Singapore economy in need of review: PM Lee

SINGAPORE'S economy is in need of a review and the country must create opportunities even as global growth flags, Prime Minister Lee Hsien Loong said on Thursday, adding that it must also move more quickly towards higher skills, innovation and productivity.

"These are urgent tasks, because both global economic conditions and domestic demographic trends will pose us severe challenges," he said at the new Cabinet's swearing-in ceremony on Thursday evening at the Istana.

He said the country has to create more good jobs and pathways for its workers, and help businesses - especially small and medium enterprises - adapt to a "lean workforce" and build links regionally and globally. Newly appointed Finance Minister Heng Swee Keat will chair a committee on "the future economy" to study these issues, Mr Lee said.

He also spoke again on leadership renewal, warning that the clock was ticking and Singapore has no time to lose. His overriding goal will be to have a new team ready to take over soon after the next election, he said.

The new Cabinet comprises both experienced ministers who "will provide steady hands in a challenging environment" and young blood with new perspectives and ideas, he said, noting that he has entrusted major responsibilities to younger ministers while the older ministers will help the government "think more deeply about issues and to plan more systematically for the future".

Cautioning that Singapore was "entering a new phase of nationhood" and now faces more complex challenges and new issues that cut across multiple domains, Mr Lee also identified three major areas Singapore must tackle. These are national security, economic and social policies as well as infrastructure, he said, and explained why he had appointed Coordinating Ministers for all three areas.

National security remains a "vital precondition" of the country's success, Mr Lee said, cautioning that the Islamic State and jihadi terrorists posed a serious problem for South-east Asia and Singapore while tensions in the South China Sea were unsettling the region.

"Political problems or racial tensions in neighbouring countries can complicate bilateral relations, or spill over to affect our own society," he said, adding that he had therefore kept Deputy Prime Minister Teo Chee Hean in charge of national security as its Coordinating Minister.

As for economic and social policies, Mr Lee noted that growth would be "harder to come by" as the population ages and the global environment remains uncertain.

"Yet our economy must grow to create opportunities for Singaporeans and improve our lives. At the same time, we must use the fruits of our growth wisely, both to invest in our future and to strengthen social safety nets. Every citizen should benefit from Singapore's success, and those needing an extra helping hand should be looked after," he said, adding that he had appointed deputy prime minister Tharman Shanmugaratnam to oversee this critical area as its Coordinating Minister.

When it comes to infrastructure, Mr Lee said that Singapore has done well compared with most other countries "but we have ambitious plans to build on what we already have over the next 20-30 years to create a new city".

The government knows where it needs to do more work to "improve standards and remedy shortcomings", he said. The new Coordinating Minister for Infrastructure is Khaw Boon Wan, who was previously Minister for National Development.

Mr Lee also called the outcome of the recent general election, in which the ruling People's Action Party won 69.9 per cent of votes, a win for all Singaporeans and a boost to investor confidence. "We have a strong, stable government, able to take Singapore confidently into the future . . . The election result sent an important signal to the world: that we Singaporeans are determined to keep Singapore special."

He recounted that the Economic Development Board had told him, after the election, that a multinational corporation (MNC) that had been here for many years had decided to raise its stake in Singapore and make another "billion-dollar" investment here, creating more jobs for Singaporeans.

"In recent times, MNCs have watched our politics more closely, to see which way it is heading . . . I have no doubt that the election result boosted this investor's confidence that they were making the right decision, and that they could be confident Singaporeans would keep our fundamentals strong."

President Tony Tan Keng Yam also spoke at the ceremony, saying that Singapore needs to robustly address the challenges created by an ageing population and shrinking workforce.

This article was first published on October 2, 2015.
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