ASEAN KEY DESTINATIONS
'The Future Economy' committee to review Singapore's policies
SINGAPORE: The committee on "The Future Economy", which was announced by Prime Minister Lee Hsien Loong on Friday (Oct 1), will review policy measures that have been in place since 2010.
The committee, chaired by Finance Minister Heng Swee Keat, aims to help create more good jobs for workers and help firms in adapting to a lean workforce, among other future challenges.
"The global economic and financial situation is changing very rapidly, and in Singapore we are also restructuring our economy,” said Mr Heng, speaking at a dialogue session with entrepreneurs on Friday.
“Important policies have been put in place since the ESC (Economic Strategies Committee) report in the last round. So we need to do an assessment now to see what are the key changes in the global economy, regional economy as well as our own domestic economy - what are the challenges ahead, where we are today, and what are the key things that we need to do going forward," he noted.
Mr Heng said this will be his first major task after he was appointed by Mr Lee to chair the committee. Mr Lee had described the work of the committee as important, as Singapore needs to create opportunities even in a weaker global economy and move faster towards higher skills, innovation and productivity.
Over the past three decades, there have been a number of planning committees set up to review and set the direction of Singapore's economy. The two most recent ones were the Economic Review Committee (ERC) in 2003 and the Economic Strategies Committee (ESC) in 2010.
The 2003 ERC focused on restructuring for growth, as well as lowering costs to stay competitive. This was against the backdrop of the US tech bubble burst and rising competition from other Asian economies.
The 2010 ESC recommended shifting to productivity-driven growth and raising real wages amid slower growth in the aftermath of the 2007-2008 global financial crisis.
"So while there is no actual trigger or crisis right now, if you look at the surrounding economies - the big boys and the smaller countries - you are actually seeing slower growth. You'll also see the next generation of voters are all looking for inclusiveness, and not just driving bottom-line growth, but quality of growth, and knowing how to have it being sustainable. So I think this is timely,” said Professor Annie Koh from Singapore Management University.
In the 2003 ERC, Prof Koh was involved in the shadow sub-committee for the committee on service, looking at finance and banking.
Other observers have said the Future Economy committee will have its work cut out for it.
"In the ERC, we had no such constraints to manage. It was just about generating growth, winning back market share, generating competitiveness, getting more FDI. Now it's subject to constraints - how much more FDI you get against ageing labour, against a limited labour pool, given the limited skillset that we have,” said Mr Leong Wai Ho, chief economist at Barclays.
“So it's an infinitely more challenging role, and these are questions we will constantly have to address, as we push for growth, given that we are at the mature stage of our development,” he added.
Mr Heng said he is assembling his committee and a timeline will be announced at a later date. The last two economic planning committees took about a year to submit their recommendations to the Government.
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