank study, he noted that while Greece, like Singapore, was part of the 13 of 101 middle-income countries that graduated to the high-income band, it has since crumbled because of mismanagement.
Speaking at a dialogue with residents during his ministerial community visit to Braddell Heights yesterday, Mr Lim said: “What it means for us as we celebrate 50 years is … it is not very easy to become a high-income country and … it is also not very easy to stay there.
“There’s a lot of competition and if you mismanage like some countries … you can drop very quickly. And it may not be gradual, you can have a very severe drop over five years,” he added.
While Singapore is still generating many jobs despite being on a more moderate growth trajectory, Mr Lim said raising the labour participation rate to fill these positions is not a long-term solution. Instead, restructuring the economy to create jobs that match the aspirations of a growing pool of better-educated Singaporeans will be key.
“So our strategy is, we continue to have a strong pipeline of investments, we’re generating good jobs, but at the same time, we have to restructure, make sure we use our manpower carefully and make full use of technology and productivity, and make every job count and make every job a good paying job,” he said.
During the 80-minute dialogue involving about 280 residents and students, Mr Lim also said local small and medium enterprises (SMEs) have the potential to play a greater role in the economy, noting that they employ about 80 per cent of the workforce here but contribute only 25 per cent of GDP growth.
Some initiatives to help local start-ups remain competitive include tie-ups between local start-ups and research agency A*STAR, which will offer new technologies and research expertise, he said. Incentives are also in place to encourage large enterprises to work with local SMEs, such as by engaging them as suppliers or subcontractors, he added.
There are also opportunities for partnerships between local SMEs and foreign companies seeking to venture into markets they are unfamiliar with, such as in Asia, Mr Lim said.
“We pay very close attention to SMEs because this is where companies grow and, hopefully, will expand to become bigger companies,” he said.
Mr Lim also noted the rise of e-commerce as a platform for expanding businesses beyond Singapore and the region, citing the example of the Singapore Food Manufacturers’ Association’s venture into China via the Internet.
However, he acknowledged that foreign companies will also seize the opportunity to carve out a share in the local market. SPRING Singapore is working with retail associations here to make better use of technology and the online space, he said.
Earlier in the day, Mr Lim visited residents and merchants at a wet market and coffee shops in the estate. With the help of students from Nanyang Junior College, Mr Lim and Braddell Heights grassroots adviser Seah Kian Peng also applied finishing touches to a wall mural. The mural is the 16th of 50 murals to be put up in the estate in time for Singapore’s Golden Jubilee.
new source & image credits: todayonline.com