A Review of recommendations made by the Economic Strategies Committee

By Jingle Yang

Introduction

The Economic Strategies Committee (ESC) is the brainchild of Prime Minister Lee Hsien Loong and his cabinet, aimed predominantly at developing the island city’s economic capabilities, achieving continued economic success and enhancing its international presence.

The ESC is chaired by Singapore’s finance minister, Mr Tharman Shanmugaratnam, and houses 11 members from the public sector and labour movements as well as 14 members in the private sector. The ESC and its diversed representation of members gives voice to a wide array of private enterprises and provides a platform to facilitate discourse for a multifaceted group of professionals from the public and private sectors.

On the 1st of February 2010, the ESC announced its very first key recommendations through a press conference and they are broadly classified into three categories:

1. Boost skills in every job

This recommendation focuses on the importance of improving the general efficiency and productivity of Singapore’s workforce, thereby increasing general wage and reducing reliance on foreign labour. What is probably worth mentioning is the proposal for the establishment of a high level national council that will serve to facilitate works of various government agencies and effectively bridging the gap between the private and public sectors. This measure, if in effect, should produce a more cohesive, less bottle-necked collaboration between them, consequently increasing general productivity.

The recommendation also urges companies to further upskill all employees, a measure that will not only increase efficiency in production but also position Singapore as an attractive choice to foreign businesses, for both high quality labour and management.

Since foreign imported labour has now increased to a rather substantial level in our workforce this recommendation’s proposal of having companies become less reliant on them is the last most tangible points to me.

The import of such labour originally started when lesser Singaporeans were willing to work in certain industries, like construction and nursing, but the intake of such workers have indeed snowballed to a level and expanded to such an extent that it has become detrimental to the local, mostly unskilled workforce.

Prime victims are probably the older generation of cleaners at hawker centres and the younger generation of workers in the F&B sector. More often than not the former group relies on such jobs in foodcourts and hawker centres as a form of sustenance but are now found having to compete with younger, stronger and more efficient foreign workers for their jobs.

Having said that, however, as the recommendation suggests, we should also implement means to retain experienced and skilled foreign workers even in our attempt to reduce reliance on them, as some do serve as a good complement to our workforce. Therefore the key to achieving a equilibrium is to maintain a balance between importing a healthy number of high quality, foreign labour and still provide sufficient jobs for the less represented yet more vulnerable local workforce.

2. Deepen Corporate Capabilities to Seize Opportunities in Asia

This recommendation provides very sound suggestions like raising the total expenditure on R&D across various industries, entrenching ourselves deeper into the Asia markets and promoting cohesion between large companies and SMEs.

The increment in expenditure on R&D should naturally increase the quality of both our physical and intellectual exports and placing us in the world map of product superiority and high level of quality control. If we do increase apportionment of our R&D expenditure to 3.5%, as suggested in the recommendation, we will be on par with the likes of USA, Japan and Europe, the top contenders for for such expenditure internationally. The industries that stand to benefit from such a vast allowance will hopefully gain a stronghold on the global markets.

With regards to the development of cross borders financing capabilities I reckon we could imitate the likes of China and Japan, where banks were set up to tailor primarily to lending facilities offered to SMEs and foreign MNCs. The China Construction Bank and the Industrial Bank of Japan, respectively, provide long term loans to corporations by selling longer tenured debentures.

These banks serve to facilitate commercial lending to companies that need heavy financing in their business expansion both locally and internationally, allowing for these companies to establish a substantial presence in the global market. However, the recommendation’s suggestion of having the government provide insurance and guarantees for these companies to increase commercial lending could potentially be open to abuses, if not defined properly.

Companies backed by such assurance from the government could take the opportunity to expand across borders, with borrowed cash, without careful considerations and managements. This will, inevitably, affect the image of local brands internationally and will prove more detrimental than the limitations set on their expansion presently.

3. Make Singapore a Distinctive Global City and Endearing Home

It has been the government’s long standing concern to create a global city that will both entice foreigners to think of Singapore as home and to make overseas-based Singaporeans to continue to regard the lion city as theirs.

The recommendation is right to suggest we hold more ‘pinnacle global events’ to put the country under international radar to showcase our world class service excellence and capabilities.

The importance of tertiary education will allow the country to participate in the exchange of intellectual workforce internationally, where locally trained graduates will have the opportunity to work overseas and learning the ropes of the working cultures elsewhere, while we entice capable expatriates to develop the local scene. However, as mentioned in recommendation (1) the government will have to thread a very thin line between importing a suitable number of foreign expatriates to positively influence the local markets yet not compromise the opportunities offered to local talents. Foreign expertise, albeit valuable, should be imported to boost the image of our industries, but not recklessly so.

The second suggestion will benefit a large pool of foreign and local residents, including myself. The rejuvenation of matured HDB towns will provide a refreshing face-lift to currently outdated estates, opening up more HDB flat opportunities that are convenient, eco-friendly and attractive to the young adults.

This continual effort suggested by the recommendation will also constantly improve the aesthetics of Singapore, allowing us to appear up to date and modern. It is also vital that we continue to develop the port at Tanjong Pagar to maintain our seaport dominance in the region. Further, it is consequential that we continue to develop areas like Orchard Road, Marina Boulevard and Sentosa or even find alternate shopping districts by roping in more international brandnames to enhance our image of a vibrant and dynamic nation city.

Conclusion:

These recommendations serve to reinforce the founding pillars of our country’s economic success and aim to establish a deeper rootedness of our economic prowess so as to sustain continued growth and achievement. They also aim to ensure that our country will not be complacent with outdated methodologies but constantly strive to achieve a dynamic and buoyant economic status that will draw on both local and foreign expertise for a sustainable and enviable growth. As our country moves along in time the ESC’s recommendations also hope to nurture a citizenry that is not only resilient to global changes but is well equipped to prosper amidst an unremitting global rat race.

About the Author:

Jingle Yang graduated with a Bachelor’s degree in English Literature with The National University of Singapore. She has worked for three years with an established bank from the United Kingdom and is currently pursuing a post graduate degree in Applied Economics.