PM calls for productivity push amid muted growth

PM calls for productivity push amid muted growth

Singapore's economy grew a moderate 2.8 per cent last year as productivity gains remained weak for a third straight year, Prime Minister Lee Hsien Loong said yesterday. But incomes continued to rise, he added in his New Year message.

The growth rate was a tad lower than the official forecasts of "around 3 per cent", an outcome that seems to underpin PM Lee's call to redouble efforts to raise productivity so that salaries and the economy will keep growing.

He also underlined the need for "stability, safety and security" to safeguard Singapore's success and assure its future, as he recalled an eventful year marked, among others, by the Ebola outbreak, terrorism and air tragedies, including the latest crash of Indonesia AirAsia Flight QZ8501.

His timely reminder comes as Singapore embarks on its 50th birthday celebrations this year.

"SG50 will be a time to look back, give thanks for what we have achieved, and look forward to the future with confidence."

But crucial to such optimism is higher productivity and, in turn, economic growth.

Productivity, however, has been disappointing, said Mr Lee. It shrank 0.5 per cent in the first three quarters of last year.

He called for a redoubling of efforts to boost it. "Otherwise, our incomes cannot continue to rise, and will soon stagnate," he said.

The Government will release more economic data tomorrow.

Meanwhile, analysts like DBS economist Irvin Seah warned that this year would be more challenging for Singapore's economy.

"Central banks around the world will be setting different monetary policy directions, which will cause a lot of volatility in financial markets and affect the economy as well," he said.

In his message, Mr Lee also said those who dismiss economic growth as unimportant are "gravely mistaken".

"Growth is not the be-all and end-all, but it is the only way for us to create good jobs for all and earn a good living, so that as a nation we can invest in our people and our future," Mr Lee said.

In particular, an expanding economy gives the country resources to continue strengthening its social safety nets, a key priority as the Government shifts gears to give Singaporeans "greater assurance, more opportunities and a better home", he added.

These three aims are embodied in new policies.

First, greater assurance is provided by last year's Pioneer Generation Package, which eases this group's medical costs, and this year's introduction of MediShield Life insurance for all.

Second, moves to invest more in early education and level the playing field among schools will bring more opportunities for all Singaporeans. The State will also provide more diverse paths to success other than just academic triumphs, Mr Lee added.

Finally, the Government is building a better home with more housing, improved transport services, special public spaces and Smart Nation initiatives.

Last year, 28,000 families moved into new Housing Board flats, with 26,000 more set to do so this year. About 550 buses were also added, with more due this year, along with new MRT lines and more trains.

Overall, Singapore is in a better position than many nations. For instance, its real median incomes rose 10 per cent in the last five years, unlike stagnant wages in many developed countries.

"In many countries, people are feeling angst, anxiety and despondency about the future, especially the young. But in Singapore, we can have a well-founded confidence about our future," Mr Lee said.

He, however, warned against succumbing to mediocrity. "It is not good enough for Singapore to be an ordinary country."

fiochan@sph.com.sg


This article was first published on January 1, 2015.
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