A diversified economy vital amid turmoil, says Hng Kiang

By MBy Low Minmin

A balanced and well-diversified economy that relies on both services and manufacturing is essential for robust growth and jobs in these uncertain times, Trade and Industry Minister Lim Hng Kiang said at a conference yesterday.

Individual sectors can also work together to reinforce one another's growth over the long term, he said.

"It is therefore crucial for economies to continue growing key economic sectors, such as the manufac- turing sector, even as they ride on burgeoning growth in the services sector," the minister said in a keynote address at the Singapore National Committee for Pacific Economic Cooperation Conference at Orchard Hotel.

Mr Lim said the spillover effects from manufac- turing activities would help to generate business, value-add and jobs for the services sector.

Citing Singapore as an example, he said: "Our efforts to grow our manufacturing sector have had the added benefit of mak- ing the Republic a more attractive loca- tion for companies to locate their corporate headquarters, and to conduct design and research and development functions here.

"This, in turn, is supporting the growth of a range of services, including financial, legal and other pro- fessional services."

The services sector has been a vital source of growth, especially in the Asia-Pacific, Mr Lim noted.

It accounted for 68 per cent of the region's gross domestic product in 2007, up from 65 per cent in 1995. Services also accounted for 61 per cent of total employment in Asia-Pacific Economic Cooperation economies in 2007, according to the latest available figures.

However, services alone will not drive economic growth and development, Mr Lim said.

"The key is to identify the ideal mix of economic activities that would generate the most amount of growth in any particular economy," he said.


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