Senior Minister Tharman Shanmugaratnam said that Singapore’s future rests on its role as a hub in sectors such as manufacturing, finance and logistics. Stressing that staying open is vital to maximizing opportunities for Singaporeans.
Minister Tharman also warned that the Covid-19 pandemic may lead to a “wipeout” of a significant number of small- and medium-sized enterprises (SMEs) as many of these companies have been battered by the crisis.
Minister Tharman, who is also Coordinating Minister for Social Policies, was speaking during a dialogue at the Singapore Summit, an annual forum bringing together leaders from around the world to discuss global trends in business, finance and geopolitics.
The dialogue was hosted by Mr Ho Kwon Ping, executive chairman of resort group Banyan Tree Holdings. It touched on topics such as the impact of Covid-19 on existing global trends, the tensions between the United States and China, and the future of Singapore’s status as an economic hub.
Elaborating on the need for Singapore to stay open, Minister Tharman said that the country cannot rely on its domestic economy for growth.
“If we are a middling business center or if we think we can get growth out of a domestic economy, not only will we not be able to grow opportunities, but most Singaporeans will leave the place… So it’s clearly not an option.”
To remain successful and competitive as an economic hub, Singapore should not just remain open to trade and investments, but it must also continue to be open to flows of people.
This requires continuous work, he said, and involves trust between the Government and the people, as well as having reliable systems and strong national education systems to ensure that these objectives can be achieved.
Minister Tharman: it wouldn’t be socially sustainable
However, Senior Minister Tharman said that it would not be “socially or politically sustainable” for a country to be “blindly open” to foreigners.
The key is for the Government to manage the flows of people and ensure that opportunities are created for all through this openness, he added.
He then laid out the ways that the Government should achieve this. Firstly, there must be opportunities for Singaporeans to develop at every skill level.
This includes ensuring that Singaporeans are able to adapt and develop adjacent skills in order to switch to new sectors.
The country must also strive to encourage firms to anchor their regional and global business here and attract the best international teams with both foreigners and Singaporeans.
The Government should ensure fair hiring and promotion practices — something that it has taken even more seriously because of the present economic downturn, he said.
Lastly, firms should also be mindful of the need for “adequate diversity of nationalities, even among the foreigners who are with us”, he said.
“Avoid significant concentrations of one nationality, and that, too, is something that we are talking to firms about.”
The overall number of foreigners relative to residents here would also need to be controlled, Minister Tharman said. “If you want to preserve openness to the top-tier talent and entrepreneurs, you have to control the overall numbers and make sure that the broad middle in our society and those in the lower-income level have opportunities and face fair competition.”